TAX
      INDEMNITY AGREEMENT

     

    This
      Tax
      Indemnity Agreement (“Agreement”) is dated for reference purposes only December
      28, 2006, and is by and between OraLabs, Inc., a Colorado corporation
      (“OraLabs”), China Precision Steel, Inc., formerly known as OraLabs Holding
      Corp., a Colorado corporation (“Holding”) and Partner Success Holdings Limited,
      a British Virgin Islands international business company (“PSHL”).

     

    WHEREAS,
      Holding and PSHL entered into a Stock Exchange Agreement (the “Exchange
      Agreement”) dated as of March 31, 2006, as amended by First Amendment to Stock
      Exchange Agreement (“First Amendment”) and the Second Amendment to Stock
      Exchange Agreement, dated October 12, 2006, under which, among other things,
      PSHL became on even date herewith (the “Closing Date”) a wholly-owned subsidiary
      of Holding in consideration for the issuance to the principals of PSHL and
      their
      designees of controlling ownership of Holding; and

     

    WHEREAS,
      under the Exchange Agreement, such acquisition of the ownership of PSHL was
      followed immediately on the Closing Date by the redemption by Holding of all
      of
      the stock of Holding owned individually by Gary H. Schlatter (“Schlatter”) in
      exchange for the conveyance to Schlatter of all of the stock of OraLabs owned
      by
      Holding (the “Redemption Transaction”); and

     

    WHEREAS,
      the parties agree that the Redemption Transaction is a taxable transaction
      under
      the Internal Revenue Code of 1986, as amended, (the “Code”), calculated upon the
      excess, if any, of the value of OraLabs (“OraLabs Value”) on the Closing Date
      over Holding’s basis in the OraLabs’ common stock owned by Holding immediately
      prior to the distribution of those shares of common stock to Schlatter (the
      “Basis”), and that income taxes assessed by a State may also be payable with
      respect to the Redemption Transaction; and 

     

    WHEREAS,
      on the Closing Date, OraLabs estimated that the Basis is $7,006,586 and the
      OraLabs Value is $8,542,000, (as determined from a fairness opinion from
      Capitalink, L.C.); and

     

    WHEREAS,
      on the Closing Date, the Spinoff Tax Liability (defined below) was estimated
      to
      be $522,041, and to pay the same, OraLabs purchased 100,000 shares of common
      stock from Holding for the total purchase price of $450,690, and paid to Holding
      an additional sum of $71,351 (the “Cash Payment”) (collectively, the “Estimated
      Tax”) plus a Gross-Up Amount (as defined in Section 5B below) on the Cash
      Payment of $36,756.25, to provide the public company with the funds to pay
      the
      Estimated Tax and taxes thereon; and

     

    WHEREAS,
      Holding and PSHL have required an indemnity from OraLabs to the extent that
      the
      amount of Spinoff Tax Liability owing with respect to the Redemption Transaction
      is Finally Determined to be more than the Estimated Tax, and OraLabs is willing
      to provide an indemnity in accordance with the provisions of this
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NOW,
      THEREFORE, in consideration of the foregoing recitals and for other good and
      valuable consideration, the receipt and sufficiency of which is acknowledged
      by
      the parties, the parties agree as follows:

     

    1. For
      the
      purposes of this Agreement, the capitalized terms set forth below have the
      meanings set forth in this Section: 

     

    1.1 “Final
      Determination” or “Finally Determined” means with respect to any liability for
      Taxes for any period, (a) a final, unappealable decision by a court of competent
      jurisdiction, (b) the expiration of applicable statutes of limitations on
      assessment of Taxes or filing of claims for refund, (c) the execution of a
      closing agreement under section 7121 of the Code or the acceptance by the IRS
      of
      an offer in compromise pursuant to section 7122 of the Code (or similar
      agreements with tax authorities entered into under applicable state or local
      tax
      law), but excluding any agreement or compromise that reserves (whether by its
      terms or by operation of law) the right of the taxpayer to file a claim for
      refund and/or the right of the Taxing Authority to assert a further deficiency,
      or (d) any other final, irrevocable and unappealable determination of Taxes
      for
      such period.

     

    1.2 “IRS”
      means the United States Internal Revenue Service or any successor
      thereto.

     

    1.3 “Income
      Tax” or “Income Taxes” means Taxes based upon or measured by net
      income.

     

    1.4 “Income
      Tax Return” means a Tax Return relating to the payment or receipt of any refund
      of any Income Tax.

     

    1.5 “Neutral
      Auditors” means a firm of nationally or regionally recognized independent
      accountants who shall not have had a material relationship with OraLabs, Holding
      or PSHL. 

     

    1.6 “Preclosing
      Taxable Period” means a Taxable Year that ends on or before the Closing
      Date.

     

    1.7 “Spinoff
      Tax Liability” means the excess of the OraLabs Value (as finally determined)
      over the Basis (as finally determined) multiplied by 34% plus the state income
      tax rate, if applicable.

     

    1.8 “Tax”
or
      “Taxes” means any taxes imposed by any federal, state or local government or
      agency thereof within the United States.

     

    1.9 “Tax
      Practices” means the most recently applied policies, procedures and practices
      employed by Holding in the preparation and filing of, and positions taken on,
      any Tax Returns of Holding for any Preclosing Taxable Period.

     

    
      
        
        

      

      
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    1.10 “Tax
      Return” means all returns and other filings relating to, or required to be filed
      by any taxpayer in connection with, the payment or receipt of any refund of
      any
      Income Tax.

     

    1.11 “Taxable
      Year” means a taxable year (which may be shorter than a full calendar or fiscal
      year) or similar period with respect to which any Tax may be imposed.


     

    1.12 “Taxing
      Authority” means the IRS or any other governmental authority responsible for the
      administration of any Tax. 

     

    2. Holding
      has the responsibility to file the Income Tax Return(s) that will report the
      Redemption Transaction for the Taxable Year during which the Closing Date
      occurs. Holding will prepare the Tax Return(s) with respect thereto in a manner
      consistent with past Tax Practices except as otherwise required by changes
      in
      applicable law or material underlying facts. Holding will report the Redemption
      Transaction in the Income Tax Return(s) for said Taxable Year and agrees that
      the basis in its OraLabs stock and the value of OraLabs will be reported as
      the
      Basis and OraLabs Value stated above. However, the Basis calculation (but not
      the OraLabs Value) may be adjusted as required by changes in applicable law
      or
      material underlying facts, or by a determination by Holding after Holding’s
      compliance with Section 4 below of a different amount of Basis. The parties
      agree that OraLabs has no indemnity obligation with respect to the amount of
      Income Tax owed with respect to the Redemption Transaction except to the extent
      that the amount of Spinoff Tax Liability exceeds the Estimated Tax. Prior to
      Holding’s filing any Income Tax Return that reports the Redemption Transaction,
      Holding will comply with the provisions of Section 4 of this Agreement, and
      if
      the amount of Basis reported in said Income Tax Return is lower than the Basis
      used to compute the Estimated Tax, OraLabs will pay to Holding, within 30 days
      after filing the Income Tax Return, the additional amount of Estimated Tax
      calculated upon the lower Basis, plus the applicable Gross-Up Amount defined
      in
      Section 5B. If the amount of Basis reported in said Income Tax Return is higher
      than used to calculate the Estimated Tax at Closing, then to the extent of
      any
      Cash Payment (and Gross-Up Amount thereon) made at Closing, Holding will refund
      to OraLabs an amount equal to the sum of the overpayment portion of the Cash
      Payment made at Closing, plus the applicable Gross-Up Amount on the refunded
      amount. 

     

    3. In
      the
      event that Holding does not comply with its obligations under this Agreement,
      then notwithstanding any provision of this Agreement to the contrary, OraLabs
      will be relieved of all of its indemnity obligations under this Agreement.
      

     

    4. OraLabs
      will cooperate and assist Holding in the preparation and filing of all Tax
      Returns required to be filed for Holding after the date hereof that relate
      to a
      Preclosing Taxable Period. At least 45 days prior to the filing of any Tax
      Return (including amendments thereto) for Holding for a Preclosing Taxable
      Period, Holding will provide OraLabs with a copy of those portions of the
      proposed Tax Return that relate to the Redemption Transaction and/or any Tax
      claimed to be payable in connection therewith, and OraLabs will have the right
      to review all related work papers prior to the filing of any such Tax Return.
      Holding will consult with OraLabs regarding its comments with respect to such
      portions of the Tax Returns, will in good faith consult with OraLabs in an
      effort to resolve any differences with respect to the preparation and accuracy
      of such portions of the Tax Returns and their consistency with past Tax
      Practices, and will consider OraLabs’ recommendations for alternative positions
      with respect to items reflected on such portions of the Tax Returns.


     

    
      
        
        

      

      
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    5. A. Subject
      to the provisions of this Agreement, OraLabs agrees to indemnify and hold
      harmless Holding and PSHL, and their respective officers, agents and directors,
      from and against any obligation of Holding to pay an amount of federal and
      state
      (if applicable) Income Tax attributable to the Redemption Transaction in an
      amount equal to the excess of the Spinoff Tax Liability over the Estimated
      Tax.
      However, the parties agree that the amount of Spinoff Tax Liability will be
      determined without regard to the actual Income Tax that may be payable by
      Holding for any Taxable Year. Provided that Holding and PSHL comply with their
      obligations under this Agreement, OraLabs will pay to Holding the amount
      indemnified hereunder that is due with the filing of the Tax Return that reports
      the Redemption Transaction, or that results from a Final Determination that
      an
      indemnified amount is due with respect to the Redemption Transaction. If an
      amount representing state Income Tax is payable by OraLabs to Holding under
      this
      paragraph, the amount of federal Income Tax payable by Holding will give effect
      to any reduction of federal taxes due to the payment of state
      taxes.

     

    B. The
      parties agree that any payment made to Holding under Section 5A above will
      be a
      taxable transaction to Holding. OraLabs agrees that when it pays the amount
      (“Tax Amount”) of indemnified Spinoff Tax Liability required to be paid under
      Section 5A, it will simultaneously pay to Holding an amount (a “Gross-Up
      Amount”) that will enable Holding to net the amount of the Tax Amount after
      paying United States federal and any state income tax due (giving effect to
      any
      reduction of federal taxes due to the payment of state taxes) with respect
      to
      OraLabs’ payment to Holding of the Tax Amount. The Gross-Up Amount shall be
      calculated by using a 34% federal income tax rate plus the state income tax
      rate, if applicable and shall be determined without regard to the actual Income
      Tax that may be payable with respect to such Tax Amount. The parties agree
      that
      the payment made by OraLabs to Holding under the preceding sentence will be
      deemed to be in full satisfaction of any Income Tax that may be payable by
      Holding that arises from OraLabs’ payment of the Tax Amount, and shall be a full
      and final settlement between the parties.

     

    6. Holding
      and OraLabs will endeavor in good faith to resolve any dispute under this
      Agreement, including without limitation any dispute about a reporting position
      in connection with the Redemption Transaction. If any such dispute is not so
      resolved, then either party may deliver to the other a written notice detailing
      such party’s objections. If the parties are unable to resolve the dispute within
      15 days after such notice is given, then either party shall have the right
      to
      refer the dispute for resolution to Neutral Auditors selected by the parties
      within 10 days after the expiration of such 15-day period. If the parties do
      not
      agree upon the Neutral Auditors within that time, then either party has the
      right to request that the American Arbitration Association appoint the Neutral
      Auditors, and any costs in connection therewith will be shared equally by the
      parties. Each party agrees to execute, if requested by the Neutral Auditors,
      a
      reasonable engagement letter. All fees and expenses relating to the work, if
      any, to be performed by the Neutral Auditors shall be borne equally by the
      parties. The Neutral Auditors shall act as an arbitrator to determine, based
      solely on presentations by OraLabs and Holding, and not by independent review,
      only those issues that remain in dispute between the parties. The Neutral
      Auditors’ determination shall be made within 30 days of such firm’s selection,
      shall be set forth in a written statement delivered to the parties, and shall
      be
      final, binding and conclusive. 

     

    
      
        
        

      

      
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    7. A. In
      the
      event that Holding is notified of any audit, examination or other controversy
      (any such proceeding will be referred to as a “Proceeding”) before a Taxing
      Authority with respect to the amount of Income Tax due from the Redemption
      Transaction, Holding will within 15 business days thereafter give written notice
      to OraLabs of the Proceeding. The notification required by this Section must
      include, insofar as relevant to the Redemption Transaction, copies of any
      correspondence between the Taxing Authority and Holding and, as applicable,
      written summaries of any oral communications, as well as a detailed statement
      of
      the reasons why Holding believes that the Proceeding may result in an
      indemnification obligation under this Agreement. To the extent known by Holding,
      the notice will also include a calculation of the estimated amount of Spinoff
      Tax Liability in excess of the Estimated Tax that may be payable. 

     

    B. Holding
      and OraLabs will comply with the provisions of Section 4 with respect to any
      Proceeding described in the previous paragraph. Holding will deliver to OraLabs
      copies of any correspondence between the Taxing Authority and Holding and,
      as
      applicable, written summaries of any subsequent oral communications, that occur
      throughout the course of the Proceeding, , insofar as relevant to the Redemption
      Transaction. OraLabs will have ultimate control over whether to settle a
      Proceeding, the amount of any settlement, and whether to challenge the
      Proceeding until a Final Determination, but only to the extent that the
      Proceeding relates to the Redemption Transaction. Holding will execute a power
      of attorney to facilitate OraLabs’ direct communications with the Taxing
      Authority. In no event will Holding or PSHL take any action with any Taxing
      Authority that Holding or PSHL could reasonably foresee would have a material
      and adverse effect upon any indemnification obligation of OraLabs under this
      Agreement. 

     

    C. OraLabs
      will reimburse Holding for its reasonable costs and fees incurred in connection
      with the conduct and resolution of a Proceeding, but if the Proceeding involves
      any Tax matter other than the Redemption Transaction, the obligation of OraLabs
      under this sentence will only apply to the reasonable costs and fees incurred
      by
      Holding that relate to the Redemption Transaction. Promptly upon resolution
      of
      the Proceeding, the parties will in good faith seek to agree upon how the costs
      and fees incurred by Holding will be allocated on the one hand to OraLabs and
      on
      the other hand to Holding. If the parties do not agree upon the allocation,
      then
      either party may deliver to the other a written notice detailing such party’s
      objections. Thereafter, the resolution procedure in Section 6 above will be
      undertaken to resolve the disagreement. The Neutral Auditors will act as an
      arbitrator to determine, based solely on presentations by OraLabs and Holding,
      and not by independent review, the allocation of the costs and fees, and the
      Neutral Auditors shall (i) assess to OraLabs the costs and fees that are found
      to be solely attributable to the Reimbursement Transaction, (ii) assess to
      Holding the costs and fees that are found to be solely attributable to matters
      other than the Redemption Transaction, and (iii) allocate the costs and fees
      incurred in the Proceeding in general, not specifically allocable to a specific
      Tax matter that is addressed in the Proceeding, as determined to be appropriate.
      

     

    
      
        
        

      

      
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    8. Holding
      shall retain all Tax Returns relating to the Redemption Transaction and any
      Proceeding involving the Redemption Transaction, and all books, records,
      schedules, work papers and other documents relating thereto, until the
      expiration of the later of (i) all applicable statutes of limitations (including
      any waivers or extensions thereof), and (ii) any retention period required
      by
      law or pursuant to any record retention agreement. OraLabs has the right to
      review and copy any of such books and records of the Proceeding relating to
      the
      Redemption Transaction from time to time upon reasonable advance notice to
      Holding. Holding shall notify OraLabs in writing of any waivers, extensions
      or
      expirations of applicable statutes of limitations, and shall provide at least
      30
      days prior written notice of any intended destruction of the documents referred
      to in the preceding sentence. Holding shall not dispose of any of the foregoing
      materials without first obtaining the written approval of OraLabs, which may
      not
      be unreasonably withheld. 

     

    9. Except
      as
      required by law or with a prior written consent of the other parties, all Tax
      Returns, documents, schedules, work papers and similar items and all information
      contained therein, which Tax Returns and other materials are within the scope
      of
      this Agreement, shall be kept confidential by the parties and their
      representatives, shall not be disclosed to any other person or entity and shall
      be used only for the purposes provided in this Agreement. 

     

    10. This
      Agreement contains the entire agreement among the parties with respect to the
      indemnification by OraLabs of Taxes arising from the Redemption Transaction.
      In
      the event of a conflict between any provision of this Agreement and any
      provision of the Exchange Agreement, First Amendment, or Indemnification
      Agreement attached to the First Amendment, the provision of this Agreement
      controls. Notices
      under this Agreement shall be given only in the same manner described in the
      Indemnification Agreement attached to the First Amendment, to the addresses
      specified therein or to such other address as any party may designate by proper
      written notice to the other.

     

    11. The
      Parties agree that this Agreement shall be construed in accordance with the
      laws
      of the State of Colorado and that exclusive jurisdiction and venue for any
      controversy, claim or suit arising out of or connected with this Agreement
      shall
      be in the courts located in Denver, Colorado. This Agreement may be executed
      in
      counterparts, each such counterpart being deemed to be an original instrument,
      and all of such counterparts shall together constitute one and the same
      instrument. Facsimile signatures will be accepted as originals.

     

    12. This
      Agreement may be amended only by written agreement executed and delivered by
      all
      of the parties. This Agreement is solely for the benefit of the parties to
      this
      Agreement and shall not be deemed to confer upon third parties any remedy,
      claim, liability, reimbursement, claim of action or other right. Except as
      otherwise stated in this Agreement, each party agrees to pay its own costs
      and
      expenses (including without limitation attorneys fees) resulting from the
      fulfillment of its respective obligations hereunder. Any ambiguities in this
      Agreement shall be resolved without regard to which party drafted this
      Agreement. 

     

    
      
        
        

      

      
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    13. The
      parties acknowledge that irreparable damage would occur in the event that any
      of
      the provisions of this Agreement were not performed in accordance with its
      specific terms or were otherwise breached. The parties shall be entitled to
      an
      injunction or injunctions to prevent breaches of this Agreement and to enforce
      specifically the terms and provisions hereof in any court having jurisdiction.
      Any such remedy shall be in addition to any other remedy available at law or
      in
      equity.

     

     

     

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              CHINA
                PRECISION STEEL, INC., formerly known as ORALABS
                HOLDINGS CORP., a Colorado corporation

               

               

              By: 
                /s/ Wo Hing Li

              
                

              

              Wo
                Hing Li, President and CEO

               

              Date:
                December 28, 2006

            	 	
              PARTNER
                SUCCESS HOLDINGS LIMITED, a British Virgin Islands international
                business
                company

               

               

              By: 
                /s/ Wo Hing Li

              
                

              

              Wo
                Hing Li, President and CEO

               

              Date:
                December 28, 2006

            
	 	 	 
	 	 	 
	
              ORALABS,
                INC., a Colorado corporation

               

               

              By: 
                /s/ Gary H. Schlatter

              
                

              

              Gary
                H. Schlatter, President

               

              Date:
                December 28, 2006

            	 	 


    

    


     

    
      
        
        

      

      
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