Document:

SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”) is dated as of ________, 2007
      among China Housing and Land Development, Inc., a Nevada corporation (the
“Company”) and the
      purchasers identified on the signature page hereto (including their successors
      and assigns, each a “Purchaser”
and
      collectively, the “Purchasers”).

     

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”)
      and Rule 506 promulgated thereunder, the Company desires to issue and sell
      to
      the Purchasers, and the Purchasers desire to purchase from the Company,
      securities of the Company as more fully described in this
      Agreement.

     

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

     

    ARTICLE
      I.

    DEFINITIONS

     

    1.1 Definitions.
      In addition to the terms defined elsewhere in this Agreement: (a) capitalized
      terms that are not otherwise defined herein have the meanings given to such
      terms in the Warrants (as defined herein), the Registration Rights Agreement
      (as
      defined herein), and the Lock-up Agreement (as defined herein), and (b) the
      following terms have the meanings indicated in this Section 1.1:

     

    “Action”
shall
      have the meaning ascribed to such term in Section 3.1(j).

     

    “Affiliate”
means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144 under the Securities Act. With
      respect to the Purchasers, any investment fund or managed account that is
      managed on a discretionary basis by the same investment manager as any of the
      Purchasers will be deemed to be an Affiliate of such Purchaser.

     

    “Baqiao”
means
      that certain property acquired pursuant to that certain Shares Transfer
      Agreement entered into on March 9, 2007, between the Company and the
      shareholders of Xi’an New Land Development Co., Ltd.

     

    “Closing”
means
      the closing of the purchase and sale of the Securities pursuant to Section
      2.1.

     

    “Closing
      Date”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto, and all conditions precedent to
      (i)
      the Purchasers’ obligations to pay the Investment Amount and (ii) the Company’s
      obligations to deliver the Securities have been satisfied or
      waived.

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    
      
        
        

      

      
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    “Common
      Stock”
means
      the common stock of the Company, par value $0.001 per share, and any other
      class
      of securities into which such securities may hereafter have been reclassified
      or
      changed into.

     

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

     

    “Company
      Counsel”
means
      Baker & McKenzie, LLP.

     

    “Disclosure
      Schedules”
shall
      have the meaning
      ascribed
      to such term in Section 3.1.

     

    “Effective
      Date”
means
      the date that the initial
      Registration Statement filed by the Company pursuant to the Registration Rights
      Agreement is first declared effective by the Commission.

     

    “Evaluation
      Date”
shall
      have the meaning ascribed
      to such
      term in Section 3.1(r). 

     

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

     

    “Excepted
      Issuance”
shall
      have the meaning
      ascribed
      to such term in Section 4.2(a).

     

    “GAAP”
shall
      have the meaning ascribed to such term in Section 3.1(h).

     

    "Knowledge"
      means,
      with respect to any statement made to the knowledge of a party, that the
      statement is based upon actual knowledge of the officers of such party having
      responsibility for the matter or matters that
      are the
      subject of the statement, after due inquiry.

     

    “Intellectual
      Property Rights”
shall
      have the
      meaning
      ascribed to such term in Section 3.1(o).

     

    “Investment
      Amount”
means,
      as to each Purchaser, the aggregate amount to be paid for Shares and Warrants
      purchased hereunder as specified below each Purchaser’s name on the signature
      page of this Agreement and next to the heading “Investment Amount”, payable in
      United States Dollars and in immediately available funds.

     

    “Lead
      Investor”
means
      Lake Street Fund LP. 

     

    “Legend
      Removal Date”
shall
      have the meaning
      ascribed
      to such term in Section 4.1(c). 

     

    “Liens”
means
      a
      lien, charge, security interest,
      encumbrance, right of first refusal, preemptive right or other restriction.
      

     

    “Lock-up
      Agreement”
means
      the Lock-up Agreement,
      dated
      the date hereof, among the Company and its directors, management and founding
      shareholders, as specified in the Lock-up Agreement, in the form of Exhibit
      A
      attached
      hereto.

     

    
      
        
        

      

      
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    “Make-Good
      Escrow”
shall
      have the meaning
      assigned
      to such term in Section 4.20.

     

    “Material
      Adverse Effect”
shall
      have the
      meaning
      assigned to such term in Section 3.1(b).

     

    “Material
      Permits”
shall
      have the meaning
      ascribed
      to such term in Section 3.1(m).

     

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

     

    “Placement
      Agent”
means
      Cantor Fitzgerald & Co.

     

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

     

    “Public
      Float”
means
      that the aggregate
      outstanding number of shares held by investors not affiliated with the
      Company.

     

    “Purchaser
      Party”
shall
      have the meaning
      ascribed
      to such term in Section 4.10.

     

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement, dated the date hereof, among the Company
      and
      the Purchaser,
      in the
      form of Exhibit
      B
      attached
      hereto.

     

    “Registration
      Statement”
means
      a
registration
      statement meeting the requirements set forth in the Registration Rights
      Agreement and covering the resale of the Shares and Warrant Shares by the
      Purchasers as provided for in the Registration Rights Agreement.

     

    “Required
      Approvals”
shall
      have the
      meaning
      ascribed to such term in Section 3.1(e).

     

    “Right
      of First Refusal Notice”
shall
      have the meaning ascribed to such term in Section 4.2(a).

     

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

     

    “SEC
      Reports”
shall
      have the meaning ascribed
      to such
      term in Section 3.1(h).

     

    “Securities”
means
      the Shares, the Warrants and the Warrant Shares.

     

    “Securities
      Act”
means
      the Securities Act of 1933,
      as
      amended. 

     

    “SFO”
shall
      have the meaning ascribed to such
      term in
      Section 4.18.

     

    
      
        
        

      

      
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    “Shares”
means
      the shares of Common Stock issued or issuable to the Purchasers pursuant to
      this
      Agreement, par value $0.001 per share.

     

    “Short
      Sales”
shall
      include all “short sales” as defined in Rule 200 of Regulation SHO under the
      Exchange Act (but shall
      not be
      deemed to include the location and/or reservation of borrowable shares of Common
      Stock).

     

    “Subsidiary”
means
      any subsidiary of the Company as set forth on Schedule
      3.1(a).

     

    “Subsequent
      Financings”
shall
      have the meaning
      ascribed
      to such term in Section 4.2(a).

     

    “Subsequent
      Financing Notice”
shall
      have the meaning ascribed to such term in Section 4.2(a).

     

    “Trading
      Day”
means
      a
      day on which the Common Stock is traded on a Trading Market.

     

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the
      date in
      question: the Nasdaq Capital Market, the American Stock Exchange, the New York
      Stock Exchange, the Nasdaq National Market or the OTC Bulletin
      Board.

     

    “Transaction
      Documents”
means
      this Agreement, the Warrants, the Registration Rights Agreement, the Lock-up
      Agreement
      and any
      other documents or agreements executed in connection with the transactions
      contemplated hereunder. 

     

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price
      of the
      Common Stock for such date (or the nearest preceding date) on the Trading Market
      on which the Common Stock is then listed or quoted as reported by Bloomberg
      Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02
      p.m.
      Eastern Time); (b) if the Common Stock is not then listed or quoted on a Trading
      Market and if prices for the Common Stock are then reported in the “Pink Sheets”
published by the Pink Sheets, LLC (or a similar organization or agency
      succeeding to its functions of reporting prices), the most recent bid price
      per
      share of the Common Stock so reported; or (c) in all other cases, the fair
      market value of a share of Common Stock as determined by an independent
      appraiser selected in good faith by the Purchasers and reasonably acceptable
      to
      the Company.

     

    “Warrants”
means
      collectively the Common Stock purchase warrants, in the form of Exhibit
      D
      delivered to each Purchaser
      at the
      Closing in accordance with Section 2.2(b) hereof, which Warrants shall be
      exercisable immediately and have a term of exercise equal to five
      years.

     

    “Warrant
      Call”
shall
      have the meaning
      ascribed
      to such term in Section 4.22.

     

    “Warrant
      Shares”
means
      the shares
      of
      Common Stock issuable upon exercise of the Warrants.

     

    
      
        
        

      

      
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    ARTICLE
      II.

    PURCHASE
      AND SALE

     

    2.1 Closing.
      

     

    On
      the
      Closing Date, upon the terms and subject to the conditions set forth herein,
      concurrent with the execution and delivery of this Agreement by the parties
      hereto, the Company agrees to sell, and the Purchasers agree to purchase (i)
      9,261,844 Shares at a price of $2.70 per Share and (ii) Warrants exercisable
      into approximately 2,778,553 Shares, with an exercise price equal to the lower
      of (a) $4.50 per Share and (b) $0.90 above the market VWAP of the last three
      trading days prior to the Closing Date. The Warrants shall have a term of five
      (5) years. The Purchasers shall deliver to the Company via wire transfer or
      certified check immediately available funds equal to their applicable Investment
      Amounts and the Company shall deliver to the Purchasers their respective Shares
      and Warrants, pro rata with each Purchaser’s Investment Amount, as determined
      pursuant to Section 2.2(a) and the other items set forth in Section 2.2 issuable
      at the Closing. Upon satisfaction of the conditions set forth in Sections 2.2
      and 2.3, the Closing shall occur at the offices of Baker & McKenzie LLP,
      1114 Avenue of the Americas, New York, NY 10036, or such other location as
      the
      parties shall mutually agree. The commission payable to the Placement Agent
      shall be paid in full upon Closing.

     

    2.2 Deliveries.

     

    (a) On
      the
      Closing Date, the Company shall deliver or cause to be delivered to each
      Purchaser the following:

     

    (i) this
      Agreement duly executed by the Company;

     

    (ii) a
      certificate evidencing a number of Shares equal to each Purchasers’ applicable
      Investment Amount registered in the name of the Purchaser, as provided for
      in
      Schedule 2.2(a)(ii); 

     

    (iii) a
      Warrant
      registered in the name of the Purchaser exercisable into a number of shares
      of
      Common Stock equal to 30% of the number of shares of Common Stock purchased
      by
      each Purchaser hereunder, with the exercise price set forth in Section 2.1
      above, subject to adjustment therein;

     

    (iv) the
      legal
      opinion of Company Counsel and/or Nevada counsel, in agreed form, addressed
      to
      the Purchasers; 

     

    (v) the
      Registration Rights Agreement, as provided for in Exhibit B, duly executed
      by
      the Company; and

     

    (vi) a
      copy of
      the duly executed Lock-up Agreement, as set forth in Exhibit A.

     

    (b) On
      the
      Closing Date, each of the Purchasers shall deliver or cause to be delivered
      to
      the Company the following: 

     

    
      
        
        

      

      
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    (i) this
      Agreement duly executed by each of the Purchasers;

     

    (ii) the
      Purchasers’ applicable Investment Amounts by wire transfer to the account as
      specified in writing by the Company; and

     

    (iii) the
      Registration Rights Agreement, duly executed by the Purchasers.

     

    2.3 Closing
      Conditions. 

     

    (a) The
      obligations of the Company hereunder in connection with the Closing are subject
      to the following conditions being met:

     

    (i) the
      accuracy in all material respects when made and on the Closing Date of the
      representations and warranties of the Purchasers contained herein;

     

    (ii) all
      obligations, covenants and agreements of the Purchasers required to be performed
      at or prior to the Closing Date shall have been performed; and

     

    (iii) the
      delivery by the Purchasers of the items set forth in Section 2.2(b) of this
      Agreement.

     

    (b) The
      respective obligations of the Purchasers hereunder in connection with the
      Closing are subject to the following conditions being met:

     

    (i) the
      accuracy in all material respects on the Closing Date of the representations
      and
      warranties of the Company contained herein;

     

    (ii) all
      obligations, covenants and agreements of the Company required to be performed
      at
      or prior to the Closing Date shall have been performed; 

     

    (iii) the
      delivery by the Company of the items set forth in Section 2.2(a) of this
      Agreement; 

     

    (iv) since
      the
      date of execution of this Agreement, no event or series of events shall have
      occurred that reasonably could have or result in (i) an adverse effect on the
      legality, validity or enforceability of any Transaction Document, or (ii) a
      Material Adverse Effect;

     

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

     

    
      
        
        

      

      
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    (vi) from
      the
      date hereof to the Closing Date, trading in the Common Stock shall not have
      been
      suspended by the Commission or the Company’s principal Trading Market (except
      for any suspension of trading of limited duration agreed to by the Company,
      which suspension shall be terminated prior to the Closing), and, at any time
      prior to the Closing Date, trading in securities generally as reported by
      Bloomberg Financial Markets shall not have been suspended or limited, or minimum
      prices shall not have been established on securities whose trades are reported
      by such service, or on any Trading Market, nor shall a banking moratorium have
      been declared either by the United States or New York State authorities nor
      shall there have occurred any material outbreak or escalation of hostilities
      or
      other national or international calamity of such magnitude in its effect on,
      or
      any material adverse change in, any financial market which, in each case, in
      the
      reasonable judgment of the Purchasers, makes it impracticable or inadvisable
      to
      purchase the Shares at the Closing; and

     

    (vii) the
      delivery by the Company of the agreements entered into by the Company in
      connection with its purchase of Baqiao.

     

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 Representations
      and Warranties of the Company. Except as set forth under the corresponding
      section of the disclosure schedules delivered to the Purchasers concurrently
      herewith (the “Disclosure Schedules”) which Disclosure Schedules shall be deemed
      a part hereof, the Company hereby makes the representations and warranties
      set
      forth below to the Purchasers.

     

    (a) Subsidiaries.
      All of
      the direct and indirect subsidiaries of the Company are set forth on
Schedule
      3.1(a).
      The
      Company owns, directly or indirectly, all of the capital stock or other equity
      interests of each Subsidiary free and clear of any Liens, and all the issued
      and
      outstanding shares of capital stock of each Subsidiary are validly issued and
      are fully paid, non-assessable and free of preemptive and similar rights to
      subscribe for or purchase securities. If the Company has no subsidiaries, then
      references in the Transaction Documents to the Subsidiaries will be
      disregarded.

     

    (b) Organization
      and Qualification.
      The
      Company and each of the Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted. Neither the Company nor any
      Subsidiary is in violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and the Subsidiaries is duly qualified
      to
      conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not,
      individually, or in the aggregate, have or reasonably be expected to result
      in
      (i) a material adverse effect on the legality, validity or enforceability of
      any
      Transaction Document, (ii) a material adverse effect on the results of
      operations, assets, business, prospects or condition (financial or otherwise)
      of
      the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
      effect on the Company’s ability to perform in any material respect on a timely
      basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
      a “Material Adverse Effect”) and no Proceeding has been instituted in any such
      jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
      curtail such power and authority or qualification.

     

    
      
        
        

      

      
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    (c) Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      and otherwise to carry out its obligations hereunder and thereunder. The
      execution and delivery of each of the Transaction Documents by the Company
      and
      the consummation by it of the transactions contemplated thereby have been duly
      authorized by all necessary action on the part of the Company and no further
      action is required by the Company, its board of directors or its stockholders
      in
      connection therewith other than in connection with the Required Approvals.
      Each
      Transaction Document has been (or upon delivery will have been) duly executed
      by
      the Company and, when delivered in accordance with the terms hereof and thereof,
      will constitute the valid and binding obligation of the Company enforceable
      against the Company in accordance with its terms except (i) as limited by
      applicable bankruptcy, insolvency, reorganization, moratorium and other laws
      of
      general application affecting enforcement of creditors’ rights generally and
      (ii) as limited by laws relating to the availability of specific performance,
      injunctive relief or other equitable remedies.

     

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

     

    (e) Filings,
      Consents and Approvals.
      The
      Company is not required to obtain any consent, waiver, authorization or order
      of, give any notice to, or make any filing or registration with, any court
      or
      other federal, state, local or other governmental authority or other Person
      in
      connection with the execution, delivery and performance by the Company of the
      Transaction Documents, other than (i) filings required pursuant to Section
      4.6,
      (ii) the filing with the Commission of one or more Registration Statements
      in
      accordance with the requirements of the Registration Rights Agreement, (iii)
      filings required by state securities laws in accordance with the requirements
      of
      the Registration Rights Agreement, which when permitted, will be made prior
      to
      the Effectiveness Date (as such term is defined in the Registration Rights
      Agreement), (iv) the notice and/or application(s) to each applicable Trading
      Market for the issuance and sale of the Shares, Warrants and the listing of
      the
      Shares and Warrant Shares for trading thereon in the time and manner required
      thereby and (v) the filing of Form D with the Commission and such filings as
      are
      required to be made under applicable state securities laws (collectively, the
      “Required Approvals”).

     

    
      
        
        

      

      
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    (f) Issuance
      of the Securities.
      The
      Securities are duly authorized and, when issued and paid for in accordance
      with
      the applicable Transaction Documents, will be duly and validly issued, fully
      paid and nonassessable, free and clear of all Liens other than restrictions
      on
      transfer provided for in the Transaction Documents. The Warrant Shares, when
      issued in accordance with the terms of the Transaction Documents, will be
      validly issued, fully paid and nonassessable, free and clear of all Liens.
      The
      Company has reserved from its duly authorized capital stock the shares of Common
      Stock issuable pursuant to this Agreement and the Warrants in order to issue
      the
      Shares and the Warrant Shares. The Securities are not subject to any preemptive
      or similar rights to subscribe for or purchase securities.

     

    (g) Capitalization.
      Other
      than disclosed in the SEC Reports and as set forth on Schedule
      3.1(g),
      the
      Company has not issued any capital stock other than pursuant to the exercise
      of
      employee stock options under the Company’s stock option plans, the issuance of
      shares of Common Stock to employees pursuant to the Company’s employee stock
      purchase plan and pursuant to the conversion or exercise of outstanding Common
      Stock Equivalents all as set forth on Schedule
      3.1(g).
      No
      securities of the Company are entitled to preemptive or similar rights and
      no
      Person has any right of first refusal, preemptive right, right of participation,
      or any similar right to participate in the transactions contemplated by the
      Transaction Documents. As of the date of this Agreement, except as disclosed
      in
      the SEC Reports and as set forth in Schedule
      3.1(g)
      and as a
      result of the purchase and sale of the Warrants, there are no outstanding
      options, warrants, script rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities, rights or obligations
      convertible into or exercisable or exchangeable for, or giving any Person any
      right to subscribe for or acquire, any shares of the capital stock of the
      Company, or contracts, commitments, understandings or arrangements by which
      the
      Company or any Subsidiary is or may become bound to issue additional shares
      of
      its capital stock, or securities or rights convertible or exchangeable into
      shares of Common Stock. The issuance and sale of the Securities will not
      obligate the Company to issue shares of Common Stock or other securities to
      any
      Person (other than the Purchasers) and will not result in a right of any holder
      of Company securities to adjust the exercise, conversion, exchange or reset
      price under such securities. All of the outstanding shares of capital stock
      of
      the Company are validly issued, fully paid and nonassessable, have been issued
      in compliance with all federal and state securities laws, and none of such
      outstanding shares was issued in violation of any preemptive rights or similar
      rights to subscribe for or purchase securities. No further approval or
      authorization of any stockholder, the Board of Directors of the Company or
      others is required for the issuance and sale of the Securities. There are no
      stockholders agreements, voting agreements or other similar agreements with
      respect to the Company’s capital stock to which the Company is a party or, to
      the Knowledge of the Company, between or among any of the Company’s
      stockholders.

     

    
      
        
        

      

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

     

    (i) Material
      Changes.
      Since
      the date of the latest audited financial statements included within the SEC
      Reports, except as specifically disclosed in the SEC Reports, (i) there has
      been
      no event, occurrence or development that has had or that, individually, or
      in
      the aggregate, could reasonably be expected to result in a Material Adverse
      Effect, (ii) the Company has not incurred any liabilities (contingent or
      otherwise) other than (A) trade payables and accrued expenses incurred in the
      ordinary course of business consistent with past practice, (B) liabilities
      not
      required to be reflected in the Company’s financial statements pursuant to GAAP
      or required to be disclosed in filings made with the Commission, and (C) other
      liabilities that would not, individually or in the aggregate, have a Material
      Adverse Effect, (iii) the Company has not altered its method of accounting
      or
      the identity of its auditors, (iv) the Company has not declared or made any
      dividend or distribution of cash or other property to its stockholders or
      purchased, redeemed or made any agreements to purchase or redeem any shares
      of
      its capital stock and (v) the Company has not issued any equity securities
      to
      any officer, director or Affiliate, except pursuant to existing Company stock
      option plans. The Company does not have pending before the Commission any
      request for confidential treatment of information. Except for the issuance
      of
      the Securities contemplated by this Agreement or as set forth on Schedule
      3.1(i),
      no
      event, liability or development has occurred or exists with respect to the
      Company or its Subsidiaries or their respective business, properties, operations
      or financial condition, that would be required to be disclosed by the Company
      under applicable securities laws at the time this representation is made that
      has not been publicly disclosed 1 Trading Day prior to the date that this
      representation is made.

     

    
      
        
        

      

      
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    (j) Litigation.
      Other
      than as otherwise disclosed in Schedule 3.1(j), there is no action, suit,
      inquiry, notice of violation, proceeding or investigation pending or, to the
      Knowledge of the Company, threatened against or affecting the Company, any
      Subsidiary or any of their respective properties before or by any court,
      arbitrator, governmental or administrative agency or regulatory authority
      (federal, state, county, local or foreign) (collectively, an “Action”) which (i)
      adversely affects or challenges the legality, validity or enforceability of
      any
      of the Transaction Documents or the Securities or (ii) could if there were
      an
      unfavorable decision, individually, or in the aggregate, have or reasonably
      be
      expected to result in a Material Adverse Effect. Neither the Company nor any
      Subsidiary, nor any director or officer thereof, is or has been the subject
      of
      any Action involving a claim of violation of or liability under federal or
      state
      securities laws or a claim of breach of fiduciary duty. There has not been,
      and
      to the Knowledge of the Company, there is not pending or contemplated, any
      investigation by the Commission involving the Company or any current or former
      director or officer of the Company. The Commission has not issued any stop
      order
      or other order suspending the effectiveness of any registration statement filed
      by the Company or any Subsidiary under the Exchange Act or the Securities Act.
      None of the Company’s or its Subsidiaries’ employees is a member of a union that
      relates to such employee’s relationship with the Company, and neither the
      Company or any of its Subsidiaries is a party to a collective bargaining
      agreement, and the Company and its Subsidiaries believe that their relationships
      with their employees are good. No executive officer, to the Knowledge of the
      Company, is, or is now expected to be, in violation of any material term of
      any
      employment contract, confidentiality, disclosure or proprietary information
      agreement or non-competition agreement, or any other contract or agreement
      or
      any restrictive covenant, and the continued employment of each such executive
      officer does not subject the Company or any of its Subsidiaries to any liability
      with respect to any of the foregoing matters. The Company and its Subsidiaries
      are in compliance with all U.S. federal, state, local and foreign laws and
      regulations relating to employment and employment practices, terms and
      conditions of employment and wages and hours, except where the failure to be
      in
      compliance could not, individually or in the aggregate, reasonably be expected
      to have a Material Adverse Effect.

     

    (k) Labor
      Relations.
      No
      material labor dispute exists or, to the Knowledge of the Company, is imminent
      with respect to any of the employees of the Company which could reasonably
      be
      expected to result in a Material Adverse Effect.

     

    
      
        
        

      

      
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    (l) Compliance.
      Neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and
      no event has occurred that has not been waived that, with notice or lapse of
      time or both, would result in a default by the Company or any Subsidiary under),
      nor has the Company or any Subsidiary received notice of a claim that it is
      in
      default under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound (whether or not such default or
      violation has been waived), (ii) is in violation of any order of any court,
      arbitrator or governmental body, or (iii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws applicable to its business
      and all such laws that affect the environment, except in each case as could
      not,
      individually, or in the aggregate, have a Material Adverse Effect. The Company
      is in compliance with all effective requirements of the Sarbanes-Oxley Act
      of
      2002, as amended, and the rules and regulations thereunder, that are applicable
      to it, except where such noncompliance, individually or in the aggregate, could
      not have or reasonably be expected to result in a Material Adverse
      Effect.

     

    (m) Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      SEC Reports, except where the failure to possess such permits could not,
      individually, or in the aggregate, have or reasonably be expected to result
      in a
      Material Adverse Effect (“Material Permits”), and neither the Company nor any
      Subsidiary has received any notice of proceedings relating to the revocation
      or
      modification of any Material Permit.

     

    (n) Title
      to Assets.
      The
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to the business of the Company
      and
      the Subsidiaries and good and marketable title in all personal property owned
      by
      them that is material to the business of the Company and the Subsidiaries,
      in
      each case free and clear of all Liens, except for Liens described in
Schedule
      3.1(n)
      and
      Liens as do not materially affect the value of such property and do not
      materially interfere with the use made and proposed to be made of such property
      by the Company and the Subsidiaries. Any real property and facilities held
      under
      lease by the Company and the Subsidiaries are held by them under valid,
      subsisting and enforceable leases of which the Company and the Subsidiaries
      are
      in compliance.

     

    (o) Patents
      and Trademarks.
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      trade secrets, inventions, copyrights, licenses and other intellectual property
      rights or similar rights necessary or material for use in connection with their
      respective businesses as described in the SEC Reports and which the failure
      to
      so have could, individually, or in the aggregate, have or reasonably be expected
      to have a Material Adverse Effect (collectively, the “Intellectual Property
      Rights”). Neither the Company nor any Subsidiary has received a notice (written
      or otherwise) that the Intellectual Property Rights used by the Company or
      any
      Subsidiary violates or infringes upon the rights of any Person. All such
      Intellectual Property Rights are enforceable and do not violate or infringe
      the
      Intellectual Property Rights of others in any respect that would, individually
      or in the aggregate, reasonably be expected to result in a Material Adverse
      Effect and, to the Knowledge of the Company, there is no existing infringement
      by another Person of any of the Company's or the Subsidiary's Intellectual
      Property Rights. The
      Company and its Subsidiaries have taken reasonable security measures to protect
      the secrecy, confidentiality and value of all of their intellectual properties,
      except where failure to do so could not, individually or in the aggregate,
      reasonably be expect to have a Material Adverse Effect.

     

    
      
        
        

      

      
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    (p) Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged, including, but not limited to, directors and officers insurance
      coverage at least equal to the aggregate Investment Amount. To the best
      Knowledge of the Company, such insurance contracts and policies are accurate
      and
      complete. Neither the Company nor any Subsidiary has any reason to believe
      that
      it will not be able to renew its existing insurance coverage as and when such
      coverage expires or to obtain similar coverage from similar insurers as may
      be
      necessary to continue its business without a significant increase in
      cost.

     

    (q) Transactions
      With Affiliates and Employees.
      Except
      as set forth in the SEC Reports, none of the officers or directors of the
      Company and, to the Knowledge of the Company, none of the employees of the
      Company is presently a party to any transaction with the Company or any
      Subsidiary (other than for services as employees, officers and directors),
      including any contract, agreement or other arrangement providing for the
      furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any officer,
      director or such employee or, to the Knowledge of the Company, any entity in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner. In particular, the Company is
      not
      an Affiliate of Xindadi and is not under common control with
      Xindadi.

     

    (r) Sarbanes-Oxley;
      Internal Accounting Controls.
      The
      Company is in compliance with all provisions of the Sarbanes-Oxley Act of 2002
      which are applicable to it as of the Closing Date. 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 Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
      Company and designed such disclosure controls and procedures to ensure that
      material information relating to the Company, including its Subsidiaries, is
      made known to the certifying officers by others within those entities,
      particularly during the period in which the Company’s most recently filed
      periodic report under the Exchange 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 date prior to the filing date of the
      most recently filed periodic report under the Exchange Act (such date, the
      “Evaluation Date”). The Company presented in its most recently filed periodic
      report under the Exchange 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 307(b) of Regulation S-K under the Exchange Act) or, to the
      Knowledge of the Company, in other factors that could significantly affect
      the
      Company’s internal controls.

     

    
      
        
        

      

      
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    (s) Private
      Placement.
      Assuming the accuracy of the Purchasers’ representations and warranties set
      forth in Section 3.2, no registration under the Securities Act is required
      for
      the offer and sale of the Securities by the Company to the Purchasers as
      contemplated hereby. The issuance and sale of the Securities hereunder does
      not
      contravene the rules and regulations of the Trading Market. Except as described
      in Schedule
      3.1(s),
      the
      Company has not granted or agreed to grant to any Person any rights (including
      "piggy-back" registration rights) to have any securities of the Company
      registered with the Commission or any other governmental authority that have
      not
      been satisfied.

     

    (t) Investment
      Company.
      The
      Company is not, and is not an Affiliate of, and immediately after receipt of
      payment for the Securities, will not be or be an Affiliate of, an “investment
      company” within the meaning of the Investment Company Act of 1940, as amended.
      The Company shall conduct its business in a manner so that it will not become
      subject to the Investment Company Act.

     

    (u) Registration
      Rights.
      Each
      Purchaser has the right to cause the Company to effect the registration under
      the Securities Act of the Securities held by such Purchaser, in accordance
      with
      the Registration Rights Agreement.

     

    (v) Listing
      and Maintenance Requirements.
      The
      Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange
      Act, and the Company has taken no action designed to, or which to its Knowledge
      is likely to have the effect of, terminating the registration of the Common
      Stock under the Exchange Act nor has the Company received any notification
      that
      the Commission is contemplating terminating such registration. The Company
      has
      not, in the 24 months preceding the date hereof, received notice from any
      Trading Market on which the Common Stock is or has been listed or quoted to
      the
      effect that the Company is not in compliance with the listing or maintenance
      requirements of such Trading Market. The Company is, and has no reason to
      believe that it will not in the foreseeable future continue to be, in compliance
      with all such listing and maintenance requirements. The issuance and sale of
      the
      Securities under the Transaction Documents does not contravene the rules and
      regulations of the Trading Market on which the Common Stock is currently listed
      or quoted, and no approval of the stockholders of the Company thereunder is
      required for the Company to issue and deliver to each Purchaser the Securities
      contemplated by the Transaction Documents. As of the date hereof, the Company’s
      Common Stock is listed on the OTC Bulletin Board.

     

    
      
        
        

      

      
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    (w) Disclosure.
      The
      Company confirms that neither it nor any other Person acting on its behalf
      has
      provided the Purchasers or their agents or counsel with any information that
      constitutes or might constitute material, nonpublic information. The Company
      understands and confirms that the Purchasers will rely on the foregoing
      representations and covenants in effecting transactions in securities of the
      Company. All disclosure provided to the Purchasers regarding the Company, its
      business and the transactions contemplated hereby, including the Disclosure
      Schedules to this Agreement, furnished by or on behalf of the Company with
      respect to the representations and warranties made herein are true and correct
      with respect to such representations and warranties and do 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 light of the circumstances
      under which they were made, not misleading. The Company acknowledges and agrees
      that the Purchaser makes or has made any representations or warranties with
      respect to the transactions contemplated hereby other than those specifically
      set forth in Section 3.2 hereof.

     

    (x) 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 security
      or
      solicited any offers to buy any security, under circumstances that would cause
      this offering of the Securities to be integrated with prior offerings by the
      Company for purposes of the Securities Act or any applicable shareholder
      approval provisions, including, without limitation, under the rules and
      regulations of any Trading Market on which any of the securities of the Company
      are listed or designated.

     

    (y) Solvency.
      Based
      on the financial condition of the Company as of the Closing Date after giving
      effect to the receipt by the Company of the proceeds from the sale of the
      Securities hereunder, (i) the Company’s cash and fair saleable value of its
      assets in an orderly liquidation exceeds the amount that will be required to
      be
      paid on or in respect of the Company’s existing debts and other liabilities
      (including known contingent liabilities) as they mature; (ii) the Company’s
      assets do not constitute unreasonably small capital to carry on its business
      for
      the current fiscal year as now conducted and as proposed to be conducted
      including its capital needs taking into account the particular capital
      requirements of the business conducted by the Company, and projected capital
      requirements and capital availability thereof; and (iii) the current cash flow
      of the Company, together with the proceeds the Company would receive, were
      it to
      liquidate all of its assets, after taking into account all anticipated uses
      of
      the cash, would be sufficient to pay all amounts on or in respect of its debt
      when such amounts are required to be paid. The Company does not intend to incur
      debts beyond its ability to pay such debts as they mature (taking into account
      the timing and amounts of cash to be payable on or in respect of its debt).
      The
      Company has no Knowledge of any facts or circumstances which lead it to believe
      that it will file for reorganization or liquidation under the bankruptcy or
      reorganization laws of any jurisdiction within one year from the Closing Date.
      

     

    (z) Tax
      Status.
       
      Except
      for matters that would not, individually or in the aggregate, have or reasonably
      be expected to result in a Material Adverse Effect, the Company and each
      Subsidiary has filed all necessary federal, state and foreign income and
      franchise tax returns and has paid or accrued all taxes shown as due thereon,
      and the Company has no Knowledge of a tax deficiency which has been asserted
      or
      threatened against the Company or any Subsidiary.

     

    
      
        
        

      

      
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    (aa) No
      General Solicitation.
      Neither
      the Company nor any person acting on behalf of the Company has offered or sold
      any of the Securities by any form of general solicitation or general
      advertising. The Company has offered the Securities for sale only to the
      Purchasers.

     

    (bb) No
      Disagreements with Accountants and Lawyers.
      There
      are no disagreements of any kind presently existing, or reasonably anticipated
      by the Company to arise, between the accountants and lawyers formerly or
      presently employed by the Company and the Company is current with respect to
      any
      fees owed to its accountants and lawyers.

     

    (cc) Acknowledgment
      Regarding Purchasers’ Purchase of Securities.
      The
      Company acknowledges and agrees that the Purchasers are acting solely in the
      capacity of arm’s length purchasers with respect to the Transaction Documents
      and the transactions contemplated hereby. The Company further acknowledges
      that
      the Purchasers are not acting as financial advisors or fiduciaries of the
      Company (or in any similar capacity) with respect to this Agreement and the
      transactions contemplated hereby and any advice given by the Purchasers or
      any
      of their respective representatives or agents in connection with this Agreement
      and the transactions contemplated hereby is merely incidental to the Purchasers’
purchase of the Securities. The Company further represents to the Purchasers
      that the Company’s decision to enter into this Agreement has been based solely
      on the independent evaluation of the transactions contemplated hereby by the
      Company and its representatives.

     

    (dd) Acknowledgement
      Regarding Purchasers’ Trading Activity.
      Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
      it is understood and agreed by the Company (i) that the Purchasers have not
      been
      asked to agree, nor have the Purchasers agreed, to desist from purchasing or
      selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities
      for any specified term; (ii) that past or future open market or other
      transactions by the Purchasers, including Short Sales, and specifically
      including, without limitation, Short Sales or “derivative” transactions, before
      or after the closing of this or future private placement transactions, may
      negatively impact the market price of the Company’s publicly-traded securities;
      (iii) that the Purchasers, and counter parties in “derivative” transactions to
      which the Purchasers are a party, directly or indirectly, presently may have
      a
“short” position in the Common Stock, and (iv) that the Purchasers shall not be
      deemed to have any affiliation with or control over any arm’s length
      counter-party in any “derivative” transaction. The
      Company further understands and acknowledges that (a) the Purchasers may engage
      in hedging activities at various times during the period that the Securities
      are
      outstanding, including, without limitation, during the periods that the value
      of
      the Warrant Shares deliverable with respect to Securities are being determined
      and (b) such hedging activities (if any) could reduce the value of the existing
      stockholders' equity interests in the Company at and after the time that the
      hedging activities are being conducted. The Company acknowledges that such
      aforementioned hedging activities do not constitute a breach of any of the
      Transaction Documents.

     

    
      
        
        

      

      
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    (ee) Manipulation
      of Price.
      The
      Company has not, and to its Knowledge no one acting on its behalf has, (i)
      taken, directly or indirectly, any action designed to cause or to result in
      the
      stabilization or manipulation of the price of any security of the Company to
      facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
      purchased, or, paid any compensation for soliciting purchases of, any of the
      Securities (other than for the placement agent’s placement of the Securities),
      or (iii) paid or agreed to pay to any person any compensation for soliciting
      another to purchase any other securities of the Company.

     

    (ff) Press
      Releases.
      The
      press releases disseminated by the Company during the two (2) years preceding
      the date of this Agreement taken as a whole do not contain any untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary in order to make the statements therein, in light of the
      circumstances under which they were made not misleading.

     

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

     

    3.2 Representations
      and Warranties of the Purchaser. The Purchasers hereby represent and warrant
      as
      of the date hereof and as of the Closing Date to the Company as
      follows:

     

    (a) Organization;
      Authority.
      Each of
      the Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with the requisite
      corporate or partnership power and authority to enter into and to consummate
      the
      transactions contemplated by the Transaction Documents and otherwise to carry
      out its obligations hereunder and thereunder. The execution, delivery and
      performance by each of the Purchaser of the transactions contemplated by this
      Agreement have been duly authorized by all necessary corporate or similar action
      on the part of each Purchaser. Each Transaction Document to which each Purchaser
      is a party has been duly executed by each Purchaser, and when delivered by
      each
      Purchaser in accordance with the terms hereof, will constitute the valid and
      legally binding obligation of such Purchaser, enforceable against it in
      accordance with its terms, except (i) as limited by general equitable principles
      and applicable bankruptcy, insolvency, reorganization, moratorium and other
      laws
      of general application affecting enforcement of creditors’ rights generally,
      (ii) as limited by laws relating to the availability of specific performance,
      injunctive relief or other equitable remedies and (iii) insofar as
      indemnification and contribution provisions may be limited by applicable
      law.

     

    
      
        
        

      

      
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    (b) Own
      Account.
      Each
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities as principal for its own account and not
      with a view to or for distributing or reselling such Securities or any part
      thereof in violation of the Securities Act or any applicable state securities
      law, has no present intention of distributing any of such Securities in
      violation of the Securities Act or any applicable state securities law and
      has
      no arrangement or understanding with any other persons regarding the
      distribution of such Securities (this representation and warranty not limiting
      each Purchaser’s right to sell the Securities pursuant to the Registration
      Statement or otherwise in compliance with applicable federal and state
      securities laws) in violation of the Securities Act or any applicable state
      securities law. Subject to the immediately preceding sentence, nothing contained
      herein shall be deemed a representation or warranty by each Purchaser to hold
      the Securities for any period of time. Each Purchaser is acquiring the
      Securities hereunder in the ordinary course of its business. None of the
      Purchasers has any agreement or understanding, directly or indirectly, with
      any
      Person to distribute any of the Securities.

     

    (c) Purchaser
      Status.
      At the
      time each Purchaser was offered the Securities, it was, and at the date hereof
      it is, and on each date on which it exercises any Warrants it will be either:
      (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
      (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
      buyer” as defined in Rule 144A(a) under the Securities Act. The Purchasers are
      not required to be registered as broker-dealers under Section 15 of the Exchange
      Act.

     

    (d) Experience
      of the Purchaser.
      Each
      Purchaser, either alone or together with its representatives, has such
      Knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Securities, and has so evaluated the merits and risks of such investment.
      Each Purchaser is able to bear the economic risk of an investment in the
      Securities and, at the present time, is able to afford a complete loss of such
      investment.

     

    (e) General
      Solicitation.
      Each
      Purchaser is not purchasing the Securities as a result of any advertisement,
      article, notice or other communication regarding the Securities published in
      any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general solicitation or general
      advertisement.

     

    (f) Short
      Sales and Confidentiality Prior To The Date Hereof.
      Other
      than the transaction contemplated hereunder, none of the Purchasers has,
      directly or indirectly, nor has any Person acting on behalf of or pursuant
      to
      any understanding with any of the Purchasers, executed any disposition,
      including Short Sales, in the securities of the Company during the period
      commencing from the time that each Purchaser first received a term sheet from
      the Company or any other Person setting forth the material terms of the
      transactions contemplated hereunder until the date hereof. Notwithstanding
      the
      foregoing, in the case that any of the Purchasers is a multi-managed investment
      vehicle whereby separate portfolio managers manage separate portions of such
      Purchaser's assets and the portfolio managers have no direct Knowledge of the
      investment decisions made by the portfolio managers managing other portions
      of
      such Purchaser's assets, the representation set forth above shall only apply
      with respect to the portion of assets managed by the portfolio manager that
      made
      the investment decision to purchase the Securities covered by this Agreement.
      Other than to other Persons party to this Agreement, each Purchaser has
      maintained the confidentiality of all disclosures made to it in connection
      with
      this transaction (including the existence and terms of this
      transaction).

     

    
      
        
        

      

      
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    The
      Company acknowledges and agrees that each Purchaser does not make or has not
      made any representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in this Section
      3.2.

     

    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1 Transfer
      Restrictions.

     

    (a) The
      Securities may only be disposed of in compliance with state and federal
      securities laws. In connection with any transfer of Securities other than
      pursuant to an effective registration statement or Rule 144, to the Company
      or
      to an affiliate of the Purchasers or in connection with a pledge as contemplated
      in Section 4.1(b), the Company may require
      the transferor thereof to provide to the Company an opinion of counsel selected
      by the transferor and reasonably acceptable to the Company, the form and
      substance of which opinion shall be reasonably satisfactory to the Company,
      to
      the effect that such transfer does not require registration of such transferred
      Securities under the Securities Act. 

     

    (b) The
      Purchasers agree to the imprinting, so long as is required by this Section
      4.1(b), of a legend on any of the Securities in the following form:

     

    [NEITHER]
      THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
      [EXERCISABLE] [CONVERTIBLE]] HAVE BEEN REGISTERED WITH THE SECURITIES AND
      EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
      AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
      TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
      TO
      THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
      [EXERCISE] [CONVERSION] OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
      A
      BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    
      
        
        

      

      
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    The
      Company acknowledges and agrees that the Purchasers may from time to time pledge
      pursuant to a bona fide margin agreement with a registered broker-dealer or
      grant a security interest in some or all of the Securities to a financial
      institution that is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act and, if required under the terms of such arrangement, each
      Purchaser may transfer pledged or secured Securities to the pledgees or secured
      parties. Such a pledge or transfer would not be subject to approval of the
      Company and no legal opinion of legal counsel of the pledgee, secured party
      or
      pledgor shall be required in connection therewith. Further, no notice shall
      be
      required of such pledge. At the expense of the Purchaser, the Company will
      execute and deliver such reasonable documentation as a pledgee or secured party
      of Securities may reasonably request in connection with a pledge or transfer
      of
      the Securities, including, if the Securities are subject to registration
      pursuant to the Registration Rights Agreement, the preparation and filing of
      any
      required prospectus supplement under Rule 424(b)(3) under the Securities Act
      or
      other applicable provision of the Securities Act to appropriately amend the
      list
      of Selling Stockholders thereunder.

     

    (c) Certificates
      evidencing the Shares and Warrant Shares shall not contain any legend (including
      the legend set forth in Section 4.1(b) hereof): (i) whenever the Shares and
      Warrant Shares are registered for resale under the Securities Act, or (ii)
      following any
      sale
      or transfer of such Shares or Warrant Shares pursuant to Rule 144, or (iii)
      while such Shares or Warrant Shares are eligible for sale under Rule 144(k),
      or
      (iv) if such legend is not required under applicable requirements of the
      Securities Act (including judicial interpretations and pronouncements issued
      by
      the staff of the Commission). The Company shall cause its counsel to issue
      a
      standing legal opinion to the Company’s transfer agent promptly after the
      Effective Date if required by the Company’s transfer agent to effect the removal
      of the legend hereunder. Following such time as restrictive legends are not
      required to be placed on certificates representing the Shares or Warrant Shares,
      the Company will, no later than three Trading Days following the delivery by
      the
      Purchaser to the Company or the Company's transfer agent of (i) a certificate
      representing such Shares or Warrant Shares containing a restrictive legend
      (endorsed or with stock power attached, signatures guaranteed, and otherwise
      in
      form necessary to affect reissuance and/ or transfer), or (ii) an Exercise
      Notice in the manner stated in the Warrants to affect the exercise of such
      Warrant in accordance with its terms (such third Trading Day, the “Legend
      Removal Date”), deliver or cause to be delivered to the Purchaser a certificate
      representing such Shares or Warrant Shares that is free from all restrictive
      and
      other legends. The Company may not make any notation on its records or give
      instructions to any transfer agent of the Company that enlarge the restrictions
      on transfer set forth in this Section 4.1(c). Certificates for Securities
      subject to legend removal hereunder shall be transmitted by the transfer agent
      of the Company to the Purchaser by crediting the account of the Purchaser’s
      prime broker with the Depository Trust Company System.

     

    
      
        
        

      

      
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    4.2 Right
      of
      First Refusal and Anti Dilution Provisions. 

     

    (a) Prior
      to
      the end of Fiscal Year 2008, the  Purchasers  shall have a right of
      first refusal, to invest and to participate in any subsequent placements or
      offerings of Common Stock,  except in connection with (i) full or partial
      consideration in connection with a strategic merger,  acquisition, 
consolidation  or  purchase of  substantially  all of the
      securities  or assets of  corporation  or other 
entity  which  holders  of such securities  or debt are not
      at any time granted  registration  rights,  (ii) the Company's
      issuance of securities in connection with strategic license agreements and
      other  partnering  arrangements  so long as such 
issuances  are not for the purpose of raising  capital which holders
      of such  securities or debt are not at any time granted 
registration  rights,  (iii) the Company's  issuance of Common
      Stock or the issuances or grants of options to purchase Common Stock pursuant
      to
      stock option plans and employee stock purchase plans  described on Schedule
      4.2(a) hereto,  (iv) as a result of the  exercise of Warrants 
pursuant to this  Agreement or any other Agreements or obligations entered
      into by the Company prior to this Agreement,  (v) the payment of any
      liquidated  damages or other damages  pursuant to the
      Transaction  Documents,  (vi) as a result of underwritten offerings
      conducted by the Company and (vii) as has been  described in the Reports or
      Other Written Information filed with the Commission not later than three
      Business Days before the Closing Date  (collectively the foregoing are
“Excepted  Issuances”). The Purchasers shall be given prior written notice
      of no less than fourteen (14) business days (the “Subsequent Financing Notice”)
      prior to any such placements or offerings of Common Stock which are not Excepted
      Issuances (“Subsequent Financings”). The  Purchaser  who decides to
      exercise its rights pursuant to this Section shall provide a written notice
      to
      the Company (the “Right of First Refusal Notice”) no later than seven (7)
      business days following the receipt of the Subsequent Financing Notice,
      providing the amount that such Purchaser is committed to invest. The Purchaser
      is deemed to have waived its right of first refusal if the Company does not
      receive the Right of First Refusal Notice by 5:00 p.m. (New York City time)
      on
      the seventh business day of the Right of First Refusal Notice period. In the
      event such terms and  conditions  are  modified  during the
      Subsequent Financing Notice period,  the Purchasers shall be given prompt
      notice of such modification and shall have the right  during 
the  fourteen  (14)   business  days  
following  the  notice  of modification to exercise such
      right.

     

    (b) Other
      than in connection with the Excepted Issuances and prior to the end of fiscal
      year 2008, if the Company shall offer, issue or agree to issue any common stock
      to any person or entity at a price per share which shall be less than the price
      of the Shares, or less than the Warrant exercise price in respect of the Warrant
      Shares, without the consent of each Purchaser, then the Company shall issue,
      for
      each such occasion, additional shares of Common Stock to each Purchaser so
      that
      the average per share purchase price of the Shares issued to the Purchasers
      (of
      only the Common Stock or Warrant Shares still owned by the Purchaser) is equal
      to such other lower price per share and the Warrant exercise price shall
      automatically be adjusted as provided in the Warrants. The average Purchase
      Price of the Shares and average exercise price in relation to the Warrant Shares
      shall be calculated separately for the Shares and Warrant Shares. The delivery
      to the Purchasers of the additional shares of Common Stock shall be not later
      than the closing date of the transaction giving rise to the requirement to
      issue
      additional shares of Common Stock. The Purchasers are granted the registration
      rights described in the Registration Rights Agreement in relation to such 
additional  shares of Common Stock, except that the Filing Date and
      Effective Date vis-a-vis such additional Shares shall be the forty-fifth
      (45th)
      day
      after the closing date giving rise to the  requirement  to issue
      the  additional  shares of Common Stock.

     

    
      
        
        

      

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

     

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

     

    4.5 Conversion
      and Exercise Procedures. The form of Notice of Exercise included in the Warrants
      set forth the totality of the procedures required of the Purchaser in order
      to
      exercise the Warrants. No additional legal opinion or other information or
      instructions shall be required of the Purchaser to exercise its Warrants. The
      Company shall honor exercises of the Warrants and shall deliver Warrant Shares
      in accordance with the terms, conditions and time periods set forth in the
      Transaction Documents.

     

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

     

    4.7 Shareholder
      Rights Plan. No claim will be made or enforced by the Company or, to the
      Knowledge of the Company, any other Person that the Purchaser is an “Acquiring
      Person” under any shareholder rights plan or similar plan or arrangement in
      effect or hereafter adopted by the Company, or that the Purchaser could be
      deemed to trigger the provisions of any such plan or arrangement, by virtue
      of
      receiving Securities under the Transaction Documents or under any other
      agreement between the Company and the Purchaser. The Company shall conduct
      its
      business in a manner so that it will not become subject to the Investment
      Company Act.

     

    
      
        
        

      

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

     

    4.9 Reimbursement.
      The Company shall reimburse the Lead Investor for legal fees up to, but in
      no
      event more than, US$30,000.00, for the services of its counsel retained in
      connection with the transactions contemplated by this Agreement.

     

    4.10 Indemnification
      of Purchaser. Subject to the provisions of this Section 4.10 and in addition
      to
      the indemnity provided in the Registration Rights Agreement, the Company will
      indemnify and hold the Purchaser and its directors, officers, shareholders,
      members, partners, employees and agents (and any other Persons with a
      functionally equivalent role of a Person holding such titles notwithstanding
      a
      lack of such title or any other title), each Person who controls the Purchaser
      (within the meaning of Section 15 of the Securities Act and Section 20 of the
      Exchange Act), and the directors, officers, agents, members, partners or
      employees (and any other Persons with a functionally equivalent role of a Person
      holding such titles notwithstanding a lack of such title or any other title)
      of
      such controlling person (each, a “Purchaser Party”) harmless from any and all
      losses, liabilities, obligations, claims, contingencies, damages, costs and
      expenses, including all judgments, amounts paid in settlements, court costs
      and
      reasonable attorneys’ fees and costs of investigation that any such Purchaser
      Party may suffer or incur as a result of or relating to (a) any breach,
      misrepresentation or inaccuracy of any of the representations, warranties,
      covenants or agreements made by the Company in this Agreement or in the other
      Transaction Documents or (b) any action instituted against the Purchaser, or
      any
      of its respective Affiliates, by any stockholder of the Company who is not
      an
      Affiliate of the Purchaser, with respect to any of the transactions contemplated
      by the Transaction Documents (unless such action is based upon a material breach
      of the Purchaser’s representations, warranties or covenants under the
      Transaction Documents or any agreements or understandings that the Purchaser
      may
      have with any such stockholder or any violations by the Purchaser of state
      or
      federal securities laws or any conduct by the Purchaser which constitutes fraud,
      gross negligence, willful misconduct or malfeasance). If any action shall be
      brought against any Purchaser Party in respect of which indemnity may be sought
      pursuant to this Agreement, such Purchaser Party shall promptly notify the
      Company in writing, and the Company shall have the right to assume the defense
      thereof with counsel of its own choosing. Any Purchaser Party shall have the
      right to employ separate counsel in any such action and participate in the
      defense thereof, but the fees and expenses of such counsel shall be at the
      expense of such Purchaser Party except to the extent that (i) the employment
      thereof has been specifically authorized by the Company in writing, (ii) the
      Company has failed after a reasonable period of time to assume such defense
      and
      to employ counsel or (iii) in such action there is, in the reasonable opinion
      of
      such separate counsel, a material conflict on any material issue between the
      position of the Company and the position of such Purchaser Party. The Company
      will not be liable to any Purchaser Party under this Agreement (i) for any
      settlement by a Purchaser Party effected without the Company’s prior written
      consent, which shall not be unreasonably withheld or delayed; or (ii) to the
      extent, but only to the extent that a loss, claim, damage or liability is
      attributable to any Purchaser Party’s material breach of any of the
      representations, warranties, covenants or agreements made by the Purchaser
      in
      this Agreement or in the other Transaction Documents. 

     

    
      
        
        

      

      
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    4.11 Equal
      Treatment. No consideration shall be offered or paid to any person to amend
      or
      consent to a waiver or modification of any provision of any of the Transaction
      Documents unless the same consideration is also offered to all of the parties
      to
      the Transaction Documents.

     

    4.12 Form
      D.
      The Company agrees to timely file a Form D with respect to the Securities as
      required under Regulation D and to provide a copy thereof, promptly upon request
      of the Purchaser. 

     

    4.13 Subsequent
      Registrations. Other than pursuant to the Registration Statement, prior to
      the
      Effective Date, the Company may not file any registration statement (other
      than
      on Form S-8) with the Commission with respect to any securities of the
      Company.

     

    4.14 Listing
      of Common Stock. The Company hereby agrees to use best efforts to maintain
      the
      listing and trading of its Common Stock on the OTC Bulletin Board (or another
      nationally recognized Trading Market). The Company further agrees, if the
      Company applies to have the Common Stock traded on any other Trading Market,
      it
      will include in such application the Shares and Warrant Shares, and will take
      such other action as is necessary or desirable in the opinion of the Purchaser
      to cause all of the Shares and Warrant Shares to be listed on such other Trading
      Market as promptly as possible. The Company will use best efforts and take
      all
      action reasonably necessary to continue the listing and trading of its Common
      Stock on the Trading Market on which the Common Stock is currently listed or
      quoted and will comply in all respects with the Company’s reporting, filing and
      other obligations under the bylaws or rules of such Trading Market.

     

    4.15 Form
      SB-2
      and Form S-1 Eligibility. The Company is eligible to register the resale of
      the
      Shares and the Warrant Shares by the Purchaser under Form SB-2 or Form S-1
      promulgated under the Securities Act and the Company hereby covenants and agrees
      to use its best efforts to maintain its eligibility to use Form SB-2 until
      the
      Registration Statement covering the resale of the Shares and Warrant Shares
      shall have been filed with, and declared effective by, the Commission. If for
      any reason the Company is not eligible to register the resale of the Shares
      and
      the Warrant Shares by the Purchaser under Form SB-2, the Company covenants
      and
      agrees to register the resale of the Shares and Warrant Shares on Form S-1
      promulgated under the Securities Act.

     

    4.16 Registration
      Rights. The
      Company shall register the Shares and the shares underlying the Warrants
      pursuant (“Registrable Securities”) to the terms set forth in the Registration
      Rights Agreement within forty-five (45) days from the Closing Date. If the
      Registrable Securities are not registered by six (6) months after the Closing
      Date, the Company shall pay to each Purchaser an amount equal to 1% per month
      of
      the aggregate Investment Amount paid by such Purchaser pursuant to this
      Agreement. Such penalty shall not apply if delays in registration are due to
      Commission comments or concerns for any reason relating to or involving Rule
      415
      of the Securities Act or its interpretation. In the event that the number of
      Shares and the shares underlying the Warrants to be registered on the initial
      registration statement as permitted by the Commission is less than the full
      amount of the Registrable Securities as a result of Rule 415 of the Securities
      Act or its interpretation, the Company shall file one or more subsequent
      registration statements to register the rest of the Registrable Securities
      until
      all Registrable Securities are registered, which shall be filed within thirty
      (30) days from the day when the Company becomes qualified or permitted by the
      Commission to file a new subsequent registration statement to registered the
      rest of the Restrable Securities; provided that each of such subsequent
      registration statement shall only register the number of Registrable Securities
      as permitted under Rule 415 of the Securities Act or its interpretation. Each
      Purchaser’s shares registered in the subsequent registrations are on a pro rata
      basis. If a subsequent registration statement is not filed by the deadline,
      damages equal to the amount of 1.0% of the remaining unregistered principal
      amount shall be paid to the Purchaser on the first business day after the
      deadline, and on each anniversary of said date (applied on a daily pro rata
      basis) until such registration statement is filed.

     

    
      
        
        

      

      
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    4.17 Board
      of
      Directors. The Company covenants and agrees that it will appoint the requisite
      number of directors and of independent directors in order to comply with Nasdaq
      Global Market listing requirements as soon as is reasonably practicable
      following the date of this Agreement. The Company covenants and agrees that,
      as
      soon as is reasonably practicable following the date of this Agreement, the
      Lead
      Investor shall have the right to approve one (1) director to serve on the Board
      of Directors of the Company as designated in writing by the Lead
      Investor.

     

    4.18 Senior
      Financial Officer. The
      Company covenants and agrees that, as soon as is reasonably practicable
      following the date of this Agreement, it will retain the services of a Senior
      Financial Officer, subject to the approval of the Lead Investor (“SFO”), with
      experience in matters relating to public companies and Commission compliance
      and
      requirements. Failure to appoint a SFO by March 30th,
      2008
      shall result in penalties to the Company in the form of 1% per month additional
      shares of Common Stock based on the Shares already issued at the Closing, to
      be
      issued and allocated among the Purchasers pro rata in accordance with their
      applicable Investment Amounts.

     

    4.19 Make-Good
      Obligation. In the event that the after-tax net income of the Company during
      fiscal year 2007 is less than US$16,300,000.00, as reported in the Company’s
      audited financial statements for fiscal year 2007, the Company shall pay the
      Purchasers 510,000 management-held shares, held in Make-Good Escrow as set
      forth
      in Section 4.20 below, to be distributed to the Purchasers pro rata in
      accordance with their respective Investment Amounts. In the event that the
      after-tax net income of the Company during fiscal year 2008 is less than
      US$35,800,000.00, as reported in the Company’s audited financial statements for
      fiscal year 2008, the Company shall pay the Purchasers either (i) 510,000
      management-held Shares, if the after-tax net income of the Company during fiscal
      year 2007 was equal to or greater than US$16,300,000.00, to be distributed
      pro
      rata in accordance with each Purchaser’s respective Investment Amounts, or (ii)
      510,000 newly issued Shares of Common Stock by the Company, if the after-tax
      net
      income of the Company during fiscal year 2007 was less than US$16,300,000.00,
      as
      reported in the Company’s audited financial statements for fiscal year 2007, and
      the 510,000 management-held shares have already been distributed to the
      Purchasers in accordance with this Section 4.19, to be distributed pro rata
      in
      accordance with each Purchaser’s respective Investment Amount. The costs
      associated with the make-good guarantee shall not be included as a cost towards
      the determination of the after-tax net income for each year.

     

    
      
        
        

      

      
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    4.20 Make-Good
      Escrow. In order to comply with the requirements of Section 4.19 above, the
      Company shall place in escrow 510,000 shares of Common Stock held by management,
      (the “Make-Good Escrow”). The Make-Good Escrow agent shall be appointed by the
      Lead Investor and the Company.

     

    4.21 Public
      Company Activities. Beginning with the quarter ending in June, 2007, the Company
      shall conduct conference calls on a quarterly basis. The management of the
      Company shall visit the United States two times per annum to meet with current
      and potential investors. The Company shall retain the services of a reputable
      investor relations company.

     

    4.22 Callable
      Warrants. If the VWAP of the Company’s Common Stock price for any continuous
      period of twenty (20) days equals or exceeds 200% above the Warrants’ exercise
      price, the Company can send a call notice on the warrants to the Purchasers
      for
      the mandatory exercise of the Warrants (the “Warrant Call”). The Purchasers
      shall have sixty (60) calendar days notice for the Warrant Call. If the
      Purchaser cannot exercise the Warrant within sixty (60) calendar days from
      receipt of Warrant Call, the Warrant shall be cancelled, forfeited and avoided
      by the Company. The Company may send a Warrant Call only after the Securities
      shall have been registered for thirty (30) calendar days.

     

    ARTICLE
      V. 

    MISCELLANEOUS

     

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

     

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

     

    (a) by
      written agreement of the Purchaser and the Company; and

     

    (b) by
      the
      Company or the Purchaser upon written notice to the other, if the Closing shall
      not have taken place by 6:30 p.m. Eastern time on May 15, 2007; provided, that
      the right to terminate this Agreement under this Section shall not be available
      to any Person whose failure to comply with its obligations under this Agreement
      has been the cause of or resulted in the failure of the Closing to occur on
      or
      before such time.

     

    Upon
      a
      termination in accordance with this Section, the Company and the Purchaser
      shall
      not have any further obligation or liability (including as arising from such
      termination) to the other except pursuant to Section 4.10.

     

    
      
        
        

      

      
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    5.3 Entire
      Agreement. The Transaction Documents, together with the exhibits and schedules
      thereto, contain the entire understanding of the parties with respect to the
      subject matter hereof and supersede all prior agreements and understandings,
      discussions, oral or written, with respect to such matters, which the parties
      acknowledge have been merged into such documents, exhibits and
      schedules.

     

    5.4 Notices.
      Any and all notices or other communications or deliveries required or permitted
      to be provided hereunder shall be in writing and shall be deemed given and
      effective on the earliest of (a) the date of transmission, if such notice or
      communication is delivered via facsimile (provided the sender receives a
      machine-generated confirmation of successful transmission) 
      at the
      facsimile number set forth on the signature pages attached hereto prior to
      5:30
      p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
      the
      date of transmission, if such notice or communication is delivered via facsimile
      at the facsimile number set forth on the signature pages attached hereto on
      a
      day that is not a Trading Day or later than 5:30 p.m. (New York City time)
      on
      any Trading Day, (c) the 2nd
      Trading
      Day following the date of mailing, if sent by U.S. nationally recognized
      overnight courier service, or (d) upon actual receipt by the party to whom
      such
      notice is required to be given. The address for such notices and communications
      shall be as set forth on the signature pages attached hereto.

     

    5.5 Amendments;
      Waivers. No provision of this Agreement may be waived, modified, supplemented
      or
      amended except in a written instrument signed, in the case of an amendment,
      by
      the Company and the Purchaser or, in the case of a waiver, by the party against
      whom enforcement of any such waiver is sought. No waiver of any default with
      respect to any provision, condition or requirement of this Agreement shall
      be
      deemed to be a continuing waiver in the future or a waiver of any subsequent
      default or a waiver of any other provision, condition or requirement hereof,
      nor
      shall any delay or omission of either party to exercise any right hereunder
      in
      any manner impair the exercise of any such right. 

     

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

     

    5.7 Successors
      and Assigns. This Agreement shall be binding upon and inure to the benefit
      of
      the parties and their successors and permitted assigns. The Company may not
      assign this Agreement or any rights or obligations hereunder without the prior
      written consent of the Purchaser. The Purchaser may assign any or all of its
      rights under this Agreement to any Person to whom the Purchaser assigns or
      transfers any Securities, provided such transferee agrees in writing to be
      bound, with respect to the transferred Securities, by the provisions hereof
      that
      apply to the Purchaser.

     

    5.8 No
      Third-Party Beneficiaries. This Agreement is intended for the benefit of the
      parties hereto and their respective successors and permitted assigns and is
      not
      for the benefit of, nor may any provision hereof be enforced by, any other
      Person, except as otherwise set forth in Section 4.10 (as to each Purchaser
      Party).

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

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

     

    5.10 Survival.
      The representations, warranties, covenants and other agreements contained herein
      shall survive the Closing and the delivery, exercise and/or conversion of the
      Securities, as applicable for the applicable statue of limitations.

     

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

     

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

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    5.13 Rescission
      and Withdrawal Right. Notwithstanding anything to the contrary contained in
      (and
      without limiting any similar provisions of) the Transaction Documents, whenever
      the Purchaser exercises a right, election, demand or option under a Transaction
      Document and the Company does not timely perform its related obligations within
      the periods therein provided, then the Purchaser may rescind or withdraw, in
      its
      sole discretion from time to time upon written notice to the Company, any
      relevant notice, demand or election in whole or in part without prejudice to
      its
      future actions and rights; provided, however, in the case of a rescission of
      exercise of a Warrant, the Purchaser shall be required to return any shares
      of
      Common Stock subject to any such rescinded exercise notice.

     

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

     

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

     

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

     

    5.17 Liquidated
      Damages. The Company’s obligations to pay any partial liquidated damages or
      other amounts owing under the Transaction Documents is a continuing obligation
      of the Company and shall not terminate until all unpaid partial liquidated
      damages and other amounts have been paid notwithstanding the fact that the
      instrument or security pursuant to which such partial liquidated damages or
      other amounts are due and payable shall have been canceled.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    5.18 Construction.
      The parties agree that each of them and/or their respective counsel has reviewed
      and had an opportunity to revise the Transaction Documents and, therefore,
      the
      normal rule of construction to the effect that any ambiguities are to be
      resolved against the drafting party shall not be employed in the interpretation
      of the Transaction Documents or any amendments hereto.

     

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

     

    (Signature
      Pages Follow)

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    

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

     

    
      	
              CHINA
                HOUSING AND LAND DEVELOPMENT, INC.

            	
              Address
                for Notice:

            
	 	 
	 	 
	
              By:__________________________________________

              Name:

              Title:

            	 
	 	 
	 	 
	 	 

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGE FOR PURCHASER FOLLOWS]

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    [PURCHASER
      SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

     

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

     

    Name
      of
      Purchaser: ________________________________________________________

    Signature
      of Authorized Signatory of Purchaser:
      __________________________________

    Name
      of
      Authorized Signatory:
      ____________________________________________________

    Title
      of
      Authorized Signatory:
      _____________________________________________________

    Email
      Address of
      Purchaser:________________________________________________

     

    Address
      for Notice of Purchaser:

     

    

     

    

     

    Address
      for Delivery of Securities for Purchaser (if not same as above):

     

    

     

    

     

    Investment
      Amount:

    Warrant
      Shares:

    EIN
      Number: 

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    Annex
      A 

     

    CLOSING
      STATEMENT

     

    Pursuant
      to the attached Securities Purchase Agreement, dated as of the date hereto,
      the
      Purchaser shall purchase up to $25,100,000.00 of Shares and Warrants from China
      Housing and Land Development, Inc. (the “Company”).
      All funds will be wired into an escrow account maintained by Signature Bank,
      escrow agent to the Company. All funds will be disbursed in accordance with
      this
      Closing Statement.

    

    Disbursement
      Date: May
      9,
      2007

     

    
      
        

      

       

    

    
      	
              I.
                PURCHASE
                PRICE

            	 
	
              Gross
                Proceeds to be Received in Escrow

            	
              $

            
	 	 
	
              II. DISBURSEMENTS

            	 
	
               

            	
              $

            
	
               

            	
              $

            
	 	
              $

            
	 	
              $

            
	 	
              $

            
	 	 
	
              Total
                Amount Disbursed:

            	
              $

            
	 	 
	 	 
	 	 
	
              WIRE
                INSTRUCTIONS:

               

            	 
	
              To:
                _____________________________________

               

               

               

               

            	 
	
              To:
                _____________________________________

            	 

    

    

    
      
        
        

      

      
        33NEITHER
      THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE
      BEEN
      REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
      COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
      MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
      OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
      EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
      SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE
      SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY
      BE
      PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED
      BY
      SUCH SECURITIES.

     

    Right
      to
      Purchase [______] shares of Common Stock of CHINA HOUSING AND LAND DEVELOPMENT,
      INC. (subject to adjustment as provided herein)

     

     

    COMMON
      STOCK PURCHASE WARRANT

     

     

    
      	
              No.
                A-1 

            	
              Issue
                Date: May 9, 2007
                

            

    

     

     

    CHINA
      HOUSING AND LAND DEVELOPMENT, INC., a corporation organized under the laws
      of
      the State of Nevada (the "Company"), hereby certifies that, for value received,
      _________________ or its assigns (the "Holder"), is entitled, subject to the
      terms set forth below, to purchase from the Company at any time and from time
      to
      time from and after the Issue Date and through and including May 9, 2012 (the
      "Expiration Date"), up to a total of _____________ fully paid and nonassessable
      shares of the common stock of the Company (the "Common Stock"), $0.001 par
      value
      per share with an exercise price of $4.50 per Share, in lawful money of the
      United States. The aforedescribed purchase price per share, as adjusted from
      time to time as herein provided, is referred to herein as the "Exercise Price."
      The number and character of such shares of Common Stock and the Exercise Price
      are subject to adjustment as provided herein. Capitalized terms used and not
      otherwise defined herein shall have the meanings set forth in the Securities
      Purchase Agreement (the “Securities Purchase Agreement”), dated May 7, 2007,
      entered into by the Company and the Holder.

     

    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The
      term
      "Company" shall include China Housing and Land Development, Inc. and any
      corporation which shall succeed or assume the obligations of China Housing
      and
      Land Development, Inc. hereunder.

     

    The
      term
      "Common Stock" includes (a) the Company's Common Stock, $0.001 par value per
      share, as authorized on the date of the Purchase Agreement, and (b) any other
      securities into which or for which any of the securities described in (a) may
      be
      converted or exchanged pursuant to a plan of recapitalization, reorganization,
      merger, sale of assets or otherwise.

     

    The
      term
      "Fundamental Transaction" means any of the following: (1) the Company effects
      any merger or consolidation of the Company with or into another Person, (2)
      the
      Company effects any sale of all or substantially all of its assets in one or
      a
      series of related transactions, (3) any tender offer or exchange offer (whether
      by the Company or another Person) is completed pursuant to which holders of
      Common Stock are permitted to tender or exchange their shares for other
      securities, cash or property, or (4) the Company effects any reclassification
      of
      the Common Stock or any compulsory share exchange pursuant to which the Common
      Stock is effectively converted into or exchanged for other securities, cash
      or
      property.

     

    The
      term
      "Issue Date" means the Issue Date first set forth on the first page of this
      Warrant.

     

    1. Exercise.

     

    (a) To
      effect
      exercises hereunder, the Holder shall not be required to physically surrender
      this Warrant unless the aggregate Warrant Shares represented by this Warrant
      is
      being exercised. Upon delivery of the form of subscription attached hereto
      (the
      "Subscription Form") to the Company at its address for notice set forth in
      the
      Purchase Agreement and upon payment of the Exercise Price multiplied by the
      number of Warrant Shares that the Holder intends to purchase hereunder, the
      Company shall promptly (but in no event later than three Trading Days after
      the
      Date of Exercise (as defined herein)) issue and deliver to the Holder, a
      certificate for the Warrant Shares issuable upon such exercise, which, unless
      otherwise required by the Purchase Agreement, shall be free of restrictive
      legends. A "Date of Exercise" means the date on which the Holder shall have
      delivered to the Company: (i) the Subscription Form, appropriately completed
      and
      duly signed and (ii) payment of the Exercise Price for the number of Warrant
      Shares so indicated by the Holder to be purchased.

     

    (b) If
      by the
      third Trading Day after a Date of Exercise the Company fails to deliver the
      required number of Warrant Shares in the manner required pursuant to Section
      1(a), then the Holder will have the right to rescind such exercise.

     

    (c) If
      by the
      third Trading Day after a Date of Exercise the Company fails to deliver the
      required number of Warrant Shares in the manner required pursuant to Section
      1(a), and if after such third Trading Day and prior to the receipt of such
      Warrant Shares, the Holder purchases (in an open market transaction or
      otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
      Holder of the Warrant Shares which the Holder anticipated receiving upon such
      exercise (a "Buy-In"), then the Company shall (1) pay in cash to the Holder
      the
      amount by which (x) the Holder's total purchase price (including brokerage
      commissions, if any) for the shares of Common Stock so purchased exceeds (y)
      the
      amount obtained by multiplying (A) the number of Warrant Shares that the Company
      was required to deliver to the Holder in connection with the exercise at issue
      by (B) the closing bid price of the Common Stock on the Date of Exercise and
      (2)
      at the option of the Holder, either reinstate the portion of the Warrant and
      equivalent number of Warrant Shares for which such exercise was not honored
      or
      deliver to the Holder the number of shares of Common Stock that would have
      been
      issued had the Company timely complied with its exercise and delivery
      obligations hereunder. The Holder shall provide the Company written notice
      indicating the amounts payable to the Holder in respect of the
      Buy-In.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (d) The
      Company's obligations to issue and deliver Warrant Shares in accordance with
      the
      terms hereof are absolute and unconditional, irrespective of any action or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof, the recovery of any judgment against any Person or
      any
      action to enforce the same, or any setoff, counterclaim, recoupment, limitation
      or termination, or any breach or alleged breach by the Holder or any other
      Person of any obligation to the Company or any violation or alleged violation
      of
      law by the Holder or any other Person, and irrespective of any other
      circumstance which might otherwise limit such obligation of the Company to
      the
      Holder in connection with the issuance of Warrant Shares. Nothing herein shall
      limit a Holder's right to pursue any other remedies available to it hereunder,
      at law or in equity including, without limitation, a decree of specific
      performance and/or injunctive relief with respect to the Company's failure
      to
      timely deliver certificates representing Warrant Shares upon exercise of the
      Warrant as required pursuant to the terms hereof.

     

    (e) If,
      following at least 30 days from the registration of the Warrant Shares in
      accordance with the Registration Rights Agreement, the VWAP of the Common Stock
      price on any day for any continuous period of twenty (20) days equals or exceeds
      200% of the Exercise Price, the Company can send a call notice in respect of
      the
      Warrants to the Holder requiring the mandatory exercise by the Holder of the
      Warrants (the “Warrant Call”). The Holders shall have sixty calendar days from
      the date of the Warrant Call to exercise the Warrants. If the Holder fails
      to
      exercise the Warrant within sixty (60) calendar days from receipt of the Warrant
      Call, the Warrant shall be cancelled and forfeited and shall become null and
      void to the extent not then exercised. 

     

    2. Certain
      Adjustments. The Exercise Price and number of Warrant Shares issuable upon
      exercise of this Warrant are subject to adjustment from time to time as set
      forth in this Section 2.

     

    (a) Stock
      Dividends and Splits. If the Company, at any time while this Warrant is
      outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes
      a
      distribution on any class of capital stock that is payable in shares of Common
      Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
      of shares, or (iii) combines outstanding shares of Common Stock into a smaller
      number of shares, then in each such case the Exercise Price shall be multiplied
      by a fraction of which the numerator shall be the number of shares of Common
      Stock outstanding immediately before such event and of which the denominator
      shall be the number of shares of Common Stock outstanding immediately after
      such
      event. Any adjustment made pursuant to clause (i) of this paragraph shall become
      effective immediately after the record date for the determination of
      stockholders entitled to receive such dividend or distribution, and any
      adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
      effective immediately after the effective date of such subdivision or
      combination.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (b) Fundamental
      Transactions. If, at any time while this Warrant is outstanding there is a
      Fundamental Transaction, then the Holder shall have the right thereafter to
      receive, upon exercise of this Warrant, the same amount and kind of securities,
      cash or property as it would have been entitled to receive upon the occurrence
      of such Fundamental Transaction if it had been, immediately prior to such
      Fundamental Transaction, the holder of the number of Warrant Shares then
      issuable upon exercise in full of this Warrant (the "Alternate Consideration").
      For purposes of any such exercise, the determination of the Exercise Price
      shall
      be appropriately adjusted to apply to such Alternate Consideration based on
      the
      amount of Alternate Consideration issuable in respect of one share of Common
      Stock in such Fundamental Transaction, and the Company shall apportion the
      Exercise Price among the Alternate Consideration in a reasonable manner
      reflecting the relative value of any different components of the Alternate
      Consideration. If holders of Common Stock are given any choice as to the
      securities, cash or property to be received in a Fundamental Transaction, then
      the Holder shall be given the same choice as to the Alternate Consideration
      it
      receives upon any exercise of this Warrant following such Fundamental
      Transaction. At the Holder's option and request, any successor to the Company
      or
      surviving entity in such Fundamental Transaction shall, either (1) issue to
      the
      Holder a new warrant substantially in the form of this Warrant and consistent
      with the foregoing provisions and evidencing the Holder's right to purchase
      the
      Alternate Consideration for the aggregate Exercise Price upon exercise thereof,
      or (2) purchase the Warrant from the Holder for a purchase price, payable in
      cash within five Trading Days after such request (or, if later, on the effective
      date of the Fundamental Transaction), equal to the Black Scholes value of the
      remaining unexercised portion of this Warrant on the date of such request.
      The
      terms of any agreement pursuant to which a Fundamental Transaction is effected
      shall include terms requiring any such successor or surviving entity to comply
      with the provisions of this paragraph (b) and insuring that the Warrant (or
      any
      such replacement security) will be similarly adjusted upon any subsequent
      transaction analogous to a Fundamental Transaction.

     

    (c) Number
      of
      Warrant Shares. Simultaneously with any adjustment to the Exercise Price
      pursuant to this Section 2, the number of Warrant Shares that may be purchased
      upon exercise of this Warrant shall be increased or decreased proportionately,
      so that after such adjustment the aggregate Exercise Price payable hereunder
      for
      the adjusted number of Warrant Shares shall be the same as the aggregate
      Exercise Price in effect immediately prior to such adjustment.

     

    (d) Notice
      of
      Adjustments. Upon the occurrence of each adjustment pursuant to this Section
      2,
      the Company at its expense will promptly compute such adjustment in accordance
      with the terms of this Warrant and prepare a certificate setting forth such
      adjustment, including a statement of the adjusted Exercise Price and adjusted
      number or type of Warrant Shares or other securities issuable upon exercise
      of
      this Warrant (as applicable), describing the transactions giving rise to such
      adjustments and showing in detail the facts upon which such adjustment is based.
      Upon written request, the Company will promptly deliver a copy of each such
      certificate to the Holder and to the Company's Transfer Agent.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (e) Notice
      of
      Corporate Events. If the Company (i) declares a dividend or any other
      distribution of cash, securities or other property in respect of its Common
      Stock, including without limitation any granting of rights or warrants to
      subscribe for or purchase any capital stock of the Company or any Subsidiary,
      (ii) authorizes or approves, enters into any agreement contemplating or solicits
      stockholder approval for any Fundamental Transaction or (iii) authorizes the
      voluntary dissolution, liquidation or winding up of the affairs of the Company,
      then the Company shall deliver to the Holder a notice describing the material
      terms and conditions of such transaction (but only to the extent such disclosure
      would not result in the dissemination of material, non-public information to
      the
      Holder) at least 10 calendar days prior to the applicable record or effective
      date on which a Person would need to hold Common Stock in order to participate
      in or vote with respect to such transaction, and the Company will take all
      steps
      reasonably necessary in order to insure that the Holder is given the practical
      opportunity to exercise this Warrant prior to such time so as to participate
      in
      or vote with respect to such transaction; provided, however, that the failure
      to
      deliver such notice or any defect therein shall not affect the validity of
      the
      corporate action required to be described in such notice.

     

    (f) Other
      than in connection with the Excepted Issuances (as hereinafter defined) and
      prior to the end of fiscal year 2008, if the Company shall offer, issue or
      agree
      to issue any common stock to any person or entity at a price per share which
      shall be less than the Exercise Price, without the consent of each Holder,
      then
      the Company shall issue, for each such occasion, additional shares of Common
      Stock to each Holder so that the average per share purchase price of the Shares
      issued to the Purchasers (of only the Warrant Shares still owned by the Holder)
      is equal to such other lower price per share and the Exercise Price shall
      automatically be adjusted as provided herein. The delivery to the Holders of
      the
      additional shares of Common Stock shall be no later than the closing date of
      the
      transaction giving rise to the requirement to issue additional shares of Common
      Stock. The Holders are granted the registration rights described in the
      Registration Rights Agreement in relation to such additional shares of Common
      Stock, except that the Filing Date and Effective Date vis-a-vis such additional
      Shares shall be the forty-fifth (45th) day after the closing date giving rise
      to
      the requirement to issue the additional shares of Common Stock.

     

    Excepted
      Issuances shall include the Company’s issuance of securities (i) as full or
      partial consideration in a strategic merger, acquisition, consolidation or
      purchase of substantially all of the securities or assets of a corporation
      or
      other entity which holders of such securities or debt are not at any time
      granted registration rights, (ii) in connection with strategic license
      agreements and other partnering arrangements so long as such issuances are
      not
      for the purpose of raising capital which holders of such securities or debt
      are
      not at any time granted registration rights, (iii) the issuances or grants
      of
      options to purchase Common Stock pursuant to stock option plans and employee
      stock purchase plans, (iv) as a result of the exercise of warrants pursuant
      to
      any other Agreements or obligations entered into by the Company prior to the
      Issuance Date of this Warrant, (v) as a result of underwritten offerings
      conducted by the Company, (vi) as payment of any liquidated damages or other
      damages pursuant to the Transaction Documents, and (vii) as has been described
      in the Reports or Other Written Information filed with the Commission not later
      than three Business Days before the Issuance Date.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    3. Common
      Stock Legend. The Holder acknowledges and agrees that the shares of Common
      Stock
      of the Company, and, until such time as the Common Stock has been registered
      under the 1933 Act and sold in accordance with an effective registration
      statement, or exemption from registration, certificates and other instruments
      representing any of the Common Stock shall bear a restrictive legend in
      substantially the following form and a stop-transfer order may be placed against
      transfer of any such securities:

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
      SECURITIES AND EXCHANGE COMMISSION NOR THE SECURITIES COMMISSION OF ANY STATE
      IN
      RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
      SOLD
      EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
      ACT
      OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
      TO,
      THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
      TO
      THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY. THESE SHARES MAY BE PLEDGED IN CONNECTION WITH A
      BONA
      FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SHARES.

     

    4. Warrant
      Agent. The Company may, by written notice to the Holder of the Warrant, appoint
      an agent (a "Warrant Agent") for the purpose of issuing Common Stock issuable
      on
      the exercise of this Warrant.

     

    5. Miscellaneous.
      The Warrant Shares shall be accorded the registration rights set forth in the
      Registration Rights Agreement.

     

    This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. This Warrant shall
      be construed and enforced in accordance with and governed by the laws of the
      State of New York, without giving effect to the conflicts of laws principles
      thereof.

     

    This
      Warrant and the legal relations among the parties hereto shall be governed
      by
      and construed in accordance with the laws of the United States of America and
      State of New York, regardless of the laws that might otherwise govern under
      applicable choice-of-law principles. The parties hereby irrevocably submit
      to
      the non-exclusive jurisdiction of the state and federal courts located in the
      State and County of New York for purposes of all legal proceedings arising
      out
      of or relating to this Common Stock Purchase Warrant or the transactions
      contemplated hereby. The parties hereby irrevocably waive, to the fullest extent
      permitted by applicable law, the right to trial by jury, any objection which
      they may now or hereafter have to the laying of venue of any such proceeding
      brought in such a court and any claim that any such proceeding brought in such
      a
      court has been brought in an inconvenient forum.

     

    [THE
      NEXT
      PAGE IS THE SIGNATURE PAGE]

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above.

     

     

    
      	 	
              China
                Housing and Land Development, Inc.

              

              By:
                ___________________

              Name:
                

              Title:
                Chief Executive Officer and
                Chairman

            

    

    

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    Exhibit
      A

     

    FORM
      OF
      SUBSCRIPTION

    (to
      be
      signed only on exercise of Warrant)

     

    TO:
      CHINA
      HOUSING AND LAND DEVELOPMENT, INC.

     

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (No.A-1), hereby irrevocably elects to purchase:

     

    _____
      Shares of the Common Stock covered by such Warrant.

     

    The
      undersigned herewith makes payment of the full purchase price for such shares
      at
      the price per share provided for in such Warrant. Such payment takes the form
      of: 

     

    $_________
      in lawful money of the United States.

     

    The
      undersigned requests that the certificates for such shares be issued in the
      name
      of, and delivered to whose address is

     

    By
      its
      delivery of this Subscription Form, the undersigned represents and warrants
      to
      the Company that in giving effect to the exercise evidenced hereby the Holder
      will not beneficially own in excess of the number of shares of Common Stock
      (determined in accordance with Section 13(d) of the Securities Exchange Act
      of
      1934) permitted to be owned under Section 3 of this Warrant to which this notice
      relates.

     

    Dated:

     

    (Address)

     

    
      
         

      

      
        8

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