INTERNATIONAL PAPER INVESTMENT (SHANGHAI) CO., LTD. (AS THE SELLER) AND SHANDONG SUN HOLDING GROUP CO., LTD. (AS THE BUYER)

INTERNATIONAL PAPER INVESTMENT (SHANGHAI) CO., LTD., a company duly established and validly existing under the laws of the PRC (registered no. 310000400629687), whose legal address is at Unit 1801, 600 Middle Longhua Road, Xuhui District, Shanghai (the "Seller"); and

SHANDONG SUN HOLDING GROUP CO., LTD., a company duly established and validly existing under the laws of PRC (registered no. 370882228000354), whose legal address is at Town Station of Xinglong Village, Yanzhou District, Jining (the "Buyer").

International Paper & Sun Cartonboard Co., Ltd. (万国纸业太阳白卡纸有限公司) ("JV1") is a Sino-foreign cooperative joint venture company duly established and validly existing under the laws of the PRC (registered no. 370000400003006), whose legal address is at 66 Xiguan Avenue, Yanzhou District, Jining, Shandong Province.

Shandong International Paper & Sun Coated Paperboard Co., Ltd. (山东国际纸业太阳纸板有限公司) ("JV2") is a Sino-foreign cooperative joint venture company duly established and validly existing under the laws of the PRC (registered no. 370000400003389), whose legal address is at 66 Xiguan Avenue, Yanzhou District, Jining, Shandong Province. JV2 has a wholly owned subsidiary called International Paper & Sun (Hong Kong) Trading Limited (the "Trading Subsidiary").

Shandong IP & Sun Food Packaging Co., Ltd. (山东万国太阳食品包装材料有限公司) ("JV3") is a Sino-foreign cooperative joint venture company duly established and validly existing under the laws of the PRC (registered no. 370000400006730), whose legal address is at 66 Xiguan Avenue, Yanzhou District, Jining, Shandong Province.

The Target Companies were originally established by the Seller's Affiliate and the Buyer's Affiliate. As of the date of this Agreement, the Seller holds fifty-five (55%) equity interests in each Target Company.

Upon friendly discussion, the Buyer proposes to acquire, and the Seller agrees to transfer, the Seller's entire equity interests in the Target Companies.

In accordance with the terms and conditions of this Agreement, the Seller shall sell to the Buyer, and the Buyer shall acquire from the Seller, the entire equity interest held by the Seller in each Target Company (representing fifty-five per cent (55%) of the total equity interest of each Target Company), together with all rights and obligations accruing or attached thereto as at the MOFCOM Approval Date (as defined in Clause 4.2) (each "JV1 Target Equity Interest", "JV2 Target Equity Interest" and "JV3 Target Equity Interest" respectively, and collectively the "Target Equity Interests").

The transfer of the JV1 Target Equity Interest, the JV2 Target Equity Interest and the JV3 Target Equity Interest shall be conducted simultaneously and the completion of the transfer of the Target Equity Interests in respect of any Target Company shall be conditional upon the completion of the transfer of the Target Equity Interests in respect of the other Target Companies. The afore-mentioned transaction is hereinafter referred to as the "Transaction".

The purchase price for the Target Equity Interests is RMB 149 million (in words: Renminbi one hundred and forty nine million) (the "Purchase Price").

The Purchase Price shall be apportioned to the Target Equity Interests in respect of each Target Company as follows:

RMB44,174,932 (in words: Renminbi forty-four million one-hundred seventy-four thousand nine-hundred and thirty-two) for the JV1 Target Equity Interest;

RMB 85,048,862 (in words: Renminbi eighty-five million forty-eight thousand eight hundred and sixty-two) for the JV2 Target Equity Interest; and

RMB19,776,206 (in words: Renminbi nineteen million seven hundred seventy-six thousand two hundred and six) for the JV3 Target Equity Interest.

For the avoidance of doubt, there shall be no adjustment to the Purchase Price after the date of this Agreement.

The Purchase Price shall be paid by the Buyer into the Seller's Bank Account, without any deduction, withholding, set-off or counterclaim whatsoever, in the following manner:

twenty percent (20%) of the Purchase Price ("First Payment") shall be paid within five (5) Business Days from the date of this Agreement;

thirty percent (30%) of the Purchase Price ("Second Payment") shall be paid within five (5) Business Days from the MOFCOM Approval Date;

fifty percent (50%) of the Purchase Price ("Final Payment") shall be paid within five (5) Business Days from the SAIC Registration Date (as defined in Clause 5).

Without prejudice to the Seller's rights under other provisions of this Agreement and the laws of the PRC, if the Buyer fails to pay any portion of the Purchase Price in accordance with Clause 2.3.1, a late-payment interest shall accrue and be payable by the Buyer to the Seller in respect of the default amount, for the period starting from the day following the expiry of the payment period mentioned above in respect of such portion until the day on which the default amount is paid, at the interest rate of 4.85% per annum.

Within ten (10) Business Days after the date of this Agreement, the Buyer shall make a notification to the Anti-monopoly Bureau of the Ministry of Commerce of the PRC ("AMB") in respect of the Transaction. For the purpose of anti-trust filing, the Buyer shall be responsible for preparing the documents and materials as may be required under the laws of the PRC or AMB and the Seller shall provide reasonable assistance to the Buyer by providing the Buyer with access to necessary information of the Target Companies which is in the possession of the Seller. The Buyer shall use its best endeavours to obtain the PRC anti-trust clearance for the Transaction as soon as practicable after the date of this Agreement.

Anti-trust clearance for the Transaction is deemed to be obtained upon the issuance of a notice by the Ministry of Commerce clearing the Transaction for merger control purposes pursuant to the Anti-Monopoly Law or the expiry of the statutory clearance period under the Anti-Monopoly Law and no objection having been raised by the Ministry of Commerce with respect to the Transaction.

Within five (5) Business Days of the receipt of the First Payment in the Seller's Bank Account, the Parties shall, and shall procure the Target Companies to, submit this Agreement together with all the other necessary documents to MOFCOM for approval of the Transaction (i.e. the transfer of the Target Equity Interests in each Target Company) as a whole.

With effect from the day on which MOFCOM issues an approval letter/approval letters approving the Transaction (i.e. the transfer of the Target Equity Interests in each Target Company) ("MOFCOM Approval Date"),

the Buyer shall assume all the rights and obligations in respect of the Target Equity Interests of the Target Companies;

the JV Contracts shall be terminated, and neither Party shall have any further responsibility or liability to the other Party or their Affiliates in respect of its obligations under the JV Contracts (unless the relevant obligations are explicitly provided under the relevant JV Contract to survive, subject to the terms and conditions thereof, after the termination of that JV Contract);

the director(s) and supervisor(s) appointed by the Seller in each Target Company shall be automatically released from their responsibilities as the director or supervisor (as the case may be) of that Target Company.

change of shareholder(s) of each Target Company so that the Seller will no longer be recorded as a shareholder of such Target Company; and

change of the directors and supervisors of each Target Company so that the persons appointed by the Seller will no longer be recorded as the directors or supervisors of such Target Company.

For the avoidance of doubt, from the date of this Agreement and until the MOFCOM Approval Date, the JV Contract in respect of each Target Company shall remain in full force and effect and the Parties shall fully respect and comply with the arrangements thereunder. Subject to the preceding provision, at any time after the receipt by the Seller of the First Payment in the Seller's Bank Account, the Buyer may appoint a deputy general manager in the Target Companies who shall report to the general manager of the Target Companies and may participate in the management and monitoring of the business operation of the Target Companies. For the avoidance of doubt, the position of the deputy general manager shall be cancelled if this Agreement is terminated in accordance with Clause 9. Separately, the Seller undertakes to the Buyer that it will procure that, between the date of this Agreement and the MOFCOM Approval Date, the general manager of the Target Companies will not take any action that is out of the ordinary course of business without the consent of the Buyer.

In addition to the obligations provided under Clause 3, Clause 4 and Clause 5 above, each Party agrees to perform (or procure the performance of) all such acts and things and/or to execute and deliver (or procure the execution and delivery of) all such documents, as may be required by PRC law or as may be necessary or reasonably requested by the other Party to implement the Transaction in accordance with this Agreement.

Each Party shall, as applicable, keep the other Party reasonably informed of the progress of the anti-trust filing, MOFCOM approval and SAIC registration in relation to the Transaction. The Buyer shall immediately notify the Seller of the obtaining of the anti-trust clearance for the Transaction, the MOFCOM Approval and the Revised Business License of any Target Company, as the case may be.

Each Party warrants to the other Party that:

it has the right, power and authority to enter into this Agreement and to perform its obligations under this Agreement; and

its obligations under this Agreement are valid, legal, binding and enforceable in accordance with the terms of this Agreement.

The Seller warrants to the Buyer that the Seller legally and beneficially owns the Target Equity Interests, free from any Encumbrance.

The Buyer acknowledges and agrees that other than those warranties set out in Clause and 7.2, no representations or warranties are, or shall be deemed as having been, explicitly or impliedly made by the Seller to the Buyer in relation to any Target Company, the Target Equity Interests or the Transaction.

The Buyer agrees to procure that:

Shandong Sun Paper Industry Joint Stock Co., Ltd. ("Sun ListCo") shall not, after the date of this Agreement, demand repayment by JV2 of the Sun ListCo Loan (or the relevant part thereof) prior to the scheduled maturity date of the same as provided under the Sun ListCo Shareholder Loan Agreement, as a result of or in connection with the Transaction; and

JV2 shall not, after the date of this Agreement, repay to the Sun ListCo the Sun ListCo Loan (or the relevant part thereof) prior to the scheduled maturity date of the same as provided under the Sun ListCo Shareholder Loan Agreement.

The Seller agrees that it will not, after the date of this Agreement, demand repayment by JV2 of the IP Loan (or the relevant part thereof) prior to the scheduled maturity date of the same as provided under the IP Shareholder Loan Agreement, as a result of or in connection with the Transaction, provided that༚

Sun ListCo will not demand the early repayment of the Sun ListCo Shareholder Loan (as described in Clause above), and

JV2 will not voluntarily prepay the Sun ListCo Loan (as described in 8.2.1(b)).

On the MOFCOM Approval Date, International Paper Company will give a written termination notice to JV1 in respect of the Trademark License Agreement between International Paper Company and JV1 dated 21 October 2006 ("Trademark License Agreement"), pursuant to which the Trademark License Agreement will terminate in accordance with the terms thereof in one-hundred and twenty (120) days after the date of the written termination notice. The rights and obligations of the parties to the Trademark License Agreement in connection with the termination shall be dealt with in accordance with the terms of the Trademark License Agreement.

The Buyer shall procure that the Target Companies and the Trading Subsidiary shall:

within twelve (12) months after the MOFCOM Approval Date, remove "International Paper" (in English) from any corporate, enterprise, trading names of the Trading Subsidiary (as the case may be) (and the Trading Subsidiary can only use "International Paper" (in English) always as part of its full company name before the afore-mentioned change of the Trading Subsidiary's corporate, enterprise and trading names is completed); and

within six (6) months after the MOFCOM Approval Date, unless otherwise allowed by the Seller, remove any brand, trademark, logo belonging to International Paper Company or its Affiliates, including "International Paper" (in English) and "国际纸业" or "万国纸业" (as the case may be) (in Chinese) which are separately used, from all brands, labels, packaging and/or promotional materials, trademarks, trade names, service marks, trade dress, and logos used by the Target Companies or the Trading Subsidiary and stop exploiting any other intellectual property belonging to International Paper Company or its Affiliates.

Subject to Clause 8.4.2 and without prejudice to the rights of International Paper Company or its Affiliates to take any actions to protect and/or preserve their intellectual property rights, the Target Companies may keep their current company names (as described in Clause 8.4.4), provided however that:

JV1 and JV2 can only use "International Paper" (in English), "国际纸业" or "万国纸业" (as the case may be) (in Chinese) always as part of their respective full company name; and

this Clause 8.4.3 shall not be interpreted in any way to indicate or imply any conveyance by the Seller, the International Paper Company or its Affiliates to the Buyer, any Target Company or the Trading Subsidiary of any intellectual property belonging to International Paper Company or its Affiliates concerning "International Paper" (in English), "国际纸业" or "万国纸业" (as the case may be) (in Chinese).

For the purpose of Clause 8.4.3, both Parties acknowledge that, as of the date of this Agreement:

The name of JV1 is: "万国纸业太阳白卡纸有限公司" (in Chinese) and "International Paper & Sun Cartonboard Co., Ltd." (in English);

The name of JV2 is: "山东国际纸业太阳纸板有限公司" (in Chinese) and "Shandong International Paper & Sun Coated Paperboard Co., Ltd." (in English); and

The name of JV3 is: "山东万国太阳食品包装材料有限公司" (in Chinese) and "Shandong IP & Sun Food Packaging Co., Ltd." (in English).

Without prejudice to the rights of International Paper Company or its Affiliates to take any actions to protect and/or preserve their intellectual property rights, for the avoidance of doubt, both Parties acknowledge that the Target Companies may keep and use the trademarks which are legally owned by them and have been duly registered by them with the PRC Trademark Office as of the date of this Agreement.

Upon the occurrence of any of the following events or circumstances, either Party (the "Terminating Party") may elect to terminate this Agreement by issuing a notice in writing to the other Party:

the AMB prohibits the completion of the Transaction (provided that the Buyer has used its best endeavours to obtain the PRC anti-trust clearance for the Transaction);

the MOFCOM approval (as described in Clause ) is not obtained within nine (9) months after the date of this Agreement, provided that a Party shall not be entitled to terminate this Agreement under this clause if the above is due to its failure to perform any of its obligations under this Agreement or is otherwise attributable to it;

at any time prior to the MOFCOM Approval Date, the other Party (the "Default Party") is in material breach of any provision of this Agreement and such default (i) fails to be rectified, to the reasonable satisfaction of the Terminating Party, within thirty (30) days after notification by the Terminating Party to the Default Party of the default or (ii) is not capable of being cured, in the reasonable opinion of the Terminating Party.

In addition to Clause 9.1.1 and notwithstanding Clause 4.2, the Seller may (at its sole discretion) elect to terminate this Agreement by issuing a notice in writing to the Buyer:

if the Buyer fails to pay the Purchase Price (or any portion thereof) in accordance with Clause 2.3 and such default fails to be rectified within thirty (30) days from the date on which the Purchase Price (or any portion thereof) becomes payable under Clause 2.3; or

if the Buyer or a Target Company fails to submit to the SAIC all the necessary documentation required to complete the SAIC registration (as described in Clause 5) within thirty (30) days from the MOFCOM Approval Date.

In addition to Clause 9.1.1 and notwithstanding Clause 4.2, the Buyer may (at its sole discretion) elect to terminate this Agreement by issuing a notice in writing to the Seller if the Seller fails to provide any document which is required to be provided by the Seller under PRC applicable laws for the purpose of submission to MOFCOM (as described in Clause 4.1) or SAIC (as described in Clause 5) and the Seller fails to rectify within thirty (30) days from the date on which the Buyer requires in writing such document and provides in reasonable detail the statutory basis for requiring such document.

For the avoidance of doubt, nothing in this Clause 9.1 shall be interpreted in any manner to prejudice the either Party's right to demand specific performance by the other Party of any of its obligation under this Agreement.

Each Party's further rights and obligations shall cease immediately upon termination of this Agreement, except that Clauses 10, 14, 15 and 16 shall survive the termination of this Agreement. Such termination shall not affect a Party's accrued rights and obligations at the date of termination.

Without prejudice to the Seller's rights under other provisions of this Agreement and the laws of the PRC, if the Seller elects to terminate this Agreement pursuant to Clause 9.1 due to a breach of this Agreement by the Buyer:

the Seller shall be entitled to the First Payment and the Buyer shall be deemed to have forfeited it; and

the Buyer shall, on demand of the Seller, indemnify the Seller against (i) all the costs incurred by the Seller relating to the negotiation, preparation,

If this Agreement is terminated pursuant to Clause 9.1.1(a) or Clause 9.1.2, upon the demand of the Seller (at the Seller's sole discretion), the Buyer shall, and the Parties shall ensure that the Target Companies shall, take all necessary actions and sign all necessary documents to re-transfer/re-instate the Target Equity Interests back to the Seller, at nil consideration to the Seller, as soon as possible after such termination and, if necessary, apply to MOFCOM for its revocation of the MOFCOM approval letter(s) (as described in Clause 4.2) ("Equity Re-transfer"); in such case, the Buyer shall also be responsible for and indemnify the Seller against all the costs incurred by the Seller arising out of or in connection with the Equity Re-transfer.

Without prejudice to the Buyer's rights under other provisions of this Agreement and the laws of the PRC, if the Buyer elects to terminate this Agreement pursuant to Clause 9.1.3, the Seller shall pay twenty percent (20%) of the Purchase Price as liquidated damages to the Buyer.

Any Notice form the Buyer to the Seller shall copy International Paper Company at the following address and fax number:

The Buyer and the Seller agree that any dispute, controversy or claim arising out of or in connection with this Agreement, including any question regarding its existence, validity, interpretation, breach or termination, shall be referred to China International Economic and Trade Arbitration Commission ("CIETAC")

The hearing of the arbitration shall take place in Shanghai.

The arbitration tribunal shall consist of three (3) arbitrators. Each Party shall appoint one (1) arbitrator, and the two (2) arbitrators thus appointed shall appoint the third arbitrator. If within thirty (30) days of a request from the other Party to do so a Party fails to appoint an arbitrator, or if the two (2) arbitrators fail to agree on the third arbitrator within thirty (30) days after the appointment of the second arbitrator, the appointment shall be made, upon request of a party, by the Chairman of CIETAC in accordance with the Rules, as amended herein.

The languages of the arbitration proceedings shall be in Chinese and English. Any arbitration award shall be made in writing and shall be final and binding on the Parties from the day it is made. The parties undertake to carry out each and every arbitral award without delay.

The Parties agree that this Agreement shall be used for submission to MOFCOM (as described in Clause 4) and to SAIC (as described in Clause 5).

Should MOFCOM or SAIC require submission of a separate equity transfer agreement ("By-entity SPA") in respect of the transfer of the JV1 Target Equity Interest, the JV2 Target Equity Interest and the JV3 Target Equity Interest respectively, the Parties shall prepare a By-entity SPA in respect of each Target Company on the basis of this Agreement, provided further that:

unless otherwise agreed between the Parties, to the extent practicable, the provisions of each By-entity SPA shall be substantially similar to the provisions of this Agreement;

the rights and obligations of the Parties under the By-entity SPAs shall be the same as those under this Agreement;

all the By-entity SPAs shall be simultaneously submitted to MOFCOM (as described in Clause 4) and the Parties shall use their best efforts to procure that MOFCOM shall approve the transactions contemplated under all the By-entity SPAs as a package deal; in the event that MOFCOM fails to approve the equity transfer transaction concerning any Target Company, the Parties shall apply to MOFCOM for the withdrawal of the approvals (if issued) for the equity transfer transactions concerning the other Target Companies;

if any By-entity SPA is terminated in accordance with the terms thereunder, the other By-entity SPAs shall be terminated as well (and a Party that commits a breach under any By-entity SPA shall be deemed to have committed a breach under this Agreement), in which case the provisions of Clause 9 shall apply mutatis mutandis;

this Agreement shall be the governing agreement in respect of the Transaction as a whole and, in the event of any discrepancy between any provision of any By-entity SPA and any provision of this Agreement, between the Parties the provision of this Agreement shall prevail.