Unassociated Document


     

    EXHIBIT 10.1

    

      SECURITIES PURCHASE
AGREEMENT


       

      THIS SECURITIES
PURCHASE AGREEMENT (this
“Agreement”), dated as of December 22, 2009 by and among ActiveWorlds Corp, a U.S. public reporting
company,  (collectively with its predecessors, the “Company") and the investors listed on
the Schedule of Investors attached hereto as Schedule
I and identified on the signature pages hereto (each, an “Investor” and collectively,
the “Investors”).


       

      BACKGROUND

       

      WHEREAS,
ActiveWorlds Corp., is a U.S. public reporting company incorporated in Delaware
whose shares of Common Stock are traded on the over-the-counter bulletin board
(the "OTC Bulletin
Board");

       

      WHEREAS,
Dragon Lead Group Limited, a British Virgin Island corporation ("Dragon Lead") is the owner of
all of the issued and outstanding capital stock of Vogue-Show Jewelry Company
Limited (“Vogue Show”),
a wholly foreign owned enterprise incorporated under the laws of the People’s
Republic of China (“PRC”).  Vogue Show
has entered into certain captive agreements (the “VIE Agreements”) with Wuhan Kingold Jewelry Company Limited by
Shares, a company limited
by shares incorporated in People's Republic of China ("Wuhan
Kingold"), pursuant
to which Vogue Show exercises substantial control over the operations of Wuhan
Kingold;

       

      WHEREAS,
the Company and Dragon
Lead have concurrently entered into an agreement and plan of
reverse acquisition ("Reverse Acquisition
Agreement") whereby the shareholders of Dragon Lead will exchange their shares of common stock in
Dragon Lead for shares of common stock of
the Company ("Reverse
Acquisition"). Dragon Lead thereby will become a direct wholly-owned subsidiary of
the Company with Vogue
Show becoming an indirect
wholly-owned subsidiary of the Company; and

       

      WHEREAS, subject to the terms and
conditions set forth in this Agreement and pursuant to Section
4(2) of the Securities Act (as defined below) and Rule 506 promulgated
thereunder, upon closing of
the Reverse Acquisition, the Company will simultaneously issue and sell to each Investor, and
each Investor, severally and not jointly, will purchase from the Company certain
securities of the Company
(the “Common Stock”), set forth opposite such Investor’s name in Schedule
I hereto (which aggregate amount for all
Investors together shall be [·] shares of common stock and shall collectively be referred to herein
as the “Shares”) and (ii) warrants, in substantially
the form attached hereto as Exhibit
B (the “Warrants”), to acquire up to that number of
additional shares of Common Stock set forth opposite such Investor’s name in Schedule I hereto (as exercised, collectively,
the ”Warrant
Shares”).


      
        
           


        

        
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      NOW, THEREFORE, IN CONSIDERATION of the
mutual covenants contained in this Agreement, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the Company, Dragon Lead and the Investors agree as
follows:


       

      DEFINITIONS


       

      In
addition to the terms defined elsewhere in this Agreement and the Reverse
Acquisition Agreement, for all purposes of this Agreement, the following terms
shall have the following meanings:

       

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

       

      "Affiliate" means any Person
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a Person, as such terms are used
in and construed under Rule 144.

       

      "Business Day" means any day
except Saturday, Sunday and any day which is a federal legal holiday or a day on
which banking institutions in the State of New York are authorized or required
by law or other governmental action to close.

       

      "Buy-In" has the meaning set
forth in Section 6.1(c).

       

      "Closing" means the closing of
the purchase and sale of the Shares pursuant to Section 1.

       

      "Closing Date" has the meaning
set forth in Section 1.2, on which all of the conditions set forth in Sections 2
hereof are satisfied, or such other date as the parties may agree.

       

      "Commission" means the United
States Securities and Exchange Commission.

       

      "Common Stock" means the
common stock of the Company, par value USD 0.001 per share, and any securities
into which such common stock may hereafter be reclassified.


      
        
           


        

        
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      "Common Stock Equivalents"
means any securities of the Company or any Subsidiary which entitle the
holder thereof to acquire Common Stock at any time, including without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.

       

      "Company Deliverables" has the
meaning set forth in Section 1.3(a).

       

      "Disclosure Materials" has the
meaning set forth in Section 3.8 and attached as Disclosure Schedules
hereto.

       

      "Effective Date" means the
date that the Registration Statement required by Section 2 of the Registration
Rights Agreement is first declared effective by the Commission.

       

      "Evaluation Date" has the
meaning set forth in Section 3.19.

       

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

       

      "U.S. GAAP" means U.S.
generally accepted accounting principles.

       

      "Intellectual Property Rights"
has the meaning set forth in Section 3.16.

       

      "Investment Amount" means,
with respect to each Investor, the Investment Amount indicated on such
Investor’s signature page to this Agreement.

       

      "Investor Deliverables" has
the meaning set forth in Section 1.3(b).

       

      "Investor Party" has the
meaning set forth in Section 6.7.

       

      "Lien" means any lien, charge,
encumbrance, security interest, right of first refusal or other restrictions of
any kind.

       

      "Losses" has the meaning set
forth in Section 6.7.

       

      "Material Adverse Effect"
means, with respect to any person, any of (i) a material and adverse
effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material and adverse effect on the results of operations, assets,
prospects, business or condition (financial or otherwise) of such person and its
subsidiaries, taken as a whole, or (iii) an adverse impairment to the Person's
ability to perform on a timely basis its obligations under any Transaction
Document.

       

      "Money Laundering Laws" has
the meaning set forth in Section 3.22.

       

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

       

      "OFAC" has the meaning set
forth in Section 3.31.


      
        
           


        

        
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      "Outside Date" means the
thirtieth (30th)
calendar day following the date of this Agreement; provided, that if
such day should fall on a day that is not a Business Day, the Outside Date shall
be deemed the next day that is a Business Day.

       

      "Per Share Purchase Price"
equals $0.498.

       

      "Person" means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

       

      "PRC" means the People’s
Republic of China, excluding Taiwan, Hong Kong and Macau.

       

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

       

      "Registration Rights Agreement"
means the Registration Rights Agreement, dated as of the date of this
Agreement, among the Company and the Investors, in the form of Exhibit B
hereto.

       

      "Registration Statement" means
a registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale by the Investors of the
Shares.

       

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

       

      "SEC Reports" has the meaning
set forth in Section 3.8.

       

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

       

      "Securities" means the Shares,
the Warrants and the Warrant Shares.

       

      "Share Delivery Date" has the
meaning set forth in Section 6.1(c).

       

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

       

      "Short Sales" include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, swaps and similar
arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated
brokers.


      
        
           


        

        
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      "Subsidiary" of any Person
shall mean any
“significant subsidiary” at such Person as defined in Rule 1-02(w) of the
Regulation S-X promulgated by the Commission under the Exchange
Act.

       

      "Trading Day" means (i) a day
on which the Common Stock is traded on a Trading Market (other than the OTC
Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market
(other than the OTC Bulletin Board), a day on which the Common Stock is traded
in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii)
if the Common Stock is not quoted on any Trading Market, a day on which the
Common Stock is quoted in the over-the-counter market as reported by the Pink
Sheets LLC (or any similar organization or agency succeeding to its functions of
reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
shall mean a Business Day.

       

      "Trading Market" means
whichever of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or OTC Bulletin Board on which the Common Stock is listed or quoted for trading
on the date in question.

       

      "Transaction Documents" means
this Agreement, the Reverse Acquisition Agreement, the Warrants, the
Registration Rights Agreement and any other documents or agreements executed in
connection with the transactions contemplated hereunder.


       

      AGREEMENT

       

      NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement, the Company, Dragon Lead, Wuhan Kingold and the Investors hereby
agree as follows:


       

      1.       
   Purchase and Sale of
Securities.

       

      1.1           Purchase of
Securities.  Subject to the terms and conditions set
forth in this Agreement, at
the Closing the Company shall issue and sell to each Investor, and each Investor
shall, severally and not jointly, purchase from the Company, the Shares and the
Warrants to be purchased by each Investor at the Closing as set forth opposite such Investor’s name in column (5) of Schedule
I hereto. Upon execution hereof by each Investor,
each Investor shall wire
transfer its respective purchase amount in same-day funds with the instructions provided by the
Company.


      
        
           


        

        
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      1.2           Closing
Date.  The closing of this transaction (the
“Closing”) shall occur simultaneously with the Reverse
Acquisition on December
____, 2009 (the “Closing
Date”) at 10:00 a.m. local
time at the offices of Cyruli Shanks Hart & Zizmor, LLP, or
such other time or location as the parties hereto shall agree, subject to notification of satisfaction
of the conditions to the Closing set forth herein and in Section 7 below, or such other date(s) as is
mutually agreed to by the
Company and the Investors.

       

      1.3           Closing
Deliveries.

       

      (a)           At each Closing, the Company shall
deliver or cause to be delivered to each Investor participating in the Closing
the following (the “Company
Deliverables”):

       

      (i)           this Agreement duly executed by the Company and the Dragon Lead;

      


      (ii)          the
Registration Rights Agreement duly executed by the Company and the other parties
thereto;

      


      (iii)         a completed and duly executed
Warrant;
and

      


      (iv)  
      a director’s certificate, in agreed form,
certifying the satisfaction
of each of the conditions
precedent to the Company’s obligation to issue Securities.

      


      (b)           At or prior to any Closing, each
Investor shall deliver or cause to be delivered (the “Investor
Deliverables”) to the Company the
following,

      


      (i)           this Agreement duly executed by the
Investors;

      


      (ii)  
       the Registration Rights Agreement
duly executed by
the
Investor;

      


      (iii)         the subscription notice duly
executed by the
Investor for the Warrant;

      


      (iv)   
     a
director’s certificate, in agreed form, certifying the satisfaction of each
of the conditions precedent to the Investors’ obligation to purchase
Securities;
and

      


      (v)     
    a payment
receipt.

       

      
        
          
          

        

        
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      2.        
  Investors
Representations and
Warranties


      Except as set forth in the schedules
hereto (the parties understand and agree that an item disclosed
under a particular schedule shall only qualify the Section referenced in the
heading to such particular schedule, and shall not modify or qualify any other
Section not referenced in such schedule heading), each Investor represents and warrants to and agrees
with the Company, Wuhan
Kingold and Dragon Leads that:

       

      2.1           Organization;
Standing.   Such Investor is an entity duly incorporated
or otherwise organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted.  It is not in violation
of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  It is duly qualified to conduct its businesses in each
jurisdiction where the nature of the business conducted or property owned by it
makes such qualification necessary, and except where the failure to be so
qualified or in good standing, as the case may be, could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

       

      2.2           Authorization; Power.
Such Investor has the requisite power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations thereunder.   The
execution and delivery of each of the Transaction Documents by such Investor and
the consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of the Investor or, if
such Investor is not a corporation, such partnership, limited liability company
or other applicable like action, on the part of such Investor and no further
action is required by the Investor in connection therewith.  Each of
this Agreement and the Registration Rights Agreement has been duly executed by
such Investor, and when delivered by such Investor in accordance with the terms
hereof and thereof, will constitute the valid and legally binding obligation of
such Investor, enforceable against it in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.


      
        
           


        

        
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      2.3           No Conflicts; No
Solicitation.  The execution, delivery and performance of the
Transaction Documents by such Investor and the consummation by such Investor of
the transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of such Investor's certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing an Investor debt or otherwise) or other understanding to
which the Investor is a party or by which any property or asset of the Investor
is bound or affected, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Investor is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Investor is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse
Effect.  Such Investor is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under the transaction documents or to purchase the Securities in
accordance with the terms hereof, provided that for purposes of the
representation made in this sentence, such Investor is assuming and relying upon
the accuracy of the relevant representations and agreements of the Company
herein.  Such Investor is not purchasing the Shares as a result of any
advertisement, article, notice or other communication regarding the Shares
published in any newspaper, magazine or similar media or broadcast over
television or radio.

       

      2.4           Information
on Investor.  At the time such
Investor was offered the Shares, it was, and at the date hereof it is, an "accredited
investor", as such
term is defined in Rule 501(a) under the Securities Act. The information set forth on the
signature page hereto and Schedule
II, as completed by the
undersigned Investor, regarding the Investor is accurate.  Such
Investor is not a registered broker-dealer under Section 15 of the
Securities
Act.  Such Investor does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities.

       

      2.5           Investment
Intent. Such
Investor is acquiring the Securities as principal for its own account for
investment purposes only and not with a view to or for distributing or reselling
such Securities or any part thereof, without prejudice, however, to such
Investor’s right at all times to sell or otherwise dispose of all or any part of
such Securities in compliance with applicable federal and state securities
laws.  Subject to the immediately preceding sentence, nothing
contained herein shall be deemed a representation or warranty by such Investor
to hold the Securities for any period of time.  Such Investor is
acquiring the Securities hereunder in the ordinary course of its business. Such
Investor does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Securities.


      
        
           


        

        
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      2.6           Access to
Information.  Such Investor acknowledges that it has reviewed
the Disclosure Materials and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Subsidiaries
and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment.  Neither such inquiries nor any other investigation
conducted by or on behalf of such Investor or its representatives or counsel
shall modify, amend or affect such Investor’s right to rely on the truth,
accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction
Documents.

       

      2.7           Certain Trading
Activities.  Such Investor has not directly or indirectly, nor
has any Person acting on behalf of or pursuant to any understanding with such
Investor, engaged in any transactions in the securities of the Company
(including, without limitation, any Short Sales involving the Company’s
securities or any hedging transactions) since the earlier to occur of (i) the
time that such Investor was first contacted by the Company regarding an
investment in the Company and (ii) the 30th day
prior to the date of this Agreement.  Such Investor covenants that
neither it nor any Person acting on its behalf or pursuant to any understanding
with it will engage in any transactions in the securities of the Company
(including Short Sales or hedging transactions) prior to the time that the
transactions contemplated by this Agreement are publicly disclosed.

       

      2.8           Independent Investment
Decision.  Such Investor has independently evaluated the merits
of its decision to purchase the Securities pursuant to the Transaction
Documents, and such Investor confirms that it has not relied on the advice of
any other Investor’s business and/or legal counsel in making such
decision.  Such Investor has not relied on the business or legal
advice of Baytree Capital Associates LLC or any of its respective agents,
counsel or Affiliates in making its investment decision hereunder, and confirms
that none of such Persons has made any representations or warranties to such
Investor in connection with the transactions contemplated by the Transaction
Documents.

       

      2.9           No Public Sale or
Distribution. Such
Investor is (i) acquiring the Shares and the Warrants and (ii) upon exercise of
the Warrants will acquire the Warrant Shares issuable upon exercise thereof, in
the ordinary course of business for its own account and not with a view towards,
or for resale in connection with, the public sale or distribution thereof,
except pursuant to sales registered or exempted under the Securities Act and
such Investor does not have a present arrangement to effect any distribution of
the Securities to or through any person or entity; provided, however, that by
making the representations herein, such Investor does not agree to hold any of
the Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
Registration Statement or an exemption under the Securities Act. Such Investor
is acquiring the Securities hereunder in the ordinary course of its
business.  Such Investor does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities.


      
        
           


        

        
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      3.          Company
Representations and Warranties

       

      Except as
set forth in the schedules hereto (the parties understand and agree that an item
disclosed under a particular schedule shall only qualify the Section referenced
in the heading to such particular schedule, and shall not modify or qualify any
other Section not referenced in such schedule heading), the Company represents
and warrants to and agrees with each Investor that:

       

      3.1           Organization;
Standing.  The
Company is duly incorporated or otherwise
organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted.  The Company is not in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.

       

      3.2           Authorization;
Power.  The
Company has the requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to
carry out its obligations thereunder.  The execution and delivery of
each of the Transaction Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company in
connection therewith.  Each Transaction Document has been (or upon
delivery will have been) duly executed by the
Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of,
creditors’ rights and remedies or by other
equitable principles of general application.

       

      3.3           Subsidiaries.  The
Company has no Subsidiaries.


      
        
           


        

        
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      3.4           No Conflicts; No
Solicitation.  The execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Shares and the Warrants and
the reservation for issuance and issuance of the Warrant Shares) do not and will
not  (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company debt or otherwise) or
other understanding to which the Company is a party or by which any property or
asset of the Company is bound or affected, or (iii) result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company is bound or affected; except in the case of
each of clauses (ii) and (iii), such as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect; or (iv) result in the creation or imposition of any Lien upon any of the
material assets of the Company; or (v) result in the activation of any
anti-dilution rights or a reset or repricing of any debt or security instrument
of any other creditor or equity holder of the Company, nor result in the
acceleration of the due date of any material obligation of the Company; or (vi)
result in the activation of any piggy-back registration rights of any person or
entity holding securities of the Company or having the right to receive
securities of the Company.

       

      3.5           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any United States or PRC court or other federal, state, local
or other governmental authority in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other than (i) the
filing with the Commission of one or more Registration Statements in accordance
with the requirements of the Registration Rights Agreement, (ii) filings
required by state securities laws, (iii) the filing of a Notice of Sale of
Securities on Form D with the Commission under Regulation D of the Securities
Act, (iv) the filings required in accordance with Section 6.5 and (v) those that
have been made or obtained prior to the date of this Agreement.

       

      3.6          Issuance of the
Shares.  The Shares and the Warrants are duly authorized and,
upon issuance in accordance with the terms hereof, shall be validly issued and
free from all taxes, liens and charges with respect to the issue thereof and the
Shares shall be fully paid and nonassessable with the holders being entitled to
all rights accorded to a holder of Common Stock.  As of the Closing
Date, the Company shall have duly authorized and reserved for issuance a number
of shares of Common Stock which equals the number of Warrant
Shares.  Upon exercise in accordance with the Warrants, the Warrant
Shares will be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common
Stock.  The offer and issuance by the Company of the Securities is
exempt from registration under the Securities Act.


      
        
           


        

        
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      3.7          Capitalization. The number of shares and
types of all authorized, issued and outstanding capital stock of the Company,
and all shares of Common Stock reserved for issuance under the Company’s option
and incentive plans, if any, is specified in the SEC Reports.  Except
as specified in the SEC Reports, no securities of the Company are entitled to
preemptive or similar rights, and no Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents.  Except as
specified in the SEC Reports, there are no outstanding options, warrants, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common
Stock.  The issuance and sale of Shares contemplated by this Agreement
to the Investors will not, immediately or with the passage of time, obligate the
Company to issue shares of Common Stock or other securities to any Person (other
than the Investors) or result in a right of any holder of Company securities to
adjust the exercise, conversion, exchange or reset price under such
securities.

       

      3.8          SEC Reports; Financial
Statements. The Company has filed
all reports required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law to file such reports) (the foregoing materials being collectively referred
to herein as the “SEC
Reports” and, together with the Schedules to this Agreement (if any), the
“Disclosure Materials”)
on a timely basis or has timely filed a valid extension of such time of filing
and has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates and the dates they were
filed, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with U.S. GAAP applied on a consistent basis
during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.


      
        
           


        

        
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      3.9          Disclosure of Transactions
and Other Material Information.  The Company shall within four
(4) Business Days after the Closing Date (A) issue a press release (the “Press Release”) reasonably
acceptable to the Investors disclosing all material terms of the transactions
contemplated hereby and (B) file a Current Report on Form 8-K describing the
terms of the transactions contemplated by the Transaction Documents in the form
required by the Securities Act, and attaching the material Transaction Documents
(including, without limitation, this Agreement (and all schedules to this
Agreement),  the Reverse Acquisition Agreement and the form of Warrant
and the Registration Rights Agreement) as exhibits to such filing (including all
attachments, the “8-K
Filing”).  From and after the issuance of the Press Release the
Company shall not, and shall cause each of its Subsidiaries and each of their
respective officers, directors, employees and agents, not to, provide any
Investor with any material, nonpublic information regarding the Company or any
of its Subsidiaries without the express written consent of such
Investor.  If an Investor has, or believes it has, received any such
material, nonpublic information regarding the Company or any of its Subsidiaries
from the Company, any of its Subsidiaries or any of the respective officers,
directors, or agents, other than as requested in writing by such Investor, it
shall provide the Company with written notice thereof.  The Company
shall, within five (5) Trading Days of receipt of such notice, make public
disclosure of such material, nonpublic information.  In the event the
Company does not make such disclosure within Five (5) Trading Days, in addition
to any other remedy provided herein or in the Transaction Documents, an Investor
shall have the right to make a public disclosure, in the form of a press
release, public advertisement or otherwise, of such material, nonpublic
information without the prior approval by the Company, its Subsidiaries, or any
of its or their respective officers, directors, employees or
agents.  No Investor shall have any liability to the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees,
stockholders or agents for any such disclosure.  Subject to the
foregoing, neither the Company, its Subsidiaries nor any Investor shall issue
any press release or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of any Investor, to make
any press release or other public disclosure with respect to such transactions
(i) in substantial conformity with the 8-K Filing other the date of such filing
and (ii) as is required by applicable law and regulations, including the
applicable rules and regulations of the OTCBB (provided that in the case of
clause (i) each Investor shall be consulted by the Company in connection with
any such Press Release or other public disclosure prior to its
release).  Without the prior written consent of any applicable
Investor, neither the Company nor any of its Subsidiaries or affiliates shall
disclose the name of such Investor in any filing, announcement, release or
otherwise, unless such disclosure is required by law rule of
regulation.


      
        
           


        

        
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      3.10        Material
Changes.  Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any material liabilities (contingent or
otherwise) other than (A) trade payables, accrued expenses and other liabilities
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company’s financial
statements pursuant to U.S. GAAP or required to be disclosed in filings made
with the Commission, (iii) the Company has not altered its method of accounting
or the identity of its auditors, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any
request for confidential treatment of information.

       

      3.11        Litigation.  There
is no Action which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or (ii) except
as specifically disclosed in the SEC Reports, could, if there were an
unfavorable decision, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect.  Neither the Company,
nor any director or officer thereof (in his or her capacity as such), is or has
been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty,
except as specifically disclosed in the SEC Reports.  There has not
been, and to the knowledge of the Company, there is not pending any
investigation by the Commission involving the Company or any current or former
director or officer of the Company (in his or her capacity as
such).  The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act.

       

      3.12        Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.


      
        
           


        

        
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      3.13        Compliance.  The
Company is not (i) in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both,
would result in a default by the Company), nor has the Company received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) in violation of any order
of any court, arbitrator or governmental body, or (iii) or in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except as could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect. The Company is in compliance with all effective requirements of the
Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
thereunder, that are applicable to it.

       

      3.14        Regulatory
Permits.  The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its business as described in
the SEC Reports and the Company has never received any notice of proceedings
relating to the revocation or modification of any such permits.

       

      3.15        Title to
Assets.  The Company has good and marketable title in fee
simple to its property that is material to its businesses, free and clear of all
Liens.

       

      3.16        Patents and
Trademarks.  The Company has rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights (collectively, the “Intellectual Property Rights”)
that are necessary or material for use in connection with its businesses as
described in the SEC Reports and which the failure to so have could,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.  The Company has never received a written
notice that the Intellectual Property Rights used by the Company violates or
infringes upon the rights of any Person.  Except as set forth in the
SEC Reports, to the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.

       

      3.17        Insurance.  The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
businesses in which the Company is engaged.

       

      3.18        Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or any entity in which any officer, director, or, to
the knowledge of the Company, any such employee has a substantial interest or is
an officer, director, trustee or partner.


      
        
           


        

        
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      3.19        Internal Accounting
Controls.  The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S. GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.  The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company, including its Subsidiaries, is
made known to the certifying officers by others within those entities, including
during the periods in which the Company’s Form 10-K or 10-Q, as the case may be,
is being prepared.  The Company’s certifying officers have evaluated
the effectiveness of the Company’s controls and procedures in accordance with
Item 307 of Regulation S-K under the Exchange Act for the Company’s most
recently ended fiscal quarter or fiscal year-end (such date, the “Evaluation
Date”).  The Company presented in its most recently filed Form
10-K or Form 10-Q the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date.  Since the Evaluation Date,
there have been no significant changes in the Company’s internal controls (as
such term is defined in Rule 13a-15 under the Exchange Act) or, to the Company’s
knowledge, in other factors that could significantly affect the Company’s
internal controls.

       

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


      
        
           


        

        
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      3.21        Certain
Fees.  Except as described in Disclosure Schedule 3.21, no
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.  The Investors shall have no
obligation with respect to any fees or with respect to any claims (other than
such fees or commissions owed by an Investor pursuant to written agreements
executed by such Investor which fees or commissions shall be the sole
responsibility of such Investor) made by or on behalf of other Persons for fees
of a type contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement.

       

      3.22        No General Solicitation;
Private Placement. Neither the Company nor any Person authorized to act
on the Company’s behalf has sold or offered to sell or solicited any offer to
buy the Securities by means of any form of general solicitation or advertising.
Neither the Company nor any of its directors or officers nor any Person
authorized to act on the Company’s behalf has, directly or indirectly, at any
time within the past six months, made any offer or sale of any security or
solicitation of any offer to buy any security under circumstances that would (i)
eliminate the availability of the exemption from registration under Regulation D
under the Securities Act in connection with the offer and sale by the Company of
the Securities as contemplated hereby, or (ii) cause the offering of the
Securities pursuant to this Agreement to be integrated with prior offerings by
the Company for purposes of any applicable law, regulation or stockholder
approval provisions, including under the rules and regulations of any national
securities exchange, market or trading or quotation facility on which the Shares
are listed or quoted.

       

      3.23        Certain Registration
Matters. Assuming the accuracy of the Investors’ representations and
warranties set forth in Section 2, no registration under the Securities Act is
required for the offer and sale of the Securities by the Company to the
Investors under the Transaction Documents.  The Company is eligible to
register its Common Stock for resale by the Investors under Form S-1 promulgated
under the Securities Act.  Except as specified in Disclosure Schedule
3.23, the Company has not granted or agreed to grant to any Person any rights
(including “piggy-back”
or "tag-along" registration rights) to have any securities of the Company
registered with the Commission or any other governmental authority that have not
been satisfied.  The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to each holder of Securities), a register for the Shares and the
Warrants, in which the Company shall record the name and address of the Investor
in whose name the Shares and the Warrants have been issued (including the name
and address of each Investor), the number of Shares held by such Investor, the
number of Warrant Shares issuable upon exercise of the Warrants held by such
Investor and the number of Shares held by such Investor assuming full exercise
of the Warrants held by such Investor.  The Company shall keep the
register open and available at all times during business hours for inspection of
any Investor or its legal representatives.

       


      
        
           


        

        
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      3.24        Listing and Maintenance
Requirements.  Except as specified in the SEC Reports and in
Disclosure Schedule 3.24, the Company has not, in the two years preceding the
date hereof, received notice from any Trading Market to the effect that the
Company is not in compliance with the listing or maintenance requirements
thereof.  The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with the listing and
maintenance requirements for continued listing of the Common Stock on the
Trading Market on which the Common Stock is currently listed or
quoted.  The issuance and sale of the Securities under the Transaction
Documents does not contravene the rules and regulations of the Trading Market on
which the Common Stock is currently listed or quoted, and no approval of the
shareholders of the Company thereunder is required for the Company to issue and
deliver to the Investors the Securities contemplated by Transaction
Documents.

       

      3.25        Investment
Company.  The Company is not, and is not an Affiliate of, and
immediately following the Closing and the application at the proceeds therefrom
will not have become, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

       

      3.26        Application of Takeover
Protections.  The Company has taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of
incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Investors as a result of
the Investors and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without limitation the
Company’s issuance of and/or delivery of all of the Shares and the Investors’
ownership of the Shares.

       

      3.27        No Additional
Agreements.  The Company does not have any agreement or
understanding with any Investor with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction
Documents.

       

      3.28        Consultation with
Auditors.  The Company has consulted its independent auditors
concerning the accounting treatment of the transactions contemplated by the
Transaction Documents, and in connection therewith has furnished such auditors
complete copies of the Transaction Documents.


      
        
           


        

        
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      3.29        Foreign Corrupt Practices
Act.  Neither the Company nor to the knowledge of the Company,
any agent or other person acting on behalf of any of the Company, has, directly
or indirectly, (i) used any funds, or will use any proceeds from the sale of the
Securities, for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to
any foreign or domestic political parties or campaigns from corporate funds or,
(iii) has violated in any material respect any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder.

       

      3.30        PFIC.  The
Company is not and does not intend to become a “passive foreign investment
company” within the meaning of Section 1297 of the U.S. Internal Revenue Code of
1986, as amended.

       

      3.31        OFAC. None of the
Company, any director or officer of the Company, or, to the knowledge of the
Company, any agent, employee, Affiliate or Person acting on behalf of the
Company is currently identified on the specially designated nationals maintained
by,  or otherwise currently subject to any U.S. sanctions administered
by, the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the sale of the Securities, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other Person or entity, towards any sales or operations
in any country sanctioned by OFAC or for the purpose of financing the activities
of any Person currently subject to, or otherwise in violation of, any U.S.
sanctions administered by OFAC.

       

      3.32        Money Laundering
Laws. The operations of the Company is and has been conducted at all
times in compliance with the money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
applicable governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.

       

      3.33        Reservation of
Shares.  So long as any Investor owns any Warrants, the Company
shall take all action necessary to at all times have authorized, and reserved
for the purpose of issuance no less than 50% of the number of shares of Common
Stock issuable upon exercise of the Warrants then outstanding (without taking
into account any limitations on the exercise of the Warrants set forth in the
Warrants).


      
        
           


        

        
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      4.           Dragon Lead
Representations and
Warranties.

       

      Except as set forth in the schedules hereto (the parties understand and agree that
an item disclosed under a particular schedule shall only qualify the Section
referenced in the heading to such particular schedule, and shall not modify or
qualify any other Section not referenced in such schedule heading), Dragon Lead represents and warrants to and agrees
with each Investor that:

       

      4.1           Organization;
Standing.  Dragon Lead and Vogue-Show are duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted.  Neither Dragon Lead nor Vogue-Show is in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.  Dragon Lead and Vogue-Show are duly qualified to conduct its
respective businesses and are in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse
Effect.

       

      4.2           Outstanding
Stock.  All
issued and outstanding shares of capital stock of Dragon Lead and Vogue-Show have been duly authorized and validly
issued and are fully paid
and non-assessable.

       

      4.3           Authorization;
Power.  Dragon Lead has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations thereunder.  The
execution and delivery of each of the Transaction Documents by Dragon Lead and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of Dragon Lead and no further action is required by
Dragon Lead in connection therewith.  Each
Transaction Document has been (or upon delivery will have been) duly executed by
Dragon Lead and, when delivered in accordance with
the terms hereof, will constitute the valid and binding obligation of Dragon Lead enforceable against Dragon Lead in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the
enforcement of, creditors’ rights and remedies or by other
equitable principles of general application.


      
        
           


        

        
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      4.4           Consents.  No consent, approval,
authorization or order of any court, governmental agency or body or arbitrator
having jurisdiction over
Dragon Lead or Vogue-Show, or any of Dragon Lead’s shareholders, or to which any of the
properties of Dragon Lead
or Vogue-Show is bound, is
required for the execution by Dragon Lead of the Transaction Documents and
compliance and performance by Dragon Lead of its obligations under the
Transaction Documents applicable to it.

       

      4.5           No
Conflicts; No Solicitation.  The execution, delivery and
performance of the Transaction Documents by Dragon Lead and Vogue-Show and the consummation by Dragon Lead or Vogue-Show of the transactions contemplated thereby
do not and will not (i) conflict with or violate any provision of Dragon Lead or Vogue-Show's certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other
instrument (evidencing Dragon Lead or Vogue-Show debt or otherwise) or other
understanding to which Dragon Lead or Vogue-Show is a party or by which any property or
asset of Dragon
Lead or Vogue-Show is bound or affected, or (iii) result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which Dragon Lead or Vogue-Show is subject (including federal and state
securities laws and
regulations), or by which any property or asset of Dragon Lead or Vogue-Show is bound or affected; except in the case
of each of clauses (ii) and (iii), such as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse Effect; or (iv) result in
the creation or imposition of any Lien upon any of the assets of
Dragon Lead or Vogue-Show; or (v) result in the activation of any
anti-dilution rights or a reset or repricing of any debt or security instrument
of any other creditor or
equity holder of Dragon
Lead, nor result in the
acceleration of the due date of any obligation of Dragon Lead; or (vi) result in the activation of
any piggy-back registration rights of any person or entity holding securities of
Dragon Lead or having the right to receive
securities of Dragon
Lead.

       

      4.6           Litigation.  There is no pending or
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over Dragon Lead or Vogue-Show.


      
        
           


        

        
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      4.7           Defaults.   Dragon Lead is not in violation of its articles of
incorporation or bylaws.  Dragon Lead is (i) not in default under or in
violation of any agreement or instrument to which it is a party or by which it
or any of its properties are bound or affected, which default or
violation would have a Material Adverse Effect, (ii) not in default with respect
to any order of any court, arbitrator or governmental body or subject to or
party to any order of any court or governmental authority arising out of any action, suit or
proceeding under any statute or other law respecting antitrust, monopoly,
restraint of trade, unfair competition or similar matters, or (iii) not in
violation of any statute, rule or regulation of any governmental
authority which violation would have a Material
Adverse Effect.

       

      4.8           Capitalization.  The number of shares and
type of all authorized, issued and outstanding capital stock of Dragon Lead and all shares of capital stock
reserved for issuance under Dragon Lead’s various option and incentive plans, if any,
is specified on Disclosure
Schedule 4.8.  Except as specified in
Disclosure Schedule 4.8, no securities of Dragon Lead are entitled to preemptive or similar
rights, and no person has any right of first refusal, preemptive right, right of participation, or
any similar right to participate in the transactions contemplated by the
Transaction Documents.  Except as specified in Disclosure Schedule 4.8, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for or acquire,
any shares of capital stock of Dragon Lead, or contracts, commitments, understandings or
arrangements by which Dragon Lead or Vogue-Show is or may become bound to issue
additional shares of capital stock, or securities or rights convertible or
exchangeable into shares of capital stock of Dragon Lead.  The sale of Securities to the Investors will not,
immediately or with the passage of time, obligate Dragon Lead to issue securities of Dragon Lead or Vogue-Show to any person (other than the
Company) or will result in a right of any
holder Dragon
Lead securities to
adjust the exercise,
conversion, exchange or reset price under such securities.

       

      4.9           Subsidiaries.  Dragon Lead has no direct or indirect subsidiaries
other than Vogue-Show
.  Dragon Lead owns all of the capital stock of Vogue-Show free and clear of any and all Liens, and all the issued and
outstanding shares of capital stock of Vogue-Show are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights.

       

      4.10  
      Financial
Statements.  The
audited consolidated financial statements of Dragon Lead and Vogue-Show as of June 30,
2009 covering the preceding
four fiscal quarters are attached hereto as Disclosure Schedule 4.10.

       

      4.11         Material
Changes; Undisclosed Events, Liabilities or Developments.  Since June 30,
2009 (i) there has
been no event, occurrence
or development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) neither Dragon Lead nor Vogue-Show has incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in Dragon Lead’s consolidated financial statements
(iii) Dragon
Lead has not altered its
method of accounting, (iv) neither Dragon Lead nor Vogue-Show has declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) neither Dragon Lead nor Vogue-Show has issued any equity securities to any
officer, director or Affiliate.


      
        
           


        

        
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      4.12         Labor
Relations.  No
material labor dispute exists or, to the knowledge of Dragon Lead, is imminent with respect to any of the
employees of Dragon
Lead or Vogue-Show which could reasonably be expected to
result in a Material Adverse Effect..

       

      4.13         Compliance
with Laws.  Neither Dragon Lead nor Vogue-Show (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with
notice or lapse of time or
both, would result in a default by the Dragon Lead or Vogue-Show under), nor has Dragon Lead or Vogue-Show received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any order of any court, arbitrator or governmental body,
or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, national and local laws applicable to its business and
all such laws that affect the environment, except in each case as could not have a Material Adverse
Effect.

       

      4.14         Regulatory
Permits.  Dragon Lead and Vogue-Show possess all certificates, authorizations
and permits issued by the appropriate national, local or foreign regulatory
authorities necessary to conduct their respective businesses, except where the
failure to possess such permits could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, and
neither Dragon
Lead nor Vogue-Show has received any notice of
proceedings relating to the
revocation or modification of any such permits.

       

      4.17         Insurance.  Dragon Lead and Vogue-Show do not carry insurance and believe that,
due to the respective businesses in which Dragon Lead and Vogue-Show are engaged, prudent and
customary business practice
would not mandate that they do so.

       

      4.18         Transactions
With Affiliates and Employees.  None of the officers or directors of
Dragon Lead or Vogue-Show and, to the knowledge of Dragon Lead, none of the employees of Dragon Lead or Vogue-Show is presently a party to any transaction
with Dragon
Lead or Vogue-Show (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to
or from, or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of Dragon Lead, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee
or partner, in each case in
excess of $50,000 other
than (i) for payment of salary or consulting fees for services rendered, and
(ii) reimbursement for expenses incurred on behalf of Dragon Lead.


      
        
           


        

        
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      4.19         Tax
Status.  Dragon Lead and Vogue-Show have filed all necessary national, local and
foreign income and franchise tax returns and has paid or accrued all taxes shown
as due thereon, and Dragon
Lead has no knowledge of a
tax deficiency which has been asserted or threatened against Dragon Lead or Vogue-Show.

       

      4.20         Manufacturing
and Marketing Rights.  Neither Dragon Lead nor Vogue-Show has granted rights to manufacture,
produce, assemble, license, market, or sell its respective products to any other
person and is not bound by
any agreement that affects Dragon Lead’s nor Vogue-Show’s exclusive right to develop,
manufacture, assemble, distribute, market or sell its products and
services.

       

      4.21         Seniority.  As of the Closing Date, no
Indebtedness or other claim against Dragon Lead is senior to its shares in right of payment, whether with
respect to interest or upon liquidation or dissolution, or otherwise, other than
indebtedness secured by purchase money security interests (which is senior only
as to underlying assets covered thereby) and capital lease obligations (which
is senior only as to the property covered thereby).

       

      4.22         Correctness
of Representations.  Dragon Lead represents that the foregoing
representations and warranties are true and correct as of the date hereof in all
material respects, and,
unless Dragon
Lead otherwise notifies the
parties hereto prior to the Closing Date, shall be true and correct in all
material respects as of the Closing Date.

       

      4.23         Survival.  The foregoing
representations and warranties shall survive the Closing Date.

       

      5.           Wuhan Kingold Representations and
Warranties

       

      Except as set forth in the schedules
hereto (the parties understand and agree that an item disclosed under a
particular schedule shall only qualify the Section referenced in the heading to
such particular schedule,
and shall not modify or qualify any other Section not referenced in such
schedule heading), Wuhan
Kingold represents and
warrants to and agrees with each Investor that:


      
        
           


        

        
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      5.1           Organization;
Standing.  Wuhan Kingold is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the PRC with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted.  It is not in
violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.  It is duly qualified to conduct
its businesses in each
jurisdiction where the nature of the business conducted or property owned by it makes such
qualification necessary, and except where the failure to be so
qualified or in good standing, as the case may be, could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

       

      5.2           Registered
Capital.  All
approved registered capital
of Wuhan Kingold has been fully paid.

       

      5.3           Authorization;
Power. Wuhan Kingold has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by
each of the Transaction
Documents and otherwise to carry out its obligations
thereunder.

       

      5.4           Consents.  No consent, approval,
authorization or order of any court, governmental agency or body or arbitrator
having jurisdiction over Wuhan Kingold or any of its Affiliates, or any of its
shareholders, or to which any of the properties of Wuhan Kingold or any of its Affiliates is subject, is
required for the execution by Wuhan Kingold of the Transaction Documents to which
it is party, and compliance and performance by Wuhan Kingold of its obligations under the
Transaction Documents to which it is party.

       

      5.5           No
Conflicts; No Solicitation.  The execution, delivery and
performance of the Transaction Documents to which it is a party by Wuhan Kingold and the consummation by Wuhan Kingold of the transactions contemplated
thereby do not and will not (i) conflict with or violate any provision of
Wuhan Kingold or any of its Affiliates' certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse
of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing Wuhan Kingold or any of its Affiliates debt or
otherwise) or other understanding to which Wuhan Kingold or any of its Affiliates is a party or
by which any property or
asset of Wuhan
Kingold or any of its
Affiliates is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which Wuhan Kingold or any of its Affiliates is subject
(including federal and state securities laws and regulations), or by which any
property or asset of Wuhan
Kingold or any of its
Affiliates is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect; or (iv) result in the creation or imposition of any
Lien upon any of the material assets of Wuhan Kingold or any of its
Affiliates.


      
        
           


        

        
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      5.6           Litigation.  There is no pending or
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over Wuhan Kingold, or any of its Affiliates that would
affect the execution by Wuhan Kingold or the performance by Wuhan Kingold of its obligations under the
Transaction Documents to
which it is a party.

       

      5.7           Subsidiaries.  Wuhan Kingold has no direct or indirect
subsidiaries.

       

      5.8           Financial
Statements.  The
unaudited consolidated financial statements of Wuhan Kingold for the fiscal quarters ended March 31, 2009 and
June 30, 2009 and the
fiscal years ended December
31, 2007 and 2008 are
attached hereto as
Disclosure Schedule 5.8.

       

      5.9           Material
Changes; Undisclosed Events, Liabilities or Developments.  Since June 30,
2009, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) Wuhan Kingold has not incurred any liabilities (contingent or
otherwise) other than (A)
trade payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in Wuhan
Kingold’s consolidated financial statements
(iii) Wuhan
Kingold has not
altered its method of
accounting, (iv) Wuhan
Kingold has not declared or made any dividend or
distribution of cash or other property to its stockholders (v) Wuhan Kingold has not issued any equity securities to any
officer, director or Affiliate.

       

      5.10         Labor
Relations.  No material labor dispute
exists or, to the knowledge of Wuhan Kingold, is imminent with respect to any of the
employees of Wuhan
Kingold which could
reasonably be expected to result in a Material Adverse
Effect.  Wuhan is
in material compliance with all PRC national, provincial and local
laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

       

      5.11         Compliance
with Laws.  Wuhan Kingold (i) is not in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse
of time or both, would result in a default by Wuhan Kingold), nor has Wuhan Kingold received notice of a claim that it is
in default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) is not in violation of any order of any court,
arbitrator or governmental body, or (iii) is not or has not been in violation of any statute, rule
or regulation of any
governmental authority, including without limitation all PRC national,
provincial, and local laws applicable to its business and all such laws that
affect the environment, except in each case as could not have a Material Adverse
Effect.


      
        
           


        

        
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      5.12         Regulatory
Permits.  Wuhan Kingold possesses all certificates, authorizations and
permits issued by the appropriate PRC national, provincial, local and foreign
regulatory authorities necessary to conduct its business, except where the failure to
possess such permits could
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, and Wuhan Kingold has not received any notice of proceedings
relating to the revocation or modification of any such
permits.

       

      5.13         Title to
Assets.  Wuhan Kingold owns, or has legal right to use, all real property
that is material to its business and good and marketable title
in all personal property owned by it that is material to its business, in each case free and clear
of all Liens, except for
Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by Wuhan
Kingold. Any real property
and facilities held under lease by Wuhan Kingold are held by it under valid, subsisting and enforceable
leases.

       

      5.14         Intellectual
Property Rights.  Wuhan Kingold has, or has rights to use, all Intellectual Property
Rights that are necessary
or material for use in connection with its business and which the
failure to so have could,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.  Wuhan Kingold has never received a written notice that the
Intellectual Property Rights used by Wuhan Kingold violates or infringes upon the rights of any
Person.

       

      5.15         Insurance.  Wuhan Kingold is insured by insurers of recognized
financial responsibility in the PRC against such losses and risks and in such
amounts as are prudent and customary in the business in which Wuhan Kingold is engaged.

       

      5.16         Tax
Status.  Except
for matters that would not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect, Wuhan Kingold has filed all necessary PRC national,
provincial, local, and foreign income and franchise tax returns and has
paid or accrued all taxes shown as due thereon, and Wuhan Kingold has no knowledge of a tax deficiency
which has been asserted or threatened against Wuhan Kingold.

       

      5.17         Obligations
of Management. Each officer
and key employee of
Wuhan Kingold is currently devoting substantially all
of his or her business time to the conduct of business of Wuhan Kingold.  Wuhan Kingold is not aware that any officer or key
employee of Wuhan
Kingold is planning to work
less than full time at
Wuhan Kingold or any Wuhan Kingold Subsidiary in the future.  No
such officer or key employee is currently working or, to Wuhan Kingold’s knowledge, plans to work for a
competitive enterprise, whether or not such officer of key employee is or will
be compensated by such
enterprise.


      
        
           


        

        
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      5.18         VIE
Agreements.  Both
Kingold and Vogue-Show have duly executed and delivered the VIE
Agreements, as attached to
the Reverse Acquisition Agreement, to which it is a party and all
necessary corporate actions to authorize the execution, delivery and performance of
such documents have been taken. Each of the VIE Agreements constitutes a legal,
valid and binding obligation of each of the parties thereto, enforceable against
such party in accordance with their respective terms. the execution, delivery and performance
of the VIE Agreements by each of Vogue-Show and Kingold do not result in (i) any
violation of the provisions of the articles of association, business license or
other constitutive documents of such party, or (ii) any violation of any applicable PRC laws
and regulations.  The VIE Agreements are perpetual in
nature.

       

      5.19         Correctness
of Representations.  Wuhan Kingold represents that the foregoing
representations and warranties are true and correct as of the date hereof
in all material respects
with respect to itself, and, unless Wuhan Kingold otherwise notifies the parties hereto
prior to the Closing Date, shall be true and correct in all material respects as
of the Closing Date.

       

      5.20         Survival.  The foregoing
representations and
warranties shall survive the Closing Date.

      


      6.      
     Other Agreements of the
Parties

       

      6.1           (a)           The
Shares may only be disposed of in compliance with state and federal securities
laws.  In connection with any transfer of the Shares other than
pursuant to an effective registration statement, pursuant to Rule 144, to the
Company, to an Affiliate of an Investor or in connection with a pledge as
contemplated in Section 6.1(b), the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Shares under the Securities Act. Notwithstanding the foregoing, the
Company hereby consents to and agrees to register on the books of the Company
and with its transfer agent, without any such legal opinion, any transfer of
Shares by an Investor to an Affiliate of such Investor, provided that the
transferee certifies to the Company that it is an “accredited investor” as
defined in Rule 501(a) under the Securities Act and provided that such Affiliate
does not request any removal of any existing legends on any certificate
evidencing the Shares.

       

      (b)          Certificates
evidencing the Shares will contain the following legend, until such time as they
are not required under Section 6.1(c):


      
        
           


        

        
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      THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH
SECURITIES.

       

      The
Company acknowledges and agrees that an Investor may from time to time pledge,
and/or grant a security interest in some or all of the Shares pursuant to a bona
fide margin agreement in connection with a bona fide margin account and, if
required under the terms of such agreement or account, such Investor may
transfer pledged or secured Shares to the pledgees or secured
parties.  Such a pledge or transfer would not be subject to approval
or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but
such legal opinion may be required in connection with a subsequent transfer
following default by the Investor transferee of the pledge.  No notice
shall be required of such pledge.  At the appropriate Investor’s
expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Shares may reasonably request in connection with a
pledge or transfer of the Shares including the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) of the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of Selling Stockholders thereunder.  Except as otherwise provided in
Section 6.1(c), any Shares subject to a pledge or security interest as
contemplated by this Section 6.1(b) shall continue to bear the legend set forth
in this Section 6.1(b) and be subject to the restrictions on transfer set forth
in Section 6.1(a).


      
        
           


        

        
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      (c)           Certificates evidencing Shares shall not
contain any legend (including the legend set forth in Section
6.1(b)): (i) following a sale or transfer
of such Shares pursuant to an effective registration statement (including a
Registration Statement), or (ii) following a sale or transfer of such Shares
pursuant to Rule 144 (assuming the transferee is not an Affiliate of
the Company), or (iii) while such Shares are eligible for sale without volume
limitations pursuant to Rule 144.  If an Investor shall make a sale or
transfer of Shares either (x) pursuant to Rule 144 or (y) pursuant to a registration statement and in each
case shall have delivered to the Company or the Company’s transfer agent the certificate
representing Shares containing a restrictive legend which are the subject of
such sale or transfer and a representation letter in customary form
(the date of such sale or transfer
and Share delivery being the “Share Delivery
Date”) and (1) the Company
shall fail to deliver or cause to be delivered to such Investor a certificate
representing such Shares that is free from all restrictive or other legends by the third
Trading Day following the Share Delivery Date and (2) following such third
Trading Day after the Share Delivery Date and prior to the time such Shares are
received free from restrictive legends, the Investor, or any third party on behalf of such Investor,
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Investor of such Shares (a "Buy-In"), then the Company shall pay in cash to
the Investor (for costs incurred either directly by such
Investor or on behalf of a third party) the amount by which the total purchase
price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such Investor as a result of the sale to which such
Buy-In relates.  The Investor shall provide the Company written notice
indicating the amounts payable to the Investor in respect of the Buy-In. Payment
by the Company of amounts payable in respect of the Buy-In are in addition to any other remedies that an
Investor may have, under the Transaction Documents or otherwise, as a result of
the Company’s failure to deliver Share certificates
free from the restrictive legend as provided herein.

       

      6.2           Furnishing
of Information.  As long as any Investor owns the Shares,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act.  As long as any
Investor owns Shares, if the Company is not required to file reports pursuant to
such laws, it will prepare and furnish to the Investors and make publicly
available in accordance with Rule 144(c) such information as is required for
the Investors to sell the Shares under
Rule 144. The Company further covenants that it will take such further action as
any holder of Shares may reasonably request, all to the extent required from
time to time to enable such Person to sell the Shares without registration under the Securities Act
within the limitation of the exemptions provided by Rule
144.


      
        
           


        

        
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    6.3           Integration.  The Company shall not, and
shall use its best efforts to ensure that no Affiliate of the Company shall,
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the Securities Act) that
would be integrated with the offer or sale of the Shares in a manner that would
require the registration under the Securities Act of the sale of the Shares to the Investors, or
that would be integrated with the offer or sale of the Shares for purposes of
the rules and regulations of any Trading Market in a manner that would require
stockholder approval of the sale of the securities to the Investors.

     

    6.4           Subsequent
Registrations.  Other than pursuant to the
Registration Rights Agreement, prior to the first to occur of (a) the Effective
Date of a Registration Statement resulting in all Registrable Securities (as
defined in the Registration Rights Agreement) being registered for resale
pursuant to one or more effective Registration Statements or (b) such time as
all Registrable Securities may be sold by the Investors without volume
restrictions pursuant to Rule 144, the Company may not file any registration statement (other than on Form
S-8)  with the Commission with respect to any securities of the
Company.

     

    6.5           Securities
Laws Disclosure; Publicity.  By 9:00 a.m. (New York
time) on the Trading Day following the execution of this Agreement, and by
9:00 a.m. (New York time)
on the Trading Day following the Closing Date, the Company shall issue press
releases disclosing the transactions contemplated hereby and the
Closing.  On the Trading Day following the execution of this Agreement
the Company will file a Current Report on Form 8-K
disclosing the material terms of the Transaction Documents (and attach as
exhibits thereto the Transaction Documents), and on the Trading Day following
the Closing Date the Company will file an additional Current Report
on Form 8-K to disclose the
Closing.  In addition, the Company will make such other filings and
notices in the manner and time required by the Commission and the Trading Market
on which the Common Stock is listed.  Notwithstanding the foregoing,
the Company shall not publicly disclose the name of
any Investor, or include the name of any Investor in any filing with the
Commission (other than a Registration Statement and any exhibits to filings made
in respect of this transaction in accordance with periodic filing requirements under the Exchange Act)
or any regulatory agency or Trading Market, without the prior written consent of
such Investor, except to the extent such disclosure is required by law or
Trading Market regulations.

     

    6.6           Indemnification
of Investors.  In
addition to the indemnity provided in the Registration Rights Agreement, the
Company will indemnify and hold the Investors and their directors, officers,
shareholders, partners, employees and agents (each, an “Investor
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation
(collectively, “Losses”) that any such Investor Party may suffer or incur as a
result of or relating to any misrepresentation, breach or inaccuracy of any
representation, warranty, covenant or agreement made by the Company in any
Transaction Document.

     

    
      
        
        

      

      
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    6.7           Non-Public
Information.  The
Company covenants and
agrees that neither it nor any other Person acting on its behalf will provide
any Investor or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto such
Investor shall have executed a written agreement
regarding the confidentiality and use of such information.  The
Company understands and confirms that each Investor shall be relying on the
foregoing covenant and agreement in effecting transactions in securities of
the Company.

     

    6.8           Listing of
Shares.  The
Company agrees, (i) if the Company applies to have the Common Stock traded on
any other Trading Market, it will include in such application the Shares, and
will take such other action as is necessary or desirable to cause the Shares to be listed on such
other Trading Market as promptly as possible, and (ii) it will take all action
reasonably necessary to continue the listing and trading of its Common Stock on
a Trading Market and will comply in all material respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market.

     

    6.9           Use of
Proceeds.  The
Company will use the net proceeds from the sale of the Shares hereunder for
working capital and general corporate purposes, including to finance potential
acquisitions, and not for the satisfaction of any portion of the
Company’s debt (other than payment of trade
payables and accrued expenses in the ordinary course of the Company’s business and consistent with prior
practices), or to redeem any Common Stock or Common
Stock Equivalents.


     

    7.           Conditions
Precedent to Closing

     

    7.1           Conditions Precedent to the
Obligations of the Investors to Purchase Shares.  The
obligation of each Investor hereunder to purchase the shares of Common Stocks
and the related Warrants at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that
these conditions are for each Investor’s sole benefit and may be waived by such
Investor at any time in its sole discretion by providing the Company with prior
written notice thereof:

     

    (a)           Representations
and Warranties.  The representations and warranties of the Company,
Dragon Lead and Wuhan Kingold contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing as though made
on and as of such date, except that representations and warranties that are
qualified by materiality shall be true and correct as of the date when made and
as of the Closing as though made on and as of such date;

     

    
      
        
        

      

      
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    (b)           Performance.  The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or prior to the
Closing;

     

    (c)           No
Injunction.  No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits
the consummation of any of the transactions contemplated by the Transaction
Documents;

     

    (d)           Adverse
Changes.  Since the date of execution of this Agreement, no event or
series of events shall have occurred that reasonably could have or result in a
Material Adverse Effect;

     

    (e)           No
Suspensions of Trading in Common Stock; Listing.  Trading in the
Common Stock shall not have been suspended by the Commission or any Trading
Market (except for any suspensions of trading of not more than one Trading Day
solely to permit dissemination of material information regarding the Company) at
any time since the date of execution of this Agreement, and the Common Stock
shall have been at all times since such date listed for trading on a Trading
Market;

     

    (f)     
      Company Deliverables.  The Company
shall have delivered the Company Deliverables in accordance with Section
1.3(a);

     

    (g)           No
Governmental Prohibition.  The sale of the Shares by the Company shall
not be prohibited by any law or governmental order or regulation;

     

    (h)           No
Stop Order.  No stop order or suspension of trading shall have been
imposed by the Trading Market, the SEC or any other government or regulatory
body with respect to public trading in the Common Stock; and

     

    (i)      
     Termination.  This Agreement shall not
have been terminated as to such Investor in accordance with Section
8.5.

     

    7.2           Conditions Precedent to the
Obligations of the Company to issue and sell Shares.  The
obligation of the Company hereunder to issue and sell the shares of Common
Stocks and the related Warrants to each Investor at the Closing is subject to
the satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Investor with prior written notice thereof:

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (a)           Representations
and Warranties.  The representations and warranties of each Investor
contained herein shall be true and correct in all material respects as of the
date when made and as of the Closing Date as though made on and as of such
date;

     

    (b)           Performance.  Each
Investor shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Investor at or
prior to the Closing;

     

    (c)           No
Injunction.  No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits
the consummation of any of the transactions contemplated by the Transaction
Documents;

     

    (d)           Investors
Deliverables.  Each Investor shall have delivered its Investors
Deliverables in accordance with Section 1.3(b); and

     

    (e)           Termination.  This
Agreement shall not have been terminated as to such Investor in accordance with
Section 8.5.

     

    8.           Miscellaneous.

     

    8.1           Fees and
Expenses.  Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of the Transaction Documents.  The Company
shall pay all stamp and other taxes and duties levied in connection with the
issuance and/or transfer of the Shares as contemplated by the Transaction
Documents.

     

    8.2  
        Entire
Agreement.  This Agreement supersedes all other prior oral or
written agreements between the Investors, the Company, their affiliates and
Persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Investor makes any representation, warranty, covenant or
undertaking with respect to such matters.  No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of Common Stocks representing at least a majority of the
amount of the Common Stocks, or, if prior to the Closing Date, the Investors
listed on Schedule I hereto as being obligated to purchase at least a majority
of the amount of the Common Stocks.  No provision hereof may be waived
other than by an instrument in writing signed by the party against whom
enforcement is sought.  No such amendment shall be effective to the
extent that it applies to less than all of the holders of Common Stocks then
outstanding.  No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration also is offered to all of
the parties to the Transaction Documents, holders of Common Stocks or holders of
the Warrants, as the case may be.  The Company has not, directly or
indirectly, made any agreements with any Investor relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.  Without limiting the
foregoing, the Company confirms that, except as set forth in this Agreement, no
Investor has made any commitment or promise or has any other obligation to
provide any financing to the Company or otherwise.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    8.3           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 6:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (c) the Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given.

     

    The
address for such notices and communications shall be as follows:

     

               To the Company:

    


                          ActiveWorlds Corp.

                          40 Wall Street

                          58th Floor

                          New York, NY 10005

                          Attention: President

    


               with copies to:

    


                          Cyruli Shanks Hart  &
Zizmor, LLP

                          420 Lexington Avenue

                          Suite 2320

                          New York, NY 10170

                          Attention: Paul Goodman,
Esq.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

               To Wuhan Kingold:

    


                          c/o Mr. Jia Zhihong

                          No. 15 Huangpu Science and Technology Park, Jiangan
District

                          Wuhan Hubei Province, the
People’s Republic of China
430023

    


               with copies to:

    


                          DLA Piper Hong Kong

                          40th
Floor Bank of China Tower

                          1
Garden Road

                          Hong
Kong

                          Attention: Stephen Peepels,
Esq.

     

    
      To an
Investor:

    

     

    To the address set forth under such
Investor’s name on the signature pages
hereof; or such other address as may be designated in writing hereafter, in the
same manner, by such Person.


     

    8.4           Waivers; No Additional
Consideration.  No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.  No consideration shall be
offered or paid to any Investor to amend or consent to a waiver or modification
of any provision of any Transaction Document unless the same consideration is
also offered to all Investors who then hold Shares.  Without the
written consent or the affirmative vote of each Investor affected thereby, an
amendment or waiver under this Section 8.4 may not waive or amend any
Transaction Document the effect of which would be to permit the Company to (a)
name any Investor as an underwriter in a Registration Statement without such
Investor’s specific written consent thereto, or (b) not include any Registrable
Securities (as defined in the Registration Rights Agreement) of an Investor in a
Registration Statement due to their refusal to be named as an underwriter
therein.

     

    8.5           Termination.  This
Agreement may be terminated prior to Closing:

     

    
      	
               
      

            	
              (a)

            	
              by
      written agreement of all of the Investors and the Company;
    and

            


    

     

    (b)           by
the Company or an Investor (as to itself but no other Investor) upon written
notice to the other, if the Closing shall not have taken place by 6:30 p.m.
Eastern time on the Outside Date; provided, that the
right to terminate this Agreement under this Section 8.5(b) shall not be
available to any Person whose failure to comply with its obligations under this
Agreement has been the cause of or resulted in the failure of the Closing to
occur on or before such time.

    
    

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    In the
event of a termination pursuant to this Section 8.5(b), the Company shall
promptly notify all non-terminating Investors. Upon a termination in accordance
with this Section 8.5(b), the Company and the terminating Investor(s) shall not
have any further obligation or liability (including as arising from such
termination) to the other and no Investor will have any liability to any other
Investor under the Transaction Documents as a result therefrom.

     

    8.6           Construction.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.  This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.

     

    8.7           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Common Stocks or the Warrants.  The Company
shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the holders of Common Stocks representing at least
a majority of the number of the Common Stocks, including by merger or
consolidation.  An Investor may assign some or all of its rights
hereunder without the consent of the Company, in which event such assignee shall
be deemed to be an Investor hereunder with respect to such assigned
rights.

     

    8.8           No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 6.7 (as to each Investor
Party).

     

    8.9           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the New York Courts.  Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of the any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any such New York Court, or
that such Proceeding has been commenced in an improper or inconvenient
forum.  Each party hereto hereby irrevocably waives personal service
of process and consents to process being served in any such Proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.  If either party
shall commence a Proceeding to enforce any provisions of a Transaction Document,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such
Proceeding.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    8.10         Survival.  The
representations, warranties, covenants, and agreements contained herein shall
survive the Closing and the delivery of the Shares.

     

    8.11         Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

     

    8.12         Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

     

    8.13         Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) the Transaction Documents,
whenever any Investor exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Investor may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    8.16         Payment Set
Aside.  To the extent that the Company makes a payment or
payments to any Investor pursuant to any Transaction Document or an Investor
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    8.17         Independent Nature of
Investors’ Obligations and Rights.  The obligations of each
Investor under any Transaction Document are several and not joint with the
obligations of any other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under any
Transaction Document.  The decision of each Investor to purchase
Shares pursuant to the Transaction Documents has been made by such Investor
independently of any other Investor.  Nothing contained herein or in
any Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction
Documents.  Each Investor acknowledges that no other Investor has
acted as agent for such Investor in connection with making its investment
hereunder and that no Investor will be acting as agent of such Investor in
connection with monitoring its investment in the Shares or enforcing its rights
under the Transaction Documents.  Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose.  The Company
acknowledges that each of the Investors has been provided with the same
Transaction Documents for the purpose of closing a transaction with multiple
Investors and not because it was required or requested to do so by any
Investor.

     

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

    


    [SIGNATURE
PAGES FOLLOW]

    


    
      
        
           


        

        
          40

          
            

          

        

        
           


        

      

    

     

    SIGNATURE PAGE TO
SECURITIES PURCHASE AGREEMENT


     

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	
                                ActiveWorlds
  Corp

                              
	 
      	 
      	 
      
	 
      	
                                By:

                              	 
      
	 
      	
                                Name:

                              
	 
      	
                                Title:

                              
	 
      	 
      	 
      
	 
      	
                                As to Section 2 and 4 only:

                              
	 	 
	 
      	
                                Dragon Lead Group
    Limited

                              
	 
      	 
      	 
      
	 
      	
                                By:

                              	 
      
	 
      	
                                Name:

                              
	 
      	
                                Title:

                              
	 
      	 
      	 
      
	 
      	
                                As to Section 2 and 5 only:

                              
	 	 
	 
      	
                                WUHAN KINGOLD JEWELRY CO.,
LTD.

                              
	 
      	 
      	 
      
	 
      	
                                By:

                              	 
      
	 
      	
                                Name:

                              
	 
      	
                                Title:

                              


                      

                    

                  

                

              

            

          

        

      


      
        
           


        

        
          41

          
            

          

        

        
           


        

      
 

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


     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      	
                                                                              NAME
      OF INVESTOR

                                                                            
	 
      	 
      
	
                                                                              By:

                                                                            	 
      
	
                                                                              Name:

                                                                            	 
      
	
                                                                              Title:

                                                                            	 
      
	
                                                                              Investment Amount:  $ 

                                                                            	             
      
	 
      	 
      
	
                                                                              Tax ID No.: 

                                                                            	 
      
	 
      	 
      
	
                                                                              ADDRESS
      FOR NOTICE

                                                                            
	 
	

                                                                              c/o:

                                                                            	 
	
                                                                              Street:

                                                                            	 
      
	

                                                                              City/State/Zip:

                                                                            	 
      	  
    
	
                                                                              Attention: 

                                                                            	 
      
	
                                                                              Tel:

                                                                            	 
      
	
                                                                              Fax:

                                                                            	 
      
	 
      	 
      
	
                                                                              DELIVERY
      INSTRUCTIONS

                                                                            
	
                                                                              (if
      different from above)

                                                                            
	 
	
                                                                              c/o:

                                                                            	 
      
	
                                                                              Street:

                                                                            	 
      
	

                                                                              City/State/Zip:

                                                                            	  
    	
                                                                               
    

                                                                            
	
                                                                              Attention: 

                                                                            	 
      
	
                                                                              Tel:

                                                                            	 
      


                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    LIST OF
EXHIBITS AND SCHEDULES

     

    
      
        
          
            
              
                	
                        Schedule I

                      	
                         
      

                      	
                        List of Investors and Shares
  purchased

                      
	 
      	 
      	 
      
	
                        Schedule II

                      	 
      	
                        Accredited Investor
      Status

                      
	 
      	 
      	 
      
	
                        Exhibit A

                      	 
      	
                        Form of Registration Rights
      Agreement

                      
	 	 	 
	
                        Exhibit B

                      	 
      	
                        Form of
    Warrant

                      


              

            

          

        

      

    

    
    

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    SCHEDULE
I            LIST OF INVESTORS AND SHARES
PURCHASED

     

    
      
        
          	
                  Investor

                	 	
                  Investment

                	 	 	
                  Shares

                	 	 	
                  Warrants

                	 
	
                  Whitebox
      Combined Partners, LP

                	 	$	1,680,000	 	 	 	3,373,494	 	 	 	674,699	 
	
                  Whitebox
      Intermarket Partners, LP

                	 	$	320,000	 	 	 	642,570	 	 	 	128,514	 
	
                  Wallington
      Investment Holding Ltd

                	 	$	1,150,000	 	 	 	2,309,237	 	 	 	461,847	 
	
                  Parkland
      Ltd.

                	 	$	500,000	 	 	 	1,004,016	 	 	 	200,803	 
	
                  Jayhawk
      Private Equity Fund II, LP

                	 	$	500,000	 	 	 	1,004,016	 	 	 	200,803	 
	
                  Trillion
      Growth China Limited Partnership

                	 	$	250,000	 	 	 	502,008	 	 	 	100,402	 
	
                  Great
      Places LLC

                	 	$	250,000	 	 	 	502,008	 	 	 	100,402	 
	
                  Donald
      Rosenfeld

                	 	$	75,000	 	 	 	150,602	 	 	 	30,120	 
	
                  Jay
      T.  Snyder

                	 	$	50,000	 	 	 	100,402	 	 	 	20,080	 
	
                  Beryl
      Snyder

                	 	$	50,000	 	 	 	100,402	 	 	 	20,080	 
	
                  Randall
      Cox

                	 	$	50,000	 	 	 	100,402	 	 	 	20,080	 
	
                  Silicon
      Prairie Partners

                	 	$	50,000	 	 	 	100,402	 	 	 	20,080	 
	
                  Michael
      Harris, Esq.

                	 	$	25,000	 	 	 	50,201	 	 	 	10,040	 
	
                  Bo
      Bai

                	 	$	150,000	 	 	 	301,206	 	 	 	60,240	 


        

      

    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    SCHEDULE
II                     ACCREDITED INVESTOR STATUS

     

    Please initial below the items which
apply to your status as an Accredited Investor.


     

    
      	
              __________

            	
              An
      individual having a net worth with spouse (excluding automobiles,
      principal residence and furnishings) at the time of purchase, individually
      or jointly, in excess of
$1,000,000.

            


    

     

    
      	
              __________

            	
              An
      individual whose individual net income was in excess of $200,000 in each
      of the two most recent years, or whose joint net income with his or her
      spouse was in excess of $300,000 in each of those years, and who
      reasonably expects his individual or joint income with such investor’s
      spouse to reach such level in the current
year.

            


    

     

    
      	
              __________

            	
              A
      corporation or partnership, not formed for the specific purpose of
      acquiring the purchased securities, having total assets in excess of
      $5,000,000.

            


    

     

    
      	
              __________

            	
              A
      small business investment company licensed by the U.S. Small Business
      Administration under section 301(c) or (d) of the Small Business
      Investment Act of 1958.

            


    

     

    
      	
              __________

            	
              A
      self-directed benefit plan within the meaning of ERISA, with investment
      decisions made solely by persons who are accredited investors as defined
      in Rule 501(2) of Regulations D.

            


    

     

    
      	
              __________

            	
              A
      trust with total assets in excess of $5,000,000 not formed for the
      specific purpose of acquiring the purchased securities, whose purchase is
      directed by a sophisticated person (i.e., a person who has such knowledge
      and experience in financial and business matters that he, she or it is
      capable of evaluating the merits and risks of an investment in the
      purchased securities).

            


    

     

    
      	
              __________

            	
              An
      entity in which all of the equity owners are accredited
      investors.

            


    

     

    
      
        
          
            
              
                
                  	
                          __________

                        	

                          Other (describe): 

                        	   
      
	 	 


                

              

            

          

        

      

    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    DISCLOSURE
SCHEDULES

     

    NONE