8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  September 10, 2010

China Golf Group, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-53399	75-3264747
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

China Merchants Tower, Suite 1503

161 Lujiazui East Road, Shanghai  PRC 20001

(Address of Principal Executive Offices)

Registrant's telephone number, including area code:  011-86-21 5876 5017

(Former name or former address if changed since the last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

Securities Purchase Agreement:

On September 10, 2010, China Golf Group, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) providing for the sale to the investors of up to 5.6 million shares of common stock, par value $.001 (the “Shares”) for an aggregate purchase  price of up to $7.0 million (or $1.25 per Share).   The Securities Purchase Agreement contemplates one or more closings.  The first closing occurred on September 10 2010, through the sale of 939,992 Shares for an aggregate purchase price of $1,174,990.

The Company will use the net proceeds from the sale of the Shares, after payment of legal fees and other closing costs, for working capital.   The Company has agreed that $2,000,000 of the proceeds of the financing will remain in escrow to be used to pay for legal, accounting, auditing and investor relations services, key man life insurance and D&O insurance.

The Securities Purchase Agreement contains representations and warranties of the Company and the investors which are customary for transactions of this type. The Securities Purchase Agreement also obligates the Company to indemnify the investors for any losses arising out of any breach of the agreement or failure by the Company to perform with respect to the representations, warranties or covenants contained in the agreement.

The Securities Purchase Agreement also contains a number of covenants by the Company, including the following:

· The Company is required to use its best efforts to consummate an underwritten public offering of its common stock no later than September 10, 2011 (the first anniversary of the initial closing) and obtain a listing on the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange.

· At the closing, the Company delivered 2,000,000 shares to an escrow agent (the “Make Good Shares”) which will be required to be delivered to the investors in the event that the Company’s net income for the fiscal year ending December 31, 2010 is less than $14.81 million (the “2010 Target Income”).   The exact number of shares to be received will depend on the extent to which the 2010 Target Income is not attained.  If the shortfall of the Company’s actual income for fiscal year 2010 to the 2010 Target Income (the “2010 Percentage Shortfall”) is equal to or greater than 10%, the investors will receive (pro rata) 50,000 shares for each one percent percen tage of the 2010 Percentage Shortfall up to a maximum of 2,000,000 shares. In addition, if net income for the fiscal year ended December 31, 2011 is less than $25 million (the “2011 Percentage Shortfall”), the investors will be entitled to additional shares. If the 2011 Percentage Shortfall is equal to or greater than ten percent (10%), the investors will receive (pro rata) 50,000 shares of common stock for each one percent percentage of the 2011 Percentage Shortfall up to a maximum of 2,000,000 shares less any shares that have been paid out as a result of any 2010 Percentage Shortfall. If the Company’s net income for fiscal years 2010 and 2011 exceeds, respectively, the 2010 Target Income and the 2011 Target Income, the Make Good Shares will be canceled.

· No later than the ten business days after the initial closing date, the Company is required to retain Friedman LLP, the Company’s independent registered accounting firm, to audit the consolidated financial statements of the Company and its subsidiaries for the nine-month period ended September 30, 2010.   

· No later than the ten business days after the initial closing date, the Company is required to  retain KPMG Beijing to attest to management’s assessment of its internal controls as of December 31, 2010 as required by Section 404 of the Sarbanes-Oxley Act of 2002.

· No later than the five (5) business days after the initial closing date, the Company is required to obtain (i) D & O insurance with coverage in the amount to be determined by the lead investor from Marsh Brokers (Hong Kong) Limited and (ii) prospectus liability insurance in the amount to be determined by the lead investor.

Registration Rights Agreement 

In connection with the Securities Purchase Agreement, the Company entered into a registration rights agreement with the investors on September 10, 2010 (the “Registration Rights Agreement”) which requires the Company to file with the SEC a "resale" registration statement providing for the resale of all of the Shares (and the Make Good Shares) for an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act of 1933, as amended.

The Company has agreed, among other things, to prepare and file an initial registration statement within 45 days of the initial closing date to register for resale all of the Shares and to cause that registration statement to be declared effective by the earlier of (i) 220 days after the initial closing date, or (ii) the fifth trading day following the day the Company receives notice from the SEC that the initial registration statement will not be reviewed or is no longer subject to further review and comments.

The Company has also agreed to file additional registration statements to cover all of the remaining registrable securities (or such lesser number as the SEC deems appropriate) if any registrable securities could not be registered in the initial registration statement, bythe 15th day following the date is able to effect the registration of such securities in accordance with any SEC restrictions. The Company has also agreed to file additional registration statements to cover all of the Make Good Shares within 45 days of the delivery of any of the Make Good Shares to the investors. 

The failure of the Company to meet this schedule and other timetables provided in the Registration Rights Agreement could result in the imposition of liquidated damages.  In no event will the Company be liable for liquidated damages in excess of 0.5% of the aggregate investment amount of the investors in any single month and the maximum aggregate liquidated damages payable to an investor is capped at ten percent (10%) of the purchase price paid by the investor.  No liquidated damages shall accrue on or as to any registrable securities which the SEC has requested (due to the application of Rule 415) the Company to remove from the registration statement as and the required effectiveness date for such securities will be tolled until such time as the Company is able to effect the registration of those se curities in accordance with any SEC restrictions.

Item 3.02     Unregistered Sales of Equity Securities

Reference is made to Item 1.01 for information relating to the issuance of securities pursuant to the Securities Purchase Agreement. The securities to be issued in this transaction are being issued as private placement exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Act”), provided by Section 4(2) of the Act, Regulation D and/or Regulation S promulgated thereunder.

Item 9.01     Financial Statements and Exhibits

Exhibit No.	Description of Exhibit
10.1.	Securities Purchase Agreement dated as of September 10, 2010 by and among the Company and the investors named therein.
10.2	Registration Rights Agreement dated as of September 10, 2010 by and among the Company and the investors named therein.
10.3	Closing Escrow Agreement dated as of September 10, 2010 by and between the Company, the investors named therein and Guzov Ofsink LLC, as escrow agent.
10.4	Securities Escrow Agreement dated as of September 10, 2010 by and between the Company, the investors named therein and Guzov Ofsink, LLC, as escrow agent.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 16, 2010
China Golf Group, Inc.
By:	/s/ Ye Bi
	Ye Bi
	Chief Executive Officer

EX-10.1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

BETWEEN

CHINA GOLF  GROUP, INC.

AND

THE INVESTORS NAMED HEREIN

DATED

September 10, 2010

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of the 10th day of September, 2010 between China Golf Group, Inc., a Delaware corporation (the “Company”), and the investors named on the signature page of this Agreement (together, the “Investors” and each an “Investor”).

RECITALS:

WHEREAS, the Investors wish to purchase from the Company, upon the terms and subject to the conditions of this Agreement, for the Purchase Price (as hereinafter defined), up to an aggregate of up to Five Million Six Hundred Thousand (5,600,000) shares of common stock, par value $.001 per share (“Common Stock”).

WHEREAS, each Investor is purchasing the Common Stock in the amounts set forth in Schedule A of this Agreement;

WHEREAS, the parties intend to memorialize the terms on which the Company will sell to the Investors and the Investors will purchase the Common Stock;

NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby conclusively acknowledged, the parties hereto, intending to be legally bound, agree as follows:

Article 1

INCORPORATION BY REFERENCE AND DEFINITIONS

1.1           Incorporation by Reference.  The foregoing recitals and the Exhibits and Schedules attached hereto and referred to herein, are hereby acknowledged to be true and accurate, and are incorporated herein by this reference.

1.2           Supersedes Other Agreements.  This Agreement, to the extent that it is inconsistent with any other instrument or understanding among the parties, shall supersede such instrument or understanding to the fullest extent permitted by law.

1.3           Certain Definitions. For purposes of this Agreement, the following capitalized terms shall have the following meanings (all capitalized terms used in this Agreement that are not defined in this Article 1 shall have the meanings set forth elsewhere in this Agreement):

1.3.1              “1933 Act” means the Securities Act of 1933, as amended.

1.3.2              “1934 Act” means the Securities Exchange Act of 1934, as amended.

1.3.3              “Affiliate” means a Person or Persons directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with the Person(s) in question.  The term “control,” as used in the immediately preceding sentence, means, with respect to a Person that is a corporation, the right to exercise, directly or indirectly,  more than 50% of the voting rights attributable to the shares of such controlled corporation and, with respect to a Person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or poli cies of such controlled Person.

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1.3.4              “Board of Directors” means the Board of Directors of the Company

1.3.5              “Bylaws” means the Bylaws of the Company, as the same may be amended from time to time.

1.3.6              “Certificate of Incorporation” means the Certificate of Incorporation of the Company, as the same may be amended from time to time.

1.3.7              “Closing”means the consummation of the transactions contemplated by this Agreement, all of which transactions shall be consummated contemporaneously with the Closing.

1.3.8              “Closing Date” means the dates on which each Closing shall occur.

1.3.9              “Closing Escrow Agreement” shall mean the agreement between the Company, the Investors and the Escrow Agent pursuant to which monies and securities are deposited into escrow to be disbursed at the Closing.  The Closing Escrow Agreement shall be in substantially the form of Exhibit B to this Agreement.

1.3.10              “Common Stock” means the Company’s common stock, par value $.001 per share.

1.3.11              “Company’s Governing Documents” means the Certificate of Incorporation and Bylaws.

1.3.12              “Delaware  Law” shall mean the Delaware General Business Corporation Law.

1.3.13              “Escrow Agent” means  Guzov Ofsink  LLC.

1.3.14              “Exempt Issuance”  means the issuance of (a) shares of Common Stock or options (not to exceed 5% of the shares of Common Stock outstanding on the date hereof) to employees, officers, directors of and consultants (other than consultants whose services relate to the raising of funds) of the Company pursuant to any stock or option plan that was or may be adopted by (i) a majority of independent members of the Board of Directors or (ii) a majority of the members of a committee of independent directors established for compensatory purposes, (b) securities issued pursuant to the Registration Rights Agreement, if any, and (c) securit ies issued upon the exercise or conversion of  any other options, warrants or convertible securities which are outstanding  on the date hereof.

1.3.15              “GAAP” means United States generally accepted accounting principles consistently applied.

1.3.16              “Lead Investor” means Alpine Venture Associates, LLC.

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1.3.17              “Make Good Escrow Shares” means 2,000,000 shares of Common Stock.

1.3.18              “Material Adverse Effect” means any adverse effect on the business, operations, properties or financial condition of the Company or any of its Subsidiaries that is material and adverse to the Company and its Subsidiaries taken as a whole and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company or any Subsidiary to perform any of its material obligations under this Agreement, or the Registration Rights Agreement or to perform its obligations under any other material agreement.

1.3.19              “Person” means an individual, partnership, firm, limited liability company, trust, joint venture, association, corporation, or any other legal entity.

1.3.20              “Net Income” means net income determined in accordance with GAAP plus any cash or non-cash charges relating to the transaction contemplated by the Transaction Documents (including, without limitation, any charges for derivative instruments)

1.3.21               “Purchase Price” means an aggregate of up to Seven Million Dollars ($7,000,000) to be paid by the Investors to the Company for the Common Stock (or $1.25 per share of Common Stock).

1.3.22              “Registration Rights Agreement” means the registration rights agreement between the Investors and the Company in substantially the form of Exhibit D to this Agreement.

1.3.23              “Registration Statement” means the registration statement under the 1933 Act to be filed with the SEC for the registration of the Shares pursuant to the Registration Rights Agreement.

1.3.24              “Restricted Stockholders” shall have the meaning set forth in Section 6.13 of this Agreement.  Any lockups

1.3.25              “Restriction Termination Date” shall mean (i) the date on which the Investors shall have sold the shares of Common Stock acquired under this Agreement in the public market or (ii) two years from the date of the initial Closing, whichever shall first occur.

1.3.26              “Securities Escrow Agreement” shall mean the agreement between the Company, the Investors and the Escrow Agent pursuant to which securities are deposited into escrow to be held as provided in Section 6 of this Agreement.  The Securities Escrow Agreement shall be in substantially the form of Exhibit C to this Agreement.

1.3.27              “SEC” means the Securities and Exchange Commission.

1.3.28              “SEC Documents” means, at any given time, the Company’s latest Form 10-K and all Forms 10-Q and 8-K and all proxy statements or information statements filed between the date the most recent Form 10-K was filed and the date as to which a determination is being made.

1.3.29              “Subsidiary” means an entity in which the Company and/or one or more other Subsidiaries directly or indirectly own either 50% of the voting rights or 50% of the equity interests.

SECURITIES PURCHASE AGREEMENT BETWEEN

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1.3.30              “Transaction Documents” means this Agreement, all Schedules and Exhibits attached hereto, the Registration Rights Agreement, the Closing Escrow Agreement, the Securities Escrow Agreement and all other documents and instruments to be executed and delivered by the parties in order to consummate the transactions contemplated hereby.

1.4           All references in this Agreement to “herein” or words of like effect, when referring to preamble, recitals, article and section numbers, schedules and exhibits shall refer to this Agreement unless otherwise stated.

Article 2

SALE AND PURCHASE OF SECURITIES; PURCHASE PRICE

2.1           Sale of Securities.

2.1.1              Upon the terms and subject to the conditions set forth herein, and in accordance with applicable law, the Company agrees to sell to each of the Investors, and each Investor severally agrees to purchase from the Company, on each Closing Date, the number of Common Stock set forth after the Investor’s name on Schedule A set forth for the portion of the Purchase Price set forth in Schedule A.  At or prior to each Closing each Investor shall wire the Investor’s portion of the Purchase Price to the Escrow Agent, who shall release the Purchase Price to the Company upon receipt of instructions from the Lead Investor and the Company as provided in the Escrow Agreement.  The Company shall cause the Common Stoc k to be issued to the Investors prior to the release of the Purchase Price to the Company by the Escrow Agent pursuant to the terms of the Closing Escrow Agreement.

Article 3

CLOSING DATE AND DELIVERIES AT CLOSING

3.1           Closing Date.   The initial closing shall occur on or before August 17, 2010 or on such other date and at such other place as may be mutually agreed by the parties (the “Initial Closing”) and shall result in gross proceeds of at least $1,000,000.   The Investors and the Company acknowledge and agree that the sale of shares of  Common Stock pursuant to this Agreement may occur at one or more  closings which shall oc cur no later than September 15, 2010 (each referred to herein as a “Closing” and each a “Closing Date”) which date may by extend by mutual consent of the Company and the Lead Investor.  Each Closing, unless expressly determined otherwise, shall be held at the offices of Guzov Ofsink, LLC, 600 Madison Avenue, New York,  New York 10022, at 2:00 P.M. local time.

3.2           Deliveries by the Company.  In addition to and without limiting any other provision of this Agreement, the Company agrees to deliver, or cause to be delivered, the following:

(a)      At or prior to Closing, an executed Agreement with all Exhibits and Schedules attached hereto;

(b)      At each Closing, shares of Common Stock  in the names of the Investors in the numbers set forth in Schedule A to this Agreement;

SECURITIES PURCHASE AGREEMENT BETWEEN

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(c)      The executed Registration Rights Agreement;

(d)      The executed Closing Escrow Agreement and Securities Escrow Agreement;

(e)      Certifications in form and substance acceptable to the Company and the Investors from any and all brokers or agents involved in the transactions contemplated hereby as to the amount of commission or compensation payable to such broker or agent as a result of the consummation of the transactions contemplated hereby and from the Company or Investor, as appropriate, to the effect that reasonable reserves for any other commissions or compensation that may be claimed by any broker or agent have been set aside;

(f)      Evidence of approval by the Board of Directors of the Transaction Documents and the transactions contemplated hereby;

(g)      Executed disbursement instructions pursuant to the Closing Escrow Agreement;

3.3           Deliveries by Investors.  In addition to and without limiting any other provision of this Agreement, each Investor agrees to deliver, or cause to be delivered, to the Escrow Agent under the Closing Escrow Agreement, the following:

(a)      The Investor’s portion of the Purchase Price;

(b)      The  executed Agreement with all Exhibits and Schedules attached hereto;

(c)      The executed Registration Rights Agreement;

(d)      The executed Closing Escrow Agreement and Securities Escrow Agreement;

(e)      The executed disbursement instructions pursuant to the Closing Escrow Agreement; and

(f)      Such other documents or certificates as shall be reasonably requested by the Company or its counsel.

3.4           Further Assurances.  The Company and each Investor shall, upon request, on or after each Closing Date, cooperate with each other (specifically, the Company shall cooperate with the Investors, and each Investor shall cooperate with the Company) by furnishing any additional information, executing and delivering any additional documents and/or other instruments and doing any and all such things as may be reasonably required by the parties or their counsel to consummate or otherwise implement the transactions contemplated by this Agreement.

3.5           Waiver.  An Investor may waive any of the requirements of Section 3.2 of this Agreement, and the Company may waive any of the provisions of Section 3.3 of this Agreement.  The Investors may also waive any of the requirements of the Company under the Closing Escrow Agreement.

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Article 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investors as of the date hereof and as of Closing Date (which warranties and representations shall survive the Closing regardless of any examinations, inspections, audits and other investigations the Investors have heretofore made or may hereinafter make with respect to such warranties and representations) as set forth below.   The Investors are entering into this Agreement in reliance on the representations and warranties set forth in this Agreement and no reliance is being placed on oral representations, if any, that may have been made prior to the execution and delivery of this Agreement.

4.1           Organization and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly qualified to do business in any other jurisdiction where the nature of the businesses conducted by it or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified will not have a Material Adverse Effect o n the business, operations, properties, assets, financial condition or results of operation of the Company and its Subsidiaries taken as a whole. The Subsidiaries are set forth on Schedule 4.l.1 to this Agreement.

4.2           Company’s Governing Documents.  Complete and accurate copies of the Company’s Governing Documents (a) have been provided to the Investors and (b) have been filed with the SEC in accordance with the regulations of the SEC and (c) will be in full force and effect on the Closing Date.

4.3           Capitalization.

4.3.1              The authorized and outstanding capital stock of the Company as of the date of this Agreement and as adjusted to reflect the issuance and sale of the Common Stock pursuant to this Agreement is set forth in Schedule 4.3.l to this Agreement.  Schedule 4.3.1 also lists all shares issuable pursuant to employment, consulting and other services agreements, acquisition agreements, options and equity-based incentive plans, debt securities, convertible securities, warrants, financing or business relationships as well as each agreement, plan, arrangement or understanding pursuant to which any shares of any class of capital stock may be issued, a copy of each of which has been provided to the Investors.

4.3.2              All shares of capital stock described above to be issued have been duly authorized and when issued, will be validly issued, fully paid and non-assessable and free of preemptive rights.

4.3.3              Except as set forth in Schedule 4.3.1, as of the date hereof, there are no outstanding options, warrants, rights to subscribe for, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of any class of capital stock of the Company, or agreements, understandings or arrangements to which the Company is a party, or by which the Company is or may be bound, to issue additional shares of its capital stock or options, warrants, scrip or rights to subscribe for, calls or commitment of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of any class of its capital stock.  The Company agrees to inform the Investors in writing of any additional warrants of other awards granted prior to the Closing Date.

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4.4           Authority.  The Company has all requisite corporate power and authority to execute and deliver each of the Transaction Documents to which the Company is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of each of the Transaction Documents to which the Company is a party, have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company is necessary to authorize this Agreement or to consummate the transactions contemplated hereby and t hereby except as disclosed in this Agreement.  This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency and other laws of general application affecting the enforcement of creditors’ rights and except that any granting of equitable relief is in the discretion of the court.

4.5           No Conflict; Required Filings and Consents. Neither the issuance of the Common Stock, nor the execution and delivery of this Agreement and other Transaction Documents by the Company and the performance by the Company of its obligations hereunder and thereunder will:  (i) conflict with or violate the Company’s or any Subsidiary’s Governing Instruments; (ii) conflict with, breach or violate any federal, state, foreign or local law, statute, ordinance, rule, regulation, order, judgment or decree (collectively, “Laws”) in effect as of the date of this Agreement and applicable to the Company or any Subsidiary; or (iii) result in any breach of, constitute a default (or an event that with notice or lapse of time or both would become a default) under, give to any other entity any right of termination, amendment, acceleration or cancellation of, require payment under, or result  in the creation of a lien or encumbrance on any of the properties or assets of the Company or any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of their respective properties or assets is bound, other than (with respect to clauses (i), (ii) and (iii) above) such violations, conflicts, breaches, defaults, terminations, accelerations or creations of liens that would not, in the aggregate, have a Material Adverse Effect.

4.6           Report and Financial Statements.  The Company’s Annual Report on Form 10-K for the year ended December 31, 2009 filed with the SEC contains the audited consolidated financial statements of the Company and its Subsidiaries, certified by Friedman LLP, the Company’s independent registered accounting firm.  Each of the consolidated balance sheets contained in the Form 10-K fairly presents the financial position of the Company, as of its date, and each of the consolidated statements of income, stockholders’ equity and cash flows (including any related notes and schedules thereto) fa irly presents the results of operations, cash flows and changes in stockholders’ equity, as the case may be, of the Company and its Subsidiaries for the periods to which they relate, in each case in accordance with GAAP consistently applied during the periods involved.  The books and records of the Company and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual transactions.  The Company has not received any letters of comments from the SEC relating to any filing made by the Company with the SEC which has not been addressed by an amended filing, and each amended filing responds in all material respects to the questions raised by the staff of the SEC.

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4.7           Compliance with Applicable Laws.  Neither the Company nor any Subsidiary is in violation of, or, to the knowledge of the Company is under investigation with respect to, or has been given notice or has been charged with the violation of, any Law of a governmental agency, except for violations which individually or in the aggregate do not have a Material Adverse Effect.

4.8           Brokers.  Except as set forth on Schedule 4.8, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

4.9           SEC Documents. The Investors acknowledge that the Company is a publicly held company and has made available to the Investors upon request true and complete copies of any requested SEC Documents.  The Company has registered its Common Stock pursuant to Section 12(d) of the 1934 Act.   The Company has not provided to the Investors any information that, according to applicable law, rule or regulation, should have been disclosed publicly prior to the date hereof by the Company, but which has not been so disclosed. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act, and rules and regulations of the SEC promulgated thereunder and the SEC Documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

4.10           Litigation.  To the knowledge of the Company, no litigation, claim, or other proceeding before any court or governmental agency is pending or to the knowledge of the Company, threatened against the Company, the prosecution or outcome of which may have a Material Adverse Effect.

4.11           Employment Agreements.  Except as disclosed in the Company’s Form 8-K filed on July 9, 2010, the Company does not have any agreement or understanding with any officer or director, and there has been no material change in the compensation of any officer and director from that shown in said Form 8-K.

4.12           Exemption from Registration. Subject to the accuracy of the Investors’ representations in Article V of this Agreement, except as required pursuant to the Registration Rights Agreement, the sale of the Common Stock will not require registration under the 1933 Act.  When issued the shares of Common Stock will be duly and validly authorized and issued, fully paid, and non-assessable.  The Company is issuing the Common Stock in accordance with and in reliance upon the exemption from registration afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(2) of the 1933 Act.

4.13           No General Solicitation or Advertising in Regard to this Transaction.  Neither the Company nor any of its Affiliates nor, to the knowledge of the Company, any Person acting on its or their behalf (i) has conducted or will conduct any general solicitation (as that term is used in Rule 502(c) of Regulation D as promulgated by the SEC under the 1933 Act) or general advertising with respect to the sale of the Common Stock , or (ii) made any offers or sales of any security or solicited any offers to buy any security under any circumstances that would require registration of the Common Stock under the 1933 Act , except as required herein.

SECURITIES PURCHASE AGREEMENT BETWEEN

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4.14           No Material Adverse Effect.  Since December 31, 2009, no event or circumstance resulting in a Material Adverse Effect has occurred or exists with respect to the Company.  Since December 31, 2009, no event or circumstance has occurred or exists with respect to the Company or its businesses, properties, prospects, operations or financial condition, that, under any applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company but which has not been so publicly announced or disclosed in writing to the Investor.

4.15           Material Non-Public Information.  The Company has not disclosed to the Investors any material non-public information that (i) if disclosed, would reasonably be expected to have a material effect on the price of the Common Stock or (ii) according to applicable law, rule or regulation, should have been disclosed publicly by the Company prior to the date hereof but which has not been so disclosed.

4.16           Internal Controls And Procedures.  The Company and its Subsidiaries maintain books and records and internal accounting controls which provide reasonable assurance that (i) all transactions to which the Company or any Subsidiary is a party or by which their respective properties are bound are executed with management’s authorization; (ii) the recorded accounting of the Company’s consolidated assets is compared with existing assets at regular intervals; (iii) access to the Company’s consolidated assets is permitted only in accordance with management’s authorization; and (iv) all tra nsactions to which the Company or any Subsidiary is a party or by which any of their respective properties are bound are recorded as necessary to permit preparation of the financial statements of the Company in accordance with GAAP.

4.17           Full Disclosure.   No representation or warranty made by the Company in this Agreement and no certificate or document furnished or to be furnished to the Investors pursuant to this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.

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REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

Each Investor severally and not jointly represents and warrants to the Company that:

5.1           Concerning the Investors.  The state in which any offer to purchase shares hereunder was made or accepted by any Investor is the state shown as such Investor’s address. The Investor was not formed for the purpose of investing solely in the Common Stock.

5.2           Authorization and Power.  The Investor has the requisite power and authority to enter into and perform this Agreement and to purchase the Common Stock being sold to it hereunder. The execution, delivery and performance of this Agreement by the Investor and the consummation by the Investor of the transactions contemplated hereby have been duly authorized by all necessary corporate or partnership action.  This Agreement, the Registration Rights Agreement, the Closing Escrow Agreement, the Securities Escrow Agreement and the other Transaction Documents to which they are parties have been duly executed and delivered by each such Investor and at the Closi ng shall constitute valid and binding obligations of each such Investor enforceable against each such Investor in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency and other laws of general application affecting the enforcement of creditors’ rights and except that any granting of equitable relief is in the discretion of the court.

5.3           No Conflicts.  The execution, delivery and performance of this Agreement, the Registration Rights Agreement, the Closing Escrow Agreement, the Securities Escrow Agreement and the other Transaction Documents to which each such Investor is a party, and the consummation by such Investor of the transactions contemplated hereby or thereby or relating hereto or thereto do not and will not (i) result in a violation of such Investor’s charter documents or bylaws where appropriate or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument to which such Investor is a party, or result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to such Investor or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have a Material Adverse Effect on such Investor).  The Investor is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of such Investor’s obligations under this Agreement the Registration Rights Agreement, the Closing Escrow Agreement, the Securities Escrow Agreement and the other Transaction Documents to which each such Investor is a party, or to purchase the Common Stock from the Company in accordance with the terms hereof.

5.4           Financial Risks.   Such Investor acknowledges that such Investor is able to bear the financial risks associated with an investment in the Common Stock being purchased by such Investor from the Company and that it has been given full access to such records of the Company and its Subsidiaries and to the officers of the Company and its Subsidiaries as it has deemed necessary or appropriate to conduct its due diligence investigation. Such Investor is capable of evaluating the risks and merits of an investment in the securities being purchased by the Investor from the Company by virtue of its experience as an investor and its knowledge, experience, and sophist ication in financial and business matters and the Investor is capable of bearing the entire loss of its investment in the securities being purchased by the Investor from the Company.

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5.5           Accredited Investor.  The Investor is (i) an “accredited investor” as that term is defined in Rule 501 of Regulation D promulgated under the 1933 Act by reason of Rule 501(a)(3) and (6), (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its affiliates or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and the related documents, and (iv ) able to afford the entire loss of its investment in the securities being purchased by the Investor from the Company.

5.6           Brokers.  No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Investor.  Such Investor understands that any obligations under agreements or arrangements with brokers disclosed in Schedule 4.8 are obligations of the Company.

5.7           Knowledge of Company.  Such Investor and such Investor’s advisors, if any, have been, upon request, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the securities being purchased by such Investor from the Company.  Such Investor and such Investor’s advisors, if any, have been afforded the opportunity to ask questions of the Company and have received complete and satisfactory answers to any such inquiries.

5.8           Risk Factors.  Each Investor understands that such Investor’s investment in the securities being purchased by such Investor from the Company involves a high degree of risk.  Such Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the securities being purchased by the Investor from the Company. Such Investor warrants that such Investor is able to bear the complete loss of such Investor’s investment in the securities being purchased by the Investor from the Company.

5.9           Full Disclosure. No representation or warranty made by such Investor in this Agreement and no certificate or document furnished or to be furnished to the Company pursuant to this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. Except as set forth or referred to in this Agreement, Investor does not have any agreement or understanding with any person relating to acquiring, holding, voting or disposing of any equity securities of the Company.

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Article 6

COVENANTS OF THE COMPANY

6.1           Registration Rights.  The Company shall cause the Registration Rights Agreement to remain in full force and effect according to the provisions of the Registration Rights Agreement and the Company shall comply in all material respects with the terms thereof.  Except as set forth on Schedule 6.1, the Company does not have any agreement or obligation which would enable any Person to include securities in any registration statement required to be filed on behalf of the Investors pursuant to the Registration Rights Agreement and will not take any action which will give any Person any right to include securities in any such registration statement.  Except as set forth on Schedule 6.1, no Person has any demand or piggyback registration right with respect to any securities of the Company.  The Company will not file any registration statement covering any shares of Common Stock issuable to any officers, directors, Affiliates of or consultants to the Company until the earlier of (a) eighteen  (18) months from the initial Closing Date or (b) the Restriction Termination Date  provided, however, that the Company may file a registration statement on Form S-8 for shares issued or issuable pursuant to employee stock option plans for employees who are not officers, directors or Affiliates of the Company

6.2           Compliance with Laws. The Company hereby agrees to comply in all material respects with the Company’s reporting, filing and other obligations under the securities Laws.

6.3           Exchange Act Registration. The Company will continue its obligation to report to the SEC under Section 12 of the 1934 Act and will use its best efforts to comply in all material respects with its reporting and filing obligations under the 1934 Act, and will not take any action or file any document (whether or not permitted by the 1934 Act or the rules thereunder) to terminate or suspend any such registration or to terminate or suspend its reporting and filing obligations under the 1934 until the Investors have disposed of all of their shares.

6.4           Corporate Existence; No Conflicting Agreements.  The Company will take all steps necessary to preserve and continue the corporate existence of the Company.  The Company shall not enter into any agreement, the terms of which agreement would restrict or impair the right or ability of the Company to perform any of its obligations under this Agreement or any of the other agreements attached as exhibits hereto.

6.5           Underwritten Public Offering; Listing on Principal Exchange.   The Company shall use its best efforts to consummate an underwritten public offering of its Common Stock no later than the first anniversary of the Initial Closing.   In connection with the public offering the Company shall obtain a listing on the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (a “Principal Market”).  In the event that the Company is unable to complete an underwritten public off ering, it shall proceed with a listing of its Common Stock on a Principal Market upon eligibility to do so.

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6.6           No Issuance of Common Stock.    Except in connection with an initial public offering and issuances contemplated by this financing, until the earlier of (a) three years from the initial Closing Date or (b) the Restriction Termination Date, the Company will not issue any Common Stock or any securities into Common Stock.

6.7           Audit. No later than the ten business days after the initial Closing Date, the Company shall retain Friedman LLP, the Company’s independent registered accounting firm to audit consolidated financial statements of the Company and its Subsidiaries for the nine month period ended September 30, 2010 which audit will be complete by December 31, 2010.  

6.8           Sarbanes-Oxley Act Section 404 Attestation.No later than the 10 business days after the initial Closing Date, the Company shall retain KPMG Beijing to attest to management’s assessment of its internal controls as of December 31, 2010 as required by Section 404 of the Sarbanes-Oxley Act of 2002.

6.9           D & O and Prospectus Liability Insurance.  No later than the five (5) business days after the Closing Date, the Company shall obtain (i) D & O Insurance with coverage in the amount to be determined by the Lead Investor from Marsh Brokers (Hong Kong) Limited and (ii) prospectus liability insurance in the amount to be determined by the Lead Investor.

6.10           Use of Proceeds; Escrow of Portion of Proceeds. The Company will use the net proceeds from the sale of the Common Stock, after payment of legal fees and other closing costs, for working capital.   The Company agrees that $2,000,000 of the proceeds of this financing will remain in escrow to be used to pay for legal, accounting, auditing and investor relations services, key man life insurance and D&O insurance and to pay for the shell. The Company shall instruct the Escrow Agent to disburse up to $2,000,000 of the proceeds of the sale of the Common Stock to be utilized to pay the aforementioned parties.  

6.11           Right of First Refusal.

In the event that the Company seeks to raise additional funds through a private placement of its securities (a “Proposed Financing”), other than Exempt Issuances as to which this section does not apply, for a period of eighteen months after the initial Closing, each Investor shall have the right to participate in any subsequent funding by the Company of the offering price on a pro rata basis.  This right is personal to the Investors and is not transferable, whether in connection with the sale of stock or otherwise. The terms on which the Investors shall purchase securities pursuant to the Proposed Financing shall be the same as such securities are purchased by other investo rs.  The Company shall give the Investors the opportunity to participate in the offering by giving the Investors not less than ten (10) days notice setting forth the terms of the Proposed Financing.  In the event that the terms of the Proposed Financing are changed in a manner which is more favorable to the potential investor, the Company shall provide the Investors, at the same time as the notice is provided to the other potential investors, with a new ten (10) day notice setting forth the revised terms that are provided to the other potential investors.

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6.12           Price Adjustment.   For a period of eighteen months after the Closing, if the Company closes on the sale or issuance of Common Stock at a sale price, or warrants, options, convertible debt or equity securities with a exercise or conversion price per share which is less than the purchase price per share of Common Stock then the Investors will be issued additional shares of Common Stock by application of the weighted average method.  For purpose of determining the exercise price of warrants issued by the Company, the purchase price, if any, paid per share for the warrants shall be added to t he exercise price of the warrants.

6.13           Insider Selling.  No Restricted Stockholders (as defined below) may sell any shares of Common Stock in the public market prior to the earlier of 24 months from the initial Closing Date or the Restriction Termination Date; provided, however, that if any Restricted Stockholder who is a director (and not an executive officer of the Company) shall cease to be a director, such Person may sell not more than a total of 50,000 shares of Common Stock in the public market during the period set forth in this sentence.  “Restricted Stockholders” shall mean any Person who is an officer, director or Affiliate of the Company on the date hereof or who becomes an officer or director of the Company subsequent to the initial Closing Date.  Without limiting the generality of the foregoing, the Restricted Stockholders shall not, directly or indirectly, offer to sell, grant an option for the purchase or sale of, transfer, pledge assign, hypothecate, distribute or otherwise encumber or dispose of any securities in the Company in a transaction which is not in the public market unless the transferee agrees to be bound by the provisions of this Section 6.14.The Company shall require any newly elected officer or director to agree to the restriction set forth in this Section 6.14.  The Lead I nvestor and the Investors shall not be considered Restricted Stockholders.

6.14           Employment and Consulting Contracts. For three years after the initial Closing, the Company shall obtain approval from the Board of Directors that any awards other than salary are customary, appropriate and reasonable for any officer, director or consultants whose compensation is more than $100,000 per annum.  This Section 6.15 does not apply to attorneys, accountants and other persons who provide professional services to the Company.

6.15           Deliveries of Make Good Escrow Shares based on Net Income.

6.15.1                       The Company hereby represents to the Investors that the Company’s Net Income for the fiscal year ending December 31, 2010 shall be at least $14,810,000 (the “2010 Target Number”).   As the Investors are relying on such expected profit in making their investment hereunder, and in order to attempt to make whole the Investors in the event these numbers are not met,  the Company shall deliver to the Escrow Agent at the Closing the Make Good Escrow Shares.

6.15.2                        In the event the Company’s Net Income for the fiscal year ended December 31, 2010 is less than the 2010 Target Number, the “2010 Percentage Shortfall” shall be computed by dividing the amount of the shortfall by the 2010 Target Number. Thus, for example, if the Company had Net Income for the fiscal year ending December 31, 2010 of $10,000,000 (representing a shortfall of $4,810,000 million), the 2010 Percentage Shortfall would be 32.47% ($4,810,000 million divided by $14,810,000).

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6.15.3                        If the 2010 Percentage Shortfall is equal to or greater than 10%, then the Escrow Agent shall deliver the Make Good Escrow Shares to the Investors (in the ratio of their initial purchase of Common Stock) as follows:

6.15.4                        the Investors shall receive 50,000 shares of Common Stock for each one percent percentage of the 2010 Percentage Shortfall up to a maximum of  2,000,000 shares.  For example if the 2010 Percentage Shortfall was 34.47% the Investors would get 1,723,500 shares (i.e 34.47 times 50,000)

6.15.5                        In the event the Net Income for the year ended December 31, 2011 is less than $25,000,000 (the “2011 Target Number”) the “2011 Percentage Shortfall” shall be computed by dividing the amount of the shortfall by the 2011 Target Number.

6.15.6                        If the 2011 Percentage Shortfall is equal to or greater than ten percent (10%), then the Escrow Agent shall deliver the Make Good Escrow Shares to the Investors (in the ratio of their initial purchase of Common Stock) as follows: the Investors shall receive 50,000 shares of Common Stock for each one percent percentage of the 2011 Percentage Shortfall up to a maximum of  2,000,000 shares less whatever shares were paid out as a result of any 2010 Percentage Shortfall.

6.15.7                        The distribution of shares of Common Stock pursuant to this Section shall be made within five (5) business days after the Company files its Form 10-K for December 31, 2010 with the SEC and for December 31, 2011, as the case may be.

6.15.8                        The parties understand that, pursuant to the Securities Escrow Agreement, the Escrow Agent will not make any deliveries of shares without the signed written instructions from the Company and the Investors.

6.16           No Outside Interests.  The Company’s chairman, chief executive officer and chief financial officer will devote their full time and attention to the business of the Company and shall not have any business interests or activities other than as chairman, chief executive officer or chief financial officer, as the case may be, except that he or she may devote time, which shall not be material and which shall not interfere with his or her duties as the Company’s chairman, chief executive officer or chief financial officer, as the case may be, to personal passive investments and charitable and community activities.

6.17           Related Party Transactions.   For so long as that the Investors continue to own in the aggregate at least 25% of the Common Stock issued hereunder, all transactions with “related persons” (as defined by Item 404 of Regulation S-K) shall require the approval of the Board of Directors comprised of a majority of independent directors.

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Article 7

COVENANTS OF THE INVESTOR

Each Investor, severally and not jointly, covenants and agrees with the Company as follows:

 7.1          Compliance with Law.  Each Investor’s trading activities with respect to Company’s Common Stock will be in compliance with all applicable state and federal securities laws, rules and regulations and rules and regulations of any public market on which the Common Stock is listed.

7.2           Limitation on Short Sales.  The Investor and its affiliates shall not engage in short sales of the  Common Stock.

7.2           Transfer Restrictions.Each Investor acknowledges that (a) the Common Stock have not been registered under the provisions of the 1933 Act, and may not be transferred unless (i) subsequently registered thereunder or (ii) the Investor shall have delivered to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that the Common Stock to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; and (b) any sale of the shares made in reliance on Rule 144 promulgated under the 1933 Act may be made only in accorda nce with the terms of said Rule and further, if said Rule is not applicable, any resale of such securities under circumstances in which the seller, or the person through whom the sale is made, may be deemed to be an underwriter, as that term is used in the 1933 Act, may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder.

7.3           Restrictive Legend.Each Investor acknowledges and agrees that the shares of Common Stock shall bear a restrictive legend and a stop-transfer order may be placed against transfer of any such securities except that the requirement for a restrictive legend shall not apply to shares sold pursuant to a current and effective registration statement or a sale pursuant Rule 144 or any successor rule.

Article 7

CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS

The obligation of the Company to consummate the transactions contemplated hereby shall be subject to the fulfillment, on or prior to Closing Date, of the following conditions:

8.1           No Termination. This Agreement shall not have been terminated pursuant to Article 10 hereof.

8.2           Representations True and Correct. The representations and warranties of the Investors contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as if made on as of the Closing Date.

8.3           Compliance with Covenants.  The Investors shall have performed and complied in all material respects with all covenants, agreements, and conditions required by this Agreement to be performed or complied by them prior to or at the Closing Date.

8.4           No Adverse Proceedings. On the Closing Date, no action or proceeding shall be pending by any public authority or individual or entity before any court or administrative body to restrain, enjoin, or otherwise prevent the consummation of this Agreement or the transactions contemplated hereby or to recover any damages or obtain other relief as a result of the transactions proposed hereby.

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Article 9

CONDITIONS PRECEDENT TO INVESTOR’S OBLIGATIONS

The obligation of the Investors to consummate the transactions contemplated hereby shall be subject to the fulfillment, on or prior to Closing Date unless specified otherwise, of the following conditions:

9.1           No Termination. This Agreement shall not have been terminated pursuant to Article 10 hereof.

9.2           Representations True and Correct. The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as if made on as of the Closing Date.

9.3           Compliance with Covenants. The Company shall have performed and complied in all material respects with all covenants, agreements, and conditions required by this Agreement to be performed or complied by it prior to or at the Closing Date.

9.4           No Adverse Proceedings. On the Closing Date, no action or proceeding shall be pending by any public authority or individual or entity before any court or administrative body to restrain, enjoin, or otherwise prevent the consummation of this Agreement or the transactions contemplated hereby or to recover any damages or obtain other relief as a result of the transactions proposed hereby.

Article 10

TERMINATION, AMENDMENT AND WAIVER

10.1          Termination. This Agreement may be terminated at any time prior to the Closing Date.

10.1.1           by mutual written consent of the Investors and the Company;

10.1.2           by the Company upon a material breach of any representation, warranty, covenant or agreement on the part of any Investor set forth in this Agreement, or by any Investor upon a material breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company or the Investor, respectively, shall have become untrue, in either case such that any of the conditions set forth in Article 8 or Article 9 hereof would not be satisfied (a “Terminating Breach”), and such breach shall, if capable of cure, not have been cured within five (5) business days after receipt by the party in breach of a noti ce from the non-breaching party setting forth in detail the nature of such breach.

10.2           Effect of Termination. Except as otherwise provided herein, in the event of the termination of this Agreement pursuant to Section 10.1 hereof, there shall be no liability on the part of the Company or any Investor or any of their respective officers, directors, agents or other representatives and all rights and obligations of any party hereto shall cease.

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10.3           Amendment. This Agreement may be amended by the parties hereto any time prior to the Closing Date by an instrument in writing signed by the parties hereto.

10.4           Waiver. At any time prior to the Closing Date, the Company or the Investors, as appropriate, may: (a) extend the time for the performance of any of the obligations or other acts of the other party or; (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto which have been made to it or them; or (c) waive compliance with any of the agreements or conditions contained herein for its or their benefit.  Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound thereby.

Article 11

GENERAL PROVISIONS

11.1           Indemnification.

(a)           The Investors agrees to indemnify, defend and hold the Company (following the Closing Date) and its officers and directors harmless against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities or damages, including interest, penalties and reasonable attorney’s fees, that any of them shall incur or suffer, which arise out of or result from any breach of this Agreement by the Investors or failure by the Investors to perform with respect to the representations, warranties or covenants contained in this Agreement or in any exhibit or other instrument furnished or to be furnished under this Agreement.  The indemnification by the Investors shall be limited to $50,000.00.

(b)           The Company agrees to indemnify, defend and hold the Investors (following the Closing Date) harmless against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities or damages, including interest, penalties and reasonable attorney’s fees, that it shall incur or suffer, which arise out of, result from or relate to any breach of this Agreement or failure by the Company to perform with respect to the representations, warranties or covenants contained in this Agreement or in any exhibit or other instrument furnished or to be furnished under this Agreement.

(c)             In no event shall the Company or the Investors be entitled to recover consequential or punitive damages resulting from a breach or violation of this Agreement nor shall any party have any liability hereunder in the event of gross negligence or willful misconduct of the indemnified party.

11.2           Headings. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

11.3           Entire Agreement.  This Agreement (together with the Schedule, Exhibits,  and agreements and documents referred to herein) constitute the entire agreement of the parties and supersedes all prior agreements and undertakings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof.

11.4           Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been given (i) on the date they are delivered if delivered in person; (ii) on the date initially received if delivered by facsimile transmission followed by registered or certified mail confirmation; (iii) on the date delivered by an overnight courier service; or (iv) on the third business day after it is mailed by registered or certified mail, return receipt requested with postage and other fees prepaid as follows:

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If to the Company:

Mr. Tiger Bi, CEO

Chin Golf Group, Inc.

China Merchants Tower, Suite 1503

161 Lujiazui East Road, Shanghai  PRC 20001

E-mail: biye666@hotmail.com

With a copy to:

Guzov Ofsink, LLC

600 Madison

New York, New York 10022

Attention: Darren Ofsink

E-mail: dofsink@go.com

Fax: (212) 688-7273

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If to the Lead Investors:

Alpine Venture Associates, LLC.

15 Church Street

Alpine, New Jersey 07620

Attn: James Hahn

E-mail: James Hahn [JHahn@AsiaAlpha.com]

Fax:

If to the other Investors, at their addresses set forth on Appendix A.

11.6             Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of 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 contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination that any such term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely a s possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

11.7             Binding Effect. All the terms and provisions of this Agreement whether so expressed or not, shall be binding upon, inure to the benefit of, and be enforceable by the parties and their respective administrators, executors, legal representatives, heirs, successors and assignees.

11.8             Preparation of Agreement. This Agreement shall not be construed more strongly against any party regardless of who is responsible for its preparation.  The parties acknowledge each contributed and is equally responsible for its preparation. In resolving any dispute regarding, or construing any provision in, this Agreement, there shall be no presumption made or inference drawn because of the drafting history of the Agreement, or because of the inclusion of a provision not contained in a prior draft or the deletion or modification of a provision contained in a prior draft.

11.9             Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to applicable principles of conflicts of law.

11.10           Jurisdiction; Waiver of Jury Trial. If any action is brought among the parties with respect to this Agreement or otherwise, by way of a claim or counterclaim, the parties agree that in any such action, and on all issues, the parties irrevocably waive their right to a trial by jury. Exclusive jurisdiction and venue for any such action shall be the federal and state courts situated in the City, County and State of New York. In the event suit or action is brought by any party under this Agreement to enforce any of its terms, or in any appeal therefrom, it is ag reed that the prevailing party shall be entitled to reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or appellate court if such party prevails on substantially all issues in dispute.

11.11           Preparation and Filing of Securities and Exchange Commission filings. The Investors shall reasonably assist and cooperate with the Company in the preparation of all filings with the SEC after the Closing Date due after the Closing Date.

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11.12           Further Assurances, Cooperation. Each party shall, upon reasonable request by the other party, execute and deliver any additional documents necessary or desirable to complete the transactions herein pursuant to and in the manner contemplated by this Agreement.  The parties hereto agree to cooperate and use their respective best efforts to consummate the transactions contemplated by this Agreement.

11.13           Survival. The representations, warranties, covenants and agreements made herein shall survive the Closing of the transaction contemplated hereby.

11.14           Third Parties. Except as disclosed in this Agreement, nothing in this Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any persons other than the parties hereto and their respective administrators, executors, legal representatives, heirs, successors and assignees.  Nothing in this Agreement is intended to relieve or discharge the obligation or liability of any third persons to any party to this Agreement, nor shall any provision give any third persons any right of subrogation or action over or against any party to this Agreement.

11.15           Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement herein, nor shall nay single or partial exercise of any such right preclude other or further exercise thereof or of any other right.  All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

11.16           Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. A facsimile transmission of this signed Agreement shall be legal and binding on all parties hereto.

11.17           Authority of Lead Investor.   By signing this Agreement each Investor authorizes the Lead Investor to execute and deliver to the escrow Agent joint written instructions with the Company pursuant to the Closing Escrow Agreement to disburse the escrowed funds in the manner contemplated by this Agreement and the Closing Escrow Agreement.

[SIGNATURES ON FOLLOWING PAGE]

SECURITIES PURCHASE AGREEMENT BETWEEN

CHINA GOLF GROUP, INC. AND THE INVESTORS NAMED HEREIN

PAGE 21

[Signature page of Securities Purchase Agreement]

IN WITNESS WHEREOF, the Investors and the Company have as of the date first written above executed this Agreement.

THE COMPANY:

CHINA GOLF GROUP, INC.

By:	/s/  Ye Bi
	Ye Bi, Chief Executive Officer

INVESTORS:

ALPINE VENTURE ASSOCIATES, LLC

By: 

 

NAME OF  INVESTOR

Print Name:

Sign here if individual:

Sign below if corpation or other entity.

By:
	Name:
	Title:

Schedule A

Name and	Amount of	Number of Shares
Address	Investment	of  Common Stock

Exhibit A

Closing Escrow Agreement

Exhibit B

Securities Escrow Agreement

Exhibit C

Registration Rights Agreement

SCHEDULES TO SECURITIES PURCHASE AGREEMENT

Schedule 4.3.1

Capitalization

Immediately prior to the Closing, the Company was authorized to issue 50,000,000 shares of common stock, par value $.001 per share (the “Common Stock”), with 30,124,577 shares issued and outstanding, and 1,000,000 shares of preferred stock, par value $.001 per share (the “Preferred Stock”), with no share issued and outstanding.

Immediately after the Initial Closing, the Company will have a total of 33,066,569 shares of Common Stock issued and outstanding.

Immediately prior to the Closing, the Company also had warrants to purchase a total of 442, 935 shares of Common Stock issued and outstanding.

Schedule 4.8

Brokers

Goodintend Holdings Limited, a wholly-owned subsidiary of the Company (“Goodintend”), entered into a Finder’s Fee Agreement with SHP Securities, LLC (“SHP”) on January 18, 2010 (the “Finder’s Fee Agreement”), which has terminated on July 30, 2010 pursuant to Section 3 thereof. However, pursuant to Section 3 of the Finder’s Fee Agreement, if Goodintend receives any financing from any investor that is introduced by SHP within 12 months after July 30, 2010, Goodintend shall pay SHP a finder’s fee as provided in Section 2(b) thereof.

Except as disclosed above, there was no agreement or arrangement in effect that entitles a broker, finder or investment banker to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement as of the date of this Agreement.

Schedule 6.1

Registration Rights

None.

EX-10.2

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement") is made and entered into as of September 10, 2010, by and among China Golf Group, Inc., a Delaware corporation (the “Company”), and the investors named on the signature page of this Agreement (each a "Investor" and collectively, the "Investors").

This Agreement is made in connection with the Securities Purchase Agreement, dated as of the date hereof among the Company and the Investors (the "Purchase Agreement").

The Company and the Investors hereby agree as follows:

1.             Definitions.  Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement will have the respective meanings given such terms in the Purchase Agreement.  As used in this Agreement, the following terms have the respective meanings set forth in this Section 1:

“2010 Make Good Shares” means the Make Good Shares, if any, required to be delivered to the Investors with respect to 2010 pursuant to the Make Good Escrow Agreement.

“2010 Delivery Date” means the date on which the 2010 Make Good Shares are required to be delivered.

“2011 Make Good Shares” means the Make Good Shares, if any, required to be delivered to the Investors with respect to 2011 pursuant to the Make Good Escrow Agreement.

“2011 Delivery Date” means the date on which the 2011 Make Good Shares are required to be delivered.

“Advice” has the meaning set forth in Section 6(d).

"Commission Comments"means written commentspertaining solely to Rule 415 which are received by the Company from the Commission to a filed Registration Statement, a copy of which shall have been provided by the Company to the Holders, which either (i) requires the Company to limit the number of Registrab le Securities which may be included therein to a number which is less than the number sought to be included thereon as filed with the Commission or (ii) requires the Company to either exclude Registrable Securities held by specified Holders or deem such Holders to be underwriters with respect to Registrable Securities they seek to include in such Registration Statement.

“Cut Back Shares” has the meaning set forth in Section 2(b).

"Effective Date" means, as to a Registration Statement, the date on which such Registration Statement is first declared effective by the Commission.

“Effectiveness Date” means (a) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the earlier of: (i) the 220th day following the Closing Date and (ii) the fifth Trading Day following the date on which the Company is notified by the Commission that the initial Registration Statement will not be reviewed or is no longer subject to further review and comments; (b) with respect to any additional Registration Statements required to be filed pursuant to Section 2(a), the earlier of: (i) the 90th day following the applicable Filing Date for such addition al Registration Statement(s) and (ii) the fifth Trading Day following the date on which the Company is notified by the Commission that such additional Registration Statement(s) will not be reviewed or is no longer subject to further review; (c) with respect to any additional Registration Statements required to be filed solely due to SEC Restrictions, the earlier of: (i) the 90th day following the applicable Restriction Termination Date and (ii) the fifth Trading Day following the date on which the Company is notified by the Commission that such Registration Statement will not be reviewed or is no longer subject to further review and comments; (d) with respect to a Registration Statement required to be filed under Section 2(c), the earlier of:  (i) the 60th day following the date on which the Company becomes eligible to utilize Form S-3 to regi ster the resale of Common Stock; provided, that, if the Commission reviews and has written comments to such filed Registration Statement that would require the filing of a pre-effective amendment thereto with the Commission, then the Effectiveness Date under this clause (d)(i) shall be the 90th day following the date on which the Company becomes eligible to utilize Form S-3 to register the resale of Common Stock, and (ii) the fifth Trading Day following the date on which the Company is notified by the Commission that the Registration Statement will not be reviewed or is no longer subject to further review and comments; (e) with respect to a Registration Statement required to be filed under Section 2(d), the earlier of: (i) the 90th day following the 2008 Delivery Date; provided, that, if the Commission reviews and has written comments to such filed Registration Statement that would require the filing of a pre-effective amendment thereto with the Commission, then the Effectiveness Date under this clause (e)(i) shall be the 120th day following the 2010 Delivery Date, and (ii) the fifth Trading Day following the date on which the Company is notified by the Commission that the Registration Statement will not be reviewed or is no longer subject to further review and comments and (f) with respect to a Registration Statement required to be filed under Section 2(e), the earlier of: (i) the 90th day following the 2011 Delivery Date; provided, that, if the Commission reviews and has written comments to such filed Regist ration Statement that would require the filing of a pre-effective amendment thereto with the Commission, then the Effectiveness Date under this clause (f)(i) shall be the 120th day following the 2011 Delivery Date, and (ii) the fifth Trading Day following the date on which the Company is notified by the Commission that the Registration Statement will not be reviewed or is no longer subject to further review and comments.

"Effectiveness Period" means, as to any Registration Statement required to be filed pursuant to this Agreement, the period commencing on the Effective Date of such Registration Statement and ending on the earliest to occur of (a) the second anniversary of such Effective Date, (b) such time as all of the Registrable Securities covered by such Registration Statement have been publicly sold by the Holders of the Registrable Securities included therein, or (c) such time as all of the Registrable Securities covered by such Registration Statement may be sold by the Holders without volume restrictions pursuant to Rule 144, in each case as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Compa ny's transfer agent and the affected Holders.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

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"Filing Date" means (a) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the 45th day following the Closing Date; (b) with respect to any additional Registration Statements required to be filed pursuant to Section 2(a), the 15th day following the Effective Date for the last Registration Statement filed pursuant to this Agreement under Section 2(a); (c) with respect to any additional Registration Statements required to be filed due to SEC Restrictions, the 15th day following the ap plicable Restriction Termination Date; (d) with respect to a Registration Statement required to be filed under Section 2(c), the 30th day following the date on which the Company becomes eligible to utilize Form S-3 to register the resale of Common Stock, (e) with respect to the Registration Statement required to be filed under Section 2(d), the 45th day following the 2008 Delivery Date (provided that if the Company is then eligible to utilize Form S-3 to register the resale of Common Stock, the Filing Date under this clause (e) shall be 30 days following the 2008 Delivery Date)and (f)with respect to the Registration Statement required to be filed under Section 2(f), the 45th day following the 2009 Delivery Date (provided that if the Company is then eligible to utilize Form S-3 to register the resale of Common Stock, the Filing Date under this clause (f) shall be 30 days following the 2009 Delivery Date).

"Holder" or "Holders" means the holder or holders, as the case may be, from time to time of Registrable Securities.

“Indemnified Party” has the meaning set forth in Section 5(c).

“Indemnifying Party” has the meaning set forth in Section 5(c).

“Losses” has the meaning set forth in Section 5(a).

“New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan.

"Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“Registrable Securities” means: (i) the Shares, (ii) the 2010 Make Good Shares, and (iii) the 2011 Make Good Shares, and (iv) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event, or any price adjustment as a result of such stock splits, reverse stock splits or similar events with respect to any of the securities referenced in (i)-(iii) above; provided, however, that any such securities which may be sold without volume restrictions pursuant to Rule 144 shall cease to be “Registrable Securities.”

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"Registration Statement" means the initial registration statement required to be filed in accordance with Section 2(a) and any additional registration statements required to be filed under this Agreement, including in each case the Prospectus, amendments and supplements to such registration statements or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference therein.

“Restriction Termination Date” has the meaning set forth in Section 2(b).

"Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

"Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

"Rule 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“SEC Restrictions” has the meaning set forth in Section 2(b).

"Securities Act" means the Securities Act of 1933, as amended.

"Shares" means the shares of Common Stock issued or issuable to the Investors pursuant to the Purchase Agreement.

2.             Registration.

(a)           On or prior to the applicable Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all Registrable Securities (other than in the case of the initial Registration Statement to be filed under this Section 2(a), the 2010 Make Good Shares and the 2011 Make Good Shares) not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415.  Each Registration Statement required to be filed under this Agreement shall be filed on Form S-1 (or on such other form appropriate for such purpose) and contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Reg istration Statement, other than as to the characterization of any Holder as an underwriter, which shall not occur without such Holder’s written consent) the "Plan of Distribution" attached hereto as Annex A.  The Company shall cause each Registration Statement required to be filed under this Agreement to be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effectiveness Date, and shall use its reasonable best efforts to keep each such Registration Statement continuously effective during its entire Effectiveness Period.  By 5:00 p.m. (New York City time) on the Business Day immediately following the Effective Date of each Registration Statement, the Company shall file with the Commission in accordance with Rule 424 under the Securities Act the final prospectus to be used in connection with sales pursuant to such Registration Statement (whether or not such filing is tech nically required under such Rule).  If for any reason other than due solely to SEC Restrictions, a Registration Statement is effective but not all outstanding Registrable Securities are registered for resale pursuant thereto, then the Company shall prepare and file by the applicable Filing Date an additional Registration Statement to register the resale of all such unregistered Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415.

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EX-10.3

Exhibit 10.3

CLOSING ESCROW AGREEMENT

This Closing Escrow Agreement, dated as of September 10, 2010 (this “Agreement”), is entered into by and among China Golf Group, Inc., a Delaware corporation (the “Company”), and the investors named on the signature page of this Agreement (together, the “Investors” and each an “Investor” or an “Escrowin g Party”) and Guzov Ofsink LLC (the “Escrow Agent”).  The principal address of each party hereto is set forth on Exhibit A.

WITNESSETH:

WHEREAS, the Company proposes to make a private offering to the Investors in an aggregate amount of up to up to Five Million Six Hundred Thousand (5,600,000) shares of common stock, par value $.001 per share (“Shares”) for an aggregate purchase price of up to Seven Million Dollars ($7,000,000) (the “Escrowed Funds”); and

WHEREAS, pursuant to a Securities Purchase Agreement to be entered into by the Company and the Investors in connection the private offering (the “Securities Purchase Agreement”), the Company and the Investors desire to deposit the Escrowed Funds with the Escrow Agent, to be held in escrow until written instructions are received by the Escrow Agent from the Lead Investor (as defined in the Securities Purchase Agreement) on behalf of the Investors and the Company at which time the Escrow Agent will disburse the Escrowed Funds in accordance with such instructions; and

WHEREAS, the Escrow Agent is willing to hold the Escrowed Funds in escrow subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual promises herein contained and intending to be legally bound, the parties hereby agree as follows:

1.   Appointment of Escrow Agent.  The Investors hereby appoints Escrow Agent as escrow agent in accordance with the terms and conditions set forth herein and the Escrow Agent hereby accepts such appointment.

2.   Delivery of the Escrowed Funds.

2.1           Each Investor will direct delivery of the Escrowed Funds to the Escrow Agent’s account on each Closing Date (as defined in the Securities Purchase Agreement) as follows:

Account ABA #________

Name of Bank: _______

Address of Bank:

Account # _________

Account Name: ________________

The Escrow Funds are to be held and distributed by the Escrow Agent in accordance with and subject to the provisions of this Agreement.

3.          Escrow Agent to Hold and Disburse Escrowed Funds.  The Escrow Agent will hold and disburse the Escrowed Funds received by it pursuant to the terms of this Escrow Agreement, as follows:

3.1           Upon receipt of the joint instructions from the Company and the Lead Investor in substantially the form of Exhibit B hereto, the Escrow Agent shall release the Escrowed Funds as directed in such instructions.

3.2           In the event this Agreement, the Escrowed Funds or the Escrow Agent becomes the subject of litigation, or if the Escrow Agent desires to do so for any reason, each of the Company, the Lead Investor and Investors authorizes the Escrow Agent, at its option, to deposit the Escrowed Funds with the clerk of the court in which the litigation is pending, or a court of competent jurisdiction if no litigation is pending, and thereupon the Escrow Agent shall be fully relieved and discharged of any further responsibility with regard thereto. Each of the Company and the Investors also authorizes the Escrow Agent, if it receives conflicting claims to the Escrow Funds, is threatened with litigation or if the Escrow Agent shall desire to do so for any reason, to interplead all interested parties in any court of competent jurisdiction and to deposit the Escrowed Funds with the clerk of that court and thereupon the Escrow Agent shall be fully relieved and discharged of any further responsibility hereunder to the parties from which they were received.

3.3            In the event that the Escrow Agent does not receive instructions by September 15 2010 regarding the final disbursement of the Escrow Funds then held (the “Escrow Termination Date”), all Escrowed Funds shall be returned to the Investors in accordance with the amounts  deposited by them (less fees of Escrow Agent)

4.           Exculpation and Indemnification of Escrow Agent

4.1           The Escrow Agent shall have no duties or responsibilities other than those expressly set forth herein.   The Escrow Agent shall have no duty to enforce any obligation of any person to make any payment or delivery, or to direct or cause any payment or delivery to be made, or to enforce any obligation of any person to perform any other act.  The Escrow Agent shall be under no liability to any party hereto or anyone else, by reason of any failure, on the part of any party hereto or any maker, guarantor, endorser or other signatory of a document or any other person, to perform such person’s obligations under any such document.  Except for joint written instructions given to the Escrow Agent by the Lead Investor and the Company relating to the Escrowed Funds, the Escrow Agent shall not be obligated to recognize any agreement between or among the Company and any other party, notwithstanding that references hereto may be made herein and whether or not it has knowledge thereof.

4.2           The  Escrow Agent shall not be liable to the  Company and the Investors or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report, or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained), which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons.

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4.3           The Escrow Agent shall not be responsible for the sufficiency or accuracy of the form, or of the execution, validity, value or genuineness of, any document or property received, held or delivered to it hereunder, or of any signature or endorsement thereon, or for any lack of endorsement thereon, or for any description therein; nor shall the Escrow Agent be responsible or liable to the Company or the Investors or to anyone else in any respect on account of the identity, authority or rights, of the person executing or delivering or purporting to execute or deliver any document or property or this Escrow Agreement. The Escrow Agent shall have no responsibility with respect to the use or application of th e Escrowed Funds pursuant to the provisions hereof.

4.4           The Escrow Agent shall have the right to assume, in the absence of written notice to the contrary from the proper person or persons, that a fact or an event, by reason of which an action would or might be taken by the Escrow Agent, does not exist or has not occurred, without incurring liability to the Company or to anyone else for any action taken or omitted to be taken or omitted, in good faith and in the exercise of its own best judgment, in reliance upon such assumption.

4.5           To the extent that the Escrow Agent becomes liable for the payment of taxes, including withholding taxes, in respect of income derived from the investment of the Escrowed Funds, or any payment made hereunder, the Escrow Agent may pay such taxes; and the Escrow Agent may withhold from any payment of the Escrowed Funds such amount as the Escrow Agent estimates to be sufficient to provide for the payment of such taxes not yet paid, and may use the sum withheld for that purpose.  The Escrow Agent shall be indemnified and held harmless against any liability for taxes and for any penalties in respect of taxes, on such investment income or payments in the manner provided in Section 4.6

4.6           The Escrow Agent will be indemnified and held harmless by the Company from and against all expenses (including all counsel fees and disbursements) or losses suffered by the Escrow Agent in connection with any action, suit or proceedings involving any claim, or in connection with any claim or demand, which in any way, directly or indirectly, arises out of or relates to this Escrow Agreement, the services of the Escrow Agent hereunder, except for claims relating to gross negligence by Escrow Agent or breach of this Escrow Agreement by the Escrow Agent, or the monies or other property held by it hereunder.  Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the c ommencement of any action, suit or proceeding, the Escrow Agent shall, if a claim in respect thereof is to be made against an Escrowing Party, notify each of them thereof in writing, but the failure by the Escrow Agent to give such notice shall not relieve any such party from any liability which an Escrowing Party may have to the Escrow Agent hereunder.  Notwithstanding any obligation to make payments and deliveries hereunder, the Escrow Agent may retain and hold for such time as it deems necessary such amount of monies or property as it shall, from time to time, in its sole discretion, seem sufficient to indemnify itself for any such loss or expense and for any amounts due it under Section 7.

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4.7           For purposes hereof, the term “expense or loss” shall include all amounts paid or payable to satisfy any claim, demand or liability, or in settlement of any claim, demand, action, suit or proceeding settled with the express written consent of the Escrow Agent, and all costs and expenses, including, but not limited to, counsel fees and disbursements, paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding.

5.           Termination of Agreement and Resignation of Escrow Agent

5.1           This Escrow Agreement shall terminate upon (a) disbursement of all of the Escrowed Funds, and (b) Escrow Termination Date as set forth under Section 3.3, whichever is earlier, provided that the rights of the Escrow Agent and the obligations of the Company under Section 4 shall survive the termination hereof.

5.2           The Escrow Agent may resign at any time and be discharged from its duties as Escrow Agent hereunder by giving the Company and the Investors at least five (5) business days written notice thereof (the “Notice Period”).  As soon as practicable after its resignation, the Escrow Agent shall, if it receives notice from the Company and the Investors within the Notice Period, turn over to a successor escrow agent appointed by the Company and the Investors all Escrowed Funds (less such amount as the Escrow Agent is entitled to retain pursuant to Section 7) upon presentation of the document appointing the new escrow agent and its acceptance thereof.  If no new agent is so appointed within the Notice Period, the Escrow Agent shall return the Escrowed Funds to the Investors from which they were received.

6.           Form of Payments by Escrow Agent

6.1           Any payments of the Escrowed Funds by the Escrow Agent pursuant to the terms of this Escrow Agreement shall be made by wire transfer unless directed to be made by check by the Escrowing Parties.

6.2           All amounts referred to herein are expressed in United States Dollars and all payments by the Escrow Agent shall be made in such dollars.

7.           Compensation.  Escrow Agent shall be entitled to the following compensation from the Company:

7.1           Documentation Fee:  The Company shall pay a documentation fee to the Escrow Agent of $1,000.

7.2           Interest                      :  The Escrowed Funds shall accrue interest (the “Accrued Interest”) at the available rate obtained by the Escrow Agent with respect to the period during which such funds are held in the Escrow Agent’s account set forth in Section 2.1 above.  All Accrued Interest shall be retained by the Escrow Agent.

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8.           Notices.  All notices, requests, demands, and other communications provided herein shall be in writing, shall be delivered by hand or by first-class mail, shall be deemed given when received and shall be addressed to parties hereto at their respective addresses first set forth on Exhibit A hereto.

9.           Further Assurances.  From time to time on and after the date hereof, the Company, and Investors shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do and cause to be done such further acts as the Escrow Agent shall reasonably request (it being understood that the Escrow Agent shall have no obligation to make any such request) to carry out more effectively the provisions and purposes of this Escrow Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

10.           Miscellaneous

10.1           This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party causing such instrument to be drafted.  The terms “hereby,” “hereof,” “hereunder,” and any similar terms, as used in this Escrow Agreement, refer to the Escrow Agreement in its entirety and not only to the particular portion of this Escrow Agreement where the term is used.  The word “person” shall mean any natural person, partnership, corporation, government and any other form of business of legal entity.  All words or terms used in this Escrow Agreement, regardless of the number or gender in which they were used, shall be deemed to include any other number and any other gender as the context may require.  This Escrow Agreement shall not be admissible in evidence to construe the provisions of any prior agreement.

10.2           This Agreement and the rights and obligations hereunder of the Company, and the Investors may not be assigned.  This Escrow Agreement and the rights and obligations hereunder of the Escrow Agent may be assigned by the Escrow Agent, with the prior consent of the Escrowing Parties.  This Escrow Agreement shall be binding upon and inure to the benefit of each party’s respective successors, heirs and permitted assigns. No other person shall acquire or have any rights under or by virtue of this Escrow Agreement. This Escrow Agreement may not be changed orally or modified, amended or supplemented without an express written agreement executed by the Escrow Agent, the Company and th e Escrowing Party. This Escrow Agreement is intended to be for the sole benefit of the parties hereto and their respective successors, heirs and permitted assigns, and none of the provisions of this Escrow Agreement are intended to be, nor shall they be construed to be, for the benefit of any third person.

10.3           This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York. The representations and warranties contained in this Escrow Agreement shall survive the execution and delivery hereof and any investigations made by any party.  The headings in this Escrow Agreement are for purposes of reference only and shall not limit or otherwise affect any of the terms thereof.

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11.           Execution of Counterparts             This Escrow Agreement may be executed in a number of counterparts, by facsimile, each of which shall be deemed to be an original as of those whose signature appears thereon, and all of which shall together constitute one and the same instrument.  This Escrow Agreement shall become binding when one or more of the counterparts hereof, individually or taken together, are signed by all the parties.

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[Signature Page to Closing Escrow Agreement]

IN WITNESS WHEREOF, the parties have executed and delivered this Escrow Agreement on the day and year first above written.

ESCROW AGENT:

GUZOV OFSINK, LLC

By: ______________________________

Name:

Title:

ALPINE VENTURE ASSOCIATES, LLC

By: ________________________________

[Name of Investor]

____________________

By: ________________________________

______________, President

CHINA GOLF GROUP, INC.

By:______________________   

        Bi Ye, Chief Executive Officer

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EXHIBIT A

PARTIES TO AGREEMENT

8

EXHIBIT B

DISBURSEMENT REQUEST

Pursuant to the Closing Escrow Agreement dated as of September 10, 2010, among China Golf Group, Inc., a Delaware corporation (the “Company”), and the investors named on the signature page of this Agreement (together, the “Investors” and each an “Investor” and Guzov Ofsink, LLC., as Escrow Agent,  Alpine Venture Ventures, LLC, as Lead Investor and the Company, hereby jointly request disbursement of funds in the amount and manner described below from account number              ____________Account.

Please disburse to:              ________________________________

Amount to disburse:           ________________________________

Form of distribution:           ________________________________

Payee:

Name:                           ________________________________

Address:                      ________________________________

City/State:                    ________________________________

Zip:                                ________________________________

Statement of event or condition which calls for this request for disbursement:

THE COMPANY:

CHINA GOLF GROUP, INC.

By:______________________      

        Bi Ye, Chief Executive Officer

LEAD INVESTOR:

ALPINE VENTURE VENTURES, LLC

By: ________________________________

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EX-10.4

Exhibit 10.4

SECURITIES ESCROW AGREEMENT

This Securities Escrow Agreement (this “Agreement”) is made on September 10, 2010, by and among China Golf Group, Inc., a Delaware corporation (the “Company”), and the investors named on the signature page of this Agreement (together, the “Investors” and each an “Investor”) and Guzov Ofsink, LLC (the “Escrow Agent”).   The aforementioned are also referred to individually herein as a “Party” and collectively herein as the “Parties.”

PRELIMINARY STATEMENTS

A.           The Company and the Investors have entered into the Securities Purchase Agreement dated the date hereof (the “Securities Purchase Agreement”), a copy of which has been delivered to the Escrow Agent, pursuant to which the Company will issue and sell to the Investors, and the Investors will subscribe for and acquire from the Company, certain Company securities for an aggregate purchase price of up to Seven Million Dollars ($7,000,000) on the terms and subject to the conditions set forth therein.  Capitalized terms used in this Agreement and not otherwise defined shall have the meanings set forth in the Securities Purchase Agreement.

B.           Section 6.15 of the Securities Purchase Agreement (the “Make Good Escrow Provisions”)  provide certain rights to the Investors, to acquire additional shares of the Company’s Common Stock  which shares will be deposited in escrow at the initial Closing by the Company as security for the Company’s obligations under Section 6.15 of the Securities Purchase Agreement.

C.           The Make Good Escrow Provisions provide that, at the initial Closing, the Company shall deposit in escrow 2,000,000 shares of Common Stock (the “Make Good Escrow Shares”) to be delivered to the Investors as set forth in Section 6.15 of the Securities Purchase Agreement in the event certain earnings targets for 2010 and 2011 are not met.

D.           The escrow fund created by the deposit of the Make Good Escrow Shares is referred to as the “Escrow Fund.”

E.           Pursuant to the terms of the Securities Purchase Agreement, the Company has agreed, as a condition to its obligations thereunder, to enter into this Agreement and establish the terms and conditions pursuant to which the Make Good Escrow Shares will be deposited, held in, and disbursed from the Escrow Fund.

F.           The Company desires to appoint the Escrow Agent to act pursuant to the terms and conditions set forth herein and the Escrow Agent desires to accept such appointment.

AGREEMENT

The Parties, intending to be legally bound, agree as follows:

1.           Establishment of the Escrow Fund.

(a)      Escrow Fund.  The Escrow Agent agrees to (i) accept delivery of the Make Good Escrow Shares, (ii) hold such Make Good Escrow Shares subject to the terms and conditions of this Agreement and the Make Good Escrow Provisions.

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(b)      Escrow Arrangements; Purpose.  The Escrow Fund is to be held and distributed by the Escrow Agent in accordance with and subject to the provisions of this Agreement and the Make Good Escrow Provisions.  The Escrow Fund will be disbursed in the manner set forth  in the Make Good Escrow Provisions in the event the earnings targets for 2010 and 2011 are not met.

2.           Administration of Escrow Fund and Tax Escrow Fund.

(a)           Delivery of Make Good Escrow Shares.  At Closing, the Make Good Escrow Shares will be delivered by the Company to the Escrow Agent in accordance with the Make Good Escrow Provisions.

(b)            Claims on the Escrow Fund.  Upon receipt by the Escrow Agent of a certificate from the Company, stating that (1) the 2010 Target Number or 2011 Target Number, as the case may be, has not been met, and (2) the number of Make Good Escrow Shares to be delivered to the Investors pursuant to the Make Good Escrow Provisions, the Escrow Agent shall deliver to the Investors out of the Escrow Fund, as promptly as practicable, the  number of Make Good Escrow Shares as specified by the Company.   The Escrow Agent shall not be required to determine or calculate the number of shares to be issued and shall not be obligated to issue Make Good Escrowed Shares, but rather will only deliver the Make Good Escrow Shares as instructed in the certificate from the Company to the Escrow Agent.  In the event that the Escrow Agent receives a certificate from the Company, the Escrow Agent shall deliver to the Company such number of Make Good Escrow Shares as specified by the Company in the certificate.

(c)           No Encumbrance.  The Escrow Fund shall be held as a trust fund and shall not be subject to any encumbrance, trustee process or any other judicial process of any creditor of any party hereto.  Except as provided in this Agreement, no Make Good Escrow Shares or any beneficial interest therein may be pledged, sold, encumbered, assigned or transferred, including by operation of law, by the Company or be taken or reached by any legal or equitable process in satisfaction of any debt or other liability of the Company, prior to the delivery to the Company of the Make Good Escrow Shares by the Escrow Agent, except as otherwise contemplated by this Agreement or the Securitie s Purchase Agreement.

3.           The Escrow Agent; Limitation of the Escrow Agent’s Liability; Fees and Expenses.

(a)           The Escrow Agent is hereby appointed depositary and escrow agent for the Company with respect to the Escrow Funds.  The Company agrees to pay Escrow Agent a flat fee of $1,000 for the services hereunder.

(b)           The Escrow Agent is not a party to, nor is it bound by nor need it give any consideration to the terms or provisions of, any agreement among the Company and the Investors.  The only duties and responsibilities of the Escrow Agent hereunder shall be to hold the Escrow Funds as escrow agent according to the terms and provisions of this Agreement and to dispose of and deliver the Escrow Fund as provided in this Agreement.

(c)           The Escrow Agent shall be indemnified and held harmless by the Company, from and against any and all liability, including all expenses reasonably incurred in its defense, to which the Escrow Agent shall be subject by reason of any action taken or omitted or any investment or disbursement of any part of the Escrow Fund made by the Escrow Agent pursuant to this Agreement, except as a result of the Escrow Agent’s willful misconduct or material breach of this Agreement, provided, however, that under all circumstances, Escrow Agent shall be given notice of any alleged breach of this Agreement and the reasonable opportunity to cure such alleged breach, which under all circumstances shall not be less than ten (10) business days following receipt of notice. The reasonable costs and expenses of enforcing this right of indemnification shall also be paid by the Company.  This right of indemnification shall survive the termination of this Agreement, and the removal or resignation of the Escrow Agent.

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(d)           The Escrow Agent undertakes to perform only such duties as are specifically set forth in this Agreement, and the Escrow Agent shall not be liable except for the non performance of such duties as are specifically set forth in this Agreement, provided, however, that under all circumstances, Escrow Agent shall be given notice of any alleged breach of this Agreement and the reasonable opportunity to cure such alleged breach, which under all circumstances shall not be less than ten (10) business days following receipt of notice, and no implied covenants or obligations shall be read into this Agreement against the Escrow Agent.  The Escrow Agent may consult with counsel (of its choice)  regarding any of its duties or obligations hereu nder, and shall be fully protected in any action taken in good faith in accordance with such advice.  The Escrow Agent shall be fully protected in acting in accordance with any written instructions given to it hereunder and believed by it to have been executed by the proper party or parties.  The Escrow Agent’s duties shall be determined only with reference to this Agreement and the Securities Purchase Agreement and applicable Laws.  The Escrow Agent is not charged with any duties or responsibilities in connection with any other documents or agreements.

(e)           Fees are payable in advance as compensation for the ordinary administrative services to be rendered hereunder and the Company agrees to pay all the fees and expenses of the Escrow Agent, including the indemnity provided in Section 3(c) hereof.

(f)           It is understood and agreed that in the event any disagreement among the parties hereto results in adverse claims or demands being made in connection with the Escrow Fund, or in the event the Escrow Agent in good faith is in doubt as to what action it should take hereunder, the Escrow Agent shall retain the Escrow Fund until the Escrow Agent shall have received (i) an enforceable final order of a court of competent jurisdiction which is not subject to further appeal directing delivery of the Escrow Fund  or (ii) a written agreement executed by the Company directing delivery of the Escrow Fund, in which event Escrow Agent shall disburse the Escrow Fund in accordance with such order or agreement.  Any court order referre d to in (i) above shall be accompanied by a legal opinion of counsel for the presenting party satisfactory to the Escrow Agent to the effect that said court order is final and enforceable and is not subject to further appeal.  The Escrow Agent shall act on such court order and legal opinion without further question.  Notwithstanding the foregoing, if Escrow Agent is in doubt or remains unsure of what action it should take hereunder, Escrow Agent shall have the right to file an interpleader action and interplead into a court of competent jurisdiction the Escrow Fund and all documents and instruments evidencing, pertaining or relating to the Escrow Fund  and any other item, instrument or document held in or subject to the Escrow Fund and thereby Escrow Agent shall be released of its duties, responsibilities and obligations arising hereunder.

(g)           The Escrow Agent may resign at any time by giving written notice thereof to the other parties hereto.  Such resignation shall become effective 10 business days following the receipt of such notice and Escrow Agent shall deliver, within 10 business days after the effectiveness of its resignation, the Escrow Shares and all items, documents and instruments held pursuant to the Escrow Fund to its successor Escrow Agent.  If an instrument of acceptance by a successor Escrow Agent shall not have been delivered to the Escrow Agent within 10 business days after the giving of such notice of resignation, the resigning Escrow Agent may, at the expense of Company, petition any court of competent jurisdiction for the appointment of a su ccessor Escrow Agent.  If any property subject hereto is at any time attached, garnished or levied upon, under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property, or any part thereof, then in any of such events, the Escrow Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree, which it is advised by legal counsel (of its own choosing) is binding upon it, and if it complies with any such order, writ judgment or decree, it shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated.

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4.      Notices.  Any certificate or other notice to any party hereto given pursuant to this Agreement shall be given by fax, first-class mail or nationally recognized express overnight courier delivery service addressed as follows.  Notices shall not be deemed to be given until actually received.

If to the Escrow Agent:

Guzov Ofsink, LLC

600 Madison Avenue

New York. NY 10022

Attention: Darren Ofsink, Esq

Telephone: 212 371 8008

Fax: (212) 688-7273

Email: dofsink@golawintl.com

If to the Company:

China Golf Group, Inc

China Merchants Tower, Suite 1503

161 Lujiazui East Road, Shanghai, PRC 20001

Attn: Bi Ye

Tel: 86-21 5876 5017

Fax: 86-21-5876-5085

Email: tigerye666@hotmail.com

with a copy (which shall not constitute notice) to:

Guzov Ofsink, LLC

600 Madison Avenue, 14th Floor

New York, New York  10022

Attention:  Darren L. Ofsink

Telephone No.: (212) 371-8008

Facsimile No.:  (212) 688-7273

E-mail: dofsink@golawintl.com

5.           Incorporation by Reference of Portions of the Securities Purchase Agreement.  The parties agree that the terms of the Make Good Escrow Provisions shall be deemed to be incorporated by reference in this Agreement as if such sections had been set forth in its entirety herein.  Notwithstanding the immediately preceding sentence, the Parties agree that the Escrow Agent’s fees and expenses shall be governed under this Agreement.  The Parties acknowledge that the administration of the Escrow Fund by the Escrow Agent will require reference to both the terms of this Agreement as well as the terms of such Make Good Escrow Provisions. In the event of any conflict between this Agreement and the Make Good Escrow Provisions, the provisions of the Make Good Escrow Provisions shall govern.

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6.           General.

(a)           Controlling Law; Venue.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to choice of law provisions, statutes, regulations or principles of this or any other jurisdiction.  Each Party hereby irrevocably submits to the exclusive jurisdiction (including personal jurisdiction) of the state and federal courts of the State of New York for any action, suit or proceeding arising in connection with this Agreement, and agrees that any such action suit or proceeding shall be brought only in such court (and waives any objection based on forum non conveniens or any other jurisdiction to venue therein).  ; Process in any proceeding under this Agreement may be served on any Party anywhere in the world.  Notwithstanding the foregoing, nothing in this Agreement shall preclude the Investors the right to commence proceedings relating to this Agreement in any foreign jurisdiction, including the People’s Republic of China.

(b)           Succession and Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns.  No Party may assign either this Agreement or any of his or its rights, interests, or obligations hereunder without the prior written approval of the other Parties adversely affected by such assignment; provided, however, that any Investor may assign any or all of its rights and interests hereunder to one or more of its Affiliates.

(c)           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

(d)           Entire Agreement.  This Agreement constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they related in any way to the subject matter hereof.

(e)           Waivers.  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all Parties.

(f)            Amendment.  This Agreement may be amended with the written consent of all Parties; provided, however, that if the Escrow Agent does not agree to an amendment agreed upon by the Company, it may resign.

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The Parties have executed and delivered this Agreement as of the date indicated in the first sentence of this Agreement.

ESCROW AGENT:

GUZOV OFSINK, LLC

By: ______________________________

Name:

Title:

THE COMPANY:

CHINA GOLF GROUP, INC.

By:_________________________, Chief Executive Officer

INVESTORS:

ALPINE VENTURE ASSOCIATES, LLC

By: ________________________________

[NAME OF INVESTOR]

By: ________________________________,