FORM
      OF SUBSCRIPTION AGREEMENT

     

    This
      subscription agreement (this “Subscription
      Agreement”)
      is
      dated November 1, 2007, by and between
      _____________________ (“Buyer”)
      and
      China Precision Steel, Inc., a Colorado corporation (“Seller”),
      whereby the parties agree as follows:

     

    1. Subscription.

     

    
      	 	
              a)

            	
              Buyer
                agrees to buy and the Seller agrees to sell and issue to Buyer
                ______________ shares of common stock, $.001 par value per share
                (the
                “Common
                Stock”),
                of the Seller (the “Shares”)
                for a purchase price per Share of $6.75 (the “Purchase
                Price”),
                for an aggregate of $___________ (the “Aggregate
                Purchase Price”),
                together with warrants to purchase ____________ shares of Common
                Stock
                (the “Warrants”),
                at an exercise price of $8.45 per share, subject to the terms and
                conditions set forth therein in the form attached hereto as Exhibit
                A.
                The shares of Common Stock and Warrants to be issued to the Buyer
                are
                hereinafter referred to as the “Securities”).
                

            


    

     

    
      	 	
              b)

            	
              The
                Securities and the shares of Common Stock underlying the Warrants
                (the
                "Warrant Shares") have been registered on a Form S-3, File No.
                333-143454, which registration statement (the “Registration
                Statement”)
                has been declared effective by the Securities and Exchange Commission,
                has
                remained effective since such date and is effective on the date
                hereof.

            


    

     

    
      	 	
              c)

            	
              
                On
                  November 6, 2007 (the “Closing
                  Date”),
                  subject to receipt by Tri-State Title (the “Escrow
                  Agent”)
                  of the Aggregate Purchase Price, Seller shall authorize Corporate
                  Stock
                  Transfer, Inc. (the “Transfer
                  Agent”)
                  to register the Securities in the name or names as designated by
                  Buyer and
                  to deliver such Securities by courier to the address designated
                  by Buyer
                  (the “Delivery
                  Instructions”),
                  in each case as set forth on the signature page hereto. The Securities
                  delivered on the Closing Date shall be unlegended and free of any
                  resale
                  restrictions. Prior to the Closing Date, the Buyer shall wire the
                  Aggregate Purchase Price to the Escrow Agent to hold in escrow
                  pursuant to
                  the wire instructions set forth on the signature page hereto.
                  

              

            


      	 	 	 


      	 	
              d)

            	
              Seller
                shall be entitled to receive the Aggregate Purchase Price from the
                Escrow Agent only after the Escrow Agent has received written confirmation
                (which confirmation may be electronic) from Buyer (the “Confirmation”)
                that (i) Buyer has received the unlegended Securities from the Seller
                in
                accordance with the Delivery Instructions and (ii) if such Securities
                have
                been delivered to Buyer’s prime broker for deposit (the “Deposit”)
                with The Depository Trust Company (“DTC”),
                that such Securities have been so deposited. Buyer shall use
                commercially reasonable efforts to provide
                the Confirmation to the Escrow Agent as promptly as practicable,
                but in no
                event later than three
                business
                days,
                after receipt and, if applicable, the Deposit of the unlegended Securities
                (the “Confirmation
                Date”).
                If (i) by 5:00 pm, New York time, on the Confirmation Date, the
                Confirmation has not been received by Seller and Buyer has not
                unreasonably objected in writing to Seller as to the form and substance
                of
                the delivery of the unlegended Securities and (ii) Seller has otherwise
                received written notice from the courier service that delivery has
                been
                effected in accordance with Delivery Instructions, then Seller and
                the
                Placement Agent shall be entitled to instruct the Escrow Agent to
                release
                the applicable Aggregate Purchase
                Price.

            


    

     

    2. Seller
      Representations, Warranties and Covenants.
      The
      Seller represents and warrants that: 

     

    (a)
      It
      has full right, power and authority to enter into this Subscription Agreement
      and to perform all of its obligations hereunder; 

    


    (b)
      This
      Subscription Agreement has been duly authorized and executed by and constitutes
      a valid and binding agreement of the Seller enforceable in accordance with
      its
      terms; 

    


    (c)
      The
      execution and delivery of this Subscription Agreement and the consummation
      of
      the transactions contemplated hereby do not conflict with or result in a breach
      of (i) the Seller’s certificate of incorporation or by-laws, or (ii) any
      material agreement to which the Seller is a party or by which any of its
      property or assets is bound; 


    
      
        
        

      

      
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    (d)
      Neither Seller nor any person acting on its behalf has provided Buyer or its
      respective agents or counsel with any information that the Seller believes
      constitutes material, non-public information except insofar as the existence
      and
      terms of the proposed transactions contemplated hereby may constitute such
      information. Seller covenants and agrees that neither it nor any person acting
      on its behalf will provide Buyer or its agents or counsel with any information
      that Seller believes constitutes material non-public information, unless prior
      thereto Buyer shall have executed a written agreement regarding the
      confidentiality of such information; 

    


    (e)
      Seller agrees to maintain the listing of the Common Stock upon each national
      securities exchange and automated quotation system, if any, upon which its
      shares of Common Stock are listed and shall maintain the effectiveness of the
      Registration Statement, until the expiration of the Warrants. The Seller agrees
      not to take any action which would be reasonably expected to result in the
      delisting or suspension of the Common Stock on each national securities exchange
      and automated quotation system, if any, upon which its shares of Common Stock
      are listed. 

    

      (f)
        Seller agrees that, if (i) all or any portion of the Warrants are exercised
        at a
        time when there is either an effective registration statement covering the
        issuance or resale of the Warrant Shares or (ii) the Warrants are exercised
        as a
“cashless exercise” (as defined in the Warrant), the shares of Common Stock to
        be issued upon exercise of the Warrant shall be unlegended and free of resale
        restrictions.



    3. Buyer
      Representations, Warranties and Acknowledgments.
      The
      Buyer represents and warrants that: (a) it has full right, power and authority
      to enter into this Subscription Agreement and to perform all of its obligations
      hereunder; (b) this Subscription Agreement has been duly authorized and executed
      by and constitutes a valid and binding agreement of the Buyer enforceable in
      accordance with its terms; (c) the execution and delivery of this Subscription
      Agreement and the consummation of the transactions contemplated hereby do not
      conflict with or result in a breach of (i) the Buyer’s certificate of
      incorporation or by-laws, or (ii) any material agreement or any law or
      regulation to which the Buyer is a party or by which any of its property or
      assets is bound; and (d) prior to the execution hereof, Buyer has received
      in
      portable document format the Prospectus Supplement, and the Base Prospectus,
      dated July 16, 2007, relating to the Securities.

     

    4. Seller
      Covenants.
      The
      Seller undertakes to the Buyer that: 

     

    (a)
      no
      later than 8:30
      am,
      New York time, on the business day following the execution of this
      Subscription Agreement, Seller will issue a press release and file a current
      report on Form 8-K with the Securities and Exchange Commission disclosing the
      transactions contemplated by this Subscription Agreement and the Placement
      Agency Agreement; and 

    


    (b)
      no
      later than one business day following the Closing Date, Seller will issue a
      press release and file a current report on Form 8-K with the Securities and
      Exchange Commission disclosing the closing of the transactions contemplated
      by
      this Subscription Agreement and the Placement Agency Agreement.


    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    


    5. Conditions
      to Closing.
      The
      obligations of the Buyer hereunder shall be subject to (a) the accuracy of
      the
      representations and warranties on the part of the Seller set forth herein and
      in
      the Placement Agency Agreement, dated as of October 31, 2007, between the Seller
      and Roth Capital Partners, LLC (the “Placement
      Agency Agreement”),
      in
      each case as of the date hereof and as of the Closing Date as though then made,
      (b) the timely performance by the Seller of its covenants and other obligations
      hereunder and under the Placement Agency Agreement, and (iii) the satisfaction
      by the Seller of all additional conditions as set forth in Section 5 of the
      Placement Agency Agreement.

     

    6. Third-Party
      Beneficiary.
      Seller
      agrees that the Buyer shall be a third party beneficiary of the representations,
      warranties and covenants given by the Seller in the Placement Agency Agreement.
      

     

    7. Miscellaneous.

     

    
      	 	
              a)

            	
              This
                Subscription Agreement constitutes the entire understanding and agreement
                between the parties with respect to its subject matter and there
                are no
                agreements or understandings with respect to the subject matter hereof
                which are not contained in this Subscription Agreement. This Subscription
                Agreement may be modified only in writing signed by the parties
                hereto.

            


    

     

    
      	 	
              b)

            	
              This
                Subscription Agreement may be executed in any number of counterparts,
                all
                of which taken together shall constitute one and the same instrument
                and
                shall become effective when counterparts have been signed by each
                party
                and delivered to the other parties hereto, it being understood that
                all
                parties need not sign the same counterpart. Execution may be made
                by
                delivery by facsimile.

            


    

     

    
      	 	
              c)

            	
              The
                provisions of this Subscription Agreement are severable and, in the
                event
                that any court or officials of any regulatory agency of competent
                jurisdiction shall determine that any one or more of the provisions
                or
                part of the provisions contained in this Subscription shall, for
                any
                reason, be held to be invalid, illegal or unenforceable in any respect,
                such invalidity, illegality or unenforceability shall not affect
                any other
                provision or part of a provision of this Subscription Agreement and
                this
                Subscription Agreement shall be reformed and construed as if such
                invalid
                or illegal or unenforceable provision, or part of such provision,
                had
                never been contained herein, so that such provisions would be valid,
                legal
                and enforceable to the maximum extent possible, so long as such
                construction does not materially adversely effect the economic rights
                of
                either party hereto.

            


    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              d)

            	
              All
                communications hereunder,
                except as may be otherwise specifically provided herein, shall be
                in
                writing and shall be mailed, hand delivered, sent by a recognized
                overnight courier service such as Federal Express, or sent via facsimile
                and confirmed by letter, to the party to whom it is addressed at
                the
                following addresses or such other address as such party may advise
                the
                other in writing:

            


    

     

    To
      the
      Seller: as set forth on the signature page hereto.

     

    To
      the
      Buyer: as
      set
      forth on the signature page hereto.

     

    All
      notices hereunder shall be effective upon receipt by the party to which it
      is
      addressed.

     

    
      	 	
              e)

            	
              This
                Agreement shall be governed by and interpreted in accordance with
                the laws
                of the State of New York for contracts to be wholly performed in
                such
                state and without giving effect to the principles thereof regarding
                the
                conflict of laws. To the extent determined by such court, the prevailing
                party shall reimburse the other party for any reasonable legal fees
                and
                disbursements incurred in enforcement of, or protection of any of
                its
                rights under this Agreement and the
                Warrant.

            


    

     

    *****

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    


    If
      the
      foregoing correctly sets forth our agreement, please confirm this by signing
      and
      returning to us the duplicate copy of this letter.

     

    
      	 	 	 
	 	AGREED AND
              ACCEPTED:
	 	 
	 	 
	 	SELLER:
	 	 
	 	CHINA
              PRECISION STEEL, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Title: 


    

     

    Address
      for Notice:

    China
      Precision Steel, Inc.

    8th
      Floor,
      Teda Building

    87
      Wing
      Lok Street

    Sheung
      Wan, Hong Kong

    Facsimile:
      +852-2854-1121

    Attention:
      Company Secretary

     

    With
      a
      copy to:

     

    K&L
      Gates

    One
      Lincoln Street

    Boston,
      MA 02111

    Facsimile:
      1-617-261-3175

    Attention:
      Barbara A. Jones/Amy Ling

    


    Wire
      Instructions for Escrow Account:

     

    
      
        	
                Bank
                  Name:

              	
                The
                  Bank of New York

              
	
                Bank
                  Address:

              	
                1
                  Wall Street, New York, NY 10286

              
	
                ABA
                  Number:

              	
                021
                  000 018

              
	
                Beneficiary:

              	
                Pershing
                  LLC

              
	
                Beneficiary
                  A/C:

              	
                890
                  051238 5

              
	
                Ultimate
                  beneficiary:

              	
                Tri-State
                  Title & Escrow, LLC

              
	
                Ultimate
                  A/C:

              	
                2S7-001214
                  (S not 5)

              
	
                Bank
                  Reference: 

              	
                China
                  Precision Steel

              


      

    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	BUYER:
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Title:


    

    
      


      Name,
        address and tax I.D. for registration of certificate(s):

      


      Name:
        _______________________________________

      


      Address:
        ______________________________________

      


      ______________________________________

      


      ______________________________________

      


      Tax
        ID:
        _______________________________________

      


       

      Facsimile:

      Attention:

       

      Delivery
        Instructions if Different from Above:

       

      Name:
        _______________________________________

      


      Address:
        _______________________________________

      


      ________________________________________

      


      ________________________________________

      


      Attention:
        _______________________________________

      


      Contact
        Telephone: ________________________________

      


      Facsimile:
        ________________________________________

      


      Email:
        _________________________________________

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

     

    FORM
      OF WARRANT

     

    


     

    
      
        
        

      

      
        -7-