Document:

ESCROW
      AGREEMENT

    

    This
      Escrow Agreement, dated as of October 26, 2007 (this “Agreement”),
      is
      entered into by and among Fushi International, Inc., a corporation organized
      under the laws of the State of Nevada (the “Company”),
      Roth
      Capital Partners, LLC, a California limited liability company (the “Placement
      Agent”)
      and
      Tri-State Title & Escrow, LLC, with its principal offices located at 360
      Main Street, P.O. Box 391, Washington, VA 22747 (the “Escrow
      Agent”).
      The
      Placement Agent and the Company are sometimes referred to herein as the
      Escrowing Parties.

    

    WITNESSETH:

    

    WHEREAS,
      the Company, with the assistance of the Placement Agent, proposes to raise
      approximately THIRTY MILLION DOLLARS ($30,000,000) through a private offering
      of
      its common stock pursuant to Regulation D of the Securities Act of 1933, as
      amended (the “Offering”
and
      the
“Act,”
      respectively) on a “best efforts” basis pursuant to a Securities Purchase
      Agreement between the Company and the investors in such Offering (the
“Purchase
      Agreement”),
      such
      Offering to be made solely to accredited investors, as that term is defined
      in
      the Act; and

    

    WHEREAS,
      the Company and the Placement Agent desire to deposit all proceeds received
      from
      subscriptions for the common stock and warrant exercises in the Offering (the
      “Escrowed
      Funds”)
      with
      the Escrow Agent, to be held in escrow until joint written instructions are
      received by the Escrow Agent from the Company and the Placement Agent, from
      time
      to time, at which time the Escrow Agent will disburse the Escrowed Funds in
      accordance with the instructions on Exhibit
      C
      hereto(a
“Closing”);
      

    

    WHEREAS,
      capitalized terms used and not otherwise defined herein that are defined in
      the
      Purchase Agreement will have the respective meanings given such terms in the
      Purchase Agreement; and

    

    WHEREAS,
      Escrow Agent is willing to hold the Escrowed Funds in escrow subject to the
      terms and conditions of this Agreement.

    

    NOW,
      THEREFORE, in consideration of the mutual promises herein contained and
      intending to be legally bound, the parties hereby agree as follows:

    

    1.
      Appointment
      of Escrow Agent.
      The
      Company and the Placement Agent hereby appoint Escrow Agent as escrow agent
      in
      accordance with the terms and conditions set forth herein and the Escrow Agent
      hereby accepts such appointment.

    

    2.
      Delivery
      of the Escrowed Funds. 

    

    2.1
       The
      Placement Agent and/or the Company will direct subscribers in the Offering
      to
      deliver the Escrowed Funds to the Escrow Agent, addressed to following account
      of the Escrow Agent:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    Account
      Name: Tri-State Title & Escrow, LLC

    Bank:
      Access National Bank, Reston, VA 20191

    Account
      No.: 2681757

    ABA
      No:
      .056009039 

     

    2.2 (a)
      All
      Subscribers’ checks shall be made payable to “TRI-STATE TITLE & ESCROW, LLC”
and shall be delivered to the Escrow Agent at the address set forth on
Exhibit
      A
      hereto
      and shall be
      accompanied by a written account of subscription in the form attached hereto
      as
Exhibit
      B
      (the “Subscription
      Information”)
      The
      Escrow
      Agent shall, upon receipt of a Subscription, together with the related
      Investment Amount therefore, deposit the related Investment Amount of said
      Subscription in the Escrow Account for collection; or (b) all funds to be wired
      shall be wired to the account set forth in Section 2.1 above and written
      Subscription Information shall be faxed or emailed to the Escrow Agent in
      accordance with the information provided on Exhibit
      A.

    

    2.3 Any
      checks which are received by Escrow Agent that are made payable to a party
      other
      than the Escrow Agent shall be returned directly to the Placement Agent together
      with any documents delivered therewith. Simultaneously with each deposit, the
      Placement Agent shall provide the Escrow Agent with the Subscription Information
      to include the name, address and taxpayer identification number of each
      Subscriber and of the aggregate principal amount of Securities subscribed for
      by
      such Subscriber. The Escrow Agent is not obligated, and may refuse, to accept
      checks that are not accompanied by a Subscription containing the requisite
      information.

    

    2.4 In
      the
      event a wire transfer is received by the Escrow Agent and the Escrow Agent
      has
      not received Subscription Information, the Escrow Agent shall notify the
      Placement Agent. If the Escrow Agent does not receive the Subscription
      Information by such Subscriber prior to close of business on the third business
      day (days other than a Saturday or Sunday or other day on which the Escrow
      Agent
      is not open for business in the State of Virginia) after notifying Placement
      Agent of receipt of said wire, the Escrow Agent shall return the funds to the
      prospective purchaser.

    

    3.
      Escrow
      Agent to Hold and Disburse Escrowed Funds.
      The
      Escrow Agent will hold and disburse the Escrowed Funds received by it pursuant
      to the terms of this Escrow Agreement, as follows: 

    

    3.1 Upon
      receipt of joint instructions from the Company and the Placement Agent, in
      substantially the form of Exhibit
      C
      hereto,
      the Escrow Agent shall release the Escrowed Funds as directed in such
      instructions. 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.2 In
      the
      event this Agreement, the Escrowed Funds or the Escrow Agent becomes the subject
      of litigation, or if the Escrow Agent shall desire to do so for any other
      reason, the Company authorizes the Escrow Agent, at its option, to deposit
      the
      Escrowed Funds with the clerk of the court in which the litigation is pending,
      or a court of competent jurisdiction if no litigation is pending, and thereupon
      the Escrow Agent shall be fully relieved and discharged of any further
      responsibility with regard thereto. The Company also authorizes the Escrow
      Agent, if it receives conflicting claims to the Escrow Funds, is threatened
      with
      litigation or if the Escrow Agent shall desire to do so for any other reason,
      to
      interplead all interested parties in any court of competent jurisdiction and
      to
      deposit the Escrowed Funds with the clerk of that court and thereupon the Escrow
      Agent shall be fully relieved and discharged of any further responsibility
      hereunder to the parties from which they were received.

    

    3.3 In
      the
      event that the Escrow Agent does not receive any instructions by a date that
      is
      90 days from the date of this Agreement (the “Escrow
      Termination Date”),
      all
      Escrowed Funds shall be returned to the parties from which they were received,
      without interest thereon or deduction therefrom.

    

    4.
       Exculpation
      and Indemnification of Escrow Agent.

    

    4.1
       The
      Escrow Agent shall haven no duties or responsibilities other than those
      expressly set forth herein. The Escrow Agent shall have no duty to enforce
      any
      obligation of any person to make any payment or delivery, or to direct or cause
      any payment or delivery to be made, or to enforce any obligation of any person
      to perform any other act. The Escrow Agent shall be under no liability to the
      other parties hereto or anyone else, by reason of any failure on the part of
      any
      party hereto or any maker, guarantor, endorser or other signatory of a document
      or any other person, to perform such person’s obligations under any such
      document. Except for amendments to this Escrow Agreement referenced below,
      and
      except for written instructions given to the Escrow Agent by the Escrowing
      Parties relating to the Escrowed funds, the Escrow Agent shall not be obligated
      to recognize any agreement between or among any of the Escrowing Parties,
      notwithstanding that references hereto may be made herein and whether or not
      it
      has knowledge thereof. 

    

    4.2 The
      Escrow Agent shall not be liable to the Company, the Placement Agent or to
      anyone else for any action taken or omitted by it, or any action suffered by
      it
      to be taken or omitted, in good faith and acting upon any order, notice, demand,
      certificate, opinion or advice of counsel (including counsel chosen by the
      Escrow Agent), statement, instrument, report, or other paper or document (not
      only as to its due execution and the validity and effectiveness of its
      provisions, but also as to the truth and acceptability of any information
      therein contained), which is believed by the Escrow Agent to be genuine and
      to
      be signed or presented by the proper person or persons. The Escrow Agent shall
      not be bound by any of the terms thereof, unless evidenced by written notice
      delivered to the Escrow Agent signed by the proper party or parties and, if
      the
      duties or rights of the Escrow Agent are affected, unless it shall give its
      prior written consent thereto.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    4.3 The
      Escrow Agent shall not be responsible for the sufficiency or accuracy of the
      form, or of the execution, validity, value or genuineness of, any document
      or
      property received, held or delivered to it hereunder, or of any signature or
      endorsement thereon, or for any lack of endorsement thereon, or for any
      description therein; nor shall the Escrow Agent be responsible or liable to
      the
      Company, the Placement Agent or to anyone else in any respect on account of
      the
      identity, authority or rights, of the person executing or delivering or
      purporting to execute or deliver any document or property or this Escrow
      Agreement. The Escrow Agent shall have no responsibility with respect to the
      use
      or application of the Escrowed Funds pursuant to the provisions
      hereof.

    

    4.4 The
      Escrow Agent shall have the right to assume, in the absence of written notice
      to
      the contrary from the proper person or persons, that a fact or an event, by
      reason of which an action would or might be taken by the Escrow Agent, does
      not
      exist or has not occurred, without incurring liability to the Company, the
      Placement Agent or to anyone else for any action taken or omitted to be taken
      or
      omitted, in good faith and in the exercise of its own best judgment, in reliance
      upon such assumption.

    

    4.5 To
      the
      extent that the Escrow Agent becomes liable for the payment of taxes, including
      withholding taxes, in respect of income derived from the investment of the
      Escrowed Funds, or any payment made hereunder, the Escrow Agent may pay such
      taxes; and the Escrow Agent may withhold from any payment of the Escrowed Funds
      such amount as the Escrow Agent estimates to be sufficient to provide for the
      payment of such taxes not yet paid, and may use the sum withheld for that
      purpose. The Escrow Agent shall be indemnified and held harmless against any
      liability for taxes and for any penalties in respect of taxes, on such
      investment income or payments in the manner provided in Section 4.6

    

    4.6 The
      Escrow Agent will be indemnified and held harmless by the Company from and
      against all expenses, including all counsel fees and disbursements, or loss
      suffered by the Escrow Agent in connection with any action, suit or proceedings
      involving any claim, or in connection with any claim or demand, which in any
      way, directly or indirectly, arises out of or relates to this Escrow Agreement,
      the services of the Escrow Agent hereunder, except for claims relating to gross
      negligence by Escrow Agent or breach of this Escrow Agreement by the Escrow
      Agent, or the monies or other property held by it hereunder. Promptly after
      the
      receipt of the Escrow Agent of notice of any demand or claim or the commencement
      of any action, suit or proceeding, the Escrow Agent shall, if a claim in respect
      thereof is to be made against an Escrowing Party, notify each of them thereof
      in
      writing, but the failure by the Escrow Agent to give such notice shall not
      relieve any such party from any liability which an Escrowing Party may have
      to
      the Escrow Agent hereunder. Notwithstanding any obligation to make payments
      and
      deliveries hereunder, the Escrow Agent may retain and hold for such time as
      it
      deems necessary such amount of monies or property as it shall, from time to
      time, in its sole discretion, seem sufficient to indemnify itself for any such
      loss or expense and for any amounts due it under Section 7. 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    4.7 For
      purposes hereof, the term “expense or loss” shall include all amounts paid or
      payable to satisfy any claim, demand or liability, or in settlement of any
      claim, demand, action, suit or proceeding settled with the express written
      consent of the Escrow Agent, and all costs and expenses, including, but not
      limited to, counsel fees and disbursements, paid or incurred in investigating
      or
      defending against any such claim, demand, action, suit or proceeding.

    

    5.
       Termination
      of Agreement and Resignation of Escrow Agent. 

    

    5.1 This
      Escrow Agreement shall terminate upon disbursement of all of the Escrowed Funds,
      provided that the rights of the Escrow Agent and the obligations of the Company
      and the Placement Agent under Section 4 shall survive the termination
      hereof.

    

    5.2 The
      Escrow Agent may resign at any time and be discharged from its duties as Escrow
      Agent hereunder by giving the Company and the Placement Agent at least five
      (5)
      business days written notice thereof (the “Notice
      Period”).
      As
      soon as practicable after its resignation, the Escrow Agent shall, if it
      receives notice from the Company and the Placement Agent within the Notice
      Period, turn over to a successor escrow agent appointed by the Company and
      the
      Placement Agent all Escrowed Funds (less such amount as the Escrow Agent is
      entitled to retain pursuant to Section 7) upon presentation of the document
      appointing the new escrow agent and its acceptance thereof. If no new agent
      is
      so appointed within the Notice Period, the Escrow Agent shall return the
      Escrowed Funds to the parties from which they were received without interest
      or
      decoction. 

    

    6.
       Form
      of Payments by Escrow Agent.

    

    6.1 Any
      payments of the Escrowed Funds by the Escrow Agent pursuant to the terms of
      this
      Escrow Agreement shall be made by wire transfer unless directed to be made
      by
      check by the Escrowing Parties.

    

    6.2
       All
      amounts referred to herein are expressed in United States Dollars and all
      payments by the Escrow Agent shall be made in such dollars.

    

    7. Compensation.
      Escrow
      Agent shall be entitled to the following compensation from the
      Company:

     

    7.1 Documentation
      Fee: The
      Company shall pay a documentation fee to the Escrow Agent of $4,500, out of
      the
      first Closing. 

    

    7.2 Interest:
      The
      Escrowed Fund shall accrue interest at the available rate obtained by the Escrow
      Agent with respect to the period during which such funds are held in the Escrow
      Agent’s account set forth in Section 2.1 above. In connection with a closing or
      a return of the funds, the party or parties receiving the Escrowed Funds shall
      be paid Accrued Interest of 2.5% per annum on the aggregate amount of the
      Escrowed Funds in the Escrow Agent’s account on the date of such Closing or
      return of funds and the balance of Accrued Interest, if any, shall be retained
      by the Escrow Agent. 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    

    8. Notices.
      All
      notices, requests, demands, and other communications provided herein shall
      be in
      writing, shall be delivered by hand or by first-class mail, shall be deemed
      given when received and shall be addressed to parties hereto at their respective
      addresses first set forth on Exhibit
      A
      hereto.

    

    9. Further
      Assurances From
      time
      to time on and after the date hereof, the Company and the Placement Agent shall
      deliver or cause to be delivered to the Escrow Agent such further documents
      and
      instruments and shall do and cause to be done such further acts as the Escrow
      Agent shall reasonably request (it being understood that the Escrow Agent shall
      have no obligation to make any such request) to carry out more effectively
      the
      provisions and purposes of this Escrow Agreement, to evidence compliance
      herewith or to assure itself that it is protected in acting
      hereunder.

    

    10. Consent
      to Service of Process 
      The
      Company and the Placement Agent hereby irrevocably consent to the jurisdiction
      of the courts of the State of Virginia and of any Federal court located in
      such
      state in connection with any action, suit or proceedings arising out of or
      relating to this Escrow Agreement or any action taken or omitted hereunder,
      and
      waives personal service of any summons, complaint or other process and agrees
      that the service thereof may be made by
      certified or registered mail directed to it at the address listed on
Exhibit
      A
      hereto.

    

    11. Miscellaneous

    

    11.1 This
      Escrow Agreement shall be construed without regard to any presumption or other
      rule requiring construction against the party causing such instrument to be
      drafted. The terms “hereby,” “hereof,” “hereunder,” and any similar terms, as
      used in this Escrow Agreement, refer to the Escrow Agreement in its entirety
      and
      not only to the particular portion of this Escrow Agreement where the term
      is
      used. The word “person” shall mean any natural person, partnership, corporation,
      government and any other form of business of legal entity. All words or terms
      used in this Escrow Agreement, regardless of the number or gender in which
      they
      were used, shall be deemed to include any other number and any other gender
      as
      the context may require. This Escrow Agreement shall not be admissible in
      evidence to construe the provisions of any prior agreement. 

    

    11.2 This
      Escrow Agreement and the rights and obligations hereunder of the Company and
      Placement Agent may not be assigned. This Escrow Agreement and the rights and
      obligations hereunder of the Escrow Agent may be assigned by the Escrow Agent.
      This Escrow Agreement shall be binding upon and inure to the benefit of each
      party’s respective successors, heirs and permitted assigns. No other person
      shall acquire or have any rights under or by virtue of this Escrow Agreement.
      This Escrow Agreement may not be changed orally or modified, amended or
      supplemented without an express written agreement executed by the Escrow Agent,
      the Company and the Placement Agent. This Escrow Agreement is intended to be
      for
      the sole benefit of the parties hereto and their respective successors, heirs
      and permitted assigns, and none of the provisions of this Escrow Agreement
      are
      intended to be, nor shall they be construed to be, for the benefit of any third
      person.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    11.3 This
      Escrow Agreement shall be governed by, and construed in accordance with, the
      internal laws of the State of Virginia. The representations and warranties
      contained in this Escrow Agreement shall survive the execution and delivery
      hereof and any investigations made by any party. The headings in this Escrow
      Agreement are for purposes of reference only and shall not limit or otherwise
      affect any of the terms thereof. 

    

    12.
       Execution
      of Counterparts. 
      This
      Escrow Agreement may be executed in a number of counterparts, by facsimile,
      each
      of which shall be deemed to be an original as of those whose signature appears
      thereon, and all of which shall together constitute one and the same instrument.
      This Escrow Agreement shall become binding when one or more of the counterparts
      hereof, individually or taken together, are signed by all the
      parties.

    

    IN
      WITNESS WHEREOF, the parties have executed and delivered this Escrow Agreement
      on the day and year first above written.

     

    
      	ESCROW AGENT:	 	 	 
	 	 	 	 
	TRI-STATE TITLE & ESCROW, LLC	 	 	 
	 	 	 	 
	By:  /s/ Guy Turner	 	 	 
	
              
                

              

              Name:
Guy
                Turner

            	 	 	
            
	
              Title:
                President

            	 	 	 

       

      
        	FUSHI INTERNATIONAL, INC.	 	 	 
	 	 	 	 
	By: /s/ Li Fu	 	 	 
	
                
                  

                

                Name:
                  Li Fu

              	 	 	
              
	
                Title:
                  CEO

              	 	 	 

      

       

      
        	
                ROTH
                  CAPITAL PARTNERS, LLC

              	 	 	 
	 	 	 	 
	By: /s/ Aaron
                M. Gurewitz	 	 	 
	
                
                  

                

                Name:
                  Aaron M. Gurewitz

              	 	 	
              
	
                Title:
                  Managing Director, Equity Capital Market

              	 	 	 

      

    

    
 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A  

    

    PARTIES
      TO AGREEMENT

    

    Tri-State
      Title & Escrow, LLC

    360
      Main
      Street

    P.O.
      Box
      391 

    Washington,
      VA 22747

    Attention:
      Johnnie L. Zarecor

    Telephone:
      (540) 675-2155

    Fax: (540)
      675-3155

    Email
      escrow@tristatetitle.net

    

    Fushi
      International, Inc.

    1
      Shuang
      Qiang Road 

    Jinzhou,
      Dalian 116100

    People's
      Republic of China

    Facsimile:
      [ ]

    Attention:
      President

    

    ROTH
      CAPITAL PARTNERS, LLC

     

    
      
        	
                Address:

              	
                24
                  Corporate Plaza

              
	 	
                Newport
                  Beach, CA 92660

              
	
                Attention:

              	
                Aaron
                  Gurewitz

              
	
                Tel:

              	
                (949)
                  720-5703

              
	
                Fax:

              	
                (949)
                  720-7227

              
	
                Email:

              	
                agurewitz@roth.com

              

      

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B

     

      SUBCRIPTION
      INFORMATION

     

    
      
        	 	
                Name
                  of Subscriber

              	 	
                ________________________________

              
	 	 	 	 
	 	
                Address
                  of Subscriber

              	 	
                ________________________________

              
	 	 	 	 
	 	
                 

              	 	
                ________________________________

              
	 	 	 	 
	
                 

              	 	 	
                ________________________________

              
	 	 	 	 
	 	
                $
                  Amount of Securities

              	 	 
	 	
                Subscribed

              	 	
                ________________________________

              
	 	 	 	 
	 	
                Subscription
                  Amount

              	 	 
	 	
                Submitted
                  Herewith

              	 	
                ________________________________

              
	 	 	 	 
	 	
                Taxpayer
                  ID Number/ 

              	 	 
	 	
                Social
                  Security Number

              	 	
                ________________________________

              

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      C  

    

    DISBURSEMENT
      REQUEST

    

    Pursuant
      to that certain Escrow Agreement dated effective as of October 26, 2007 by
      and
      among Fushi International, Inc., Roth Capital Partners, LLC and Tri-State Title
      & Escrow, LLC, Fushi International, Inc. and Roth Capital Partners, LLC
      hereby requests disbursement of funds in the amount and manner described below
      from account number 2681757,
      styled
      Tri-State Title & Escrow, LLC Escrow Account.

    

    

      
        	
                Please
                  disburse to:

              	 	
                ________________________________

              
	 	 	 
	
                Amount
                  to disburse:

              	 	
                ________________________________

              
	 	 	 
	
                Form
                  of distribution:

              	 	
                ________________________________

              
	 	 	 
	
                Payee:

              	 
	
                Name:

              	
                ________________________________

              
	
                Address:

              	
                ________________________________

              
	
                City/State:

              	
                ________________________________

              
	
                Zip:

              	
                ________________________________

              
	 	 	 
	 	 	 
	 	 	 
	
                Please
                  disburse to:

              	 	
                ________________________________

              
	 	 	 
	
                Amount
                  to disburse:

              	 	
                ________________________________

              
	 	 	 
	
                Form
                  of distribution:

              	 	
                ________________________________

              
	 	 	 
	
                Payee:

              	 
	
                Name:

              	
                ________________________________

              
	
                Address:

              	
                ________________________________

              
	
                City/State:

              	
                ________________________________

              
	
                Zip:

              	
                ________________________________

              

      

    

    

    Subscriptions
      Accepted From

    

    Subscriber                                                          
      Amount

    ___________________________  __________________________

    ___________________________  __________________________

    ___________________________  __________________________

    ___________________________  __________________________

    

    Total:                  
       __________________________

    

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    

    Statement
      of event or condition which calls for this request for
      disbursement:

    _______________________________________________________________

    _______________________________________________________________

    _______________________________________________________________

     

    FUSHI
      INTERNATIONAL, INC. 

    

    

    By:
      _________________________

     

    Name:
      ________________________

     

    Title:
      _________________________ 

     

    Date:
      _________________________

    

    

    ROTH
      CAPITAL PARTNERS, LLC

    

    By:
      __________________________

     

     

    Name:
      ________________________

     

    Title:
      _________________________

     

    Date:
      _________________________

    

    
      
        
        

      

      
        11WAIVER
      AND CONSENT

    

    This
      Waiver and Consent (the “Waiver”)
      is
      made as of October 26, 2007, by and among Fushi International Inc., a Nevada
      corporation (the “Company”),
      Fushi
      Holdings, Inc. (“FHI”),
      Fushi International (Dalian) Bimetallic Cable Co., Ltd., (“WFOE”),
      and Dalian Fushi Bimetallic Manufacturing Co., Ltd. (“Dalian
      Fushi”,
      and together with the Company, FHI, the WFOE and any other subsidiary (the
      “Group
      Companies”),
      Mr. Fu
      Li (the “Controlling
      Shareholder”)
      (c)
      Mr. Fu Li, Mr. Mathus Yang Yue, and Mr. Chris Wang Wenbing, (together with
      Mr.
      Fu Li and Mr. Mathus Yang Yue, the “Senior
      Management”)
      and Citadel
      Equity Fund, Ltd (the “Purchaser”).

     

    RECITALS
      

     

    WHEREAS,
      on January 19, 2007, the Company, the Group Companies, the Controlling
      Shareholder, and the Purchaser entered into a Note Purchase Agreement (the
      “Note
      Purchase Agreement”),
      pursuant to which, among other things, the Company issued to the Purchaser
      (x)
      the Company’s Guaranteed Senior Secured Floating Rate Notes due 2012 in the
      aggregate principal amount of $40,000,000 (the “HY
      Notes”)
      and (y) the Company’s 3% Senior Secured Convertible Notes due 2012 in the
      aggregate principal amount of $20,000,000 (the “Convertible
      Notes”,
      and together with the HY Notes, the “Notes”)
      convertible into shares of common stock of the Company, par value $.006 per
      share (the “Common
      Stock”),
      at an initial conversion price of $7 per share;
      

    

    WHEREAS,
      in connection Note Purchase Agreement, the Company, the Group Companies, the
      Controlling Shareholder, Senior Management and the Purchaser entered into a
      Investor Rights Agreement as of January 19, 2007 (the “Investor
      Rights Agreement”),
      

    

    WHEREAS,
      pursuant to Section 3 of the Investor Rights Agreement if the
      Company proposes to issue or sell any securities to a purchaser that is not
      an
      affiliate of the Company, the Company is required to (not less than fifteen
      (15)
      business days prior to the consummation of such issuance or sale) offer such
      securities to Citadel by sending written notice (an “Issuance
      Notice”)
      to Citadel, which states (a)
      the identity of the Proposed Third Party Purchaser, (b) a description of the
      securities to be issued or sold, including detailed terms of such securities,
      (c) the amount of the securities proposed to be issued to the Proposed Third
      Party Purchaser (the “Offered
      New Securities”);
      (d) the proposed purchase price for the Offered Securities (the “Issuance
      Price”);
      and (e) the terms and conditions of such proposed sale.
      The Issuance Notice is also required to certify that the Company has received
      a
      firm offer from the Proposed Third Party Purchaser and in good faith believes
      a
      binding agreement for the Offered New Securities is obtainable on the terms
      set
      forth in the Issuance Notice. 

    

    WHEREAS,
      the
      Company desires to enter into a Securities Purchase Agreement with a number
      of
      investors (the “Investors”)
      pursuant to which the Company will issue up to an aggregate of
      2,786,000 million
      shares of its common stock to the Investors for an aggregate purchase price
      of
      up to $39,004,000.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      in connection with the Securities Purchase Agreement the Company proposes to
      enter into a Registration Rights Agreement (a copy of which is attached hereto)
      pursuant to which the Company is agreeing to register the shares of common
      stock
      being purchased by the Investors. 

    

    WHEREAS,
      the Purchaser is willing to waive its right of first refusal set forth in
      Section 3 of the Securities Purchase Agreement on condition that the Company
      grant the Purchaser the same registration rights afforded to the Investors
      in
      the Registration Rights Agreement and execute and deliver to the Purchaser
      the
      Registration Rights Agreement. 

     

    NOW,
      THEREFORE, in consideration of the mutual terms, conditions and other agreements
      set forth herein, the parties hereto hereby agree as follows:

     

    Section
      1. Waiver and Consent. Simultaneously
      with the execution and delivery by the Company to the holders of the Convertible
      Notes of the Registration Rights Agreement, Purchaser hereby waives (the
“Waiver”)
      the
      application of and Purchaser’s rights under Section 3 of the Investors’ Rights
      Agreement solely with respect to the issuance of the common stock to the
      Investors contemplated by the Securities Purchase Agreement. For the avoidance
      of doubt, the execution and delivery of the Registration Rights Agreement shall
      be a condition precedent to the Waiver.

    

    Section
      2. Effect on Transaction Documents.
      Except
      as expressly set forth above, all of the terms and conditions of the Investor
      Rights Agreement and any agreements, documents and instruments signed by the
      Company and any Purchaser in connection therewith shall continue in full force
      and effect after the execution of this Waiver and shall not be in any way
      changed, modified or superseded by the terms set forth herein. 

    

    Section
      3. Miscellaneous.
      

     

     

    
      	 	
              a.

            	
              Amendments
                and Waivers.
                The provisions of this Waiver, including the provisions of this sentence,
                may not be amended, modified or supplemented, and waivers or consents
                to
                departures from the provisions hereof may not be given, unless the
                same
                shall be in writing and signed by the Company and the Purchaser.
                

            

    

     

    
      	 	
              b.

            	
              Notices.
                Any and all notices or other communications or deliveries required
                or
                permitted to be provided hereunder shall be delivered as set forth
                in the
                Investor Rights Agreement. 

            

    

     

    
      	 	
              c.

            	
              Successors
                and Assigns.
                This Waiver shall inure to the benefit of and be binding upon the
                successors and permitted assigns of each of the parties.
                

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              d.

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

            

    

     

    
      	 	
              e.

            	
              Governing
                Law.
                All questions concerning the construction, validity, enforcement
                and
                interpretation of this Agreement shall be determined in accordance
                with
                the provisions of the Investor Rights
                Agreement.

            

    

     

    
      	 	
              f.

            	
              Severability.
                If any term, provision, covenant or restriction of this Agreement
                is held
                by a court of competent jurisdiction to be invalid, illegal, void
                or
                unenforceable, the remainder of the terms, provisions, covenants
                and
                restrictions set forth herein shall remain in full force and effect
                and
                shall in no way be affected, impaired or invalidated, and the parties
                hereto shall use their commercially reasonable efforts to find and
                employ
                an alternative means to achieve the same or substantially the same
                result
                as that contemplated by such term, provision, covenant or restriction.
                It
                is hereby stipulated and declared to be the intention of the parties
                that
                they would have executed the remaining terms, provisions, covenants
                and
                restrictions without including any of such that may be hereafter
                declared
                invalid, illegal, void or
                unenforceable.

            

    

     

    
      	 	
              g.

            	
              Headings.
                The headings in this Agreement are for convenience only, do not constitute
                a part of the Agreement and shall not be deemed to limit or affect
                any of
                the provisions hereof.

            

    

    

    [SIGNATURE
      PAGE FOLLOWS]

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned have executed this Wavier and Consent as of the
      day and year written above.

    
       

      
        	 	GROUP
                COMPANIES:
	 	 	 
	 	Fushi International,
                Inc.
	 
 	 
 	 
 
	 	By:  	
                /s/
                  Li
                  Fu

              
	 	
                
Name:
Li
                Fu
	 	Title: CEO

      

       

      
        
          	 	 	 
	 	Fushi Holdings,
                  Inc.
	 
 	 
 	 
 
	 	By:  	
                  /s/
                    Li Fu

                
	
                   

                	
                  
Name:
Li
                  Fu
	 	Title: CEO

        

         

        
          
            	 	 	 
	 	
                    Fushi International (Dalian) Bimetallic
                      

                    Cable Co., Ltd.

                  
	 
 	 
 	 
 
	 	By:  	
                    /s/
                      Li Fu

                  
	
                     

                  	
                    
Name: Li
                    Fu
	 	Title: CEO

          

           

          
            
              	 	 	 
	 	
                      Dalian Fushi Bimetallic Manufacturing
                        

                      Co., Ltd.

                    
	 
 	 
 	 

	 	By:  	
                      /s/
                        Li Fu

                    
	 	
                      
Name:
                      Li Fu
	 	Title:
                      CEO

            

          

        

      

       

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	CONTROLLING SHAREHOLDER:
	 
 	 
 	 
 
	 	By:  	/s/
              Fu
              Li
	 	
              

            
	 	Mr. Fu Li, as Controlling Shareholder
              

    

    
       

      
        	 	 	 
	 	SENIOR MANAGEMENT:
	 
 	 
 	 
 
	 	By:  	/s/ Fu Li
	 	
                
                  

                

                 

              
	 	
                Mr. Fu Li, as a member of the Senior 

                Management

              

      

      
         

        
          	 	 	 
	 	By:  	
                  /s/
                    Mathus
                    Yang Yue

                
	 	
                  
                    

                  

                  Mr.
                    Mathus Yang Yue 

                
	 	 

        

         

      

    

    
      
        
          	 	 	 
	 	By:  	/s/
                  Chris
                  Wang
	 	
                  
                    

                  

                  Mr.
                    Chris Wang Wenbing 

                
	 	 

        

        

          
            
              
              

            

            
              5

              
                

              

            

            
              
              

            

          

      

    

    Accepted
      and Agreed to:

     

    CITADEL
      EQUITY FUND LTD.

    

    By:
      Citadel Limited Partnership, its Portfolio Manager

    

    By:
      Citadel Investment Group, L.L.C., its General Partner

     

    
      	 	 	 	 
	By: /s/
              Andrew
              Fong	 	 	 
	
              
                

              

              Name:
                ANDREW FONG

            	 	 	
            
	
              Title:
                Authorized Signatory

            	 	 	 

    

     

    
      
        
        

      

      
        6

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