f8k030708ex4i_chinayida.htm


    SECURITIES PURCHASE
AGREEMENT

    


    


            THIS SECURITIES
PURCHASE AGREEMENT (“Agreement”) is made
as of the 7th day of
March, 2008, by and among China Yida Holding, Co., a Delaware corporation, with
an address at RM 1302-3 13/F, Crocodile House II, 55 Connaught Road Central,
Hong Kong (the “Company”), and the
Investors set forth on the signature pages affixed hereto (each an “Investor” and
collectively the “Investors”).

    


    Recitals:

    


    A.           The
Company and the Investors are executing and delivering this Agreement in
connection with an offering of securities of the Company (the “Offering”) in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as
promulgated by the United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act”);
and

    


    B.           The
Investors wish to purchase from the Company, and the Company wishes to sell and
issue to the Investors, upon the terms and conditions stated in this Agreement,
units of securities of the Company aggregating up to a maximum of $14,000,000
(the “Units”),
each Unit to consist of:

    


    (i)           one
(1) share of the Company’s Common Stock, $0.001 par value per share (the “Common Stock”);
and

    


    (ii)           a
Class A Warrant, in substantially the form attached hereto as Exhibit
A, to purchase that number of shares of the Company’s Common Stock equal
to fifty (50%) percent of the principal dollar amount of the Units purchased,
divided by the Unit Purchase Price (rounded to the nearest whole share), at an
exercise price of $1.25 per share;

    


    C.           The
purchase price shall be $1.05 per Unit (the “Unit Purchase
Price”); and

    


    D.           Pursuant
to its terms an aggregate of up to 13,333,333 Units, consisting of (i)
13,333,333 shares of Common Stock (post-Reverse Split), and (ii) Class A
Warrants to purchase 6,666,667 shares of Common Stock (post-Reverse Split) may
be sold in this Offering; and

    


    E.           Contemporaneous
with the sale of the Shares and the Class A Warrants, the parties hereto will
execute and deliver a Registration Rights Agreement, in substantially the form
attached hereto as Exhibit
B (the “Registration Rights
Agreement”), pursuant to which the Company will agree to provide certain
registration rights under the 1933 Act, as amended, and the rules and
regulations promulgated thereunder, and applicable state securities
laws.

    



    
      
         


      

      
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      In
consideration of the mutual promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

      


      1.           Definitions.  In addition to
those terms defined above and elsewhere in this Agreement, for the purposes of
this Agreement, the following terms shall have the meanings set forth
below:

      


      “Affiliate” means,
with respect to any Person, any other Person which directly or indirectly
through one or more intermediaries Controls, is controlled by, or is under
common control with, such Person.

      


      “Amendment” means an
amendment to the Company’s Certificate of Incorporation which has the effect of
(a) changing the Company’s name from “Intelisys Aviation Systems of America
Inc.” to “China Yida Holding, Co.”; and (ii) implementing the Reverse
Split.

      


      “Business Day” means a
day, other than a Saturday or Sunday, on which banks in New York City are open
for the general transaction of business.

      


      “Class A Warrants”
means the warrants to purchase shares of Common Stock to be included in the
Units purchased in connection with the Offering.

      


      “Common Stock” means
the Company’s common stock, par value $0.001 per share, and any securities into
which the common stock may be reclassified.

      


      “Company’s Knowledge”
means the actual knowledge of the executive officers (as defined in Rule 405
under the 1933 Act) of the Company, after due inquiry.

      


      “Confidential
Information” means trade secrets, confidential information and know-how
(including but not limited to ideas, formulae, compositions, processes,
procedures and techniques, research and development information, computer
program code, performance specifications, support documentation, drawings,
specifications, designs, business and marketing plans, and customer and supplier
lists and related information).

      


      “Control” (including
the terms “controlling”, “controlled by” or “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

      


      “CYHC Shareholder”
means Chen Minhua.

      


      “Effective Date” means
the date on which the initial Registration Statement is declared effective by
the SEC.


      
        
           


        

        
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                “Effectiveness
Deadline” means the date on which the initial Registration Statement is
required to be declared effective by the SEC under the terms of the Registration
Rights Agreement.

      


      “Escrow Agent” means
Anslow & Jaclin, LLP.

      


      “Escrow Agreement”
means the Escrow Agreement the Company, Pope, as Investor Agent, and the Escrow
Agent will enter into at the Closing, in substantially the form attached hereto
as Exhibit
C.

      


      “Intellectual
Property” means all of the following: (i) patents, patent applications,
patent disclosures and inventions (whether or not patentable and whether or not
reduced to practice); (ii) trademarks, service marks, trade dress, trade names,
corporate names, logos, slogans and Internet domain names, together with all
goodwill associated with each of the foregoing; (iii) copyrights and
copyrightable works; (iv) registrations, applications and renewals for any of
the foregoing; and (v) proprietary computer software (including but not limited
to data, data bases and documentation).

      


      “Lock-Up Agreement”
means the Lock-Up Agreement the Company and the Majority Stockholders will enter
into at the Closing, in substantially the form attached hereto as Exhibit
D.

      


      “Majority
Stockholders” means Chen Minhua and Fan Yanling.

      


      “Make Good Agreement”
means the Make Good Agreement the Company, the CYHC Shareholder and Pope, as
Investor Agent, will enter into at the Closing, in substantially the form
attached hereto as Exhibit
E.

      


      “Make Good Escrow
Agreement” means the Make Good Agreement the Company, the CYHC
Shareholder, Pope, as Investor Agent, and the Transfer Agent will enter into at
the Closing, in substantially the form attached hereto as Exhibit
F.

      


      “Material Adverse
Effect” means a material adverse effect on (i) the assets, liabilities,
results of operations, condition (financial or otherwise), business, or
prospects of the Company and its Subsidiaries taken as a whole, or (ii) the
ability of the Company to perform its obligations under the Transaction
Documents.

      


      “Person” means an
individual, corporation, partnership, limited liability company, trust, business
trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.

      


      “Pope” means Pope Investments II LLC, a Delaware limited
liability company.

      


      “Purchase Price” means up to a maximum of
$14,000,000.


      
        
           


        

        
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                      “Registration
Statement” has the meaning set forth in the Registration Rights
Agreement.

      


      “Reverse Split” means
a 1-for-10 reverse split of the Common Stock of the Company that does not alter
the number of shares of Common Stock the Company is authorized to issue or the
par value per share of the Company’s Common Stock.

      


      “SEC Filings” has the
meaning set forth in Section 4.6.

      


      “Securities” means the
Units, the Shares, the Class A Warrants and the Warrant Shares.

      


      “Shares” means the
shares of Common Stock included in the Units and to be purchased in connection
with the Offering.

      


      “Subsidiary” of any
Person means another Person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first Person.

      


      “Transaction
Documents” means this Agreement, the Class A Warrants, the Registration
Rights Agreement, the Escrow Agreement, the Lock-Up Agreement, the Make Good
Agreement and the Make Good Escrow Agreement, and certain other papers,
agreements, documents, instruments and certificates necessary to carry out the
purposes thereof.

      


      “Transfer Agent” means
American Stock Transfer & Trust Company, the Company’s transfer
agent.

      


      “Warrant Shares” means
the shares of Common Stock issuable upon the exercise of the Class A Warrants,
giving effect to the Reverse Split.

      


      “1933 Act” has the
meaning set forth in the Recitals above.

      


      “1934 Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.

      


      2.           Purchase and Sale of the
Units.

      


      2.1           Purchase and
Sale. Subject to the terms and
conditions of this Agreement, on the Closing Date, the Investors shall
severally, and not jointly, purchase, and the Company shall sell and issue to
the Investors, Units of the securities consisting of the Shares and the Class A
Warrants in the respective amounts set forth opposite the Investors’ names on
the signature pages attached hereto in exchange for payment of each Investor’s
pro rata share of the Purchase Price as specified in Section 3 below; provided, however, that not
more than $14,000,000 of Units, in the aggregate, shall be purchased in this
Offering.


      
        
           


        

        
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                2.2           Call Options on Class A
Warrants.

      


      (a)           The
Company covenants to the Investors that the Adjusted EPS (as defined below) for
the fiscal year ending December 31, 2008 (“FY08 Adjusted EPS”)
of the Company will be greater than or equal to $0.22 per share (the “FY08 Performance
Threshold”), as determined pursuant to Section 2(d) of the Make Good
Agreement.  Pursuant to Section 2(e) of the Make Good Agreement, the
Company shall (i) provide the Investors with its audited financial statements
(the “FY08 Financial
Statements”) for the fiscal year ended December 31, 2008 (“FY08”) on or before
March 31, 2009 (the “Evaluation Date”),
and (ii) concurrently with the release of the FY08 Financial Statements to the
Investors, the Company shall (A)  provide to the Investors a written
certification  as to the amount of the Adjusted EPS for FY08 and
whether the FY08 Performance Threshold, as adjusted, has been met (the “EPS Certification”),
and (B) the Company shall make such FY08 Financial Statements and EPS
Certification publicly available (as part of an Annual Report on Form 10-KSB or
on a Current Report on Form 8-K, or otherwise).  In the event
that the Company attains the FY08 Performance Threshold, it shall have the
right, but not the obligation, to include with the EPS Certification provided to
the Investors (i) a written notice (the “Call Notice”) that it
is exercising its option to call fifty (50%) percent of the Class A Warrants
originally issued to the Investors (the “Callable Warrants”),
at a redemption price equal to $0.001 per share (the “Redemption Price”) of
Common Stock then purchasable pursuant to such Class A Warrants, and (ii) a
check to each Investor in the amount of the aggregate Redemption Price for the
applicable number of Class A Warrants to be redeemed from such Investor; provided, however, that the
Company may only call all, but  not less than all, of the Callable
Warrants.  Upon receipt of a Call Notice, assuming the Company has in
fact attained the FY08 Performance Threshold, each Investor shall return fifty
(50%) percent of the Class A Warrants he, she or it purchased hereunder to the
Company within ten (10) business days.  With regard to the foregoing,
between the six-month anniversary of the Closing Date and the Evaluation Date,
each Investor shall have the right to exercise only up to fifty (50%) percent of
the Class A Warrants he, she or it has purchased hereunder.  In the
event that the Company does not meet the FY08 Performance Threshold, or, if no
Call Notice is included with the EPS Certification, each Investor shall have the
right to exercise the remaining fifty (50%) percent of the Class A Warrants he,
she or it has purchased hereunder at any time prior to the Expiration
Date.  For the purpose of this Section 2.2, “Adjusted EPS” means the
net income (or loss) of the Company and its subsidiaries for such period,
determined on a consolidated basis divided by 67,833,333 shares; provided, however, that the
Adjusted EPS for such period will be increased by any cash charges related to
the Offering and non-cash charges incurred as a result of the Offering (due to
non-cash amortization on warrants charged to the Company’s results of operation,
if any).

      


      (b)           In the
event that the Company attains consolidated net income for the fiscal year ended
December 31, 2010 greater than or equal to $39,000,000, as set forth in the
audited financial statements of the Company for the period ending December 31,
2010, (excluding non-cash, one-time gains, acceptable to Investors), it shall
have the right, but not the obligation, upon thirty (30) days prior written
notice (“Notice
Period”) given to the Investors, to call one hundred (100%) percent of
the Class A Warrants issued to each Investor at a redemption price equal to
$0.001 per share of Common Stock then purchasable pursuant to such Class A
Warrants, to the extent that such number of Class A Warrants have
not

       

      
 

      
        
          
             


          

          
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      been
previously exercised by any Investor; provided that (i) the Company
simultaneously calls all of the remaining Class A Warrants sold hereunder on the
same terms, (ii) all of the shares of Common Stock issuable under the Class A
Warrants either (A) are registered pursuant to an effective Registration
Statement (as defined in the Registration Rights Agreement) which has not been
suspended and for which no stop order is in effect, and pursuant to which the
Investor is able to sell such shares of Common Stock at all times during the
Notice Period, or (B) no longer constitute Registrable Securities (as defined in
the Registration Rights Agreement), and (iii) the Class A Warrants are fully
exercisable for the full amount of Warrant Shares covered
thereby.  Notwithstanding any such notice by the Company, each
Investor shall have the right to exercise all, but  not less than all,
of his, her, or its Class A Warrants prior to the end of the Notice
Period.

      


      2.3           Appointment of Investor
Agent.

      


      (a)           The
Investors hereby irrevocably appoint Pope as their agent (the “Investor Agent”) for
the purposes specified in this Agreement.  Without prior notice to any
Investor, the Investor Agent shall have full, exclusive and irrevocable
authority on behalf of each of the Investors to (i) execute and deliver the
Escrow Agreement, Make Good Agreement and Make Good Escrow Agreement and (ii)
perform the services set forth in the Escrow Agreement, Make Good Agreement and
Make Good Escrow Agreement.  The foregoing authorization is granted
and conferred by the Investors in consideration of the grant of such
authorization by each of the other Investors and in consideration of the
agreements and covenants of the Company contained herein. In consideration of,
and except as provided by, the foregoing, this authorization granted to the
Investor Agent shall be absolute and unconditional and shall only be terminated
by upon thirty (30) days prior written notice to the Company by Investors
holding greater than fifty (50%) percent of the Shares, such notice to include
the name of a replacement agent reasonably acceptable the Company.

      


      (b)           The
Investors hereby covenant and agree, jointly and severally, to reimburse,
indemnify and hold the Investor Agent harmless from and against any and all
losses, claims, damages, liabilities and expenses (including without limitation
reasonable attorney fees and disbursements and other expenses incurred in
connection with investigating, preparing or defending any action, claim or
proceeding, pending or threatened and the costs of enforcement thereof) which,
without gross negligence or willful misconduct on the part of Investor Agent,
may be paid, incurred or suffered by the Investor Agent in its capacity as
Investor Agent, or to which the Investor Agent may become subject, arising out
of or incident to its actions taken as Investor Agent, or any agreement,
document or instrument executed in connection therewith, or the administration
of the Investor Agent’s duties under or pursuant to the Escrow Agreement, Make
Good Agreement or Make Good Escrow Agreement, or as a result of the Investor
Agent defending itself against any claim or liability resulting from the
Investor Agent’s actions as Investor Agent.  This Section 2.3(b) shall
survive the termination of this Agreement, the Escrow Agreement, the Make Good
Agreement and the Make Good Escrow Agreement.

      


      3.           Closing.  Each Investor
shall deliver, or cause to be delivered, their pro rata share of the Purchase
Price to the Escrow Agent, in immediately available funds, to be held and
disbursed by the Escrow Agent as provided in the Escrow
Agreement.  The Escrow Agent shall promptly notify the Company of its
receipt of the aggregate Unit Purchase Price from any Investor and shall deposit
such amount in an interest bearing account, as further set forth in the Escrow
Agreement.


      
        
           


        

        
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      The
Company shall deliver certificates representing the appropriate number of Shares
and Class A Warrants to the Escrow Agent to be held and disbursed by the Escrow
Agent as provided in the Escrow Agreement.  The Escrow Agent shall
promptly notify the Investor Agent of its receipt of the Shares and Class A
Warrants for each Investor.  The Unit Purchase Price, Shares and Class
A Warrants are hereafter referred to collectively as, the “Escrow
Property”).  The Escrow Agent shall hold the Escrow Property in
accordance with the terms and conditions of the Escrow Agreement.  In
the event there are any inconsistencies between the terms of the Escrow
Agreement as discussed herein and the actual Escrow Agreement, the Escrow
Agreement shall govern.  On the date (the “Closing Date”) the
Escrow Agent receives joint written instructions from the Company and the
Investor Agent directing the manner in which the Escrow Agent shall distribute
all or any portion of the Purchase Price, plus any interest earned thereon, and
the Shares and Class A Warrants, and provided each of the conditions set forth
in Section 6 hereof have been satisfied or waived by the appropriate party or
parties, the Escrow Property shall be released to the Investors and the Company,
as applicable (each, a “Closing”).  The
Closing(s) shall take place at the offices of Anslow & Jaclin, LLP, 195
Route 9 South, Suite 204, Manalapan, NJ 07726, or at such other location and on
such other date as the Company and the Investors shall mutually
agree.

      


      4.           Representations
and Warranties of the Company.  The Company
hereby represents and warrants to the Investors that, except as set forth in the
schedules delivered herewith (collectively, the “Disclosure
Schedules”):

      


      4.1           Organization, Good Standing
and Qualification.  Each of the Company and its Subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to carry on its business as now conducted and to own its
properties.  Each of the Company and its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property makes such qualification or leasing necessary unless the
failure to so qualify has not had and could not reasonably be expected to have a
Material Adverse Effect.  The Company’s Subsidiaries are listed on
Schedule 4.1
hereto.

      


      4.2           Authorization.  The
Company has full power and authority and, except
as described in Schedule 4.2, has taken all requisite action on the part of
the Company, its officers, directors and stockholders necessary for (i) the
authorization, execution and delivery of the Transaction Documents, (ii) the
authorization of the performance of all obligations of the Company hereunder or
thereunder, (iii) the authorization, issuance (or reservation for issuance) and
delivery of the Securities, (iv) the filing of the Amendment, and (v) the
effectuation of the Reverse Split.  The Transaction Documents
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights
generally.


      
        
           


        

        
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                4.3           Capitalization.  Schedule 4.3 sets
forth (a) the authorized capital stock of the Company on the date hereof; (b)
the number of shares of capital stock issued and outstanding; (c) the number of
shares of capital stock issuable pursuant to the Company’s stock plans; and (d)
the number of shares of capital stock issuable and reserved for issuance
pursuant to securities (other than the Securities) exercisable for, or
convertible into or exchangeable for any shares of capital stock of the Company,
giving effect to the Reverse Split and the Corrective Issuances (as defined in
Section 5.12).  All of the issued and outstanding shares of the
Company’s capital stock have been, or will be, duly authorized and validly
issued and are fully paid, nonassessable and free of pre-emptive rights and
were, or shall be, issued in full compliance with applicable state and federal
securities law and any rights of third parties.  Except as described
on Schedule
4.3, all of the issued and outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully paid,
nonassessable and free of pre-emptive rights, were issued in full compliance
with applicable state and federal securities law and any rights of third parties
and are owned by the Company, beneficially and of record, subject to no lien,
encumbrance or other adverse claim.  Except as described on Schedule 4.3, no
Person is entitled to pre-emptive or similar statutory or contractual rights
with respect to any securities of the Company.  Except as described on
Schedule 4.3,
there are no outstanding warrants, options, convertible securities or other
rights, agreements or arrangements of any character under which the Company or
any of its Subsidiaries is or may be obligated to issue any equity securities of
any kind and except as contemplated by this Agreement, neither the Company nor
any of its Subsidiaries is currently in negotiations for the issuance of any
equity securities of any kind.  Except as described on Schedule 4.3, and
except for the Registration Rights Agreement, there are no voting agreements,
buy-sell agreements, option or right of first purchase agreements or other
agreements of any kind among the Company and any of the securityholders of the
Company relating to the securities of the Company held by
them.  Except as described on Schedule 4.3 and
except as provided in the Registration Rights Agreement, no Person has the right
to require the Company to register any securities of the Company under the 1933
Act, whether on a demand basis or in connection with the registration of
securities of the Company for its own account or for the account of any other
Person.

      


      Except as described on Schedule 4.3, the
issuance and sale of the Securities hereunder will not obligate the Company to
issue shares of Common Stock or other securities to any other Person (other than
the Investors) and will not result in the adjustment of the exercise,
conversion, exchange or reset price of any outstanding security.

      


      Except as described on Schedule 4.3, the
Company does not have outstanding stockholder purchase rights or “poison pill”
or any similar arrangement in effect giving any Person the right to purchase any
equity interest in the Company upon the occurrence of certain
events.

      


      4.4           Valid
Issuance.  The Shares have been duly and validly authorized
and, when issued and paid for pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions (other than those created by the Investors),
except for restrictions on transfer set forth in the Transaction
Documents.  The Class A Warrants have been duly and validly
authorized.  Upon the due exercise of the Class A Warrants, the
Warrant Shares will be validly issued, fully paid and non-assessable free and
clear of all encumbrances and restrictions, except for restrictions on transfer
set forth in the Transaction Documents or imposed by applicable securities laws
and except for those created by the Investors.


      
        
           


        

        
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    The
Company has, or will have by the Closing, reserved a sufficient number of shares
of Common Stock for issuance upon the exercise of the Class A Warrants, free and
clear of all encumbrances and restrictions, except for restrictions on transfer
set forth in the Transaction Documents or imposed by applicable securities laws
and except for those created by the Investors.

    


    4.5           Consents.  Except
as described in Schedule 4.5, (a)
the execution, delivery and performance by
the Company of the Transaction Documents, (b) the offer, issuance and sale of
the Securities, (c) the filing of the Amendment, and (d) the effectuation of the
Reverse Split, require no consent of, action by or in respect of, or filing
with, any Person, governmental body, agency, or official other than filings that
have been made pursuant to applicable state securities laws and post-sale
filings pursuant to applicable state and federal securities laws or any other
notices required thereby, all of which the Company undertakes to file within the
applicable time periods.  Subject to the accuracy of the
representations and warranties of each Investor set forth in Section 5 hereof,
the Company has taken all action necessary to exempt (i) the issuance and sale
of the Securities, (ii) the issuance of the Warrant Shares upon due exercise of
the Class A Warrants, and (iii) the other transactions contemplated by the
Transaction Documents from the provisions of any stockholder rights plan or
other “poison pill” arrangement, any anti-takeover, business combination or
control share law or statute binding on the Company or to which the Company or
any of its assets and properties may be subject and any provision of the
Company’s Certificate of Incorporation or Bylaws that is or could reasonably be
expected to become applicable to the Investors as a result of the transactions
contemplated hereby, including without limitation, the issuance of the
Securities and the ownership, disposition or voting of the Securities by the
Investors or the exercise of any right granted to the Investors pursuant to this
Agreement or the other Transaction Documents.

    


    4.6           Delivery of SEC Filings;
Business.  The Company has made available to the Investors
through the EDGAR system, true and complete copies of the Company’s Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2006 (the “10-KSB”), and all
other reports filed by the Company pursuant to the 1934 Act since the filing of
the 10-KSB and prior to the date hereof (collectively, the “SEC
Filings”).  Except as indicated in the SEC Filings, the SEC
Filings are the only filings required of the Company pursuant to the 1934 Act
for such period.  The Company and its Subsidiaries are engaged in all
material respects only in the business described in the SEC Filings and the SEC
Filings contain a complete and accurate description in all material respects of
the business of the Company and its Subsidiaries, taken as a whole.

    


    4.7           Use of
Proceeds.  The net proceeds from this Offering will be used
primarily for: (a) expenses related to the Offering and the Registration
Statement, (b) the purchase of tour boats to be used at the Company’s tourist
destinations, (c) expansion of the Company’s tourism operations, (d)
advertisements related to the Company’s tourism operations, and (e) general
working capital purposes.

    


    4.8           No Material Adverse
Change.  Since November 19, 2007, the effect date of the Share
Exchange Agreement (the “Share Exchange
Agreement”) by and among the Company, Keenway Limited, a company
incorporated under the laws of the Cayman Islands and each of the equity owners
of Keenway Limited, except as identified and described on Schedule 4.8, or
filed with the SEC on reports publicly available at www.sec.gov, there has not
been:

     

     

    


    
      
        
           


        

        
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    (a)           any
change in the consolidated assets, liabilities, financial condition or operating
results of the Company from that reflected in the financial statements included
in the Company’s Current Report on Form 8-K filed with the SEC on November 26,
2007, except for changes in the ordinary course of business which have not had
and could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate;

    


    (b)           any
declaration or payment of any dividend, or any authorization or payment of any
distribution, on any of the capital stock of the Company, or any redemption or
repurchase of any securities of the Company;

    


    (c)           any
material damage, destruction or loss, whether or not covered by insurance to any
assets or properties of the Company or its Subsidiaries;

    


    (d)           any
waiver, not in the ordinary course of business, by the Company or any Subsidiary
of a material right or of a material debt owed to it;

    


    (e)           any
satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company or a Subsidiary, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of the Company and its Subsidiaries
taken as a whole (as such business is presently conducted and as it is proposed
to be conducted);

    


    (f)           any
change or amendment to the Company’s Certificate of Incorporation or Bylaws, or
material change to any material contract or arrangement by which the Company or
any Subsidiary is bound or to which any of their respective assets or properties
is subject;

    


    (g)           any
material labor difficulties or labor union organizing activities with respect to
employees of the Company or any Subsidiary;

    


    (h)           any
material transaction entered into by the Company or a Subsidiary other than in
the ordinary course of business;

    


    (i)           the
loss of the services of any key employee, or material change in the composition
or duties of the senior management of the Company or any
Subsidiary;

    


    (j)           the
loss or threatened loss of any customer which has had or could reasonably be
expected to have a Material Adverse Effect; or

    


    (k)           any
other event or condition of any character that has had or could reasonably be
expected to have a Material Adverse Effect.

    


    


    
      
        
           


        

        
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      4.9           SEC
Filings.

      


      (a)           At
the time of filing thereof, the SEC Filings complied as to form in all material
respects with the requirements of the 1934 Act and did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.

      


      (b)           To
the Company’s Knowledge, each registration statement and any amendment thereto
filed by the Company pursuant to the 1933 Act and/or 1934 Act, and the rules and
regulations thereunder, as of the date such statement or amendment became
effective, complied as to form in all material respects with the 1933 Act and/or
1934 Act, and did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein not misleading; and each prospectus filed
pursuant to Rule 424(b) under the 1933 Act, as of its issue date and as of the
closing of any sale of securities pursuant thereto did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.

      


      4.10           No Conflict, Breach,
Violation or Default.  The
execution, delivery and performance of the Transaction Documents by the Company
and the issuance and sale of the Securities will not conflict with or result in
a breach or violation of any of the terms and provisions of, or constitute a
default under (i) the Company’s Certificate of Incorporation, as amended by the
Amendment, or the Company’s Bylaws, in effect on the date hereof (true and
complete copies of which have been made available to the Investors), or (ii)(a)
any statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company, any Subsidiary
or any of their respective assets or properties, or (b) any agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or a Subsidiary is bound or to which any of their respective assets or
properties is subject.

      


      4.11           Tax
Matters.  The Company and each Subsidiary has timely prepared
and filed all tax returns required to have been filed by the Company or such
Subsidiary with all appropriate governmental agencies and timely paid all taxes
shown thereon or otherwise owed by it.  The charges, accruals and
reserves on the books of the Company in respect of taxes for all fiscal periods
are adequate in all material respects, and there are no material unpaid
assessments against the Company or any Subsidiary nor, to the Company’s
Knowledge, any basis for the assessment of any additional taxes, penalties or
interest for any fiscal period or audits by any federal, state or local taxing
authority except for any assessment which is not material to the Company and its
Subsidiaries, taken as a whole.  All taxes and other assessments and
levies that the Company or any Subsidiary is required to withhold or to collect
for payment have been duly withheld and collected and paid to the proper
governmental entity or third party when due.  There are no tax liens
or claims pending or, to the Company’s Knowledge, threatened against the Company
or any Subsidiary or any of their respective assets or
property.  Except as described on Schedule 4.11, there
are no outstanding tax sharing agreements or other such arrangements between the
Company and any Subsidiary or other corporation or entity.


      
        
           


        

        
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4.12           Title to
Properties.  Except as disclosed in Schedule 4.12, the
Company and each Subsidiary has good and marketable title to all real properties
and all other properties and assets owned by it, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or currently planned to be made thereof
by them; and except as disclosed in Schedule 4.12, the
Company and each Subsidiary holds any leased real or personal property under
valid and enforceable leases with no exceptions that would materially interfere
with the use made or currently planned to be made thereof by them.

      


      4.13           Certificates, Authorities
and Permits.  The Company and each Subsidiary possess adequate
certificates, authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by it, and neither the
Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or such Subsidiary, could
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate.

      


                                      4.14           Labor Matters.

      


                                      (a)           Except as set forth on Schedule 4.14, the Company is not a party to or bound by any
collective bargaining agreements or other agreements with labor
organizations.  The Company has not violated in any material respect
any laws, regulations, orders or contract terms, affecting the collective
bargaining rights of employees, labor organizations or any laws, regulations or
orders affecting employment discrimination, equal opportunity employment, or
employees’ health, safety, welfare, wages and hours.

      


                                      (b)           (i) There are no labor disputes existing, or to the
Company’s Knowledge, threatened, involving strikes, slow-downs, work stoppages,
job actions, disputes, lockouts or any other disruptions of or by the Company’s
employees, (ii) there are no unfair labor practices or petitions for election
pending or, to the Company’s Knowledge, threatened before any governmental
agency or labor commission relating to the Company’s employees, (iii) no demand
for recognition or certification heretofore made by any labor organization or
group of employees is pending with respect to the Company, and (iv) to the
Company’s Knowledge, the Company enjoys good labor and employee relations with
its employees and labor organizations.

      


                                      (c)           The Company is, and at all times has been, in compliance
in all material respects with all applicable laws respecting employment
(including laws relating to classification of employees and independent
contractors) and employment practices, terms and conditions of employment, wages
and hours, and immigration and naturalization.

      


                                      (d)           Except as disclosed in the SEC Filings or as described
on Schedule
4.14, the Company is not a party to, or
bound by, any employment or other contract or agreement that contains any
severance, termination pay or change of control liability or obligation,
including, without limitation, any “excess parachute payment,” as defined in
Section 2806(b) of the Internal Revenue Code.


      
        
           


        

        
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                                      (e)           Except as specified in Schedule 4.14, to the Company’s Knowledge, none of the Company’s
employees is a Person who is either a United States citizen or a permanent
resident entitled to work in the United States.  To the Company’s
Knowledge, the Company has no liability for the improper classification by the
Company of such employees as independent contractors or leased employees prior
to the Closing.

      


      4.15           Intellectual
Property.    Except as specified in Schedule
4.15:

      


      (a)           All
Intellectual Property of the Company and its Subsidiaries is currently in
compliance with all legal requirements (including timely filings, proofs and
payments of fees) and is valid and enforceable.  No Intellectual
Property of the Company or its Subsidiaries which is necessary for the conduct
of Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted has been or is now involved
in any cancellation, dispute or litigation, and, to the Company’s Knowledge, no
such action is threatened.  No patent of the Company or its
Subsidiaries has been or is now involved in any interference, reissue,
re-examination or opposition proceeding.

      


      (b)           All
of the licenses and sublicenses and consent, royalty or other agreements
concerning Intellectual Property which are necessary for the conduct of the
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted to which the Company or any
Subsidiary is a party or by which any of their assets are bound (other than
 generally commercially available, non-custom, off-the-shelf software
application programs having a retail acquisition price of less than $10,000 per
license) (collectively, “License Agreements”)
are valid and binding obligations of the Company or its Subsidiaries that are
parties thereto and, to the Company’s Knowledge, the other parties thereto,
enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors’ rights generally, and there exists no event or
condition which will result in a material violation or breach of or constitute
(with or without due notice or lapse of time or both) a default by the Company
or any of its Subsidiaries under any such License Agreement.

      


      (c)           The
Company and its Subsidiaries own or have the valid right to use all of the
Intellectual Property that is necessary for the conduct of the Company’s and
each of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted and for the ownership, maintenance and
operation of the Company’s and its Subsidiaries’ properties and assets, free and
clear of all liens, encumbrances, adverse claims or obligations to license all
such owned Intellectual Property and Confidential Information, other than
licenses entered into in the ordinary course of the Company’s and its
Subsidiaries’ businesses.  The Company and its Subsidiaries have a
valid and enforceable right to use all third party Intellectual Property and
Confidential Information used or held for use in the respective businesses of
the Company and its Subsidiaries.


      
        
           


        

        
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                (d)           To
the Company’s Knowledge, the conduct of the Company’s and its Subsidiaries’
businesses as currently conducted does not infringe or otherwise impair or
conflict with (collectively, “Infringe”) any
Intellectual Property rights of any third party or any confidentiality
obligation owed to a third party, and, to the Company’s Knowledge, the
Intellectual Property and Confidential Information of the Company and its
Subsidiaries which are necessary for the conduct of Company’s and each of its
Subsidiaries’ respective businesses as currently conducted or as currently
proposed to be conducted are not being Infringed by any third
party.  There is no litigation or order pending or outstanding or, to
the Company’s Knowledge, threatened or imminent, that seeks to limit or
challenge or that concerns the ownership, use, validity or enforceability of any
Intellectual Property or Confidential Information of the Company and its
Subsidiaries and the Company’s and its Subsidiaries’ use of any Intellectual
Property or Confidential Information owned by a third party, and, to the
Company’s Knowledge, there is no valid basis for the same.

      


      (e)           The
consummation of the transactions contemplated hereby and by the other
Transaction Documents will not result in the alteration, loss, impairment of or
restriction on the Company’s or any of its Subsidiaries’ ownership or right to
use any of the Intellectual Property or Confidential Information which is
necessary for the conduct of Company’s and each of its Subsidiaries’ respective
businesses as currently conducted or as currently proposed to be
conducted.

      


      (f)           The
Company and its Subsidiaries have taken reasonable steps to protect the
Company’s and its Subsidiaries’ rights in their Intellectual Property and
Confidential Information.  Each employee, consultant and contractor
who has had access to Confidential Information which is necessary for the
conduct of Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted has executed an
agreement to maintain the confidentiality of such Confidential Information and
has executed appropriate agreements that are substantially consistent with the
Company’s standard forms thereof, except where the failure to do so has not had
and could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.  Except under confidentiality
obligations, there has been no material disclosure of any of the Company’s or
its Subsidiaries’ Confidential Information to any third party.

      


      4.16           Environmental
Matters.  Except as specified in Schedule 4.16, to the
Company’s Knowledge, neither the Company nor any Subsidiary (i) is in violation
of any statute, rule, regulation, decision or order of any governmental agency
or body or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, “Environmental Laws”),
(ii) owns or operates any real property contaminated with any substance that is
subject to any Environmental Laws, (iii) is liable for any off-site disposal or
contamination pursuant to any Environmental Laws, or (iv) is subject to any
claim relating to any Environmental Laws, which violation, contamination,
liability or claim has had or could reasonably be expected to have a Material
Adverse Effect, individually or in the aggregate; and there is no pending or, to
the Company’s Knowledge, threatened investigation that might lead to such a
claim.

      



      
        
           


        

        
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             4.17           Litigation.  Except
as described on Schedule 4.17, there are no pending actions, suits or
proceedings against or affecting the Company, its Subsidiaries or any of its or
their properties; and to the Company’s Knowledge, no such actions, suits or
proceedings are threatened or contemplated.

      


      4.18           Financial
Statements.  The financial statements included in each SEC
Filing present fairly, in all material respects, the consolidated financial
position of the Company as of the dates shown and its consolidated results of
operations and cash flows for the periods shown, and such financial statements
have been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis (“GAAP”) (except as may
be disclosed therein or in the notes thereto, and, in the case of quarterly
financial statements, as permitted by Form 10-QSB under the 1934
Act).  Except as set forth in the financial statements of the Company
included in the SEC Filings filed prior to the date hereof or as described on
Schedule 4.18,
neither the Company nor any of its Subsidiaries has incurred any liabilities,
contingent or otherwise, except those incurred in the ordinary course of
business, consistent (as to amount and nature) with past practices since the
date of such financial statements, none of which, individually or in the
aggregate, have had or could reasonably be expected to have a Material Adverse
Effect.

      


      4.19           Insurance
Coverage.  Except as set forth on Schedule 4.19, the
Company and each Subsidiary maintains in full force and effect insurance
coverage that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Company and each
Subsidiary, and the Company reasonably believes such insurance coverage to be
adequate against all liabilities, claims and risks against which it is customary
for comparably situated companies to insure.

      


      4.20           Brokers and
Finders.  No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company, other than as
described in Schedule
4.20.

      


      4.21           No Directed Selling Efforts
or General Solicitation.  Neither the Company nor any Person
acting on its behalf has conducted any general solicitation or general
advertising (as those terms are used in Regulation D) in connection with the
offer or sale of any of the Securities.

      


      4.22           No Integrated
Offering.  Neither the Company nor any of its Affiliates, nor
any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any Company security or solicited any offers to buy any
security, under circumstances that would adversely affect reliance by the
Company on Section 4(2) for the exemption from registration for the transactions
contemplated hereby or would require registration of the Securities under the
1933 Act.

      


      4.23           Private
Placement.  The offer and sale of the Securities to the
Investors as contemplated hereby is exempt from the registration requirements of
the 1933 Act.


      
        
           


        

        
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4.24           Questionable
Payments.  Neither
the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any of
their respective current or former stockholders, directors, officers, employees,
agents or other Persons acting on behalf of the Company or any Subsidiary, has
on behalf of the Company or any Subsidiary or in connection with their
respective businesses: (a) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity;
(b) made any direct or indirect unlawful payments to any governmental officials
or employees from corporate funds; (c) established or maintained any unlawful or
unrecorded fund of corporate monies or other assets; (d) made any false or
fictitious entries on the books and records of the Company or any Subsidiary;
(e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment of any nature; or (f) taken any actions that would
violate the U.S. Foreign Corrupt Practices Act of 1977, as amended.

      


      4.25           Transactions with
Affiliates.  Except as disclosed in the SEC Filings or as
disclosed on Schedule
4.25, none of the officers or directors of the Company and, to the
Company’s Knowledge, none of the employees of the Company is presently a party
to any transaction with the Company or any Subsidiary (other than as holders of
stock options and/or warrants, and 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 Company’s Knowledge, any entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

      


      4.26           Internal
Controls.  The Company is in
material compliance with the provisions of the Sarbanes-Oxley Act of 2002
currently applicable to the Company.  The Company and the
Subsidiaries maintain 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 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 1934 Act Rules 13a-14 and 15d-14) for the Company and
designed such disclosure controls and procedures to ensure that material
information relating to the Company, including the Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company’s most recently filed periodic report under the
1934 Act, as the case may be, is being prepared.  The Company’s
certifying officers have evaluated the effectiveness of the Company's controls
and procedures as of the end of the period covered by the most recently filed
periodic report under the 1934 Act (such date, the “Evaluation
Date”).  The Company presented in its most recently filed
periodic report under the 1934 Act 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 Item 308 of Regulation S-B) or, to the Company’s
Knowledge, in other factors that could significantly affect the Company’s
internal controls.


      
        
           


        

        
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      The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with GAAP and the applicable
requirements of the 1934 Act.  In the event that the Company is
notified, either by an Investor, the SEC, or some other party, that the Company
is not in compliance with the provisions of the Sarbanes-Oxley act of 2002, the
Company shall have ten (10) days (or such amount of time as is reasonably
practicable) to cure such non-compliance).

      


      4.27           Disclosures.  Neither
the Company nor any Person acting on its behalf has provided the Investors or
their agents or counsel with any information that constitutes or might
constitute material, non-public information.  The written materials
delivered to the Investors in connection with the transactions contemplated by
the Transaction Documents do not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.

      


      4.28           Dilution; Hedging.
The Company acknowledges and agrees that the issuance of the Securities will
have a potential dilutive effect on the equity holdings of other holders of the
Company’s equity or rights to receive equity of the Company. The Board of
Directors of the Company has concluded, in its good faith business judgment,
that the issuance of the Securities is in the best interests of the
Company.  The Company specifically acknowledges that its obligation to
issue the Warrant Shares upon exercise of the Class A Warrants, is absolute
regardless of the dilution such issuance may have on the ownership interests of
other stockholders of the Company or parties entitled to receive equity
securities or equity-linked securities of the Company.  Subject to
compliance with applicable securities laws, the Investors may enter into lawful
hedging transactions with third parties, which may in turn engage in short sales
of the Securities in the course of hedging the position they assume and the
Investors may also enter into short positions or other derivative transactions
relating to the Securities, or interests in the Securities, and deliver the
Securities, or interests in the Securities, to close out their short or other
positions or otherwise settle short sales or other transactions, or loan or
pledge the Securities, or interests in the Securities, to third parties that in
turn may dispose of these Securities.

      


      4.29           No Market
Manipulation.  The Company has not taken, and will not take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
the Common Stock of the Company to facilitate the sale or resale of the
Securities or affect the price at which the Securities may be issued or
resold.

      


      5.           Representations
and Warranties of the Investors.  Each of the
Investors hereby severally, and not jointly, represents and warrants to the
Company that:

      


      5.1           Organization and
Existence.  Such Investor is an individual or a validly
existing corporation, limited partnership, or limited liability company and has
all requisite individual, corporate, partnership or limited liability company
power and authority to invest in the Securities pursuant to this
Agreement.


      
        
           


        

        
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5.2           Authorization.  The
execution, delivery and performance by such Investor of the Transaction
Documents to which such Investor is a party have been duly authorized and will
each constitute the valid and legally binding obligation of such Investor,
enforceable against such Investor in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally.

      


      5.3           Purchase Entirely for Own
Account.  The Securities to be received by such Investor
hereunder will be acquired for such Investor’s own account, not as nominee or
agent, and not with a view to the resale or distribution of any part thereof in
violation of the 1933 Act, and such Investor has no present intention of
selling, granting any participation in, or otherwise distributing the same in
violation of the 1933 Act 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.  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 not a broker-dealer
registered with the SEC under the 1934 Act or an entity engaged in a business
that would require it to be so registered.

      


      5.4           Investment
Experience.  Such Investor acknowledges that it can bear the
economic risk and complete loss of its investment in the Securities and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment contemplated
hereby.

      


      5.5           Disclosure of
Information.  Such Investor has had an opportunity to receive
all information related to the Company requested by it and to ask questions of
and receive answers from the Company regarding the Company, its business and the
terms and conditions of the offering of the Securities.  Such Investor
acknowledges receipt of copies of the SEC Filings.  Neither such
inquiries nor any other due diligence investigation conducted by such Investor
shall modify, amend or affect such Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement.

      


      5.6           Restricted
Securities.  Such Investor understands that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the 1933 Act only in
certain limited circumstances.

      


      5.7           Legends.  It
is understood that, except as provided below, certificates evidencing the
Securities may bear the following or any similar legend:

      


      (a)           “The
securities represented hereby may not be transferred unless (i) such securities
have been registered for sale pursuant to the 1933 Act, as amended, (ii) such
securities may be sold pursuant to Rule 144(k), or (iii) the Company has
received an opinion of counsel reasonably satisfactory to it that such transfer
may lawfully be made without registration under the 1933 Act, as amended, or
qualification under applicable state securities laws.”


      
        
           


        

        
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                      (b)           If
required by the authorities of any state in connection with the issuance of sale
of the Securities, the legend required by such state authority.

      


      5.8           Accredited
Investor.  Such Investor is an “accredited investor” within the
meaning of Rule 501(a) of Regulation D promulgated under the 1933 Act for the
reasons checked on Schedule
1 hereto.

      


      5.9           No General
Solicitation.  Such Investor did not learn of the investment in
the Securities as a result of any public advertising or general
solicitation.

      


      5.10           Brokers and
Finders.  No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of such Investor.

      


      5.11           Reliance on
Exemptions.  Such Investor understands that the Securities are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and such Investor’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of such Investor to acquire
the Securities.

      


      5.12           Corrective
Issuances.  Such Investor acknowledges that, following the
filing of the Amendment and the effectiveness of the Reverse Split, the Company
is obligated to issue 44,751,046 additional shares of its Common Stock to
certain of its stockholders, as further set forth on Schedule 5.12 hereto
(the “Corrective
Issuances”), in order to arrive at the beneficial ownership amounts
anticipated by the Share Exchange Agreement (defined in Section 4.8
above).

      


      5.13           Listing on
OTCBB.  The Investors understand and acknowledge that the
Company is currently listed on the Over-the-Counter Bulletin Board
(OTCBB).  The Investors agree that the Company, in its sole
discretion, may apply to be listed on a national exchange such as the AMEX, NYSE
or Nasdaq.

      


      6.           Conditions to
Closing.

      


      6.1           Conditions to the Investors’
Obligations. The obligation of each Investor to purchase the Shares and
the Class A Warrants at the Closing is subject to the fulfillment to such
Investor’s satisfaction, on or prior to the Closing Date, of the following
conditions, any of which may be waived by such Investor (as to itself
only):


      
        
           


        

        
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                      (a)           The
representations and warranties made by the Company in Section 4 hereof qualified
as to materiality shall be true and correct at all times prior to and on the
Closing Date, except to the extent any such representation or warranty expressly
speaks as of a specific date, in which case such representation or warranty
shall be true and correct as of such date, and, the representations and
warranties made by the Company in Section 4 hereof not qualified as to
materiality shall be true and correct in all material respects at all times
prior to and on the Closing Date, except to the extent any such representation
or warranty expressly speaks as of a specific date, in which case such
representation or warranty shall be true and correct in all material respects as
of such specific date.

      


      (b)           The
Company shall have performed in all material respects all obligations and
covenants herein required to be performed by it on or prior to the Closing
Date.

      


      (c)           The
Company shall have obtained any and all consents, permits, approvals,
registrations and waivers necessary or appropriate
for consummation of the purchase and sale of the Shares and the Class A Warrants
and the consummation of the other transactions contemplated by the Transaction
Documents to be consummated on or prior to the Closing Date, all of which shall
be in full force and effect.

      


      (d)           The
Company shall have executed and delivered certificates representing the
appropriate number of Shares and the Class A Warrants to the Escrow
Agent.

      


      (e)           The
Company shall have executed and delivered the Registration Rights
Agreement.

      


      (f)           The
Company and the Escrow Agent shall have executed and delivered the Escrow
Agreement.

      


      (g)           The
Company and the CYHC Shareholder shall have executed and delivered the Make Good
Agreement, and the Company, the CYHC Shareholder and the Transfer Agent shall
have executed and delivered the Make Good Escrow Agreement.

      


      (h)           The
Company and the Majority Stockholders shall have executed and delivered the
Lock-Up Agreement.

      


      (i)           No
judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of
or by any governmental authority, shall have been issued, and no action or
proceeding shall have been instituted by any governmental authority, enjoining
or preventing the consummation of the transactions contemplated hereby or in the
other Transaction Documents.

      


      (j)           The
Company shall have delivered a Certificate, executed on behalf of the Company by
its Chief Executive Officer or its Chief Financial Officer, dated as of the
Closing Date, certifying to the fulfillment of the conditions specified in
subsections (a), (b) and (c) of this Section 6.1.

      



      
        
           


        

        
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                      (k)           The
Company shall have delivered a Certificate, executed on behalf of the Company by
its Secretary, dated as of the Closing Date, certifying the resolutions adopted
by the Board of Directors of the Company approving the transactions contemplated
by this Agreement and the other Transaction Documents and the issuance of the
Securities, certifying the current versions of the Certificate of Incorporation
and Bylaws of the Company and certifying as to the signatures and authority of
persons signing the Transaction Documents and related documents on behalf of the
Company.

      


      (l)           The
Investors shall have received an opinion from Anslow & Jaclin, LLP, the
Company’s counsel, dated as of the Closing Date, in form and substance
reasonably acceptable to the Investors and addressing such legal matters as the
Investors may reasonably request.

      


      (m)           No
stop order or suspension of trading shall have been imposed by the SEC or any
other governmental or regulatory body with respect to public trading in the
Common Stock.

      


      (n)           The
Company shall have received not greater than $14,000,000, in the
aggregate.

      


      (o)           The
Company shall have filed the Amendment.

      


      (p)           The
Reverse Split shall have taken effect.

      


      (q)           The
Company will have coordinated with Nasdaq to process the change of the Company’s
name in the marketplace and will have obtained a new trading symbol on the
Over-the-Counter Bulletin Board.

      


      6.2           Conditions to Obligations of
the Company. The Company’s obligation to sell and issue the Shares and
the Class A Warrants at the Closing is subject to the fulfillment to the
satisfaction of the Company on or prior to the Closing Date of the following
conditions, any of which may be waived by the Company:

      


      (a)           The
representations and warranties made by the Investors in Section 5 hereof, other
than the representations and warranties contained in Sections 5.3, 5.4, 5.5,
5.6, 5.7, 5.8 and 5.9 (the “Investment
Representations”), shall be true and correct in all material respects
when made, and shall be true and correct in all material respects on the Closing
Date with the same force and effect as if they had been made on and as of said
date.  The Investment Representations shall be true and correct in all
respects when made, and shall be true and correct in all respects on the Closing
Date with the same force and effect as if they had been made on and as of said
date.  The Investors shall have performed in all material respects all
obligations and covenants herein required to be performed by them on or prior to
the Closing Date.

      


      (b)           The
Investors shall have delivered to the Escrow Agent the Unit Purchase Price for
the number of Units to be purchased.

      


      (c)           The
Investors shall have executed and delivered the Registration Rights
Agreement.


      
        
           


        

        
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      (d)           The
Investor Agent and the Escrow Agent shall have executed and delivered the Escrow
Agreement.

      


      (e)           The
Investor Agent and the CYHC Shareholder shall have executed and delivered the
Make Good Agreement, and the Investor Agent, the CYHC Shareholder and the
Transfer Agent shall have executed and delivered the Make Good Escrow
Agreement.

      


      (f)           The
Majority Stockholders shall have executed and delivered the Lock-Up
Agreement.

      


      (g)           No
judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of
or by any governmental authority, shall have been issued, and no action or
proceeding shall have been instituted by any governmental authority, enjoining
or preventing the consummation of the transactions contemplated hereby or in the
other Transaction Documents.

      


      (h)           The
Company shall have received not greater than $14,000,000, in the
aggregate.

      


      6.3           Termination of Obligations
to Effect Closing; Effects.

      


      (a)           The
outstanding obligations of the Company, on the one hand, and the Investors, on
the other hand, to effect the Closing shall terminate as follows:

      


      (i)           Upon
the mutual written consent of the Company and the Investors;

      


      (ii)           By
the Company if any of the conditions set forth in Section 6.2 shall have become
incapable of fulfillment, and shall not have been waived by the
Company;

      


      (iii)           By
an Investor (with respect to itself only), if such Investor reasonably
determines that any condition set forth in Section 6.1 has become incapable of
fulfillment, and such Investor does not waive such condition; or

      


      (iv)           By
either the Company, or any Investor (with respect to itself only), only upon
written notice of its intent to terminate the transaction, if the Closing has
not occurred on or prior to March 31, 2008;

      


      provided, however, that, except
in the case of clause (i) above, the party seeking to terminate its obligation
to effect the Closing shall not then be in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement or the other
Transaction Documents if such breach has resulted in the circumstances giving
rise to such party’s seeking to terminate its obligation to effect the
Closing.


      
        
           


        

        
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                      (b)           In
the event of termination by any Investor of its obligations to effect the
Closing pursuant to this Section 6.3, written notice thereof shall forthwith be
given to the other Investors and the other Investors shall have the right to
terminate their obligations to effect such Closing upon written notice to the
Company and the other Investors.  Nothing in this Section 6.3 shall be
deemed to release any party from any liability for any breach by such party of
the terms and provisions of this Agreement or the other Transaction Documents or
to impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement or the other Transaction
Documents.

      


      7.           Covenants and Agreements of
the Company.

      


      7.1           Reservation of Common
Stock.  The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of providing for the exercise of the Class A Warrants, such number
of shares of Common Stock as shall be required to issue the Warrant
Shares.

      


      7.2           Reports.  If
the information is not already publicly disclosed in the Company’s public
filings available on the SEC’s website, the Company will furnish to the
Investors and/or their assignees such information relating to the Company and
its Subsidiaries as from time to time may reasonably be requested by the
Investors and/or their assignees; provided, however, that the Company shall not
disclose material nonpublic information to the Investors, or to advisors to or
representatives of the Investors, unless prior to disclosure of such information
the Company identifies such information as being material nonpublic information
and provides the Investors, such advisors and representatives with the
opportunity to accept or refuse to accept such material nonpublic information
for review and any Investor wishing to obtain such information enters into an
appropriate confidentiality agreement with the Company with respect
thereto.

      


      7.3           No Conflicting
Agreements.  The Company will not take any action, enter into
any agreement or make any commitment that would conflict or interfere in any
material respect with the Company’s obligations to the Investors under the
Transaction Documents.

      


      7.4           Insurance.  The
Company shall not materially reduce the insurance coverages described in Section
4.19.

      


      7.5           Compliance with
Laws.  The Company will comply in all material respects with
all applicable laws, rules, regulations, orders and decrees of all governmental
authorities.

      


      7.6           Listing of Underlying Shares
and Related Matters.  If the Company applies to have its Common
Stock or other securities traded on any stock exchange or market, it shall
include in such application the Shares and the Warrant Shares and will take such
other action as is necessary to cause such Common Stock to be so
listed.  Thereafter, the Company will use commercially reasonable
efforts to continue the listing and trading of its Common Stock on such exchange
or market and, in accordance, therewith, will use commercially reasonable
efforts to comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of such exchange or market, as
applicable.


      
        
           


        

        
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7.7           Offering
Restrictions.  Until two
(2) years after the final Closing Date pursuant to this Agreement, the Company
will not issue any security, with the exception of Excepted Issuances (defined
in Section 7.11 below), with a variable purchase price, conversion price or
exercise price without the prior written consent of the Investors, which consent
may be withheld for any reason.


      7.8           Investor Relations
Firm.  The Company will engage a reputable investor relations
firm within six months following the final Closing Date and will maintain such
investor relations firm under a pre-determined monthly budgeted payment
amount.  The proposed investor relations firm will be subject to the
approval of the Investors, which approval may be unreasonably
withheld.

      


      7.9           Chief Financial
Officer.  The Company will hire and maintain an
English-speaking Chief Financial Officer within six (6) months following the
final Closing Date.  The candidate for Chief Financial Officer will be
subject to the approval of the Investors, which approval may not be unreasonably
withheld.

      


      7.10           Removal of
Legends.  Upon the earlier of (i) registration for resale
pursuant to the Registration Rights Agreement or (ii) Rule 144(k) becoming
available the Company shall (A) deliver to the transfer agent for the Common
Stock (the “Transfer
Agent”) irrevocable instructions that the Transfer Agent shall reissue a
certificate representing shares of Common Stock without legends upon receipt by
such Transfer Agent of the legended certificates for such shares, together with
either (1) a customary representation by the Investor that Rule 144(k) applies
to the shares of Common Stock represented thereby or (2) a statement by the
Investor that such Investor has sold the shares of Common Stock represented
thereby in accordance with the Plan of Distribution contained in the
Registration Statement, and (B) cause its counsel to deliver to the Transfer
Agent one or more blanket opinions to the effect that the removal of such
legends in such circumstances may be effected under the 1933
Act.  From and after the earlier of such dates, upon an Investor’s
written request, the Company shall promptly cause certificates evidencing the
Investor’s Securities to be replaced with certificates which do not bear such
restrictive legends, and Warrant Shares subsequently issued upon due exercise of
the Class A Warrants shall not bear such restrictive legends provided the
provisions of either clause (i) or clause (ii) above, as applicable, are
satisfied with respect to such Warrant Shares, as applicable.  When
the Company is required to cause unlegended certificates to replace previously
issued legended certificates, if unlegended certificates are not delivered to an
Investor within three (3) Business Days of submission by that Investor of
legended certificate(s) to the Transfer Agent as provided above (or to the
Company, in the case of the Class A Warrants), the Company shall be liable to
the Investor for liquidated damages in an amount equal to 1.5% of the aggregate
purchase price of the Securities evidenced by such certificate(s) for each
thirty (30) day period (or portion thereof) beyond such three (3) Business Day
that the unlegended certificates have not been so delivered.

      



      
        
           


        

        
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                7.11           Right of First
Refusal.  Until twelve (12) months after the effective
date of the Registration Statement, the Investors shall be given not less than
ten (10) business days prior written notice of any proposed sale by the Company
of its common stock or other securities or debt obligations, except (i)
securities issued or issuable to officers, directors, or full-time employees of
the Company pursuant to stock grants, stock purchases and/or stock option plans
or any other stock incentive program, agreement, or arrangement approved by all
of the disinterested members of the Company’s Board of Directors, (ii)
securities issued as full or partial consideration in connection with a
strategic merger, consolidation, or purchase of substantially all of the
securities or assets of another corporation or entity, (iii) securities issued
in connection with bank financing or equipment leasing transactions, (iv) shares
of Common Stock issued upon exercise of the Class A Warrants or pursuant to the
provisions of this Section 7.11, and (v) as has been described in the SEC
Filings filed with the SEC or delivered to the Investors prior to the Closing
Date (collectively the foregoing are “Excepted
Issuances”).  With respect to
each additional issuance, other than Excepted Issuances, the Investors shall
have the right during the twenty (20) business days following receipt of the
notice to purchase, on a Pro Rata Basis (as defined below), all or any portion
of such amount of offered common stock, debt or other securities (the
“Offered
Securities”), in accordance with the terms
and conditions set forth in the notice of sale. For the purpose of
this Section 7.11, “Pro Rata Basis” means such portion of the Offered Securities
equal to the product of (i) the number of Offered Securities and (ii) the quotient of (x) the number of Units acquired by such Investor in
this Offering and (y) the number of Units acquired by
all Investors in this Offering.  In the event such terms and conditions are
modified during the notice period, the Investors shall be given prompt notice of
such modification and shall have the right during the twenty (20) business days
following the notice of modification to exercise their rights under this Section
7.11.

      


      7.12           Right of Minimum Investment
Amount. Pope shall be entitled to receive an allocation of up
to $10,000,000 of the Units sold in the Offering and shall have the right to
allocate an additional $2,000,000 of the Units to an Investor or Investors of
its designation.

      


      7.13           Adjustments Upon Certain
Events.

      


      (a)           For the purposes of this Section 7.13, the following
words and terms shall have the following meanings:

      


      “Approved Stock
Plan”  means any employee benefit
plan which has been approved by the Board of Directors of the Company, pursuant
to which the Company’s securities may be issued to any employee, officer, director, consultant or
advisor for services provided to the
Company.

      


      “Excluded
Securities”  means, (i) securities issued in connection
with additional equity financings, provided the purchase price, conversion price
and/or exercise price of such securities is greater than or equal to the Unit
Purchase Price: (ii) any issuance by the Company of securities as consideration
for a merger or consolidation or the acquisition of a business, product,
license, or other assets of another person or entity of which value equals or
exceed $5,000,000 (iii) securities issued to non-affiliated parties in
connection with services rendered or to be rendered to the Company, not to
exceed 2% of the Company’s total outstanding and (iv) options to purchase shares
of Common Stock, provided (A) such options are issued pursuant to the Approved
Stock Plan and (B) the aggregate number of shares of Common Stock issuable upon
exercise of the options shall not exceed 5% of the Company’s total issued and
outstanding shares of Common Stock as at the time of
issuance.


      
        
           


        

        
          -25-

          
            

          

        

        
           


        

      




      


      “Other Securities” means (i) those options and warrants of the Company
issued prior to, and outstanding on, the Closing Date, (ii) the shares of Common
Stock issuable on exercise of such options and warrants, provided such options
and warrants are not amended after the Closing Date, (iii) the shares of Common
Stock issuable upon exercise of the Class A Warrants, and (iv) the Escrow
Shares, as such term is defined in the Make Good Agreement executed concurrently
herewith.

      


      (b)           Adjustment to the Number of
Shares.  If and whenever, within twelve (12) months of the date
of this Agreement, the Company issues or sells, or is deemed to have issued or
sold, any shares of Common Stock, or securities convertible into or exercisable
for shares of Common Stock, or modifies any of the foregoing which may be
outstanding (other than (a) Excluded Securities, and (b) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved Stock Plan or upon exercise or conversion of the Other Securities)
to any person or entity at a price per share, or conversion or exercise price
per share less than the Unit Purchase Price, then the Company shall issue, for
each such occasion additional shares of its Common Stock to the Investor in such
number so that the average per share purchase price of the shares of Common
Stock purchased by the Investor hereunder shall automatically be reduced to such
other lower price per share (in each case, the “Additional
Shares”). The delivery to the Investor of
the Additional Shares shall be not later than the closing date of the
transaction giving rise to the requirement for the Company to issue such
Additional Shares. The Investor is hereby granted the registration rights
described in the Registration Rights Agreement in relation to such Additional
Shares. For the purposes of the issuances and adjustments described in this
Section 7.13(b), the issuance of any security of the Company, or of any warrant,
right or option to purchase Common Stock, shall result in the issuance of
Additional Shares of Common Stock upon the issuance of such convertible
security, warrant, right or option and again at any time upon any subsequent
issuances of shares of Common Stock upon exercise of such conversion or purchase
rights if such issuance is at a price lower than the Unit Purchase
Price.

      


      8.           Survival and
Indemnification.

      


      8.1           Survival.  The
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Closing of the transactions contemplated by this
Agreement.

      


      8.2           Indemnification.  The
Company agrees to indemnify and hold harmless each Investor and its Affiliates
and their respective directors, officers, employees and agents from and against
any and all losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorney fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof)
(collectively, “Losses”) to which
such Person may become subject as a result of any breach of representation,
warranty, covenant or agreement made by or to be performed on the part of the
Company under the Transaction Documents, and will reimburse any such Person for
all such amounts as they are incurred by such Person.


      
        
           


        

        
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      8.3           Conduct of Indemnification
Proceedings.  Promptly
after receipt by any Person (the “Indemnified Person”)
of notice of any demand, claim or circumstances which would or might give rise
to a claim or the commencement of any action, proceeding or investigation in
respect of which indemnity may be sought pursuant to Section 8.2, such
Indemnified Person shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall assume the payment of all
fees and expenses; provided, however, that the failure of any
Indemnified Person so to notify the Company shall not relieve the Company of its
obligations hereunder except to the extent that the Company is materially
prejudiced by such failure to notify.  In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel; or (ii) in the reasonable judgment of counsel to
such Indemnified Person representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them.  The Company shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Company shall indemnify and hold harmless such
Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment.  Without the prior
written consent of the Indemnified Person, which consent shall not be
unreasonably withheld, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such
proceeding.

      


      9.           Miscellaneous.

      


      9.1           Successors and
Assigns.  This Agreement may not be assigned by a party hereto
without the prior written consent of the Company or the Investors, as
applicable, provided, however, that an Investor may assign its rights and
delegate its duties hereunder in whole or in part to an Affiliate or to a third
party acquiring some or all of its Securities in a private transaction without
the prior written consent of the Company or the other Investors, after notice
duly given by such Investor to the Company provided, that no such assignment or
obligation shall affect the obligations of such Investor
hereunder.  The provisions of this Agreement shall inure to the
benefit of and be binding upon the respective permitted successors and assigns
of the parties.  Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

      



      
        
           


        

        
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9.2           Counterparts;
Faxes.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement
may also be executed via facsimile, which shall be deemed an
original.

      


      9.3           Titles and
Subtitles.  The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

      


      9.4           Notices.  Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given as hereinafter
described (i) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (ii) if given by telex or telecopier, then such notice
shall be deemed given upon receipt of confirmation of complete transmittal,
(iii) if given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by
an internationally recognized overnight air courier, then such notice shall be
deemed given one Business Day after delivery to such carrier.  All
notices shall be addressed to the party to be notified at the address as
follows, or at such other address as such party may designate by ten days’
advance written notice to the other party:

      


      If to the Company:

      


      China Yida Holding, Co.

      RM 1302-3 13/F, Crocodile House
II

      55 Connaught Road Central

      Hong Kong

      Attn: Chen Minhua, Chief Executive
Officer

      Fax: + 86 591 28308388

      


      With a copy to:

      


      Anslow
& Jaclin, LLP

      195 Route
9 South, Suite 204

      Manalapan,
NJ 07726

      Attn:
Eric Stein, Esq.

      Fax:
(732) 577-1188

      


      If to the Investors:

      


      to the addresses set forth on the
signature pages hereto.

      


      9.5           Expenses.  The
parties hereto shall pay their own costs and expenses in connection herewith;
provided, however, that, at the
Closing, the Company shall either reimburse the Investor Agent for out-of-pocket
attorneys’ fees, and/or pay the Investor Agent’s legal fees directly, in an
aggregate of up to $20,000.

       


      
        
           


        

        
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      In the
event that legal proceedings are commenced by any party to this Agreement
against another party to this Agreement in connection with this Agreement or the
other Transaction Documents, the party or parties which do not prevail in such
proceedings shall severally, but not jointly, pay their pro rata share of the
reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses
incurred by the prevailing party in such proceedings.

      


      9.6           Amendments and
Waivers.  Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investors.  Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Securities purchased under this Agreement at the time outstanding,
each future holder of all such Securities, and the
Company.  Notwithstanding the foregoing, no consideration shall be
offered or paid by the Company to any Investor to amend or consent to a waiver
or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the holders of the Shares and/or Class A
Warrants.

      


      9.7           Publicity.  No
public release or announcement concerning the transactions contemplated hereby
shall be issued by the Company or the Investors without the prior consent of the
Company (in the case of a release or announcement by the Investors) or the
Investors (in the case of a release or announcement by the Company) (which
consents shall not be unreasonably withheld), except as such release or
announcement may be required by law or the applicable rules or regulations of
any securities exchange or securities market, in which case the Company or the
Investors, as the case may be, shall allow the Investors or the Company, as
applicable, to the extent reasonably practicable in the circumstances,
reasonable time to comment on such release or announcement in advance of such
issuance.

      


      9.8           Severability.  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.  To the
extent permitted by applicable law, the parties hereby waive any provision of
law which renders any provision hereof prohibited or unenforceable in any
respect.

      


      9.9           Entire
Agreement.  This Agreement, including the Exhibits and the
Disclosure Schedules, and the other Transaction Documents constitute the entire
agreement among the parties hereof with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof and
thereof.

      


      9.10           Further
Assurances.  The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.


      
        
           


        

        
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9.11           Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial.  This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without regard to the choice of law principles thereof.  Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby.  Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement.  Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such
court.  Each party hereto irrevocably waives any objection to the
laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.

    


    9.12           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 Securities
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 Securities 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.

     

     

     

     

     

    
 

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        IN WITNESS
WHEREOF, the parties have executed this Agreement or caused their duly
authorized officers to execute this Agreement as of the date first above
written.

    


    CHINA YIDA HOLDING, CO.

    


    


    


    By:   /s/ 
Chen
Minhua                                                                                            

    Name:  Chen
Minhua

    Title:    Chairman
and Chief Executive Officer

    


     

     

     

     

     

    -31-