Filed Pursuant to Rule 424(b)(3)
Registration No. 333-159252

2020 CHINACAP ACQUIRCO, INC.
C/O SURFMAX CORPORATION
221 BOSTON POST ROAD EAST
SUITE 410
MARLBOROUGH, MASSACHUSETTS 01752

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
OF 2020 CHINACAP ACQUIRCO, INC.
TO BE HELD ON October 19, 2009

To the Stockholders of 2020 ChinaCap Acquirco, Inc.:

NOTICE IS HEREBY GIVEN that the special meeting of stockholders of 2020 ChinaCap Acquirco, Inc. (“2020”), a Delaware corporation, will be held at 9:00 a.m. local time, on October 19, 2009, at the offices of Seyfarth Shaw LLP, 131 S. Dearborn St., Chicago, Illinois 60603. You are cordially invited to attend the meeting, which will be held to consider and vote upon Proposals to:

These items of business are described in the attached proxy statement/prospectus, which you are encouraged to read in its entirety before voting. Only holders of record of 2020 common stock at the close of business on October 2, 2009 are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting.

After careful consideration, 2020’s board of directors has determined that the Acquisition Proposal, the Redomestication Proposal and the Adjournment Proposal are fair to and in the best interests of 2020 and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the approval of all of the proposals.

We will not consummate the transactions described under Proposal (1) unless the Redomestication Proposal in Proposal (2) is also approved. Similarly, the transactions described under Proposal (2) will not take place if the Acquisition Proposal in Proposal (1) is not approved. Consequently, each of Proposal (1) and Proposal (2) must be approved for either transaction to be completed.

All of 2020’s stockholders are cordially invited to attend the special meeting in person. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a stockholder of record of 2020 common stock, you may also cast your vote in person at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the meeting and vote in person, obtain a proxy from your broker or bank. If you do not vote or do not instruct your broker or bank how to vote, it will have the same effect as voting against the Acquisition and the Redomestication Proposals.

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A complete list of 2020’s stockholders of record entitled to vote at the special meeting will be available beginning ten days before the special meeting at the principal executive offices of 2020 for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors

George Lu
Chairman, Chief Executive Officer and President
October 5, 2009

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS AND YOU WILL NOT BE ELIGIBLE TO HAVE YOUR SHARES CONVERTED INTO A PRO RATA PORTION OF THE TRUST ACCOUNT IN WHICH A SUBSTANTIAL PORTION OF THE NET PROCEEDS OF 2020’S INITIAL PUBLIC OFFERING ARE HELD. YOU MUST AFFIRMATIVELY VOTE AGAINST THE ACQUISITION PROPOSAL AND DEMAND THAT 2020 CONVERT YOUR SHARES INTO CASH NO LATER THAN THE CLOSE OF THE VOTE ON THE ACQUISITION PROPOSAL TO EXERCISE YOUR CONVERSION RIGHTS. IN ORDER TO CONVERT YOUR SHARES, YOU MUST CONTINUE TO HOLD YOUR SHARES THROUGH THE CLOSING DATE OF THE ACQUISITION AND THEN TENDER YOUR STOCK TO 2020’S STOCK TRANSFER AGENT WITHIN THE TIME PERIOD SPECIFIED IN A NOTICE YOU WILL RECEIVE FROM OR ON BEHALF OF EXCEED, WHICH PERIOD WILL BE NOT LESS THAN 20 DAYS. YOU MAY TENDER YOUR STOCK BY EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE ACQUISITION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE CONVERTED INTO CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR CONVERSION RIGHTS. SEE “2020’S SPECIAL MEETING — CONVERSION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.

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DATED OCTOBER 5, 2009

PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS OF
2020 CHINACAP ACQUIRCO, INC.

The board of directors of 2020 ChinaCap Acquirco, Inc. (“2020”) has unanimously approved the acquisition of Windrace International Company Limited (“Windrace”), a holding company incorporated in the Cayman Islands with operating subsidiaries in the People’s Republic of China, pursuant to the Agreement for Sale and Purchase of Windrace International Company Limited (as supplemented by a supplemental purchase agreement dated July 27, 2009 and a letter agreement dated September 9, 2009, the “Purchase Agreement”) whereby Exceed Company Ltd. (“Exceed”), a wholly-owned subsidiary of 2020 formed under the laws of the British Virgin Islands (the “BVI”) with limited liability, will purchase 100% of the issued and outstanding ordinary shares of Windrace held by the shareholders of Windrace (the “Sellers”). The transactions contemplated under the Purchase Agreement are referred to as the Acquisition in this proxy statement/prospectus. The board of directors of 2020 also has unanimously approved the simultaneous reincorporation of 2020 from the State of Delaware to the BVI through a redomestication merger (the “Redomestication”) with and into Exceed. The transactions contemplated under the merger agreement are referred to as the Redomestication in this proxy statement/prospectus. In the Redomestication, Exceed will issue its securities in exchange for the issued and outstanding securities of 2020 on a one-to-one basis. This proxy statement/prospectus also constitutes a prospectus of Exceed for the securities of Exceed to be issued to the security holders of 2020 pursuant to terms of the Redomestication. Proposals to approve the Purchase Agreement (the “Acquisition Proposal”) and the Redomestication (the “Redomestication Proposal”) and the other matters discussed in this proxy statement/prospectus will be presented at the special meeting of the stockholders of 2020 scheduled to be held on October 19, 2009.

2020’s common stock, units and warrants are currently traded on the NYSE Amex under the symbols TTY, TTY.U and TTY.WS, respectively. 2020 will transfer the listing of its common stock, units and warrants to the NASDAQ Capital Market under the same symbols on October 12, 2009. After the closing of the transactions contemplated by the Purchase Agreement, the securities of Exceed are expected to be listed on the NASDAQ Capital Market under the symbols EDS, EDS.U and EDS.WS.

2020 is providing this proxy statement/prospectus and accompanying proxy card to its stockholders in connection with the solicitation of proxies to be voted at the special meeting of 2020’s stockholders and at any adjournments or postponements of the special meeting.

This proxy statement/prospectus provides you with detailed information about the Acquisition and the Redomestication and other matters to be considered by 2020’s stockholders. You are encouraged to carefully read the entire document and the documents filed as annexes to this proxy statement/prospectus and which are incorporated by reference herein. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 30.

The Acquisition and the Redomestication will be completed upon approval of at least a majority of the shares of common stock outstanding present in person or by proxy and entitled to vote at the special meeting on October 19, 2009, provided that public stockholders owning less than 30% of the 8,625,000 outstanding shares sold in 2020’s initial public offering vote against the Acquisition Proposal and exercise their right to convert their shares into a pro rata portion of the trust account maintained by 2020 as described in this proxy statement/prospectus.

Your vote is very important. Whether or not you expect to attend the special meeting, the details of which are described on the following pages, please complete, date, sign and promptly return the accompanying proxy in the enclosed envelope.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The proxy statement/prospectus statement is dated October 5, 2009, and is first being mailed on or about October 5, 2009.

If you would like additional copies of this proxy statement/prospectus or have questions about the proposals, you should contact George Lu, Chairman, Chief Executive Officer and President, 2020 ChinaCap Acquirco, Inc., c/o Surfmax Corporation, 221 Boston Post Road East, Suite 410, Marlborough, Massachusetts 01753, (508) 624-4948.

To obtain timely delivery of requested materials, security holders must request the information no later than five business days before the date they submit their proxies or attend the special meeting. The latest date to request the information to be received timely is October 12, 2009.

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FORWARD LOOKING STATEMENTS			1
SUMMARY			2
QUESTIONS AND ANSWERS ABOUT THE PROPOSALS			7
2020 SELECTED HISTORICAL FINANCIAL DATA			23
WINDRACE SELECTED HISTORICAL FINANCIAL DATA			24
PRO FORMA SUMMARY FINANCIAL DATA			25
MARKET PRICE INFORMATION			29
RISK FACTORS			30
2020’S SPECIAL MEETING			56
CONSIDERATION OF THE ACQUISITION			62
THE PURCHASE AGREEMENT			80
2020 REDOMESTICATION			89
INFORMATION ABOUT WINDRACE			106
WINDRACE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			136
QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISKS			160
INFORMATION ABOUT 2020			162
2020’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			165
PRO FORMA UNAUDITED COMBINED FINANCIAL STATEMENTS			171
CAPITALIZATION			184
DIRECTORS AND MANAGEMENT			185
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			189
BENEFICIAL OWNERSHIP OF SECURITIES			193
SHARES ELIGIBLE FOR FUTURE SALE			199
DESCRIPTION OF THE COMBINED COMPANY’S SECURITIES FOLLOWING THE ACQUISITION			201
LEGAL MATTERS			203
EXPERTS			203
DELIVERY OF DOCUMENTS TO STOCKHOLDERS			203
WHERE YOU CAN FIND MORE INFORMATION			204
CONSOLIDATED FINANCIAL STATEMENTS OF WINDRACE			F-33

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FORWARD LOOKING STATEMENTS

This proxy statement/prospectus and certain information incorporated herein by reference contains “forward-looking statements” within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this proxy statement/prospectus other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any statements of plans and objectives for future operations and any statement of assumptions underlying any of the foregoing. Statements that include the use of terminology such as “may,” “will,” “expects,” “believes,” “plans,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology are forward-looking statements.

These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those projected or assumed in such forward-looking statements. Among the factors that could cause actual results to differ materially are our being a development stage company with no operating history, our dependence on key personnel some of whom may join us following a business combination, our personnel allocating their time to other businesses and potentially having conflicts of interest with our business, our potential inability to obtain additional financing to complete a business combination, the ownership of our securities being concentrated, and the factors detailed under the heading “Risk Factors” beginning on page 30 of this proxy statement/prospectus. All forward-looking statements and risk factors included in this proxy statement/prospectus are made as of the date hereof, based on information available to us as of the date hereof, and we assume no obligation to update any forward-looking statement or risk factor except as required by applicable law.

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RISK FACTORS

You should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before you decide whether to vote or instruct your vote to be cast to adopt the Acquisition and the Redomestication Proposals. If we complete the Acquisition of Windrace, Exceed will be subject to a number of risks. Exceed has described all material risks that are currently known and reasonably foreseeable. You should carefully consider the risks we describe below and the other information included in this proxy statement/prospectus before you decide how you want to vote on the Acquisition Proposal and the Redomestication Proposal. Following the closing of the Acquisition, the market price of our common stock could decline due to any of these risks, in which case you could lose all or part of your investment. In assessing these risks, you should also refer to the other information included in this proxy statement/ prospectus, including our consolidated financial statements and the accompanying notes. You should pay particular attention to the fact that we would become a BVI company with substantial operations in the PRC. As a result, we would be subject to legal and regulatory environments that differ in many respects from those of the United States. Our business financial condition or results of operations could be affected materially and adversely by any of the risks discussed below. This discussion contains forward-looking statements.

Risks Relating to Windrace’s Business

Deterioration of economic conditions and a resulting decrease in consumer demand for Windrace’s products could materially adversely affect its financial condition and results of operations.

Demand for Windrace’s products, and the resulting purchase orders from its distributors, is largely dependent upon prevailing economic conditions. The recent financial crisis and economic downturns in global markets have impacted, and could further impact, the purchase orders from its distributors. Windrace’s revenue decreased 19.7% from RMB1,017.4 million (approximately $149.2 million) for the six months ended June 30, 2008 to RMB816.8 million (approximately $119.8 million) for the six months ended June 30, 2009. As the crisis spreads to China, demand for consumer products, including demand for Windrace’s sports products, could further decline.

Windrace distributes its products mainly through the Xidelong retail stores operated by independent third party distributors over which Windrace has limited control.

Windrace distributes its products mainly through the Xidelong retail stores, which offer Windrace’s products exclusively and do not carry other brands’ products. Windrace’s 23 distributors own and operate all Xidelong retail stores. They operate some of the Xidelong retail stores directly and delegate operation of the remaining stores to third parties. Windrace has limited control over the Xidelong retail stores operated by its distributors and authorized third party retail store operators. It has contractual relationships only with its distributors and not with authorized third party retail store operators. There can be no assurance that these current distribution arrangements provide Windrace sufficient control to ensure the Xidelong retail stores sell Windrace’s products on an exclusive basis or to prevent its Xidelong brand from being associated with any negative image relating to quality or customer service. Such association could damage Windrace’s brand image and reputation and could have a material adverse effect on its business, results of operations and financial condition. Further, if distributors experience financial difficulties, they may unilaterally attempt to liquidate their inventory build-up through discounts at their Xidelong retail stores without Windrace’s approval, which may damage the image and the value of Windrace’s “” (Xidelong) brand.

Adverse changes in the business and creditworthiness of Windrace’s distributors could materially adversely affect its financial condition and results of operations.

Windrace derives all of its revenue from sales to distributors. Such arrangement is risky for the following reasons:

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If Windrace’s distributors perform poorly or if Windrace fails to maintain good relationship with its distributors or retains them in its distribution network, Windrace’s sales, financial condition and operating results may be adversely affected.

Windrace relies on its distributors for the expansion of its retail sales network but they may not be willing to accommodate the needs of Windrace’s business plans.

As of June 30, 2009, Windrace’s distribution network consisted of 3,411 Xidelong retail stores covering 28 provinces and municipalities in China, 995 of which were operated directly by 23 distributors and the remaining 2,416 were operated indirectly through authorized third party retail store operators. Windrace relies on its existing and new distributors to assist it in exploring new markets for its products and identifying potential locations for new stores. The number of the Xidelong retail stores increased from 3,277 at December 31, 2008 to 3,411 at June 30, 2008. Some of Windrace’s distributors, however, also distribute other brands of sports and leisurewear products, including competitor brands. Although these distributors are required to operate separate retail stores for other brands’ products, there can be no assurance that they will always provide favorable retail store locations and marketing resources to Windrace. There can be no assurance that their expansion would be timely or sufficient in scope to satisfy the needs of Windrace’s business.

Windrace relies on several large distributors for a significant portion of its sales.

Windrace derives a significant portion of its sales from several large distributors. For 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009, sales to its top five distributors accounted for approximately 58.0%, 43.4%, 43.1%, 46.3% and 32.7%, respectively, of its total revenue. For 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009, sales to Windrace’s single largest distributor accounted for approximately 18.5%, 13.8%, 12.3%, 12.8% and 9.4%, respectively, of Windrace’s total revenue. Windrace generally enters into distributorship agreements with its distributors for up to a term of 12 months. The duration of Windrace’s contractual relationships with each of its top five distributors has been for more than three years. Windrace does not manufacture its products on a make-to-order basis, but takes orders for its prototype products at sales fairs before entering into sale contracts with its distributors to manufacture its products. Windrace’s purchase orders at sales fairs constitute approximately 80% to 90% of its revenue. There can be no assurance that Windrace’s top distributors will renew their distributorship agreements with Windrace on commercially acceptable terms or at all.

Under Windrace’s agreements with its distributors, Windrace appoints only one distributor instead of multiple competing distributors for one designated geographical area or region. This enables it to manage and monitor the distributor and the Xidelong retail stores in the designated region more effectively. While Windrace may rely on a sole distributor in a designated region to sell its products, Windrace believes it would be able to appoint a replacement distributor in the designated region if the need arises. However, to the extent that any distributor for any particular market ceases to cooperate with Windrace for any reason and Windrace is not able to find a suitable replacement distributor for that market in a timely manner, Windrace may lose significant business in that market. Furthermore, Windrace’s top distributors are not obliged to continue to place orders with Windrace at the same levels as before or at all. There can be no assurance that Windrace would be able to obtain orders from other distributors to replace any such lost sales. Any substantial reduction in purchases from Windrace’s top distributors, or any failure to renew their agreements with Windrace, may result in a significant loss of sales and Windrace’s business, financial condition and results of operation may be materially adversely affected.

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The wholesale prices at which Windrace sells its products to its distributors are determined by factors beyond its control. In addition, sales of Windrace’s products at a discount to suggested retail price to end customers could have an adverse effect on Windrace’s business and brand name.

The prices at which Windrace sells its products are affected by supply and demand fluctuations inherent in the market for its products. Under its business model, Windrace sells its products to distributors and does not sell directly to consumers. Windrace does not have any agreements with its distributors that provide for a minimum purchase price at which the distributors buy its products. Windrace does, however, provide suggested retail prices. As such, the wholesale prices Windrace offers for its products to its distributors must match the distributors’ expectations for the retail sale of its products to consumers. If distributors believe that Windrace’s suggested retail prices do not justify the wholesale prices Windrace is offering them, they may require Windrace to lower its wholesale prices. If the wholesale prices of Windrace’s products should decrease, Windrace’s growth targets, financial condition, and results of operations may be materially adversely affected.

During the years ended December 31, 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009, a number of distributors notified Windrace of certain products with minor deviation from specification. Because such deviation and the amounts involved were immaterial, Windrace allowed the distributors and their authorized third-party retailers to sell these products at a discount to the suggested retail prices to end consumers. The amounts of any such discount were decided and approved by Windrace on a case-by-case basis. Further, such discounts only affected the suggested retail prices to end consumers and had no impact on Windrace’s revenue because the wholesale price at which Windrace sold these products to the distributors remained unchanged. However, if the deviation from specification and the amounts involved were to become material in the future, the distributors could potentially negotiate for a reduction in the wholesale prices, which would adversely affect Windrace’s business. Increased sales of products with deviation from specification could also damage Windrace’s brand image.

Windrace is exposed to credit risks of its distributors, some of which may experience financial difficulties, which could in turn adversely affect Windrace’s financial condition and results of operations.

Windrace provides credit terms to its distributors based on its assessment of each distributor’s financial condition. Windrace’s distributors place advance orders at sales fairs but the risk of default may increase when dealing with financially ailing distributors or distributors struggling with economic uncertainty. Windrace’s increased sales going forward may rely heavily on credit, and Windrace may be unable to collect these accounts receivable in full or at all. The loss of, or significant decrease in, sales to these distributors, or their failure to pay Windrace in a timely manner or at all, could materially adversely affect Windrace’s business, financial condition and results of operation.

Windrace’s sales to distributors may not directly correlate to the demand for its products by end consumers, which could adversely affect Windrace’s ability to accurately track market trends and preferences of end consumers for its products and respond to such changing market dynamics.

Windrace sells its products to distributors and does not sell directly to end consumers. Windrace neither accepts returns from distributors of unsold stock nor tracks information on a real-time basis with respect to the inventory levels and movements of its products at all of the Xidelong retail stores. Windrace’s distributors do not provide Windrace with any sales reports. Therefore, in order to monitor consumer demand for its products, Windrace requires its distributors to submit inventory reports that provide information on the sales of Windrace’s products by its distributors. These reports enable Windrace to identify whether its products are gaining consumer acceptance at the Xidelong retail stores. However, such reporting system requires the cooperation of the distributors to report accurately and submit the relevant inventory data to Windrace on a timely basis. If Windrace’s distributors do not provide accurate and timely inventory data, Windrace is not able to assess accurately whether its sales to distributors track sales of its products to end consumers. Further, Windrace is only able to obtain inventory data from the retail stores directly operated by the distributors but not the authorized third party retail store operators because Windrace does not have contractual relationships with them. Therefore, Windrace relies on its distributors to monitor inventory levels and overall sales performance

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of authorized third party retail store operators. If Windrace is unable to track end-consumer sales accurately, it may not be able to assess market trends and preferences, which ultimately could have a material adverse effect on its revenue.

Windrace faces increasing labor costs and other costs of production in the PRC, which could materially adversely affect its profitability.

The sportswear manufacturing industry is labor intensive. Labor costs in China have been increasing in recent years and Windrace’s labor costs in the PRC could continue to increase in the future. If labor costs in the PRC continue to increase, Windrace’s production costs, including both Windrace’s own manufacturing and its outsourcing costs, will likely increase. This may in turn affect the selling prices of Windrace’s products, which may then affect the demand of such products and thereby adversely affect Windrace’s sales, financial condition and results of operations. Moreover, increases in costs of product parts required for production of Windrace’s products such as natural and synthetic leather, and semi-finished rubber soles, increases in electricity costs and other increases in production costs may cause similar adverse effects, particularly if Windrace is unable to identify and employ other appropriate means to reduce its costs of production. Furthermore, Windrace may not be able to pass on these increased costs to consumers by increasing the selling prices of its products in light of competitive pressure in the markets where it operates. In such circumstances, its profit margin may decrease and its financial results may be adversely affected.

Interruptions in Windrace’s supply of raw materials and product parts could adversely affect its business, financial condition and results of operations.

Windrace purchases a large portion of its raw materials and product parts from a small number of suppliers. For 2006, 2007 and 2008, Windrace’s standard supply agreements were for one year. Starting from 2009, such agreements have been extended to two years. For 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009, Windrace purchased raw materials for its products from 48, 38, 36, 32 and 44 suppliers, respectively, most of which are located in Quanzhou, which is adjacent to Jinjiang. Windrace’s contractual relationships with most of its suppliers have been in place since 2004. For 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009, Windrace’s top five raw material suppliers and subcontractors accounted for approximately 30.3%, 35.6%, 40.4%, 45.0% and 42.6%, respectively, of its total purchases from raw material suppliers and subcontractors. Windrace’s single largest supplier accounted for approximately 11.4%, 7.9%, 9.9%, 12.5% and 12.6%, respectively, of its total purchases. There can be no assurance that Windrace’s top suppliers will continue to deliver raw materials or product parts to it in a timely manner or at acceptable prices and quality, or at all. Any disruption in supply of raw materials or product parts from Windrace’s suppliers may adversely affect its business, financial condition and results of operations.

Windrace’s profitability may decrease if it is unable to pass on increased cost of raw materials and product parts to its customers.

Windrace’s manufacturing operations depend on adequate supplies of raw materials and product parts. Windrace purchases all of its raw materials on an order-by-order basis with suppliers. The prices of certain of Windrace’s key raw materials, such as synthetic leather, are subject to factors beyond its control, such as fluctuations in crude oil prices. Windrace may also experience difficulty in obtaining other acceptable quality materials on a timely basis and the prices that it pays for such materials may increase due to increased demand or other factors. Windrace may not be able to pass on the increased cost to its customers by increasing the selling prices due to competitive pressure in the markets. In such circumstances, Windrace’s business, financial condition and results of operations may be adversely affected.

Windrace relies on third party contract manufacturers for a portion of its footwear production and all of its apparel and accessories production and failure of such parties to provide products in a timely fashion could adversely affect its business, financial condition and results of operations.

During 2006, 2007 and 2008, Windrace outsourced a portion of its footwear production to three contract manufacturers and all of its apparel and accessories production to more than 30 contract manufacturers. During the six months ended June 30, 2008, Windrace outsourced production of a portion of its footwear to three contract manufacturers and all of its apparel and accessories to 20 contract manufacturers. During the six

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months ended June 30, 2009, Windrace outsourced production of a portion of its footwear to two contract manufacturers and all of its apparel and accessories to more than ten contract manufacturers. The table below sets forth the percentages of the products that Windrace outsourced to these contract manufacturers in terms of sales volume for the periods indicated:

		For the year ended December 31,												For six months ended June 30,
		2006				2007				2008				2008				2009
Footwear			20.3	%			37.1	%			47.8	%			55.4	%			21.9	%
Apparel			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Accessories			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%

For 2006, 2007 and 2008, the duration of agreements with Windrace’s contract manufacturers for footwear, apparel and accessories had been one year. Starting from 2009 the duration of agreements with Windrace’s contract manufacturers has been extended to two years.

For 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009, Windrace’s single largest contract manufacturer of footwear accounted for approximately 39.3%, 35.2%, 40.8%, 41.2% and 38.9%, respectively, of its total purchases of footwear. For 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009, Windrace’s single largest contract manufacturer for apparel and accessories accounted for approximately 20.9%, 14.8%, 15.7%, 14.0% and 22.6%, respectively, of its total purchases of apparel and accessories. For 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009, Windrace’s top five contract manufacturers for apparel and accessories accounted for approximately 49.6%, 48.0%, 57.1%, 54.2% and 71.9%, respectively, of its total purchases of apparel and accessories.

Windrace has not entered into any long term contracts with these contract manufacturers. As such, there can be no assurance that Windrace can renew these contracts upon expiry, on commercially acceptable terms, or at all. Contract manufacturers may unilaterally terminate Windrace’s supply contracts or they may seek to increase the prices that they charge. As a result, Windrace is not assured of an uninterrupted supply of footwear, apparel and accessories of acceptable quality or at acceptable prices from its contract manufacturers. Windrace may not be able to offset any interruption or decrease in supply of its products by increasing production at its own production facilities due to capacity constraints, and it may not be able to substitute suitable alternative contract manufacturers in a timely manner at commercially acceptable terms. Any disruption in Windrace’s supply of products from contract manufacturers may adversely affect Windrace’s business and could result in loss of sales and increase in production costs, which would adversely affect Windrace’s business and results of operations.

Windrace may be involved in legal proceedings arising from violation of relevant laws, rules or regulations particularly in respect of labor and environmental protection by third party contract manufacturers and suffer from damage to its reputation.

Windrace contracts with third-party contract manufacturers and raw material suppliers. In order to protect the reputation of its brand, Windrace strives to adhere to all relevant laws, rules and regulations, particularly in respect of labor and environmental protection. However, Windrace does not exercise any control over the operations of its contract manufacturers or suppliers and is therefore not able to ensure their compliance with applicable laws and regulations. Therefore, there can be no assurance that Windrace’s contract manufacturers or suppliers are in compliance with, or will comply with, all applicable labor and environmental laws, rules and regulations with respect to their manufacturing operations. In the event that Windrace’s contract manufacturers or suppliers violate any of these laws, rules or regulations, any resulting negative publicity may damage Windrace’s brand and defeat its brand building efforts. In the event that Windrace were named as a defendant in a lawsuit or any other proceeding arising from violations by Windrace’s contract manufacturers or suppliers of any applicable laws, rules or regulations with respect to their manufacturing operations, Windrace will incur costs and resources in defending itself in such a lawsuit or proceeding. As a result of the foregoing factors, Windrace’s business, profitability and results of operations may be adversely affected.

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Failure to continue to obtain high quality endorsers to promote Windrace’s products could harm Windrace’s business.

Windrace engages external educational institutions, former professional athletes and celebrities to promote its products and establish the credibility of its products with consumers. If any of Windrace’s endorsers associated with Windrace’s products were to stop using its products in violation of their endorsement agreements, Windrace’s business could be adversely affected. In addition, actions taken by these endorsers that harm their reputations could in turn also harm Windrace’s brand image with consumers, which could have an adverse effect on Windrace’s sales and financial condition. In addition, poor performance by Windrace’s endorsers in their fields, Windrace’s failure to continue to correctly identify promising athletes and/or celebrities to use and endorse its products, or Windrace’s failure to enter into endorsement arrangements with prominent athletes and sports organizations, could adversely affect Windrace’s brand and result in decreased sales of its products.

Failure to effectively promote or maintain the Xidelong brand may affect Windrace’s performance and sales and incur significant costs.

The image of the Xidelong brand is an important factor in influencing consumer preferences and building brand loyalty. Promoting and maintaining the Xidelong brand is therefore crucial to Windrace’s success and growth within the PRC sportswear market. Windrace has a branding and promotional department that deals mainly with media arrangements, sponsorships and other endorsement activities. Windrace uses a variety of media, such as television, newspapers, magazines, the Internet and outdoor billboard displays to build both regional and national brand recognition. Windrace collaborates with athletes, media celebrities and industry experts on marketing and endorsement arrangements and they act as spokespersons for the Xidelong brand. Windrace spent approximately 7.0%, 7.2%, 7.5%, 4.2% and 3.9% of its annual revenue on its advertising and promotional activities for 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009, respectively. If Windrace is unsuccessful in promoting its Xidelong brand among its targeted consumer groups, the goodwill and consumer acceptance of its Xidelong brand may be eroded, and its business, financial condition, results of operations and prospects may be adversely affected. As Windrace also promotes its brand through athletes, media celebrities and spokespersons, its brand is partly dependent on the public perception of these individuals, over which Windrace has no control. Any negative publicity, whether in the PRC or abroad, in relation to Windrace’s brand or its brand representatives could have an adverse effect on the public’s perception of its brands, which could have a negative impact on Windrace’s business and results of operations.

In addition, Windrace has incurred and expects to continue to incur significant costs and expenses arising out of its brand-building activities including, but not limited to, sponsorships and increased advertising in regional and national newspapers, magazines, the Internet, television and billboard displays. These activities may not be successful in building the goodwill and profile of Windrace’s brand, which could have a negative effect on its sales and results of operations.

Windrace’s sales may be affected by seasonality, weather conditions and a number of other factors.

Windrace operates its business in the PRC and derives all of its revenue from these operations. Generally, PRC consumers’ spending behavior is stable year-on-year but varies seasonally, particularly during the Chinese New Year in early spring, the Labor Day holiday in early May, the summer months and the National Day holiday in early October.

Generally, Windrace experiences moderate fluctuations in its aggregate sales volume during the year. Historically, revenues in the third and fourth fiscal quarters have slightly exceeded those in the first and second fiscal quarters. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and geographic demand for particular types of footwear, apparel and accessories. In addition, unexpected and abnormal changes in climate may affect sales of Windrace’s products that are timed for release during a particular season. For example, the climate change resulted in an extended winter season from 2008 to 2009 in many regions in China. A longer winter adversely affected the delivery schedules to the distributors and the sales volumes of Windrace’s spring and summer collections in the first quarter of 2009.

Fluctuations in Windrace’s sales may also result from a number of other factors including:

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As a result, we believe that comparisons of Windrace’s operating results between any interim periods may not be meaningful and that these comparisons may not be an accurate indicator of Windrace’s future performance.

Windrace’s operations may be disrupted and its business, financial condition and/or results of operations may be adversely affected by a failure in its facilities for reasons beyond its control.

Windrace’s manufacturing operations could be disrupted for reasons beyond its control. The causes of disruptions may include extreme weather conditions, landslides, earthquakes, fires, natural catastrophes, raw material supply disruptions, equipment and system failures, labor force shortages, energy shortages, workforce actions or environmental issues. Any significant disruption to Windrace’s operations could adversely affect its ability to make and sell products.

In addition, the occurrence of any of these events could have a material adverse effect on the productivity and profitability of any of Windrace’s manufacturing facilities and on its business, financial condition or results of operations, and/or the operations of its distributors.

In May 2008, Wenchuan County of Sichuan Province, a region that is approximately 360 kilometers away from Chongqing City, suffered an earthquake with a 8.0 magnitude on the Richter Scale. 87 retail stores of Windrace’s distributors were shut down as a result of the earthquake. There can be no assurance that Windrace will not suffer any further losses as a result of similar reasons beyond its control in the future.

Windrace has a limited operating history and its historical results of operations of its apparel business may not be indicative of its future performance.

Windrace’s business began when XDLong Fujian was established in September 2001. Windrace therefore has a limited history of operation and the historical financial information in this proxy statement/prospectus may not necessarily reflect its future results of operation. There also may not be a sufficient basis to evaluate its future prospects.

Further, since the commencement of its apparel business in 2003, Windrace has outsourced all of its apparel production to contract manufacturers. Windrace is currently examining plans to commence its own production of apparel. Windrace has a limited operating history in the sale and marketing of apparel and does not have any experience in manufacturing apparel. As a result, the historical operating results of Windrace’s apparel business may not provide a meaningful basis for evaluating the performance of its apparel business going forward and may not be indicative of its future performance.

If Windrace is unable to increase its production capacity due to its internal production constraints or its inability to locate suitable contract manufacturers with sufficient production capacity of their own, its operating results may be adversely affected.

Windrace manufactures a significant portion of its footwear at its production facility in Jinjiang, Fujian province. Windrace outsources the manufacturing of a portion of its footwear and all of its apparel and accessories to contract manufacturers. Although Windrace produces a portion of its footwear products in house, it expects to continue to rely on contract manufacturers for the production of a portion of its footwear and all of its apparel and accessories. Therefore, Windrace’s ability to continue to increase its sales depends on the successful expansion of its footwear production capacity at its production facility and the availability of

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contract manufacturers with sufficient production capacity of their own. If Windrace is unable to continue to increase its internal production capacity or engage suitable contract manufacturers, its operating results may be adversely affected.

Windrace may not be able to manage its growth effectively and its growth may slow down in the future.

Windrace has been expanding its business rapidly and intends to continue to do so either through organic growth or through acquisitions and investments in related businesses as it deems appropriate. Such expansion may place a significant strain on Windrace’s managerial, operational and financial resources. Further, Windrace has no prior experience in engaging in the management and operation of retail stores or retail business. Windrace will need to manage its growth effectively, which may entail devising and implementing business plans, training and managing its growing workforce, managing its costs and implementing adequate control and reporting systems in a timely manner. There can be no assurance that Windrace’s personnel, procedures and controls will be managed effectively to support its future growth adequately. Failure to manage its expansion effectively may affect its success in executing its business plan and adversely affect its business, financial condition and results of operation. In addition, Windrace’s growth in percentage terms may slow in the future. Accordingly, you should not rely on its historic growth rate as an indicator for its future growth rate.

Windrace may not be successful in its future expansion plans and may be unable to secure sufficient funding for such plans to further grow its business.

Windrace’s business expansion plans will require it to increase investments in, and devote significant resources to, its brand promotion efforts, its internal production capacities, its research and design capabilities and the Xidelong sales distribution network operated by its distributors. If Windrace fails to implement its future expansion plans, it may not achieve its growth target. Furthermore, Windrace’s ability to obtain adequate funds to finance its expansion plans depends on its financial condition and results of operations, as well as other factors that may be outside its control, such as general market conditions, the performance of the PRC sportswear industry, and political and economic conditions in China. If additional capital is unavailable, Windrace may be forced to abandon some or all of its expansion plans, as a result of which its business, financial condition and results of operations could be adversely affected.

Loss of any key executive personnel or any failure to attract such personnel in the future will adversely impact Windrace’s business and growth prospects.

Windrace’s future success will depend on the continued service of its senior management. In particular, Mr. Lin Shuipan, chairman of the board and chief executive officer, has over 15 years’ experience in the sportswear industry and is responsible for the overall corporate strategies, planning and business development of Windrace group. His experience and leadership is critical to Windrace’s operations and financial performance. Windrace does not maintain any “key-man” insurance policy. If Windrace loses the services of Mr. Lin or any of its key executive personnel and cannot replace them in a timely manner, such loss may reduce its competitiveness, and may adversely affect its financial condition, operating results and future prospects. In addition, Windrace’s success depends significantly on other personnel and, in particular, its team of designers. Other international and domestic competitors that operate in the PRC may be able to offer more favorable compensation packages to recruit personnel whom Windrace considers desirable. Windrace’s continued success will depend on its ability to attract and retain qualified personnel in order to manage its existing operations as well as its future growth. Windrace may not be able to attract, assimilate or retain the personnel whom it needs. Its staff expenses in relation thereto may increase significantly. This may adversely affect its ability to expand its business effectively.

Failure to develop technically innovative products could adversely affect Windrace’s competitiveness.

While design and aesthetics of Windrace’s products are important factors for consumer acceptance of its products, technical innovation in the design of footwear, apparel, and sports equipment is also essential to the commercial success of its products. Research and development plays a key role in technical innovation. Windrace relies upon specialists in the fields of biomechanics, exercise physiology, engineering, industrial design and related fields, and other experts to develop cutting edge performance products. While Windrace

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strives to produce products that help to reduce injury, enhance athletic performance and maximize comfort, its failure to introduce technical innovation in its products could result in a decline in consumer demand for its products.

Windrace’s research and development capabilities may be adversely affected if it is unable to renew the technology cooperation agreement with China Institute of Sport Science.

One element of Windrace’s growth strategy is to continue to design and manufacture products through further investment in product design and research and development initiatives. Windrace primarily relies on the China Institute of Sport Science for such research and development initiatives. Its technology cooperation agreement with the China Institute of Sport Science, General Administration of Sport of China is for a term of five years from October 20, 2006, which Windrace may renew at its option. There can be no assurance, however, that the China Institute of Sport Science will comply with the terms and conditions of the agreement and the renewal provisions. If Windrace does not renew the agreement or if the China Institute of Sport Science breaches the agreement prior to the expiration of its term for any reason, Windrace’s research and development capabilities may be adversely affected. This could in turn have an indirect adverse effect to Windrace’s results of operations and financial condition.

Windrace may be involved in litigation on intellectual property infringement or other litigation or regulatory proceedings, which could adversely affect its reputation, financial condition and results of operations.

Windrace may design products with elements that may inadvertently infringe copyright or other intellectual property rights, as a result of which other parties may initiate litigation or other proceedings against it. Responding to and defending these proceedings may require substantial costs and diversion of resources, and the result of these proceedings may be uncertain. Furthermore, Windrace’s reputation may be adversely affected.

Windrace may be subject to other lawsuits and regulatory actions relating to its business from time to time. Due to the inherent uncertainties of litigation and regulatory proceedings, Windrace cannot accurately predict the ultimate outcome of any such proceedings. An unfavorable outcome could have an adverse impact on its business, financial condition and results of operations. In addition, any significant litigation in the future, regardless of its merits, could divert management’s attention from Windrace’s operations and result in substantial legal fees.

If Windrace is unable to adequately protect its intellectual property, it may be involved in legal proceedings which could be expensive and time consuming and consumers may shift their preference away from its products.

We believe that Windrace’s trademarks, patents, and other intellectual property rights are important to its brand, its success and its competitive position. Windrace considers its Xidelong and “” trademarks to be among its most valuable assets and it has registered these trademarks in the PRC. In addition, Windrace owns other trademarks that it uses in marketing its products. Windrace periodically discovers products that it believes are counterfeit reproductions of its products or that otherwise infringe on its intellectual property rights. Windrace may pursue litigation in the future to enforce its intellectual property rights. Any such litigation could result in substantial costs and a diversion of its resources. If Windrace is unsuccessful in challenging a party’s products on the basis of trademark or design or utility patent infringement, continued sales of these products could adversely affect Windrace’s sales and its brand and result in the shift of consumer preference away from its products. The actions Windrace takes to establish and protect trademarks, patents, and other intellectual property rights may not be adequate to prevent imitation of its products by others or to prevent others from seeking to block sales of its products on grounds of violations of proprietary rights.

Changes in existing laws and regulations or additional or stricter laws and regulations on environmental protection in the PRC may cause Windrace to incur additional capital expenditures.

Windrace’s production facility is located in Jinjiang, Fujian province and is subject to PRC environmental protection laws and regulations. These laws and regulations require enterprises engaged in manufacturing that

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may generate industrial waste to adopt effective measures to control and properly dispose of such waste. The relevant administrative department for environmental protection can levy fines for any violations of such environmental laws or regulations. For material violations, the PRC government may suspend or close any or all of Windrace’s operations. There can also be no assurance that the PRC government will not change the existing laws or regulations or impose additional or stricter laws or regulation. Compliance with any of these additional or stricter laws or regulations may cause Windrace to incur additional capital expenditure, which it may be unable to pass on to its customers through higher prices for its products.

Windrace’s current insurance coverage may not be sufficient to cover the risks related to its operations.

Windrace’s operations are subject to hazards and risks normally associated with manufacturing operations, which may cause damage to persons or property. Currently, Windrace maintains insurance policies for damage to real property and for employer liability for personal injury of employees. Windrace is not required under PRC law to maintain, and it does not maintain, any product liability insurance. If Windrace was found liable for any product liability claim, it may be required to pay substantial damages. Even if Windrace were successful in defending such a claim, it may incur substantial financial and other resources in defending such a claim. Under such circumstances, its financial results will be adversely affected. Depending on the outcome of any such claim, the reputation of Xidelong brand may also be adversely affected. Further, Windrace does not maintain business interruption insurance or third party liability insurance against claims for property damage, personal injury and environmental liabilities. The occurrence of any of these events may result in interruption of Windrace’s operations and subject it to significant losses or liabilities. Any losses or liabilities that are not covered by Windrace’s current insurance policies may have a material adverse effect on its business, financial condition and results of operations.

Non-compliance with PRC laws and regulations by Windrace may result in certain legal consequences under PRC law.

Pursuant to the State-owned Land Use Right Transfer Contract for the grant of land use rights for the production site in Jinjiang, XDLong Fujian is required to commence construction by February 28, 2006. However, XDLong Fujian did not commence construction by such date. XDLong Fujian is applying to relevant local government agency to postpone construction on the land. However, it is possible that the local government may repossess the land before XDLong Fujian obtains an approval to postpone construction. The land covers an area of approximately 15,000 square meters and XDLong Fujian paid approximately RMB53,000 to the government as land grant fees. If the local government repossesses the land, Windrace will lose its land use rights over the land and Windrace will not be able to recover the land grant fees previously paid to the government. In addition, Windrace will not be able to construct additional facilities on the land to implement its expansion plans.

Under PRC law, a company must apply to the environmental protection authority in the PRC for an environmental protection examination and acceptance after completion of a construction project. XDLong China has not applied for an environmental protection examination and acceptance for a construction project that it finished. As a result, the environmental protection authority has the right to request XDLong China to rectify such non-compliance by applying for an environmental protection examination and acceptance within a specified period of time. If XDLong China fails to obtain an environmental protection examination and acceptance within the specified period of time, XDLong may be subject to a fine up to RMB50,000 or be ordered to suspend its operations.

Windrace recorded net current liabilities at December 31, 2006 and 2007 and there can be no assurance that Windrace will not experience net current liabilities again in the future.

Windrace had a net current liabilities position of approximately RMB43.2 million, and RMB0.4 million at December 31, 2006 and December 31, 2007, respectively, primarily due to outstanding advances from Mr. Lin Shuipan, an executive Director, of approximately RMB82.5 million and RMB82.5 million in 2006 and 2007. These advances from Mr. Lin mainly served as short term funds to support the expansion of Windrace’s footwear production facilities and the construction of its office building in Jinjiang. As of June 30, 2009, Windrace had a net asset position of approximately RMB135.5 million. However, there can be no assurance that Windrace will not experience periods of net current liabilities in the future. In the event that Windrace has net current liabilities in the future, its working capital for the purposes of its operations may be constrained.

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Difficulties in obtaining new credit facilities or acceleration of payments under existing credit facilities could have an adverse effect on Windrace’s liquidity.

Under the current economic situation, banks and other financial institutions have tightened lending to businesses. As a result, businesses have difficulties in obtaining credit at commercially acceptable terms, or at all. While Windrace obtained a new bank borrowing of RMB90.5 million in the six months ended June 30, 2009, there can be no assurance that Windrace will continue to be able to obtain additional funding when the need arises if current economic situation persists. If Windrace is unable to obtain new credit facilities and is unable to finance its liquidity or working capital requirements through cash flows from operating activities or other sources, its financial condition and results of operations could be adversely affected.

In addition, certain existing credit facilities of Windrace require consent from lenders in advance of a material change of ownership or change of business operations, including restructuring, mergers and acquisitions. As of June 30, 2009, an aggregate outstanding amount of RMB83.0 million of Windrace’s outstanding loans require such consent. Jingtian & Gongcheng, Windrace’s PRC counsel, is of the opinion that these loan agreements require consent for transactions that occur in the PRC. Therefore, offshore transactions such as the Acquisition should not require consents from the banks. In the event that the banks are of a different opinion and consider the Acquisition constitutes a material change of ownership or change of business operations and therefore require consents in advance of such changes, Windrace could be deemed as in breach of these agreements for not having obtained such consents in advance of relevant changes. If the banks accelerate its payment obligations under these agreements, Windrace’s liquidity could be adversely affected.

Windrace relied on loans from Mr. Lin Shuipan, an executive Director, in 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009 for its expansion and the cessation of such shareholder support may affect its cash flows.

Windrace had advances from Mr. Lin Shuipan, an executive Director, in the amount of approximately RMB82.5 million, RMB82.5 million, RMB0.9 million, nil and RMB3.6 million in 2006, 2007 and 2008 and the six months ended June 30, 2008 and 2009. These advances mainly served as short term funds to support the expansion of Windrace’s footwear production facilities and the construction of its office building in Jinjiang. In the event that Windrace fails to generate sufficient cash flows from its operations or obtain alternative financing to meet the operating expenditure of Windrace in the future, its working capital will be constrained.

Windrace’s risk management and internal control systems improvements may not be adequate or effective, which could adversely affect its business, financial condition and results of operations.

Windrace has established risk management and internal control systems consisting of relevant organizational framework, policies, procedures and risk management methods that it believes are appropriate for its business operations, and it seeks to continue to improve such risk management and internal control systems from time to time. However, due to the inherent limitations in the design and implementation of risk management and internal control systems, there can be no assurance that Windrace’s risk management and internal control systems will be sufficiently effective in identifying and preventing all such risks.

In addition, as some of its risk management and internal control policies and procedures are relatively new, Windrace may need to establish and implement additional risk management and internal control policies and procedures to further improve its systems from time to time. Windrace’s risk management and internal control systems also depend on their implementation by its employees, there can be no assurance that such implementation will not involve any human errors or mistakes. If Windrace fails to timely adapt and implement its risk management and internal control policies and procedures, its business, results of operations and financial condition could be materially adversely affected.

Risks Relating to the Industry in Which Windrace Operates

Windrace’s products face intense competition, and Windrace may not have the resources necessary to compete with its competitors.

Windrace is a sports and leisure footwear, apparel and accessories company. This industry is highly competitive in the PRC and the competitors in this market include both international and domestic companies. Some of Windrace’s competitors may have greater financial, research and development and design, marketing,

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distribution, management or other resources. Windrace’s results of operations could be affected by a number of competitive factors, including entry by new competitors into its current markets, expansion by existing competitors, better marketing/advertising leading to stronger brand equity for the competitors, and competition with other companies for the production capacity of contract manufacturers. Windrace’s results of operations and market position may be adversely impacted by these competitive pressures.

There can be no assurance that Windrace’s strategies will remain competitive or that Windrace will continue to be successful in the future. Increased competition could result in a loss of market share for Windrace. In particular, if its competitors adopt aggressive pricing policies, Windrace may be forced to adjust the pricing of their products to level their competitiveness. This could adversely affect Windrace’s profitability and financial results.

Windrace may not be able to predict or meet consumer preferences or demand accurately.

Windrace derives a significant amount of revenue from the sale of sports and leisurewear products that are subject to rapidly changing consumer preferences. Windrace’s sales and profits are sensitive to these changing preferences and its success depends on its ability to identify, originate and define product and fashion trends as well as to anticipate, gauge and react to changing consumer demands in a timely manner. All of Windrace’s products are subject to changing consumer preferences that it cannot predict with certainty. Windrace’s new products may not receive consumer acceptance as consumer preferences could shift rapidly to different types of performance or other sports footwear or apparel or away from these types of products altogether, and Windrace’s future success depends in part on its ability to anticipate and respond to these changes. If Windrace fails to anticipate accurately and respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, designs and styles, or influencing sports and fitness preferences through vigorous marketing, it could experience lower sales, excess inventories and lower profit margins, any of which could have an adverse effect on its results of operations and financial condition.

Consolidation of distributors or concentration of retail market share among a few distributors may increase and concentrate Windrace’s credit risk and impair its ability to sell its products.

The sports and leisure footwear, apparel, and accessories retail markets in the PRC are dominated by a few large sports and leisure footwear, apparel, and accessories distributors with many stores. These significant distributors may increase their market share by expanding through acquisitions or through the establishment of additional stores. The consolidation of distributors concentrates Windrace’s credit risk in a relatively small number of distributors and, if any of these retailers were to experience a shortage of liquidity, it would increase the risk of nonpayment of their outstanding payables to Windrace. In addition, any shifting concentration of market share to a small number of distributors in a particular county or region increases operational risks. If any one of them substantially reduces their purchases of Windrace’s products, Windrace may be unable to find a sufficient number of other retail stores for its products to sustain the same level of sales and revenues. Further, the consolidation of distributors could limit Windrace’s ability to negotiate contract terms in its favor. For example, due to a small number of distributors existing in the industry to whom Windrace can sell its products, Windrace’s ability to sell its products at the price level that it wishes to may be adversely affected. If the selling prices to the distributors decrease, Windrace’s profitability would be adversely affected.

Risks Relating to the PRC

All of Windrace’s business and its assets are located in the PRC. Accordingly, its results of operations, financial condition and prospects are subject, to a significant degree, to economic, political and legal developments in the PRC.

Windrace’s future performance is dependent on the PRC economy and, in particular, the level of growth of the PRC consumer market.

Windrace derives all of its revenue from sales of its products in the PRC. The success of its business depends on the condition and growth of the PRC consumer market, which in turn depends on macro-economic conditions and individual income levels in the PRC. There is no assurance that projected growth rates of the PRC economy and the PRC consumer market will be realized under current economic situation. Any future

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slowdowns or declines in the PRC economy or consumer spending may adversely affect Windrace’s business, operating results and financial condition. We believe that consumer spending habits may be adversely affected during a period of recession in the economy or that uncertainties regarding future economic prospects could also affect consumer spending habits, all of which may have an adverse effect on certain enterprises operating within the consumer and retail sectors, including Windrace. The consumer and retail market may be affected by the changing operating conditions in the PRC. With accession of the PRC to the World Trade Organization (the “WTO”), changes and developments in the consumer and retail market may be volatile and unpredictable. For instance, the reduction in tariffs on foreign products after the liberalization of the PRC market and further entry of international brands may intensify the competition in the PRC market. This may have a material adverse impact on Windrace’s business, operating results and financial condition.

Political, economic and social policies of the PRC government and PRC laws and regulations could affect Windrace’s business and results of operations and may result in its inability to sustain its growth.

The economy of the PRC differs from the economies of most developed countries in a number of respects, including:

Before its adoption of reform and open door policies beginning in 1978, China was primarily a planned economy. Since then, the PRC government has been reforming the PRC’s economic system, and has also begun reforming the government structure in recent years. These reforms have resulted in significant economic growth and social progress. Although the PRC government still owns a significant portion of the productive assets in the PRC, economic reform policies since the late 1970s have emphasized autonomous enterprises and the utilization of market mechanisms, especially where these policies apply to privately-owned businesses such as Windrace. Although we believe these reforms will have a positive effect on Windrace’s overall and long-term development, we cannot predict whether changes in the PRC’s political, economic and social conditions, laws, regulations and policies will have an adverse impact on Windrace’s current or future business, results of operations or financial condition.

Windrace’s ability to continue to expand its business is dependent on a number of factors, including general economic and capital market conditions, and credit availability from banks or other lenders. In the past few years, the PRC government has articulated a need to control the rate of economic growth and may tighten its monetary policies, including increasing interest rates on bank loans and deposits and tightening the money supply to control growth in lending. Under current economic situation, financial institutions have tightened their lending. Stricter lending policies may, among other things, affect Windrace’s ability to obtain financing, which may, in turn, adversely affect its growth and financial condition.

As Windrace conducts a significant portion of its business through its subsidiaries in China, Windrace is subject to PRC laws and regulations on labor and employee benefits. In recent years, the PRC government has implemented policies to strengthen the protection of employees and obligate employers to provide more benefits to their employees. In addition, an employment contract law came into effect in China on January 1, 2008. The PRC employment contract law and related legislations require more benefits to be provided to employees, such as an increase in pay or compensation for termination of employment contracts. As a result, Windrace expects to incur higher labor costs, which could have an adverse impact on its current or future business, results of operations or financial condition. Additional changes in the PRC’s political, economic and social conditions, laws, regulations and policies could have an adverse effect on Windrace’s business, results of operations or financial condition.

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The approval of the China Securities Regulatory Commission may be required in connection with this Acquisition under a recently adopted PRC regulation, and, if required, Windrace cannot currently predict whether it will be able to obtain such approval.

On August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission, or “CSRC,” promulgated the Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors, which became effective on September 8, 2006. This regulation, among other things, has certain provisions that purport to require offshore special purpose vehicles formed for overseas listing purposes and directly or indirectly controlled by PRC individuals or companies to obtain approval from the CSRC prior to listing their securities on an overseas stock exchange. The application of this new PRC regulation remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope and applicability of the CSRC approval requirement. On September 21, 2006, the CSRC published on its official website a notice specifying the documents and materials that are required to be submitted for obtaining CSRC approval. Since the regulation was promulgated, the PRC government has not issued the implementing rules, and there may be some uncertainties as to how this regulation will be interpreted or implemented. If the CSRC or another PRC regulatory agency subsequently determines that the CSRC approval is required for this Acquisition, Windrace may face sanctions by the CSRC or other PRC regulatory agencies. If this happens, these regulatory agencies may impose fines and penalties on Windrace’s operations in the PRC, limit its operating privileges in the PRC, delay or restrict the repatriation of the proceeds from this Acquisition into the PRC, restrict or prohibit payment or remittance of dividends by its PRC subsidiaries, or take other actions that could have a material adverse effect on its current or future business, results of operations or financial condition, reputation and prospects. The CSRC or other PRC regulatory agencies may also take actions requiring or advising Windrace to halt this Acquisition.

The regulation also established additional procedures and requirements that could make merger and acquisition activities by foreign investors in China more time-consuming and complex, including requirements in some instances that the Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. Compliance with the requirements of the regulation to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the Ministry of Commerce, may delay or inhibit Windrace’s ability to complete such transactions, which could affect its ability to expand business.

Failure to comply with the State Administration of Foreign Exchange regulations relating to registration of interests before the establishment of offshore special purpose companies by Windrace’s beneficial owners may adversely affect Windrace’s business operations.

On October 21, 2005, the State Administration of Foreign Exchange issued a public notice which became effective on November 1, 2005. The notice requires PRC residents to register with the local State Administration of Foreign Exchange branch before establishing or controlling any company, referred to in the notice as an “offshore special purpose company,” outside of the PRC for the purpose of capital financing (the “No. 75 SAFE Initial Registration”). Besides that, an alteration registration shall be filed after completing an investment in or acquisition of any operating subsidiaries in the PRC, which we refer to herein as a “round-trip investment,” and any change of shareholding or any other material capital alteration in such offshore special purpose company involving a round-trip investment shall also be filed within 30 days from the date of shareholding transfer or capital alteration, and the registration conducted under the above two situations is defined as the “No. 75 SAFE Alteration Registration.”

Mr. Lin Shuipan, Mr. Shi Jinlei and Ms. Chen Shuli are subject to the registration requirements under the No. 75 SAFE Notice, and have conducted the No. 75 SAFE Initial Registration with the Fujian Provincial State Administration of Foreign Exchange. After the offshore special purpose companies were established by the aforementioned persons, some round-trip investments by, and change of shareholders or other material capital alteration in, such offshore special purpose companies occurred, and Mr. Lin Shuipan, Mr. Shi Jinlei and Ms Chen are subject to the No. 75 Alteration Registration for the above events.

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Windrace’s PRC beneficial owners must comply with these requirements in connection with Windrace’s future investments and financing activities. If its PRC beneficial owners fail to comply with the relevant requirements, such failure may subject the beneficial owners to fines and legal sanctions, which may adversely affect Windrace’s business operations.

Windrace’s revenues are denominated in Renminbi, which is not freely convertible for capital account transactions and may be subject to exchange rate volatility.

Windrace is exposed to the risks associated with foreign exchange controls and restrictions in China, as its revenues are denominated in Renminbi, which is currently not freely exchangeable. The PRC government imposes control over the convertibility of Renminbi into foreign currencies. Under the rules promulgated under the PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and operation-related expenditures, may be made in foreign currencies without prior approval but are subject to procedural requirements. Strict foreign exchange control continues to apply to capital account transactions. These transactions must be approved by or registered with the PRC State Administration of Foreign Exchange and repayment of loan principal, distribution of return on direct capital investment and investments in negotiable instruments are also subject to restrictions. There can be no assurance that Windrace will be able to meet all of its foreign currency obligations or to remit profits out of China.

Fluctuation in the value of the Renminbi and of the U.S. dollar may have a material adverse effect on your investment.

Any significant revaluation of the Renminbi may have a material adverse effect on Windrace’s revenues and financial condition as well as on the value of, and any dividends payable on, its ordinary shares in foreign currency terms. For instance, a decline in the value of Renminbi against the U.S. dollar could reduce the U.S. dollar equivalent amounts of Windrace’s financial results, the value of your investment in Windrace and the dividends Windrace may pay in the future, if any.

There remains significant international pressure on the PRC government to further liberalize its currency policy, which could result in a further and more significant appreciation in the value of the Renminbi against the U.S. dollar. The Renminbi may be revalued further against the U.S. dollar or other currencies, or may be permitted to enter into a full or limited free float, which may result in an appreciation or depreciation in the value of the Renminbi against the U.S. dollar or other currencies.

Windrace relies principally on dividends paid by its subsidiaries to fund any cash and financing requirements it may have, and any limitation on the ability of its PRC subsidiaries to pay dividends to it could have a material adverse effect on its ability to conduct its business.

Windrace is a holding company incorporated in Cayman Islands and relies principally on dividends paid by its subsidiaries for cash requirements, including the funds necessary to service any debt it may incur. If any of Windrace’s subsidiaries incurs debt in its own name in the future, the instruments governing the debt may restrict dividends or other distributions on its equity interest to Windrace.

Furthermore, applicable PRC laws, rules and regulations permit payment of dividends by Windrace’s consolidated PRC entities only out of their retained earnings, if any, determined in accordance with PRC accounting standards which differ in many aspects from generally accepted accounting principles in other jurisdictions including IFRS. Based on PRC accounting standards, Windrace’s consolidated PRC entities are also required to set aside a certain percentage of their after-tax profit each year to their reserve fund in accordance with the requirements of relevant laws and provisions in their respective articles of associations, which are not available for distribution as cash dividends. As a result, Windrace’s consolidated PRC entities are restricted in their ability to transfer a portion of their net income to it whether in the form of dividends, loans or advances. Any limitation on the ability of Windrace’s subsidiaries to pay dividends to it could materially adversely limit its ability to grow, make investments or acquisitions that could be beneficial to its businesses, pay dividends or otherwise fund and conduct its business. Under the new PRC Enterprise Income Tax Law and implementation regulations issued by the State Council, PRC income tax at the rate of 10%, unless relevant treaties provide for a lower rate, is applicable to dividends paid by enterprises incorporated in the PRC to “non-resident enterprises” (enterprises that do not have an establishment or place of business in the PRC,

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or that have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business) subject to the application of any relevant income tax treaty that the PRC has entered into. If Windrace or its non-PRC incorporated subsidiaries are considered “nonresident enterprises,” any dividend that Windrace or any such subsidiary receives from Windrace’s PRC subsidiaries may be subject to PRC taxation at the 10% rate (or lower treaty rate).

Any changes in PRC policies on enterprise income tax may adversely affect Windrace’s ability in paying dividends and financial condition.

Windrace’s subsidiaries are incorporated in the PRC, Hong Kong or the British Virgin Islands. On March 16, 2007, the new PRC Enterprise Income Tax Law (the “new tax law”) was issued and on December 6, 2007, the Rules on the Implementation of Enterprise Income Tax Law of the PRC (“Implementation Rules”) were issued, both of which became effective on January 1, 2008. Under the new tax law, non-PRC tax resident enterprises will be taxed at a withholding tax rate of 5% for Hong Kong companies and 10% for British Virgin Islands companies. If an entity is deemed to be a PRC tax resident enterprise, which is an enterprise that is set up under PRC law within the territory of the PRC, or set up under the law of a foreign country or region but which has “de facto management organization” within the PRC, then qualified dividend and profit distribution from equity investment between them shall be exempted from withholding tax and income tax. Among other things, qualified dividend and profit distribution as stated in the new tax law shall refer to investment income derived by a PRC tax resident enterprise from the direct investment in other PRC tax resident enterprises, which shall exclude investment income from circulating stock issued publicly by PRC tax resident enterprises and traded on stock exchanges where the holding period is less than 12 months.

Windrace’s subsidiaries may trigger withholding tax requirements in the future under the new tax law and the Implementation Rules, depending on their classification as a PRC or non-PRC tax resident enterprise. The new tax law provides that if an enterprise incorporated outside of the PRC has “de facto management organization” within the PRC, it may be recognized as a PRC tax resident enterprise and may be subject to a 25% enterprise income tax on its worldwide income. According to the Implementation Rules, “de facto management organization” means the institution which materially and comprehensively manages and controls the enterprise’s business, personnel, finance and assets. Given the short history of the tax law and the Implementation Rules, how an enterprise qualifies for tax exemptions remains unclear. Windrace’s ability in paying dividends and financial condition may be adversely affected as a result of the new tax law and other changes in PRC policies and regulations on dividend distributions, withholding tax, and enterprise income tax.

All of Windrace’s management is currently substantially based in the PRC, and may remain in the PRC after the new tax law takes effect. Therefore, Windrace may be treated as a PRC resident enterprise for new tax law purposes. The tax consequences of such treatment are currently unclear as they will depend on the implementation regulations and on how local tax authorities apply or enforce the new tax law or the implementation regulations.

The levy and collection of enterprise income tax in China are handled by various local governments which in turn submit such tax revenues to their respective higher administrative authorities. Each local government has its own administrative practice with regard to the manner and the amount of tax submitted by the local government to its higher administrative authorities. PRC enterprises, including Windrace, have no participation in or control over such administrative practices. Any discrepancies in implementation among the local governments of such administrative practice may result in uncertainties over the amount of tax for which a PRC enterprise is liable.

An outbreak of the H1N1 swine flu, H5N1 strain of bird flu (Avian Flu), Severe Acute Respiratory Syndrome (SARS) or any other similar epidemic may, directly or indirectly, adversely affect Windrace’s operating results.

The recent outbreak of the H1N1 swine flu in North America and Europe has caused governments to take measures to prevent spread of the virus. In addition, there have been reports of swine flu cases in Asia. If the H1N1 virus further spreads in Asia, including China, epidemic could negatively affect the Asian economy. Past occurrences of epidemics have caused different degrees of damage to the national and local economies in China. China encountered epidemics such as SARS and incidents of the Avian Flu, which is spread through

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poultry populations, and is capable in certain circumstances of being transmitted to humans causing death. If any of Windrace’s employees are identified as a possible source of spreading the swine flu, the Avian Flu or any other similar epidemic, Windrace may be required to quarantine employees that are suspected of being infected, as well as others that have come into contact with those employees. Windrace may also be required to disinfect its affected premises, which could cause a temporary suspension of its manufacturing capacity, thus adversely affecting its operations. An outbreak of swine flu or a recurrence of an outbreak of SARS, Avian Flu or any other similar epidemic could restrict the level of economic activities generally and/or slow down or disrupt Windrace’s business activities which could in turn adversely affect its results of operations.

Power shortages in the PRC may disrupt Windrace’s business.

Windrace’s manufacturing processes consume substantial amounts of electricity supplied by local power grids. Certain cities in the PRC have experienced power shortages in the past or been subjected to restrictions in electricity consumption. A power shortage could affect or delay Windrace’s production schedule. Windrace maintains backup power generators to provide electricity to its machinery and equipment in case of electricity supply interruptions. However, there is no assurance that Windrace will always have adequate supply of electricity to meet its production requirements and its results of operations may be adversely affected in the event of any material interruption in electricity supply. An extended interruption in the power supply may also affect the operations of the Xidelong retail stores and result in a decrease in revenue.

2020 has not had operations, and Windrace has not operated as a public company. Fulfilling the combined company’s obligations incident to being a public company after completing the Acquisition will be expensive and time consuming.

Each of 2020, as a company without operations, and Windrace, as a private company, have maintained relatively small finance and accounting staffs. Neither 2020 nor Windrace currently has an internal audit group. Although 2020 has maintained disclosure controls and procedures and internal control over financial reporting as required under the Federal securities laws with respect to its very limited activities, it has not been required to maintain and establish these disclosure controls and procedures and internal control as will be required with respect to businesses such as Windrace with substantial operations. Under the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the U.S. Securities and Exchange Commission, the combined company will need to implement additional corporate governance practices and adhere to a variety of reporting requirements and complex accounting rules. Compliance with these obligations will require significant management time, place significant additional demands on the combined company’s finance and accounting staff and on its financial, accounting and information systems, and increase its insurance, legal and financial compliance costs. The combined company may also need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.

Risks Relating to the Acquisition

The officers and directors of 2020, and entities affiliated with them, control a substantial interest in 2020 and thus may influence certain actions requiring stockholder vote.

The officers and directors of 2020, and entities controlled by them, collectively own approximately 18% of 2020’s issued and outstanding shares of common stock. They may vote these shares on any corporate action, other than the Acquisition Proposal, in any manner each of them chooses. They may influence actions requiring a stockholder vote, including the Redomestication Proposal.

If 2020 is unable to effect a business combination and is forced to liquidate, its warrants will expire worthless.

If 2020 does not complete the Acquisition or another business combination by November 8, 2009, its corporate existence will automatically terminate and it will distribute to all Public Shareholders, in proportion to the number of shares held by them, an aggregate sum equal to the amount in the trust fund, inclusive of any interest, plus any remaining net assets. In such event, there will be no distribution with respect to 2020’s outstanding warrants. Accordingly, the warrants will expire worthless.

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2020’s stockholders may be held liable for claims by third parties against 2020 to the extent of distributions received by them.

2020’s amended and restated certificate of incorporation provides that 2020 will continue in existence only until November 8, 2009. If 2020 has not completed a business combination by such date and amended this provision in connection thereto, pursuant to the Delaware General Corporation Law, its corporate existence will cease except for the purposes of winding up its affairs and liquidating. Under Sections 280 through 282 of the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by the stockholders in a dissolution. If the corporation complies with certain procedures set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims against it, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, to the extent it is required to do so, it is 2020’s intention to make liquidating distributions to its stockholders as soon as reasonably possible after November 8, 2009 and, therefore, it does not intend to comply with those procedures.

Because 2020 does not intend to comply with those procedures, it is required, pursuant to Section 281 of the Delaware General Corporation Law, to adopt a plan that will provide for payment, based on facts known to it at such time, of (i) all existing claims, (ii) all pending claims and (iii) all claims that may be potentially brought against it within the subsequent 10 years. Accordingly, 2020 would be required to provide for any creditors known to it at that time or those that it believes could be potentially brought against it within the subsequent 10 years prior to distributing the funds held in the trust to stockholders. there can be no assurance that it will properly assess all claims that may be potentially brought against it. As such, 2020’s stockholders could potentially be liable for any claims to the extent of distributions received by them and any liability of 2020’s stockholders may extend well beyond the third anniversary of such date. Accordingly, there can be no assurance that third parties will not seek to recover from 2020’s stockholders amounts owed to them by 2020.

If 2020 is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it and not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by 2020’s stockholders. Furthermore, because 2020 intends to distribute the proceeds held in the trust fund to its public stockholders promptly after November 8, 2009 if it has not completed a business combination by such date, this may be viewed or interpreted as giving preference to 2020’s public stockholders over any potential creditors with respect to access to or distributions from 2020’s assets. Furthermore, 2020’s board may be viewed as having breached its fiduciary duties to 2020’s creditors or may have acted in bad faith; thereby exposing itself and 2020 to claims of punitive damages, by paying public stockholders from the trust fund prior to addressing the claims of creditors. There can be no assurance that claims will not be brought against 2020 for these reasons.

You will not be able to exercise your warrants if an effective registration statement is not in place when you desire to do so.

No warrants will be exercisable and Exceed will not be obligated to issue the shares of stock underlying the warrants unless, at the time a holder seeks to exercise such public warrant, a registration statement covering the issuance is effective and a prospectus relating to the common stock issuable upon exercise of the warrant is current. Under the terms of the warrant agreement, Exceed will be required to use its best efforts to maintain an effective registration statement and a current prospectus relating to the ordinary shares issuable upon exercise of the warrants until the expiration of the warrants. However, there can be no assurance that Exceed will be able to do so, and if it does not maintain a current prospectus related to the shares issuable upon exercise of the warrants, holders will be unable to exercise their warrants. Additionally, Exceed will have no obligation to settle the warrants for cash or “net cash settle” any warrant exercise. Accordingly, if the prospectus relating to the common stock issuable upon the exercise of the warrants is not current, the warrants may have no value, the market for the warrants may be limited and the warrants may expire worthless. If the warrants expire worthless, this would mean that a person who paid $8.00 for a unit in 2020’s IPO and who did not sell the warrant included in the unit would have effectively paid $8.00 for one Exceed ordinary share.

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The working capital available to Exceed following the Acquisition and the Redomestication will be reduced if 2020’s stockholders exercise their right to convert their shares into cash, which may adversely affect Exceed’s business and future operations.

Pursuant to 2020’s certificate of incorporation, public stockholders may vote against the Acquisition Proposal and demand that it convert their shares, calculated as of two business days prior to the anticipated consummation of the Acquisition, into a pro rata share of the trust account where a substantial portion of the net proceeds of the IPO are held. 2020 and Exceed will not consummate the Acquisition if holders of 2,587,500 or more Public Shares exercise these conversion rights. If no holders elect to convert their Public Shares, the trust account will be approximately $68.1 million at closing. To the extent the Acquisition is consummated and holders have demanded to convert their shares, there will be a corresponding reduction in the amount of funds available to Exceed. If conversion rights are exercised with respect to 2,587,499 shares, the maximum potential conversion cost would be approximately $20.4 million.

2020’s outstanding warrants may be exercised in the future for shares of Exceed ordinary shares, which would increase the number of shares eligible for future resale in the public market and result in dilution of our stockholders.

Outstanding redeemable warrants to purchase an aggregate of 8,625,000 shares of 2020’s common stock, which will convert into the right to purchase the same number of ordinary shares of Exceed upon consummation of the Redomestication (issued in exchange for 2020 warrants included in the units issued in the IPO), warrants to purchase an aggregate of 2,265,000 ordinary shares (issued in exchange for 2020 warrants issued to certain of the 2020 Inside Stockholders and others in a private placement concurrently with the IPO) and warrants to purchase 550,000 shares of 2020’s common stock, which will convert into the right to purchase the same number of ordinary shares of Exceed upon the Redomestication (issuable upon the exercise of the underwriter’s Unit Purchase Option) will become exercisable after the consummation of the Acquisition. These warrants likely will be exercised only if the $5.25 per share exercise price is below the market price of Exceed’s ordinary shares. To the extent such warrants or options are exercised, additional shares of Exceed’s ordinary shares will be issued, which will result in dilution to Exceed’s stockholders and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of Exceed’s ordinary shares.

Additional issuances and future sales of our securities, or the perception in the markets that these sales may occur, could depress our stock price.

An aggregate of between 9,708,030 and 12,400,245 ordinary shares of Exceed will be released to the Sellers out of escrow in stages if certain earnings targets for fiscal years 2009, 2010 and 2011 are satisfied and an additional 2,212,789 ordinary shares of Exceed will be newly issuable to the Sellers if certain earnings targets for fiscal year 2011 are satisfied. Up to an additional 329,816 ordinary shares of Exceed may be issued to Windtech and Wisetech within six months following the closing of the Acquisition if certain criteria are met. To the extent that all or a portion of such shares is released or newly issued, this would result in dilution to Exceed’s stockholders other than the Sellers or, as applicable, Windtech and Wisetech and increase the number of shares eligible for resale in the public market. In addition, contractual restrictions on transfer with respect to 1,875,000 Exceed ordinary shares that will be held by 2020’s officers and directors and their affiliates will terminate six months after the closing of the Acquisition. In addition, the holders of the shares issued to 2020’s officers and directors and their affiliates, the Sellers and Windtech and Wisetech are entitled to registration rights with respect to such shares. Sales of substantial numbers of such shares in the public market could adversely affect the market price of Exceed’s ordinary shares.

If 2020’s stockholders fail to vote against the Acquisition Proposal and fail to deliver their shares in accordance with the conversion requirements specified in this proxy statement/prospectus, they will not be entitled to convert their shares of common stock of 2020 into a pro rata portion of the trust account.

2020’s stockholders holding Public Shares who affirmatively vote against the Acquisition Proposal may demand that 2020 convert their shares into a pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the Acquisition. 2020’s stockholders who seek to exercise this conversion right must affirmatively vote against the Acquisition and deliver their stock (either physically

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or electronically) to 2020’s transfer agent within the time period described in this proxy statement/prospectus. Any 2020 stockholder who fails to vote against the Acquisition Proposal and who fails to deliver his or her stock will not be entitled to convert his or her shares into a pro rata portion of the trust account for conversion of his or her shares. See “2020’s Special Meeting — Conversion Rights” for the procedures to be followed if you wish to convert your shares to cash.

Exceed’s securities may not be listed on a national security exchange, which could limit investors’ ability to make transactions in Exceed’s securities and subject Exceed to additional trading restrictions.

Exceed is seeking listing of its securities on the NASDAQ Capital Market to take effect as soon as practicable after the consummation of the Acquisition and the Redomestication. Exceed will be required to meet initial listing requirements of the NASDAQ Global Market as opposed to its more lenient continued listing requirements. Exceed may not be able to meet those initial listing requirements. Even if such application is accepted and Exceed’s securities are so listed, Exceed may be unable to maintain the listing of its securities on the exchange in the future.

If the NASDAQ Global Market does not list Exceed’s securities for trading on its exchange, or if Exceed is unable to obtain a listing on another exchange, Exceed could face significant material adverse consequences, including:

2020’s current directors and executive officers own shares of 2020 common stock and warrants that will be worthless if the Acquisition is not approved and have loaned money to 2020 through an affiliate. Such interests may have influenced their decision to approve the Acquisition of Windrace.

Certain of 2020’s officers, directors and their affiliates beneficially own stock in 2020 that they purchased prior to its IPO. Additionally, certain of such persons and others beneficially own 2,265,000 Insider Warrants purchased in a private placement that occurred simultaneously with 2020’s IPO. Such persons are not entitled to receive any of the cash proceeds that may be distributed upon 2020’s liquidation with respect to shares they acquired prior to its IPO. In addition, 2020 International Capital Group Limited, a Cayman Islands company in which certain of our officers and directors collectively own an 80% beneficial interest has lent 2020 an aggregate of $700,000. Therefore, if the Acquisition is not approved and 2020 does not consummate another business combination by November 8, 2009 and is forced to liquidate, such shares held by such persons will be worthless, as will the warrants, and 2020 will likely be unable to repay the loans. As of October 2, 2009, the record date for the special meeting, 2020’s officers, directors and initial shareholders held $14.9 million in common stock (based on a market price of $7.95) and $2.9 million in warrants (based on a market price of $1.29. See “2020’s Special Meeting — Interests of 2020’s Directors and Officers and Others in the Acquisition and the Redomestication.”

These financial interests of 2020’s directors and officers may have influenced their decision to approve 2020’s acquisition of Windrace and to continue to pursue the Acquisition. In considering the recommendations of 2020’s board of directors to vote for the Acquisition Proposal and other proposals, you should consider these interests.

Dr. Jianming Yu, one of 2020’s directors and an indirect stockholder of 2020 through his ownership interest in certain 2020 stockholders, holds shares representing 1.2% of Wisetech and 2% of Windtech through NH Partners and NH Partners III, respectively, on behalf of the senior management team of New Horizon Capital, excluding himself, and Dr. Yu does not receive any economic benefit from such arrangement.

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Wisetech and Windtech will receive Exceed ordinary shares upon the consummation of the Acquisition pursuant to the NH Investment Agreement. Mr. Yu participated in the deliberations of the Board relating to the initial approval of the Acquisition, which occurred prior to the execution of the NH Investment Agreement. Dr. Yu has agreed to recuse himself from further votes of the 2020 Board relating to the Acquisition and has so recused himself to date. Pursuant to the NH Investment Agreement, if the Acquisition does not close, Windtech and Wisetech will be entitled to receive the amount they have invested in Windrace plus interest at a rate of 10% per annum, payable by Mr. Shuipan Lin, the controlling stockholder of Windrace. You should consider these interests in considering any resulting recommendations by the 2020 Board.

Certain of the officers and directors of 2020 are liable to ensure that proceeds of the trust are not reduced by vendor claims in the event the Acquisition is not consummated. Such liability may have influenced his decision to approve the Acquisition with Exceed.

If 2020 liquidates prior to the consummation of a business combination, Messrs. Lu, Koo and Yu, and certain entities under their control, will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by 2020 for services rendered or contracted for or products sold to 2020. On the other hand, if 2020 consummates the Acquisition and the Redomestication, Exceed will be liable for all such claims. Neither 2020 nor the officers and directors has any reason to believe that they will not be able to fulfill their indemnity obligations to 2020. See “2020’s Special Meeting — Interests of 2020’s Directors and Officers and Others in the Acquisition and the Redomestication.”

This personal obligation may have influenced the directors’ decision to approve 2020’s acquisition of Windrace and to continue to pursue the Acquisition. In considering the recommendations of 2020’s board of directors to vote for the Acquisition Proposal and other proposals, you should consider these interests.

The exercise of 2020’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Acquisition may result in a conflict of interest when determining whether such changes to the terms of the Acquisition or waivers of conditions are appropriate and in 2020’s stockholders’ best interest.

In the period leading up to the closing of the Acquisition, events may occur that, pursuant to the Purchase Agreement, would require 2020 to agree to amend the Purchase Agreement, to consent to certain actions taken by Windrace or to waive rights that 2020 is entitled to under the Purchase Agreement. Such events could arise because of changes in the course of Windrace’s business, a request by Windrace to undertake actions that would otherwise be prohibited by the terms of the Purchase Agreement or the occurrence of other events that would have a material adverse effect on Windrace’s business and would entitle 2020 to terminate the Purchase Agreement. In any of such circumstances, it would be discretionary on 2020, acting through its board of directors, to grant its consent or waive its rights. The existence of the financial and personal interests of the directors described in the preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he may believe is best for 2020 and what he may believe is best for himself in determining whether or not to take the requested action. As of the date of this proxy statement/ prospectus, 2020 does not believe there will be any changes or waivers that its directors and officers would be likely to make after stockholder approval of the Acquisition Proposal has been obtained. While certain changes could be made without further stockholder approval, 2020 will circulate a new or amended proxy statement/prospectus and resolicit its stockholders if changes to the terms of the transaction that would have a material impact on its stockholders are required prior to the stockholder vote on the Acquisition Proposal.

Voting control of the combined company by the Sellers and Windtech and Wisetech following the Acquisition may limit your ability to influence the outcome of director elections and other matters requiring shareholder approval.

Upon consummation of the business combination, the Sellers, who include the chief executive officer of Exceed following the Acquisition, and Windtech and Wisetech will collectively own approximately 51% of Exceed’s voting shares, which percentage could increase upon release of the Escrowed Shares and issuance of the Earn-Out Shares. Of these shares, between 19% and 23% will be beneficially owned by Lin Shuipan, the chief executive officer of Exceed following the Acquisition, and between 17% and 22% will be collectively owned by Windtech and Wisetech. These shareholders can control substantially all matters requiring approval

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by Exceed’s shareholders, including the election of directors and the approval of other business transactions. This concentration of ownership could have the effect of delaying or preventing a change in control of Exceed or discouraging a potential acquirer from attempting to obtain control of Exceed, which in turn could have a material adverse effect on the market price of ordinary shares or prevent its shareholders from realizing a premium over the market price for their ordinary shares.

If 2020 is unable to complete the Acquisition of Windrace or another business combination by November 8, 2009, its corporate existence will automatically terminate and, it will be forced to liquidate. In such event, third parties may bring claims against 2020 and, as a result, the proceeds held in trust could be reduced and the per-share liquidation price received by stockholders could be less than $7.90 per share.

2020 must complete the Acquisition or another business combination with the target business by November 8, 2009, when its corporate existence will terminate and it will be required to liquidate if no business combination, including the Acquisition, were consummated by such date. In such event, third parties may bring claims against 2020. Although 2020 has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any claim of any kind they may have in any monies held in the trust account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of 2020’s public stockholders. Additionally, if 2020 is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in 2020’s bankruptcy estate and subject to the claims of third parties with priority over the claims of 2020’s stockholders. To the extent any bankruptcy or other claims deplete the trust account, there can be no assurance that 2020 will be able to return to its public stockholders at least $7.90 per share.

If 2020 is unable to consummate the Acquisition or another business combination with a target company, its public stockholders will be forced to wait until after November 8, 2009 before receiving liquidation distributions.

2020 has until November 8, 2009 to complete an initial business combination. It has no obligation to return funds to its public stockholders prior to such date unless it consummates an initial business combination prior thereto and only then in cases where public stockholders have sought conversion of their shares. Only after the expiration of this full time period will public stockholders be entitled to liquidation distributions if 2020 is unable to complete an initial business combination. Accordingly, public stockholders’ funds may be unavailable to them until such date.

The failure of Windrace to redeem the preferred shares held by Elevatech, an indirectly wholly owned subsidiary of The Goldman Sachs Group, Inc., in accordance with the terms agreed by the parties could have an adverse effect on the Acquisition.

On April 30, 2008, Windrace issued and allotted 2,500 preferred shares representing 2.5% of the issued share capital of Windrace to Elevatech, an indirect wholly-owned subsidiary of The Goldman Sachs Group, Inc., and Mr. Lin Shuipan and RichWise International Investment Group Limited, or RichWise, transferred an aggregate of 5,500 preferred shares representing 5.5% of the issued share capital of Windrace to Elevatech. Pursuant to a letter agreement dated May 8, 2009 among Windrace, Elevatech, Mr. Lin Shuipan and RichWise, all of the preferred shares will be redeemed upon the consummation of the Acquisition by Windrace in exchange for the issue of a promissory note by Windrace to Elevatech, providing for the payment by Windrace of (i) HK$306.2 million ($39.5 million and RMB272.5 million) as redemption price on the earlier of the fifth business day following the date of issue of the promissory note and October 31, 2009 and (ii) US$1.0 million (RMB 6.9 million) as additional premium on June 30, 2010. The promissory note will constitute Windrace's payment of the full consideration for the redemption of the preferred shares. Following the issuance of the promissory note, the original terms of the preferred shares will be superseded by the terms of this promissory note. Hence, any provisions in the preferred shares, including those concerning the payment of accrued interest at an internal rate of return of 12%, will be of no further effect. Pursuant to the letter

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agreement, Elevatech also consented to Windrace’s entering into the Purchase Agreement and, subject to Windrace’s provision of additional information to Elevatech’s satisfaction, one or more other financing agreements with third-party investors.

If the Acquisition is not consummated by October 31, 2009, the letter agreement will have no further effect. Because the preferred shares cannot be redeemed at Windrace’s option, Elevatech will continue to be a preferred shareholder of Windrace, which may materially affect the successful consummation of the business combination for the following reasons:

There is no assurance that we will be successful in consummating the Acquisition prior to October 31, 2009. If Elevatech refuses to extend the term of the letter agreement to accommodate a later completion date, the uncertainty relating to the preferred shares held by Elevatech may prevent the completion of the proposed financing transactions by new third-party investors or the business combination altogether.

Activities taken by 2020, 2020’s existing stockholders or Windrace to increase the likelihood of approval of the Acquisition Proposal and other proposals could have a depressive effect on 2020’s stock and/or reduce the availability of operating capital for Exceed.

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding 2020 or its securities, 2020, the 2020 Inside Stockholders, Windrace and Windrace’s shareholders and their respective affiliates may purchase shares from institutional and other investors, or execute agreements to purchase such shares from them in the future, or they or 2020 may enter into transactions with such persons and others to provide them with incentives to acquire shares of 2020’s common stock and vote the acquired shares in favor of the Acquisition Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that the holders of a majority of the Public Shares present (in person or represented by proxy) and entitled to vote on the Acquisition Proposal at the meeting vote in its favor and that holders of fewer than 30% of the Public Shares vote against the Acquisition Proposal and demand conversion of their Public Shares into cash where it appears that such requirements would otherwise not be met. Entering into any such arrangements may have a depressive effect on 2020’s stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the special meeting. See “2020’s Special Meeting —  2020 Inside Stockholders.” In addition, to the extent that 2020 makes such purchases, it will reduce the amount of money available from the trust account following the Acquisition and Redomestication that may be used by Exceed for working capital.

Because Windrace does not intend to pay dividends on its ordinary shares, stockholders will benefit from an investment in Windrace’s ordinary shares only if those shares appreciate in value.

Windrace has never declared or paid any cash dividends on its shares of common stock. After consummation of the Acquisition and the Redomestication, Windrace currently intends to retain all future earnings, if any, for use in the operations and expansion of the business. As a result, Windrace does not anticipate paying cash dividends in the foreseeable future. Any future determination as to the declaration and payment of cash dividends will be at the discretion of Windrace’s board of directors and will depend on factors Windrace’s board of directors deems relevant, including among others, Windrace’s results of operations, financial condition and cash requirements, business prospects, and the terms of Windrace’s credit facilities, if any, and any

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other financing arrangements. Accordingly, realization of a gain on stockholders’ investments will depend on the appreciation of the price of Windrace’s ordinary shares, and there is no guarantee that Windrace’s ordinary shares will appreciate in value.

BVI companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their interests.

BVI companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be available with respect to any such action, may result in the rights of shareholders of a BVI company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The BVI courts are also unlikely to recognize or enforce against Exceed judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to impose liabilities against it, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.

Although there is no statutory enforcement in the British Virgin Islands of judgments obtained in the United States, the courts of the British Virgin Islands will recognize a foreign judgment as the basis for a claim at common law in the British Virgin Islands provided:

Under the laws of the British Virgin Islands, there is some statutory provisions for the protection of minority shareholders under the BVI Business Companies Act, 2004 (the “Act”). The principal protection under the Act is that shareholders may bring an action to enforce the Amended and Restated Memorandum and Articles of Association of Exceed. The Act sets forth the procedure to bring such a claim. Shareholders are entitled to have the affairs of the company conducted in accordance with the general law and the Amended and Restated Memorandum and Articles of Association. Pursuant to Exceed’s constitutional documents, the company is obliged to hold an annual general meeting and provide for the election of directors. Companies are not obligated to appoint an independent auditor and shareholders are not entitled to receive the audited financial statements of the company.

There are common law rights for the protection of shareholders that m ay be invoked (such rights have also now been given statutory footing under the Act; for further discussion of the rights of minority shareholders, see “2020 Redomestication — Rights of Minority Shareholders” beginning on page 98), largely dependent on English company law, since the common law of the British Virgin Islands for business companies is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and the constituent documents of the company. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company’s memorandum or articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene generally include the following, which are more limited than the rights afforded to minority stockholders under the laws of many states in the United States:

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Being a foreign private issuer would exempt us from certain Securities and Exchange Commission requirements that provide stockholders the protection of information that must be made available to stockholders of United States public companies.

Upon consummation of the Acquisition and the Redomestication we may be a foreign private issuer within the meaning of the rules promulgated under the Securities Exchange Act of 1934. If we qualify as a foreign private issuer, we will be exempt from certain provisions applicable to United States public companies including:

Because of these exemptions, our stockholders would not be afforded the same protections or information generally available to investors holding shares in public companies organized in the United States.

Risks Relating to Tax Matters

There is a risk that Exceed could be treated as a U.S. domestic corporation for U.S. federal income tax purposes after the Acquisition and the Redomestication, which could result in U.S. federal income tax liability to Exceed.

Section 7874(b) (“Section 7874(b)”) of the Internal Revenue Code of 1986, as amended, provides that a corporation organized outside the United States which acquires, directly or indirectly, pursuant to a plan or series of related transactions, substantially all of the assets of a corporation organized in the United States will be treated as a domestic corporation for U.S. federal income tax purposes if shareholders of the acquired corporation, by reason of owning shares of the acquired corporation, own at least 80% (of either the voting power or the value) of the stock of the acquiring corporation after the acquisition. If Section 7874(b) were to apply to the Redomestication, then Exceed, as the surviving entity, would be subject to U.S. federal income tax on its worldwide taxable income following the Acquisition and the Redomestication as if Exceed were a domestic corporation.

Although it is anticipated that Section 7874(b) should not apply to treat Exceed as a domestic corporation for U.S. federal income tax purposes, due to the absence of complete guidance on how the rules of Section 7874(b) apply to the transactions contemplated by the Acquisition and the Redomestication, this result is not free from doubt. As a result, stockholders are urged to consult their own tax advisors on this issue. For a more detailed discussion of the foregoing, see “Material United States Federal Income Tax Considerations — U.S. Federal Income Tax Consequences of the Redomestication — Tax Consequences to 2020 and Exceed.”

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2020 may recognize gain (but not loss) for U.S. federal income tax purposes as a result of the Redomestication, which may result in increased U.S. federal income tax liability to 2020.

It is anticipated that for U.S. federal income tax purposes, as to each of its assets, 2020 may recognize gain (but not loss) realized as a result of the Redomestication in an amount equal to the excess (if any) of the fair market value of such asset over such asset’s adjusted tax basis at the effective time of the Redomestication. Since any such gain will be determined based on the value of its assets at that time, the amount of such gain (and any U.S. federal income tax liability to 2020 by reason of such gain) cannot be determined at this time. Stockholders are urged to consult their own tax advisors on this tax issue and other tax issues in connection with the Redomestication. For a more detailed discussion of the foregoing, see “Material United States Federal Income Tax Considerations — U.S. Federal Income Tax Consequences of the Redomestication — Tax Consequences to 2020 and Exceed.”

There is a risk that Exceed will be classified as a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. holders of ordinary shares of Exceed.

Exceed may be treated as a PFIC for any taxable year in which either (1) at least 75% of its gross income (looking through certain corporate subsidiaries) is passive income or (2) at least 50% of the average value of its assets (looking through certain corporate subsidiaries) produce, or are held for the production of, passive income. Passive income generally includes dividends, interest, rents, royalties, and gains from the disposition of passive assets. If Exceed were a PFIC for any taxable year during which a U.S. holder held its ordinary shares, the U.S. holder may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements. The actual PFIC status of Exceed for any taxable year, however, will not be determinable until after the end of its taxable year, and accordingly there can be no assurance as to the status of Exceed as a PFIC for the current taxable year or any future taxable year. We urge U.S. holders to consult their own tax advisors regarding the possible application of the PFIC rules. For a more detailed discussion of the foregoing, see “Material United States Federal Income Tax Considerations — U.S. Federal Income Tax Consequences to U.S. Holders of Ordinary Shares of Exceed — Passive Foreign Investment Company Rules.”

The tax disclosure included as part of this Registration Statement expresses uncertainty as to certain tax issues and does not address all tax issues, including those that are dependent on future facts or events.

Due to the absence of complete guidance as to how the transactions contemplated by the Acquisition and the Redomestication and other transactions discussed in the tax disclosure would be treated for U.S. federal income tax purposes, there is a degree of uncertainty as stated in the tax disclosure with respect to the U.S. federal income tax consequences of certain of the tax matters considered therein. Moreover, certain tax matters that are discussed in the tax disclosure are dependent on future facts or events, such as whether Exceed will be classified as a PFIC for U.S. federal income tax purposes following the Redomestication and Acquisition, and as to which no conclusion therefore can be expressed. Finally, no assurance can be given that positions contrary to those discussed in the tax disclosure may not be taken by the Internal Revenue Service (“IRS”) or a court considering the tax issues discussed in the tax disclosure. Accordingly, each stockholder is urged to consult its own tax advisor on the tax issues discussed in the tax disclosure and how they may relate to the holder’s particular circumstances. See “Material United States Federal Income Tax Considerations.”

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2020’S SPECIAL MEETING

General

2020 is furnishing this proxy statement/prospectus to its stockholders as part of the solicitation of proxies by its board of directors for use at the special meeting of 2020’s stockholders to be held on October 19, 2009, and at any adjournment or postponement thereof. This proxy statement/prospectus is first being furnished to 2020’s stockholders on or about October 5, 2009 in connection with the vote on the Acquisition Proposal, the Redomestication Proposal and the Adjournment Proposal. This proxy statement/prospectus provides you with information you need to know to be able to vote or instruct your vote to be cast at the special meeting.

Date, Time and Place

The special meeting of stockholders will be held on October 19, 2009, at 9:00 a.m., local time, at 131 S. Dearborn St., Chicago, Illinois 60603.

Purpose of 2020’s Special Meeting

At the special meeting, 2020 will ask holders of its common stock to:

Recommendation of 2020 Board of Directors

2020’s board of directors:

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Interests of 2020’s Directors and Officers and Others in the Acquisition and the Redomestication

When you consider the recommendation of 2020’s board of directors in favor of approval of the Acquisition Proposal and the Redomestication Proposal, you should keep in mind that 2020’s directors and officers have interests in the Acquisition and the Redomestication (to the extent that the Redomestication is a condition to the Acquisition) that are different from, or in addition to, your interests as a stockholder. These interests include, among other things:

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Record Date; Who is Entitled to Vote

2020 has fixed the close of business on October 2, 2009, as the “record date” for determining 2020’s stockholders entitled to notice of and to attend and vote at its special meeting. As of the close of business on October 2, 2009, there were 10,500,000 shares of 2020’s common stock outstanding and entitled to vote. Each share of 2020’s common stock is entitled to one vote per share at the special meeting.

Pursuant to agreements with 2020, the 1,875,000 shares of common stock issued before the initial public offering and held by insiders at 2020 (the “2020 Inside Shareholders”) will be voted on the Acquisition Proposal in accordance with the majority of the votes cast at the special meeting on such proposal by the holders of all of the other outstanding shares of the common stock. The vote of such shares will not affect the outcome of the vote on the Acquisition Proposal.

Quorum

The presence, in person or by proxy, of a majority of all the outstanding shares of common stock entitled to vote constitutes a quorum at the special meeting.

Abstentions and Broker Non-Votes

Proxies that are marked “abstain” and proxies relating to “street name” shares that are returned to 2020 but marked by brokers as “not voted” will be treated as shares present for purposes of determining the presence of a quorum on all matters. Broker “non-votes” will not be treated as shares entitled to vote on the matter as to which authority to vote is withheld from the broker. If you do not give the broker voting instructions, under applicable self-regulatory organization rules, your broker may not vote your shares on “non-routine” proposals, such as the Acquisition and the Redomestication Proposals. Since a stockholder must affirmatively vote against the Acquisition Proposal to have conversion rights, individuals who fail to vote or who abstain from voting on such proposal may not exercise their conversion rights. See the information set forth in “2020’s Special Meeting — Conversion Rights.”

Vote of 2020’s Stockholders Required

The approval of the Acquisition and the Adjournment Proposals will require the affirmative vote for the proposal by the holders of a majority of the Public Shares present in person or by proxy and entitled to vote on the proposal at the meeting. Abstentions and broker non-votes will have the same effect as a vote “AGAINST” the Acquisition and the Redomestication Proposals. You cannot seek conversion unless you affirmatively vote against the Acquisition Proposal. Broker non-votes are not deemed entitled to vote on such proposals and, therefore, they will have no effect on the votes on these proposals.

The approval of the Redomestication Proposal will require the affirmative vote of the holders of a majority of 2020’s issued and outstanding common stock. Accordingly, abstentions and broker “non-votes” will have the same effect as a vote “AGAINST” the Redomestication Proposal.

Voting Your Shares

Each share of 2020 common stock that you own in your name entitles you to one vote. Your proxy card shows the number of shares of 2020’s common stock that you own. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

There are two ways to vote your shares of 2020 common stock at the special meeting:

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Revoking Your Proxy

If you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

Who Can Answer Your Questions About Voting Your Shares

If you have any questions about how to vote or direct a vote in respect of your shares of 2020’s common stock, you may call Innisfree M&A Incorporated, 2020’s proxy solicitor, at (800) 750-5834.

Conversion Rights

Any of 2020’s stockholders holding Public Shares as of the record date who affirmatively vote their Public Shares against the Acquisition Proposal may also demand that such shares be converted into a pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Acquisition. If demand is properly made and the Acquisition is consummated, these shares will be converted into a pro rata portion of funds deposited in the trust account plus interest, calculated as of such date.

2020’s stockholders who seek to exercise this conversion right (“converting stockholders”) must affirmatively vote against the Acquisition Proposal. Abstentions and broker non-votes do not satisfy this requirement. Additionally, holders demanding conversion must deliver their stock (either physically or electronically using Depository Trust Company’s DWAC (Deposit Withdrawal at Custodian) System) to 2020’s transfer agent after the meeting within the time period specified in a notice you will receive after the meeting from or on behalf of Exceed, which period will be not less than 20 days. If you hold the shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered (either physically or electronically) in accordance with these procedures will not be converted into cash.

If the holders of at least 2,587,500 or more Public Shares (an amount equal to 30% or more of the Public Shares) vote against the Acquisition Proposal and properly demand conversion of their shares, 2020 will not be able to consummate the Acquisition.

The closing bid price of 2020’s common stock on October 2, 2009 (the record date for 2020’s special meeting) was $7.95. The cash held in the trust account on October 2, 2009 was approximately $68.1 million ($7.90 per Public Share). Prior to exercising conversion rights, stockholders should verify the market price of 2020’s common stock as they may receive higher proceeds from the sale of their common stock in the public market than from exercising their conversion rights if the market price per share is higher than the conversion price. There can be no assurance that 2020’s stockholders will be able to sell their shares of 2020 common stock in the open market, even if the market price per share is higher than the conversion price stated above, as there may not be sufficient liquidity in 2020’s securities when 2020’s stockholders wish to sell their shares.

If you exercise your conversion rights, then you will be exchanging your shares of 2020 common stock for cash and will no longer own those shares. You will be entitled to receive cash for these shares only if you affirmatively vote against the Acquisition Proposal, properly demand conversion and deliver your stock certificate (either physically or electronically) to 2020’s transfer agent after the meeting within the time period specified in a notice you will receive from or on behalf of Exceed, which period will be not less than 20 days.

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Appraisal Rights

Stockholders of 2020 have appraisal rights in connection with each of the Acquisition Proposal and the Redomestication Proposal under the Delaware General Corporation Law. See “2020 Redomestication —  Appraisal Rights.” Stockholders who vote against the Acquisition Proposal and elect to convert their shares into cash will not have appraisal rights.

Proxy Solicitation Costs

2020 is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail but also may be made by telephone or in person. 2020 and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means.

2020 has hired Innisfree M&A Incorporated to assist in the proxy solicitation process. It will pay that firm a fee of $20,000 plus disbursements. Such fee will be paid with non-trust account funds.

2020 will ask banks, brokers and other institutions, nominees and fiduciaries to forward its proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. 2020 will reimburse them for their reasonable expenses.

2020 Inside Stockholders

As of October 2, 2009, the record date for 2020’s special meeting, the officers and directors of 2020, and certain entities controlled by them, beneficially owned and were entitled to vote 1,875,000 Original Shares. The Original Shares constituted 17.9% of the outstanding shares of 2020’s common stock immediately after the IPO (including shares of common stock issued pursuant to the exercise of the over-allotment option). The holders of the Original Shares have agreed to vote their Original Shares on the Acquisition Proposal in accordance with the majority of the votes cast by the holders of Public Shares. The 2020 Inside Stockholders have also indicated that they intend to vote their Original Shares in favor of all other proposals being presented at the meeting. The Original Shares have no liquidation rights and will be worthless if no business combination is effected by 2020. In connection with the IPO, the 2020 Inside Stockholders entered into an escrow agreement pursuant to which their Original Shares will be held in escrow until six months after a business combination, subject to limited exceptions.

Actions That May Be Taken to Secure Approval of 2020’s Stockholders

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding 2020, Windrace or their respective securities, the 2020 Inside Stockholders, Windrace or affiliates of the 2020 Inside Stockholders or of 2020, Windrace or Exceed may purchase shares from institutional and other investors, or execute agreements to purchase such shares from them in the future, or they may enter into transactions with such persons and others to provide them with incentives to acquire shares of 2020’s common stock or vote their shares in favor of the Acquisition Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that the holders of a majority of the Public Shares present (in person or represented by proxy) and entitled to vote on the Acquisition Proposal vote in its favor and that holders of fewer than 30% of the Public Shares vote against the Acquisition Proposal and demand conversion of their Public Shares into cash where it appears that such requirements would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, arrangements to protect such holders against potential loss in value of their shares, including the granting of put options, the transfer to such holders, shares or warrants owned by the 2020 Inside Stockholders for nominal value and the grant to such investors and holders of rights to nominate directors of 2020 or Exceed.

Any arrangements that are entered into may involve any or all of payment of significant fees, interest payments and issuance of additional Exceed shares to the persons providing the financing or other assistance in the transactions. As there have been no discussions with potential sellers, it is difficult to quantify what such fees or expenses might entail. We do not anticipate that such arrangements will be made in accordance with Rule 10b-18 under the Exchange Act.

Purchases pursuant to such arrangements ultimately paid for with funds in 2020’s trust account would diminish the funds available to Exceed after the Acquisition and the Redomestication for working capital and

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general corporate purposes. This may limit Exceed’s ability to internally finance its growth without raising additional capital from outside sources. In addition, such purchases could reduce the funds available to repay the portion of US$39.5 million owed by Windrace to Elevatech not repaid from the proceeds of the investment by Windtech and Wisetech. Nevertheless, in all events, Exceed will pay the holders of all Public Shares that are properly converted and condition any payments for purchases under such arrangements on Exceed first satisfying its obligations to the holders of Public Shares that are properly converted or subject to such arrangements. As a result of the purchases that may be effected through such arrangements, it is likely that the number of shares of common stock of Exceed in its public float will be significantly reduced and that the number of beneficial holders of Exceed securities will also be significantly reduced. This may make it difficult to obtain the quotation, listing or trading of Exceed securities on the NASDAQ Capital Market or another national securities exchange.

Entering into any such arrangements may have a depressive effect on 2020’s stock. For example, as a result of these arrangements, a holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the special meeting.

The impact of any such arrangements on the financial statements of the combined companies will depend on the ultimate structure of the arrangements. To the extent that the arrangements result in the redemption of shares and, accordingly, a decrease in the number of outstanding shares, the arrangements could result in an increase in earnings per share. To the extent that the repurchases require payments by Windrace or by Exceed following closing of the arrangements, they would have the effect of decreasing net assets by reducing the available cash of Exceed.

If such transactions are effected, the consequence could be to cause the Acquisition to be approved in circumstances where such approval could not otherwise be obtained pursuant to the requirements set forth in 2020’s Form S-1. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the Acquisition Proposal and other proposals and would likely increase the chances that such proposals would be approved. Moreover, any such purchases may make it less likely that the holders of 30% or more of the Public Shares will vote against the Acquisition Proposal and exercise their conversion shares. To secure approval of the Acquisition Proposal and the Redomestication Proposal, it may be necessary to repurchase as much as 70% of the Public Shares, but there is currently no binding arrangement or agreement regarding such repurchase.

As of the date of this proxy statement/prospectus, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder. The parties have engaged in preliminary discussions with certain current shareholders and prospective purchasers of shares from such investors or holders but have not entered into or agreed upon any definitive agreements.

We have, as a courtesy, provided assistance to an investor who identified itself to us as having obtained more than 5% of 2020’s outstanding common stock in making apprpropriate filings with the Securities and Exchange Commission with respect to such acquisition. No person affiliated with the 2020, Exceed, Windrace or Windtech or Wisetech offered such investor any inducement to purchase such shares or to vote such shares in any manner with respect to the Acquisition. We may provide similar assistance to stockholders that request it.

2020 will mail a supplement to this proxy statement/prospectus to its stockholders and file a current report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Acquisition Proposal or the conversion threshold. Any such supplement or report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

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CONSIDERATION OF THE ACQUISITION

2020 was formed on August 21, 2006 to serve as a vehicle to accomplish a business combination with an unidentified business in China. 2020 completed an initial public offering on November 7, 2007 and the concurrent sale of warrants in a private placement to certain affiliates of 2020. Morgan Joseph subsequently exercised its over-allotment option with respect to the offering. The offerings yielded gross proceeds to 2020 of approximately $68.2 million. Of these net proceeds, approximately $68.1 million were placed in a trust account. In accordance with 2020’s Certificate of Incorporation, the trust account will be released either upon the consummation of a business combination or upon the liquidation of 2020. 2020 must liquidate unless a business combination is consummated by November 8, 2009.

Since the completion of the initial public offering of the company in November 2007, management has looked at close to 30 potential projects in China. Management focus has been on unlisted companies which are sector leaders in fields ranging from healthcare, specialty chemicals, renewable energy, mining, real estate, construction, biotechnology to contract outsourcing. In December 2007, the management team commenced a review of Chinese companies which had just successfully completed initial public offerings in Hong Kong and the United States. This was to assess the state of the respective sectors in which those companies operated and more importantly, to identify unlisted peers of those companies which were potential candidates for a business combination. At the same time, the management team tapped its network of investment banking and private equity contacts to prepare a list of companies which were in the midst of doing filings for initial public offerings or which were considering a public markets capital raising.

This initial assessment resulted in a list of more than 50 candidates across a wide range of sectors. The management team conferred and decided to narrow down the list of candidates by excluding companies which did not have an offshore ownership structure. This decision was reached after taking into account the difficulties of obtaining Chinese regulatory approval in a timely manner for a business combination which was essentially an all-stock reverse merger of a Chinese enterprise. This still resulted in a list of over 30 potential candidates, and over a three month period from December 2007 to February 2008, the management team started to approach candidates to assess their suitability and willingness to form a partnership with 2020.

February 2008 Candidate

On or about February 19, 2008, the management team made contact with an investment banking associate and received information on an electronic manufacturing services (EMS) company which had attempted an initial public offering in late 2007. After receiving the EMS company’s prospectus, marketing materials and 2008 projections, 2020’s management team conferred and decided to proceed with a preliminary assessment of the EMS company. On or about February 25, 2008, the 2020 management team visited the EMS company’s headquarters and operations in China and engaged in a discussion of preliminary terms with the EMS company’s management and shareholders. After extensive discussions, 2020’s management team was asked to provide a summary of terms. On or about March 31, 2008, the 2020 management team met with the founder of the EMS company to finalize the 2020 initial proposal, and draft terms were provided to the EMS company on April 2, 2008. The EMS company’s management informed the 2020 team that it would commence discussions among the EMS company’s shareholders to obtain consensus on the 2020 initial proposal. Email and telephone exchanges during the two months of April 2008 and May 2008 were the primary forms of communication regarding amendment and revision to the 2020 initial proposal. In parallel, the 2020 management continued to request and receive information from the EMS company for the purpose of assessing the suitability of the EMS company for a business combination with 2020.

By the end of June 2008, the EMS company’s management and 2020’s management team had made substantial progress on discussions over the transaction structure. On or about July 17, 2008, the EMS company and the 2020 management team finalized a non-binding term sheet, which was signed on or about July 21, 2008. Throughout this time, due diligence on the EMS company continued with weekly updates from the EMS company and its advisors. On or about August 8, 2008, 2020 convened a board meeting to discuss a potential combination and to seek approval to commence drafting of documentation for the project. With the board’s approval, counsel for 2020 was formally engaged to start on the documentation for the transaction. A draft agreement was circulated on August 14, 2008. From the second half of August 2008 to late September 2008, due diligence continued alongside the amendment of the draft agreement. By October 2008,

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however, market conditions had severely deteriorated and 2020 management team assessed that it would be difficult to effect a business combination under the then agreed commercial terms. On or about November 5, 2008, the 2020 management team conveyed the difficulty of effecting a transaction under the current terms and suggested either waiting for the market to recover or assisting the EMS company with raising private equity funding. Since that correspondence, 2020 management referred third party investment banks to assist the EMS company with alternative fund raising solutions.

March 2008 Candidate

Throughout the discussions with the EMS company and prior to entering into any exclusivity arrangement with such company, the 2020 management team continued to evaluate other candidates in different sectors. On or about March 8, 2008, the 2020 management team was introduced to a leading Chinese healthcare company which was seeking a listing on a U.S. stock exchange. On or about March 11, 2008, one of the 2020 directors met with the company’s management at their Hong Kong office. The company is a leading specialty healthcare provider which had attempted a listing on a U.S. stock exchange in late 2007. The then underwriter was of the view that market sentiment was not conducive for an initial public offering and advised against proceeding with the offering. The company’s management was interested in transacting with a special purpose acquisition company (“SPAC”) which had between US$70 – 100 million in proceeds. After due assessment of the market, 2020 management concluded that the company operates in a highly regulated specialized healthcare sector in China, and there is a significant commercial advantage if the company can rapidly deploy funds raised in the capital markets to consolidate its leading position. 2020 management conferred on or about March 13, 2008 and decided to engage the company’s management.

On or about March 14, 2008, 2020 management met with the company and its financial advisor to discuss indicative terms. During the second half of March 2008, the 2020 management team received materials from the company relating to its previous listing attempt and commenced initial due diligence. Emails were exchanged to clarify points raised in the course of such investigation. On or about April 11, 2008, the 2020 management team met with the company at its Beijing headquarters. A draft letter of intent was prepared by both sides and the company requested 2020 to allow it time to communicate the 2020 proposal to its shareholders. On or about April 15, 2008, 2020 and the company entered into the non-binding letter of intent. After further discussions with company management in the second half of April, 2008, it decided to engage counsel to commence work on a formal term sheet. On or about May 6, 2008, a kick-off meeting was held in Hong Kong to discuss the terms as well as the transaction timetable. Between May 8, 2008 and May 14, 2008, the two sets of counsel worked with the company and 2020 to prepare a term sheet.

One key unresolved commercial issue during the discussions related to the composition of the board after the completion of the business combination. On May 16, 2008, the 2020 management team and its advisor received a message from the company to postpone further discussion until the company had reached internal consensus on the outstanding issue. On May 19, 2008, 2020’s counsel reminded all parties that the original “good faith” exclusivity period in the letter of intent would expire on May 21, 2008. On May 21, 2008, the 2020 management team, after taking into consideration the importance of the outstanding issue with the company and the other potential opportunities it was being invited to look at, decided to set aside this transaction pending resolution of the outstanding issue and refocus its attention on the EMS company and other potential targets.

October 2008 Candidate

When the 2020 management team observed that market conditions had deteriorated in the EMS sector and upon the expiration of the exclusivity arrangement with the EMS target, the team started to explore other sectors which may yield suitable targets for a business combination. For the entire month of October 2008, the team explored potential opportunities in the mining, engineering material and heavy machinery sectors, including visiting sites where such enterprises were located and interviewing management teams. Although none of those enterprises were considered suitable by the 2020 management team, the team was introduced to a potential opportunity in the specialty chemicals sector by a business associate in the course of those discussions. On October 20, 2008, the 2020 management team received a draft prospectus relating to a specialty chemicals company which had considered an initial public offering on the Stock Exchange of Hong Kong in mid 2008. As market conditions deteriorated, the company’s underwriter advised that the company postpone its listing

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plans until market conditions improved. After a review of the draft prospectus, the 2020 management team assessed there was a potential transformational opportunity in this company and decided to initiate contact with the company’s management.

On October 25, 2008, members from the 2020 management team visited the company’s headquarters and plant at its Northeast China location. The 2020 team interviewed the chairman and majority shareholder to understand the business sector as well as to validate the potential transformational opportunity. On the same visit, the 2020 team interviewed plant operational personnel so as to ascertain the capacity and utilization of the company’s operations. At the visit, the team identified a potential intellectual property issue as the plant employed foreign technology, and was assured that the relevant confirmations and licenses could be procured with little difficulty. After the conclusion of the visit, the 2020 management team commenced separate investigations into the viability of the transformational opportunity by speaking with independent third party experts in the sector. Initial conclusions were promising and on October 29, 2008, the 2020 management team provided an indicative proposal on the approach to the transaction.

On November 6, William Sharp, one of the 2020 directors, visited the company’s headquarters and spoke with both the company’s chairman and the plant manager. After the visit, the 2020 management team conferred and concluded there was sufficient confidence in the strength of the business as well as the potential transformational opportunity. A term sheet was signed on November 9, 2008 and third party advisors were engaged to commence formal due diligence. On November 26, 2008, a special board meeting was convened to, among other things, ratify the provisions of the term sheet. Ratification was obtained and work commenced on preparing a draft sale and purchase agreement. In parallel with the due diligence work as well as the drafting, the 2020 management team liaised with intellectual property holders of a domestic technology which would underpin the transformational strategy which the 2020 team had in mind. On December 9, 2008, counsel to 2020 advised there were potential issues relating to the statutory records of the company’s operating subsidiary. Between December 10, 2008 and December 22, 2008, counsel to 2020 exchanged correspondence and documentation relating to the company’s operating subsidiary, and it was discovered that, contrary to initial representations by the company’s management, there was a pledge over the common shares of the company’s operating subsidiary. From December 23, 2008 to December 31, 2008, the 2020 management team assessed if there was any alternative to the sale and purchase structure in order for the transaction to proceed. Ultimately, it was decided that there was substantial risk for the transaction as long as the pledge over the common shares of the company’s operating subsidiary remained. On February 7, 2009, the 2020 management team informed the company that it considered the previous arrangements suspended indefinitely pending resolution of the pledge. On February 23, 2009, the 2020 management team informed the company that it considered the previous arrangements terminated.

The Current Target

As the 2020 management team was assessing the risk profile of the proposed transaction with the specialty chemicals company relating to, among other things, the material misrepresentation by its management and shareholders over the undisclosed share pledge, which invalidated all previous arrangements between 2020 and the specialty chemicals company, a decision was made on or about December 15, 2008, to explore alternative sectors. On or about December 20, 2008, the 2020 management team was invited to look at a potential opportunity relating to Windrace, which had attempted to list on the Hong Kong Stock Exchange in 2008. Windrace obtained approval of the Hong Kong Stock Exchange to initiate the Hong Kong retail offering in June 2008. Due to market conditions, Windrace decided on July 2, 2008 not to proceed with the initial public offering. The company is in the sports and leisurewear sector serving domestic consumer demand, which was a macro-economic theme which the 2020 management team felt was relevant to the current economic situation. The opportunity was introduced by a business associate who was familiar with one of the company’s institutional investors, RichWise. The actual introduction to RichWise took place via telephone on or about December 2, 2009. On January 7, 2009, a member of the 2020 management team visited RichWise’s office in Shenzhen, China, to explore the possibility of a business combination with Windrace. During the visit, the background of 2020 was explained to RichWise, together with its transformational investment strategy. RichWise expressed interest in assisting 2020 in exploring a partnership with Windrace. The RichWise team provided a sector overview of the China sporting goods industry, together with a brief analysis of Windrace’s positioning in this sector. Between January 9, 2009 and January 15, 2009, the 2020 management team

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received from Windrace materials relating to the business. After a careful review of the materials, the 2020 management team concluded that there was a transformational opportunity and RichWise was asked to facilitate a face-to-face meeting with Windrace’s management. Neither Richwise nor the business associate who introduced the 2020 management team to Richwise, nor any other party, has been paid, or is entitled to, any finders fee in connection with the Windrace opportunity.

On January 16, 2009, George Lu, chairman, chief executive officer and president of 2020, visited Windrace’s premises in Jinjiang, Fujian Province, China. Mr. Lu met with Mr. Shuipan Lin, the founder, chairman of the board and chief executive officer of Windrace, as well as the principals of RichWise, Mr. Kenry Shi and Mr. Jeff Huang. At the meeting, Mr. Lin described how he had established Windrace in 2001 as a branded sporting goods company to capitalize on a market opportunity for sportswear in tier 2 and tier 3 cities in China that focused on comfort, functionality and value. Mr. Lin had observed that there was a market demarcation between the domestic sporting brands which competed with the international brands in the tier 1 cities and the domestic sporting manufacturers which provided contract outsourcing services or engaged in wholesale of products without branding. When asked by Mr. Lu how he intended to distinguish himself from both sets of competitors, Mr. Lin replied that Windrace emphasized research and development, partnering with the Chinese Academy of Sciences and the China Institute of Sport Science under the General Administration of Sport of China, in addition to brand management strategies employed by foreign brands in China. Mr. Lin also informed Mr. Lu that Windrace had attempted an initial public offering on the Stock Exchange of Hong Kong in the second half of 2008 with Goldman Sachs and KGI as joint underwriters. At the time of the attempted Hong Kong Stock Exchange listing, the proposed valuation of the company, including the proceeds from the initial public offering, would have ranged between HK$2.76 billion (approximately US$353.8 million) and HK$3.96 billion (approximately US$507.7 million). The offering did not succeed because market conditions had severely deteriorated in the week before Windrace was due to price its securities. Goldman Sachs, through Elevatech, had also invested in Windrace prior to the attempted initial public offering for a sum of HK$306.2 million to acquire the preferred shares.

Mr. Lu had the opportunity to review the production lines of Windrace and speak with the other key management of Windrace. As part of business due diligence, Mr. Lu and other members of the 2020 management team visited the locations of Windrace’s domestic competitors which were largely located in the same city, as well as the retail stores of the leading domestic brands and Windrace’s store which were located in the city. After returning from the visit, Mr. Lu convened an internal discussion with the management team of 2020 on or about January 17, 2009 regarding the suitability of Windrace for a business combination with 2020. A key factor was whether Windrace had at least one of the following characteristics:

After due consideration, the 2020 management team concluded that Windrace possessed all of the above characteristics and a decision was made to engage Windrace further. On January 18, 2009, 2020 provided to Windrace, through RichWise, a summary of the discussions with Windrace at the January 16, 2009 meeting. Among other things, the summary highlighted:

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On January 19, 2009, Mr. Lu met with Mr. Shi in Shenzhen and both parties agreed on the importance of resolving the issue relating to the preferred shares. Possible solutions were discussed, including but not limited to:

At the meeting, RichWise and Windrace indicated their desire to exclude 2020 from their discussion with the preferred shareholder given that it was not an original party to the investment relating to the preferred shares. RichWise agreed to assist Windrace in discussions with Elevatech and to update 2020 on any developments relating to the issue. 2020 indicated and both parties agreed that a satisfactory resolution to the redemption of the preferred shares from Elevatech would be a pre-requisite prior to 2020 and Windrace entering any binding commercial agreement.

From January 20, 2009 to January 31, 2009, Windrace continued to provide materials relating to its business to 2020 for due diligence. At the same time, 2020 commenced investigations into market rumors and allegations in the media relating to Windrace’s IPO during its attempted initial public offering in the second half of 2008. The 2020 management team obtained the Chinese legal opinion relating to the Hong Kong offering which, among other things, addressed the legal, taxation and regulatory compliance of Windrace’s operations in accordance with Chinese law. The team also had the opportunity of talking with Windrace’s Chinese legal advisor for the Hong Kong offering. The team separately spoke with Windrace’s auditors for the Hong Kong offering as well as certain members of the underwriters involved in the Hong Kong offering. In addition, the 2020 management team requested and was given full access to a data room of Windrace to conduct documentary due diligence. In the course of such documentary due diligence, 2020 and its advisors were given access to the underlying licenses, permits, receipts and official statements which formed the basis of the Chinese legal opinion as well as the conclusions in the audited financial statements relating to the Hong Kong offering. After consulting with 2020’s own advisors, the management team of 2020 concluded that there were no material issues relating to the market rumors and allegations and it was the deterioration of the general market conditions which had led to the cessation of the previous attempt at a Hong Kong listing. Therefore, on or about January 30, 2009, 2020’s management team introduced Crowe Horwath to Windrace as a potential auditor on behalf of Windrace for the Acquisition and discussions commenced as to the most efficient way of conducting the audit. It was agreed that the audit of Windrace would be undertaken under IFRS, with 2020 to provide pro forma financial information under United States Generally Accepted Accounting Principles (“U.S. GAAP”).

On or about February 2, 2009, the management team of 2020 conferred on the initial valuation of the transaction and decided to propose the following terms to Windrace:

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The foregoing terms were forwarded by 2020 to Windrace via RichWise on or about February 3, 2009. In the meantime, RichWise and 2020 assisted Windrace in drawing up a short list of legal advisors to work on the Acquisition on behalf of Windrace on February 5, 2009. On or about February 9, 2009, Mr. Lin indicated he was satisfied with the initial terms proposed by 2020. To proceed with the transaction, he agreed to finalize the appointments of both auditor and counsel for the Acquisition no later than the following week. On or about February 19, 2009, the 2020 management team drew up a short list of potential strategic co-investors with a view to inviting them to assess the business opportunity relating to Windrace and the Acquisition and to facilitate the resolution of the issue relating to the preferred shares.

On February 23, 2009, Mr. Lu had a discussion with Mr. Lin at the headquarters of Windrace in Jinjiang regarding the future plans of Windrace and the use of proceeds from the Acquisition and any potential strategic co-investment. Mr. Lin outlined the evolution of the Chinese sporting goods sector from a purely contract manufacturing role to three distinctive branded business models. In all three models, Windrace engaged in the wholesale of their products to distributors which had no equity relationship with the wholesaler. This was a channel which was first established in 2004 and had since been replicated across China. Where each model differed was its ownership of the brand and approach to manufacturing. The first model was typified by a company which managed its own sporting brand and outsourced all of its manufacturing to third parties. The second model was typified by a company which licensed and managed a sporting brand from an overseas brand owner, and also outsourced all of its manufacturing to third parties. The third model was typified by a company which managed its own sporting brand and continued to manufacture a substantial portion of its products through an integrated approach.

Mr. Lin expressed that Windrace currently implemented the third model, but there was a market opportunity to create a hybrid model by licensing an overseas brand to create market segmentation among Windrace’s product offerings. Windrace had been in non-exclusive discussions with an independent fund which had expressed intention in investing in Windrace and/or assisting it in seeking an overseas sporting brand. Mr. Lu observed that Windrace’s product offerings were dominant in tier 2 and tier 3 markets and having an overseas sporting brand would help Windrace to access the tier 1 market. This was in line with the transformational strategy which the 2020 management team had identified for Windrace and Mr. Lin agreed that it would be a priority of Windrace upon completion of the Acquisition. Mr. Lin and Mr. Lu further discussed specific ideas for the future direction of the current brand as well as certain key design characteristics of any new brand to be acquired or licensed from overseas brand owners. At the conclusion of the discussions, Mr. Lin and Mr. Lu agreed that having a listed status would facilitate many of the strategies which Windrace had in mind to expand the business.

On or about February 25, 2009, Mr. Lu arranged for a delegation from Morgan Joseph to attend a meeting hosted by Mr. Lin. At the meeting, Mr. Lin, through an interpretation provided by Mr. Lu, explained Windrace’s history and its strategy for the future direction of the business. Following the meeting, and based on a determination that Windrace’s listed peers were trading in a band between 10 to 15 times 2009 projected earnings, Mr. Lu explored the possibility of structuring the payment of consideration to Windrace’s shareholders such that the effective post-money valuation at Closing would be at an acceptable discount to Windrace’s listed peers. In addition, Mr. Lu believed that by having further payments contingent on Windrace’s performance, it would help ensure that the post-money valuation of Windrace remained competitive with its listed

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peer group throughout the next three audit cycles. Mr. Lu conferred with the 2020 management team on the key commercial terms which would be incorporated into the draft sale and purchase agreement relating to the Acquisition.

On March 2, the 2020 management team was informed by Windrace that Mr. Lin and RichWise had met with Elevatech in Hong Kong to discuss the matter of the preferred shares. Mr. Lin reported that Elevatech had expressed support for Windrace and was willing to work with Mr. Lin and the Windrace management to arrive at a mutually beneficial solution. The 2020 management team was further informed that Windrace and RichWise would continue to discuss with Elevatech on various proposals relating to a resolution of the preferred shares issue, and would keep the 2020 management team updated of any key developments.

After referencing the previous terms discussed between 2020 and Windrace on February 3, 2009, the 2020 management team decided to establish the following key commercial propositions:

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On or about March 6, 2009, the foregoing propositions were conveyed to Mr. Lin by Mr. Lu. Mr. Lin agreed to the proposed terms and a draft sale and purchase agreement was circulated to all parties based on the commercial understanding. On March 9, 2009, a formal third party meeting was held in the offices of Richwise in Shenzhen. In attendance were Mr. Lin, Mr. Lu, Deacons (Hong Kong counsel for 2020), Jones Day (U.S. and Hong Kong counsel for Windrace), Jingtian (Chinese counsel for Windrace), Crowe Horwath and certain members of the management teams of both Windrace and 2020. The agenda for the meeting was as follows:

At the conclusion of the March 12, 2009 meeting, Mr. Lin indicated to Mr. Lu that would be imperative for Windrace to find co-investors to satisfy the cash payments to Elevatech and he would be willing to concede to the valuation as he indicated to Elevatech in their prior meetings and Mr. Lu expressed his support. Mr. Lu further indicated that he would follow up on the introduction of potential co-investors to Windrace. Mr. Lin said he would be willing to host meetings at Windrace’s headquarters for any interested parties in the coming weeks.

Between March 16, 2009 and March 24, 2009, counsel for Windrace and 2020 continued to exchange comments and correspondence relating to the draft Purchase Agreement. The 2020 management team participated in such discussions on a as-needed basis to clarify commercial points which were agreed with Windrace and its shareholders.

On March 25, 2009, Mr. Lin informed Mr. Lu that he had a second meeting with Elevatech in Hong Kong. At the meeting, Mr. Lin reported that Elevatech was willing to convert the principal value of its preferred shares into debt, which was to be repaid before the end of 2009. However, Elevatech indicated it would like to receive interest to represent their cost of capital and would have further discussions internally before reverting to Windrace on the amount. Mr. Lin replied he was open to discussions on this issue and nominated Mr. Shi from RichWise to negotiate on behalf of Windrace. On the same day, Mr. Lu and Mr. Lin met in Shenzhen and discussed refinements on the commercial terms of the Acquisition which had been gradually incorporated into the legal language of the draft Purchase Agreement. Mr. Lin had mentioned that he understood that with the current uncertainty in the capital markets, it was impossible for Windrace to achieve the same valuation it may have had if it had successfully listed a year ago, but at the same time, in light of the aggressive performance targets to which Windrace was willing to commit, he asked Mr. Lu to consider an additional consideration for the original shareholders if Windrace met its final audit cycle target. Mr. Lu conferred with the 2020 management team and after due consideration, agreed with Mr. Lin that an additional issuance of 2,212,789 shares shall be made to the original shareholders of Windrace (excluding the replacement shareholders for the preferred shares) if Windrace met its final 2011 audit cycle target at or around March 2012. Mr. Lu’s conclusion was based on the fact that the issuance represented a small part of the overall capital of 2020 by or around March 2012, which is when the additional issuance may be made, and it would serve to further align the interest of the Founders (which comprise the largest portion of the issuance) with the other shareholders.

Between March 27, 2009 and March 30, 2009, Mr. Lin organized a trip for Mr. Lu to meet with Windrace’s distributors in Xi’an and Hefei and also to meet with Windrace’s research and development partner, a Chinese Science Academy Institute based in Hefei. The meeting with the Xi’an and Hefei distributors

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was extremely helpful for Mr. Lu in understanding the business dynamics of selling a branded sportswear products in tier 2 and tier 3 cities, especially since Mr. Lu had the opportunity before the meeting to visit and assess the retail stores belonging to Windrace’s peers. The visits and the meeting helped to validate the 2020 management team’s assessment of the importance of having highly motivated distributors and retail owners to promote the wholesaler’s products. In this regard, Windrace had immense potential as it offered comparatively higher margins to its distributors, and in terms of store management and location coverage, it was not obvious that Windrace’s listed peers had any distinct advantage over Windrace. The visit to the Chinese Science Academy was also helpful to understand Mr. Lin’s emphasis on using science and technology to improve functional sportswear to China’s mass market at competitive prices. Mr. Lu met with Professor Sun, who introduced some of the innovations which his institute was currently exploring with Windrace on an exclusive basis.

From April 1, 2009 to April 5, 2009, the 2020 management team continued to work with the various counsel to further refine the draft Purchase Agreement. On April 6, 2009, Mr. Lu met with Mr. Lin in Shenzhen to discuss progress on a potential overseas licensing arrangement, the preferred shares issue as well as to meet with the distributor of the Guangdong province. Mr. Lin indicated that he had an interest in certain foreign brands which could be successful in the China market and had asked an intermediary to look into possibilities of cooperation with those brands and asked Mr. Lu to represent him and Windrace in those discussions. On the preferred shares issue, he reported that RichWise had made good progress in discussions with Elevatech and the only outstanding issue was over the amount of interest and the timing of payment. Mr. Lin then introduced the Guangdong distributor to Mr. Lu and mentioned that Guangdong province, being one of the wealthiest areas in China, was a key location for future launch of any overseas brand managed by Windrace. Mr. Lu had a constructive discussion with the distributor on the market segmentation between tier 1 cities and the rest of China.

From April 7, 2009 to April 13, 2009, the 2020 management team divided its attention between finalizing the draft Purchase Agreement (pending resolution of the preferred shares issue) and further diligence. On April 14, 2009, Mr. Shi from RichWise informed Mr. Lu that Elevatech had reached preliminary agreement with Windrace on the timing and amount of payments relating to the preferred shares, and Windrace intended to have Elevatech meet with Windrace’s counsel that week to finalize a set of terms relating to the preferred shares. On the same day, Mr. Lu had a discussion with Morgan Joseph in order to plan a working schedule for the announcement of the transaction, the filing of the proxy statement, and the preparation of presentation materials and for Morgan Joseph to schedule meetings for the Windrace management team, as well as related travel visa issues. At the same time, counsel for 2020 and Windrace continued to exchange correspondence on the drafting of the sale and purchase agreement. In parallel, the 2020 management team began to finalize the analysis of the accounting treatment for the Acquisition under IFRS.

On April 16, 2009, 2020 was informed by RichWise that it had convened a discussion with Elevatech to formally commence drafting a set of terms which would form the basis for a binding memorandum of understanding relating to the preferred shares. Elevatech informed Windrace that it was retaining its own counsel to participate in this process. The agreed intention was for a draft set of terms to be ready and circulated on April 19, 2009. On April 18, 2009, the 2020 management team finalized its analysis of the accounting treatment for the Acquisition under IFRS, and counsel was instructed to prepare the appropriate revisions to the draft sale and purchase agreement. On the same day, the 2020 management team commenced working with Windrace on its corporate presentation, which would form the basis for the presentation which would eventually be filed with the SEC upon the announcement of the Acquisition.

On April 20, 2009, Windrace informed 2020 that it had sent the first draft of the set of terms to Elevatech for their review. Elevatech requested a discussion between Windrace’s counsel and their own counsel on the draft, and a teleconference was held on April 23, 2009 during which Elevatech proposed some revisions. Windrace’s counsel conferred and reverted with a revised draft which was sent to Elevatech on the same day. On April 24, 2009, after taking into account the progress of discussions with the shareholders of Windrace and Windrace’s discussions with Elevatech, Mr. Lu called for a special meeting of the Board to review and approve the terms of the potential acquisition of Windrace, to be held on May 4, 2009. From April 25, 2009 to April 29, 2009, the 2020 management team continued to work with Windrace and counsel to finalize the equity purchase agreement. Work also commenced in parallel on the preparation of the draft of the proxy statement, the first draft of which was circulated to all parties for comments on April 29, 2009.

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On April 29, 2009, Seyfarth circulated materials for the proposed Board meeting on May 4, 2009. The materials included:

On the same day, 2020 was informed by Windrace that it had progressed in discussions with Elevatech and was close to agreeing on a set of terms for the proposed redemption of the Elevatech preferred shares.

The Board Meeting

On May 3, 2009, the Board of 2020 met by telephone conference to discuss and approve the proposed acquisition of Windrace. The meeting opened with Seyfarth confirming that all board members were in attendance. It was then confirmed that all the board members had received the materials previously circulated to them on April 29, 2009 and had the opportunity to review such materials. George Lu then opened the meeting with a discussion of the transaction structure. Referring to the draft corporate presentation, Mr. Lu stated that the transaction would be structured as an all-stock acquisition, with common stock to be issued and released to the Sellers subject to the achievement of certain performance targets in each of the three fiscal years ended December 31, 2011. The aggregate consideration to be paid to the Sellers consists of a total of 17,008,633 ordinary shares of Exceed to be issued at closing. A significant portion of these shares would be held in an escrow account pending the completion of performance targets, but 8,236,356 shares would be released into circulation at closing to the Sellers, assuming the maximum amount of Public Shares were converted into cash. Mr. Lu explained that if Windrace brought in new investors in Windrace before the closing, the 8,236,356 shares released to the Sellers at closing from the escrow account would decrease by the number of shares issued to such investors would be in addition to the aggregate 17,008,633 Exceed shares issued to the Sellers, as any such new investors would be contributing additional capital to Windrace, 2020’s management did not believe that any such investment would substantially alter 2020’s analysis of the value of Windrace. Also outstanding at the conclusion of the Acquisition would be the 7,913,362 Exceed ordinary shares issued to the 2020 current shareholders, assuming the maximum amount of Public Shares were converted into cash. In calculating the preceding figures, 2020’s management assumed that 29.99% of the 2020 Public Shares would be converted into cash. Finally, an additional number of 812,895 to 3,739,198 shares could be released into circulation from the exercise of warrants and options. Therefore, the total number of shares in circulation at closing would range between 16,962,613 and 19,888,916 shares. As a result of the structure, the transaction consideration to the Sellers and any new investors in Windrace at closing, or the “standalone” valuation, would amount to $65.4 million, which would equate to a pro forma fully diluted equity value of the merged company of $158.0 million, excluding escrowed and contingent shares, but including 2020 public and founders shares and fully diluted for all warrants. In the event that all public warrants were repurchased, the pro forma fully diluted equity value of the merged company would be $134.8 million. All of the foregoing values were based on an assumed share price of $7.95, being the cash per Public Share within the trust account of 2020 at the time of the board meeting. It was explained to the board that the share price of $7.95 used in the calculations was an assumption only, and the board was made aware that if the share price were different on the date of closing, the pro forma equity value would proportionately change. The board understood that there were variables which might impact on the share price, including but not limited to market perceptions of the dilutive effect of the release of shares from escrow or the exercise of warrants. However, the board was of the view that the cash per Public Share of $7.95 was a reasonable starting point for the valuation analysis. Based on the lower equity value of $134.8 million, the transaction would meet the 80% test as required under the charter of 2020.

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Below is a table setting out the pro forma equity value of the combined company following the Acquisition on a fully-diluted basis assuming there is conversion of 29.99% of the Public Shares.

		Public Warrants Repurchased				No Warrants Repurchased
2020 shares in current circulation			10,500,000				10,500,000
Assumed 29.99% redemption			(2,586,638	)			(2,586,638	)
Net shares from warrants/options			812,895				3,739,198
Sellers’ shares released at Closing (including any new Windrace investors’ shares)			8,236,356				8,236,356
Shares in circulation			16,962,613				19,888,916
Pro forma equity value (based on shares in circulation and share price of $7.95 per share)		$	134,783,131			$	158,055,226

The pro forma equity value analysis took into account the transaction, i.e. the cash contribution of Public Shares, even though no cash was paid out to the Sellers. The 2020 management team believed that while it was standard industry practice to evaluate the enterprise and equity valuation of Windrace on a standalone basis it was also useful to include the valuation on a pro forma basis given the potential impact of the cash reserves of 2020 to the combined company following the Acquisition. The standalone valuation reflects the valuation of the consideration received by Windrace shareholders while the pro forma valuation reflects the value of the consideration including the effect of the outstanding founders shares of 2020, the impact of the outstanding warrants as well as the cash received by Windrace upon the closing. Under the pro forma valuation methodology, the pro forma value increases based on the number of shares being issued in the transaction even if the number of shares is unrelated to the underlying enterprise value of the acquired company. In evaluating the transaction, the 2020 management team noted that there were no comparable merger transactions within the Chinese sportswear sector in which Windrace operates, and the appropriate method of determining the fairness of the transaction to the public shareholders would be to assess if the transaction was implemented at a reasonable discount to the publicly traded comparable companies.

Mr. Lu also discussed Windrace’s net income for 2008 and 2009. Unaudited 2008 net income was RMB168.5 million (approximately $24.3 million) — this included one-time expenses and certain non-cash charges relating to issuance of the Elevatech preferred shares in 2008. Without such expenses and charges, 2008 unaudited adjusted net income would be RMB221.7 million (approximately $31.9 million). The implied price/earnings multiple based on pro forma equity value and unadjusted 2008 net income would range between 5.5 times to 6.4 times, whereas the implied price/earnings multiple based on pro forma equity value and adjusted 2008 net income would range between 4.2 times to 4.9 times. The implied “standalone” price/earnings multiples based on adjusted and unadjusted 2008 net income would range between 2.1 times and 2.7 times respectively. Regarding the 2009 projection, Mr. Lu referred to the performance target for 2009 of RMB260 million (approximately $38.1 million) and conveyed that Windrace’s management was confident it would be able to exceed that target. However, in order to be conservative, Mr. Lu said that the 2020 management team had assumed 2009 projected income of RMB260 million in order to assess valuation. Based on the pro forma equity value of Windrace both on a fully-diluted and non fully-diluted basis, the implied price/earnings multiple based on 2009 projected income of RMB260 million would range between 5.3 times to 5.9 times. Also provided for the board’s consideration was the valuation of Windrace during its previous Hong Kong offering. Including the proceeds from the initial public offering, the Hong Kong offering valued Windrace at between HK$2.76 billion (approximately $353.8 million) and HK$3.96 billion (approximately $507.7 million). The implied price/earnings multiple based on unadjusted 2008 income would have ranged between 14.6 to 20.9 times, a substantially higher multiple than that being contemplated by the board.

Referring to a table of publicly-traded comparable companies which was updated as of April 24, 2009 and which is reproduced below, Mr. Lu drew attention to the fact that the mean and medium implied price/earnings multiple for 2008 among China branded sportswear companies was 12.5 times and 13.5 times respectively, and for 2009 was 11.2 times and 11.9 times. Among international branded sportswear companies, the mean and medium price/earnings multiple for 2008 was 11.3 times and 10.0 times respectively, and for 2009 was 12.5 times and 11.5 times. Mr. Lu pointed out and the Board understood that the publicly traded

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comparable companies were valued at considerably higher multiples than the proposed transaction, regardless of whether the “standalone” valuation or pro forma equity value was employed. Given that the “standalone” valuation at closing would represent a discount of at least 70% of the valuation of the publicly traded comparable companies, and the pro forma equity valuation at closing would represent a discount of at least 50% of the valuation of the publicly traded comparable companies, the Board was comfortable that the discount at closing was sufficiently large and therefore the valuation of the transaction was fair and in the best interests of the public shareholders. Mr. Lu explained that the peer companies had been selected based on the similarities of their business models to Windrace. The “China Branded Sportswear” companies had certain common features: (i) own distinctive brands rather than being merely a contract manufacturer; (ii) products are designed in China; (iii) revenues substantially derived from sportswear or leisurewear as opposed to fashion and/or business wear; and (iv) wholesale business only with no ownership of distribution channel. Excluded from the list were companies which are substantially contract manufacturing operations, owners of distribution channels and wholesalers of leatherwear or fashion brands, as these were regarded by the 2020 management team as having different operational considerations. The “International Branded Sportswear” companies were provided as reference points to illustrate how global branded sportwear companies performed in the capital markets. Mr. Lu also discussed the possibility that U.S. investors, in particular, 2020’s shareholders, may compare Windrace with a U.S. apparel company rather than a purely China branded sportswear company. Mr. Lu mentioned that based on growth rate and other indicators, the closest comparable U.S. apparel company was trading at more than 20 times historical 2008 earnings. A question was raised as to the total consideration being paid and the approximate value of the interest being acquired. Mr. Lu referred the board to the table below which illustrated a scenario at the end of the three year period in which the merged company was able to ultimately achieve its 2011 performance target and therefore all of the shares in escrow were released, and an additional amount of earn-out shares for achieving the 2011 performance target was issued, to the Sellers. The total consideration paid to the Sellers, or the “standalone” valuation, would be $152.8 million based on an assumed share price of $7.95, representing an implied price/earnings multiple based on unadjusted 2008 income of 6.3 times. Mr. Lu noted that the share price of $7.95 used in the calculations was an assumption only, and that the actual price of the stock was subject to change over time based on the Company’s performance, market conditions and the potential dilutive effect of the release of the additional shares from escrow and the issuance of the Earn-Out Shares. Mr. Lu added that if the share price were different on the relevant date, the pro forma equity value would proportionately change. The Board understood that the same variables which might impact on the share price at closing might also be relevant in the 2011 analysis. In comparison, excluding the proceeds from the initial public offering, the Hong Kong offering valued Windrace at between HK$2.07 billion (approximately $265.4 million) and HK$2.97 billion (approximately $380.8 million). The implied price/earnings multiple based on unadjusted 2008 income would have ranged between 10.9 to 15.7 times, a higher multiple than that contemplated by the board.

Standalone valuation after 2011 audit cycle
Sellers’ Shares released at Closing and from escrow			17,008,633
Earn-Out Shares			2,212,789
Total shares issued to Sellers			19,221,422
Consideration (at $7.95 per share)		$	152,810,305
2008 audited earnings		$	24,236,876
2011 target earnings		$	64,333,821
Implied price/earnings multiple for 2008 earnings			6.3
Implied price/earnings multiple for 2011 earnings			2.4

Based on the foregoing chart, Mr. Lu and the Board arrived at the conclusion that the transaction on a “standalone” basis resulted in a range of potential values for Windrace of between 6.3 times 2008 earnings and 2.4 times 2011 earnings, both of which were recognized to be below the multiples for comparable public companies, providing what the Board believed to be a reasonable discount that could help mitigate unanticipated future risks relating to Windrace or the transaction.

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Mr. Lu further elaborated that the performance targets for 2009, 2010 and 2011 had been the subject of internal assessment by the 2020 management team. The team built its own bottom-up analysis of Windrace’s projections and also took into account the considerations set out in the section “Windrace’s Management’s Discussion and Analysis of Financial Condition And Results Of Operations — Factors Affecting Windrace’s Results of Operations and Financial Condition” Some of these considerations included (i) the rate of economic growth in China, (ii) consumer demand for sportswear products in China, (iii) pricing of Windrace’s products, (iv) range of product portfolio, (v) growth of Windrace’s network through distributors, (vi) costs of sales and expenses, (vii) amount of outsourcing to contract manufacturers, (viii) impact of branding enhancement on margins and (ix) level of income tax and preferential tax treatment.” One of the key assumptions behind the final earnings target for 2011 was that revenue would achieve a compound annual growth of more than 20% from 2008 to 2011. This is expected to be driven by volume growth as well as increase in the average selling price of products. Windrace expects to expand its sales network through its distributors by opening between 500 to 1,000 new stores or outlets annually before the end of 2011. Through brand enhancement, increase in the average selling price was also expected to contribute a few percentage points to gross margin. In addition, the effective tax rate for 2011 was forecast to be slightly less than 13% based on the current direction of tax law in China. However, to be conservative, net profit margins was forecast to increase by only approximately two percentage points. As Mr. Lu recapped the transaction structure to the board, he explained that the core of the analysis was that a maximum of 19,221,422 shares of Exceed in total may be issued solely to the current Windrace sellers, comprising 17,008,633 shares issued at closing out of which a substantial majority would be held in escrow, as well as 2,212,789 shares to be issued upon the achievement of the final earnings target for fiscal year 2011. Management of 2020 and Windrace determined that in order to limit the dilution of the shareholders as a whole, the participation of new Windrace investors should be capped at a new issuance of 5,277,045 shares which was an amount based on the projected purchase price per share in the Purchase Agreements to generate sufficient proceeds to repay the obligation to Elevatech. The board determined that in coming to its fairness determination, it should consider both the standalone valuation of the business of Windrace, as well as the potential dilution of introducing new Windrace investors. Mr. Lu and the Board assumed that the transaction was completed including the issuance of up to 5,277,045 shares to new Windrace investors. Mr. Lu noted that in the event that less than 5,277,045 shares were issued to the new Windrace investors, the potential dilution arising from issuing additional shares to new Windrace investors would be less and the applicable pro forma equity value would decrease. Based on the review of the comparable companies set forth in the following table, Mr. Lu assessed that the transaction valuation was fair and in the best interests of the stockholders of 2020.

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		Ticker				Share Price 4/24/09				Market Cap				CY 2008												P/E								CY 2009 Net Income Growth
Name														Revenue				EBITDA				Net Inc.				CY2008				CY2009
China Branded Sportswear
Li Ning Co. Ltd.			SEHK:2331			$	2.03			$	2,118.0			$	980.4			$	156.1			$	105.7				20.2x				16.9x				18.8	%
China Dongxiang (Group) Company Ltd			SEHK:3818				0.48				2,704.9				486.8				204.7				200.4				13.5				11.9				3.8	%
ANTA Sports Products Limited			SEHK:2020				0.84				2,088.4				678.0				141.6				131.1				15.8				14.0				18.7	%
XTEP International Holdings Ltd.			SEHK:1368				0.35				765.7				420.2				88.4				74.5				9.3				8.8				12.3	%
China Hongxing Sports Ltd			SGX:BR9				0.09				254.3				423.4				83.1				65.7				3.7				4.5				-9.3	%
			China Branded Sportswear
			Mean							$	1,586.2			$	597.8			$	134.8			$	115.5				12.5x				11.2x				8.8%
			Median								2,088.4				486.8				141.6				105.7				13.5				11.9				12.3%
International Branded Sportswear
Nike Inc.(1)			NYSE:NKE			$	54.73			$	26,508.4			$	18,971.2			$	2,694.6			$	1,635.8				14.6x				14.9x				8.7	%
Adidas AG			DB:ADS				40.57				7,851.0				15,089.8				1,693.6				897.1				9.5				11.5				-21.5	%
Puma AG Rudolf Dassler Sport			DB:PUM				210.95				3,181.6				3,527.1				531.7				325.3				10.0				11.0				-10.3	%
K-Swiss Inc.			NasdaqGS:KSWS				9.70				338.1				340.2				(8.2	)			(3.0	)			NM				NM				NA
			International Branded Sportswear
			Mean							$	9,469.8			$	9,482.1			$	1,227.9			$	713.8				11.3x				12.5x				-7.7%
			Median								5,516.3				9,308.5				1,112.6				611.2				10.0				11.5				-10.3%
			All Companies:
			Mean							$	5,090.0			$	4,546.3			$	620.6			$	381.4				12.1x				11.7x				2.6%
			Median								2,118.0				678.0				156.1				131.1				11.7				11.7				6.3%
Windrace(2) – All Public Warrants Repurchased										$	133.1			$	262.2			$	30.3			$	24.3				5.5x				5.3x				54.3%
– No Public Warrants Repurchased										$	156.4																6.4x				5.9x