THIS
      NOTE
      AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED
      FOR
      SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
      OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
      REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH
      ACT.

     

    SECURED
      CONVERTIBLE PROMISSORY NOTE

    


    
      	 	 	 
	
              No.
                N-1

            	 	
              Date
                of Issuance

            
	
              US
                $500,000

            	 	
              September
                26,
                2006

            


    

     

    FOR
      VALUE
      RECEIVED, Long-e International Group Co., Ltd., a British Virgin Islands
      corporation (the “Company”), hereby promises to pay MidSouth Investor Fund LP
      (the “Lender”), the principal sum of Five Hundred Thousand United States Dollars
      (US$500,000), together with interest thereon from the date of this Note.
      Interest shall accrue at a rate of ten percent (10%) per annum, compounded
      annually. Unless earlier converted into Conversion Shares pursuant to
      Section 2.2 of that certain Note and Warrant Purchase Agreement dated
      September 22, 2006 among the Company, Lender and certain other investors (the
      “Purchase Agreement”), the principal and accrued interest shall be due and
      payable by the Company on demand by the Lender at any time after the date
      hereof.

     

    This
      Note
      is one of a series of Notes issued pursuant to the Purchase Agreement, and
      capitalized terms not defined herein shall have the meaning set forth in the
      Purchase Agreement.

     

    1.  Payment.
      All
      payments shall be made in lawful money of the United States of America at the
      principal office of the Company, or at such other place as the holder hereof
      may
      from time to time designate in writing to the Company. Payment shall be credited
      first to Costs (as defined below), if any, then to accrued interest due and
      payable and any remainder applied to principal. Prepayment of principal,
      together with accrued interest, may not be made without the Lender’s consent.
The
      Company hereby waives demand, notice, presentment, protest and notice of
      dishonor.

     

    2.   Security. This
      Note
      is secured under that certain Security Agreement (the “Security Agreement”)
      between the Company and the Lender of even date herewith, attached hereto as
      Exhibit
      A.
      Reference is hereby made to the Security Agreement for a description of the
      nature and extent of the security for this Note and the rights with respect
      to
      such security of the holder of this Note.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    3.  Conversion
      of the Notes.
      This
      Note and any amounts due hereunder shall be convertible into Conversion Shares
      in accordance with the terms of Section 2.2 of the Purchase Agreement. As
      promptly as practicable after the conversion of this Note, the Company at its
      expense shall issue and deliver to the holder of this Note, upon surrender
      of
      the Note, a certificate or certificates for the number of full Conversion Shares
      issuable upon such conversion.

     

    4.  Amendments
      and Waivers; Resolutions of Dispute; Notice.
      The
      amendment or waiver of any term of this Note, the resolution of any controversy
      or claim arising out of or relating to this Note and the provision of notice
      shall be conducted pursuant to the terms of the Purchase Agreement.

     

    5.  Successors
      and Assigns.
      This
      Note applies to, inures to the benefit of, and binds the successors and assigns
      of the parties hereto; provided, however, that the Company may not assign its
      obligations under this Note without the written consent of the Majority Note
      Holders. Any transfer of this Note may be effected only pursuant to the Purchase
      Agreement and by surrender of this Note to the Company and reissuance of a
      new
      note to the transferee. The Lender and any subsequent holder of this Note
      receives this Note subject to the foregoing terms and conditions, and agrees
      to
      comply with the foregoing terms and conditions for the benefit of the Company
      and any other Lenders.

     

    6.  Officers
      and Directors Not Liable.
      In no
      event shall any officer or director of the Company be liable for any amounts
      due
      and payable pursuant to this Note.

     

    7.  Expenses.
      The
      Company hereby agrees, subject only to any limitation imposed by applicable
      law,
      to pay all expenses, including reasonable attorneys’ fees and legal expenses,
      incurred by the holder of this Note (“Costs”) in endeavoring to collect any
      amounts payable hereunder which are not paid when due, whether by declaration
      or
      otherwise. The Company agrees that any delay on the part of the holder in
      exercising any rights hereunder will not operate as a waiver of such rights.
      The
      holder of this Note shall not by any act, delay, omission or otherwise be deemed
      to have waived any of its rights or remedies, and no waiver of any kind shall
      be
      valid unless in writing and signed by the party or parties waiving such rights
      or remedies.

     

    8.  Governing
      Law.
      This
      Note shall be governed by and construed under the laws of the State of
      California as applied to other instruments made by California residents to
      be
      performed entirely within the State of California. Notwithstanding any provision
      of this Secured Convertible Promissory Note to the contrary, this Secured
      Convertible Promissory Note shall be (to the extent necessary to satisfy the
      requirements of Section 22062(b)(3)(D) of the California Financial Code) subject
      to the implied covenant of good faith and fair dealing arising under Section
      1655 of the California Civil Code. 

     

    9.  Approval.
      The
      Company hereby represents that its board of directors, in the exercise of its
      fiduciary duty, has approved the Company’s execution of this Secured Convertible
      Promissory Note based upon a reasonable belief that the principal provided
      hereunder is appropriate for the Company after reasonable inquiry concerning
      the
      Company’s financing objectives and financial situation. In addition, the Company
      hereby represents that it intends to use the principal of this Secured
      Convertible Promissory Note primarily for the operations of its business, and
      not for any personal, family or household purpose.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    
      	 	 	 
	 	Long-e
              International Group Co., Ltd.
	 
 	 
 	 
 
	 	By:  	
              /s/
                Bu Shengfu

            
	 	 	Bu
              Shengfu
	 	Chief Executive Officer
	 	
            




    
      
        
        

      

      
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