Document:

AMENDED
        AND RESTATED STOCK PURCHASE AGREEMENT
        dated as
        of May 20, 2008 (this "Agreement")
        among
WO
        HING LI (the
        "Seller"),
        and
        the investors listed on the Schedule of Buyers attached hereto (individually,
        a
        "Purchaser"
        and
        collectively, the "Purchasers").

       

      WHEREAS,
        the
        Company and the Purchasers are parties to that certain Stock Purchase Agreement,
        dated as of March 13, 2008 (the Existing SPA").

       

      WHEREAS,
        the
        parties desire to enter into this Agreement, pursuant to which, the Existing
        SPA
        is hereby amended and restated in its entirety as set forth herein.

       

      WHEREAS,
        the
        Seller owns shares of Ordinary Stock, $0.001 par value per share (the
        "Ordinary
        Stock"),
        of
        China Precision Steel, Inc., a Delaware corporation (the "Company")
        and is
        the Chairman of the Board, Chief Executive Officer and President of the
        Company.

       

      WHEREAS,
        the
        Purchasers seek to purchase from the Seller, and the Seller seeks to sell
        to the
        Purchasers, (i) Three Million, Five Hundred Twenty Four Thousand, Eight Hundred
        Ten (3,524,810) shares of Ordinary Stock currently owned by the Seller (the
        "Initial
        Purchased Shares")
        and
        (ii) One Million (1,000,000) shares of Ordinary Stock currently owned by
        the
        Seller (the "Additional
        Purchased Shares",
        and
        together with the Initial Purchased Shares, the "Purchased
        Shares"),
        all
        in accordance with the terms of this Agreement.

       

      NOW,
        THEREFORE,
        in
        consideration of the premises and mutual benefits representations, warranties,
        conditions, covenants and agreements contained herein, the parties hereto
        hereby
        agree as set forth below.

       

      ARTICLE
        I

      PURCHASE
        AND SALE OF THE PURCHASED SHARES

       

      1.1 Purchase
        and Sale of Purchased Shares.

       

      (a)
        Purchase
        and Sale of Initial Purchased Shares.
        Upon
        the terms and subject to the conditions set forth herein, subject to the
        satisfaction (or waiver) of the conditions set forth in Sections 4.1 and
        4.2
        below, the Seller shall sell to each Purchaser, and each Purchaser severally,
        but not jointly, agrees to purchase from the Seller on the Initial Closing
        Date
        (as defined below) the number of Initial Purchased Shares set forth opposite
        such Purchaser's name in column (3) of the Schedule of Buyers attached hereto
        for $3.75 per Initial Purchased Share (the "Initial
        Closing").
        The
        aggregate purchase price for each Purchaser at the Initial Closing shall
        be as
        set forth in column (5) of the Schedule of Buyers (the aggregate of all such
        purchase prices to be paid at the Initial Closing shall be referred to as
        the
        "Initial
        Purchase Price").

       

      (b)
        Purchase
        of Additional Purchased Shares.
        Subject
        to the satisfaction (or waiver) of the conditions set forth in Sections 4.3
        and
        4.4 below, the Seller agrees to sell to each Purchaser, and each Purchaser,
        severally, but not jointly, agrees to purchase from the Seller on the Additional
        Closing Date (as defined below), the number of Additional Purchased Shares
        as
        set forth opposite such Purchaser's name in column (4) of the Schedule of
        Buyers
        attached hereto for $6.70 per Additional Purchased Share (the "Additional
        Closing").
        The
        aggregate purchase price for each Purchaser at the Additional Closing shall
        be
        as set forth in column (6) of the Schedule of Buyers (the aggregate of all
        such
        purchase prices to be paid at the Additional Closing shall be referred to
        as the
        "Additional
        Purchase Price"
        and
        together with the Initial Purchase Price, the "Purchase
        Price").

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (c)
        Closing.
        The
        Initial Closing and the Additional Closing are each referred to in this
        Agreement as a "Closing"
        and the
        Initial Closing Date and the Additional Closing Date are each referred to
        in
        this Agreement as a "Closing Date." Each Closing shall occur on the applicable
        Closing Date at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue,
        New York, New York 10022. Subject to the satisfaction (or waiver by the Seller
        and each Purchaser, as applicable) of the conditions set forth in Sections
        4.1
        and 4.2 below, the date and time of the Initial Closing (the "Initial Closing
        Date")
        shall
        be 10:00 a.m., New York City time, on May 23, 2008 (or such other date as
        is
        mutually agreed to by the Seller and each Purchaser). Subject to the
        satisfaction (or waiver by the applicable Purchasers and the Seller, as
        applicable) of the conditions to the Additional Closing set forth in Section
        4.3
        and 4.4, the date and time of the Additional Closing (the "Additional
        Closing Date")
        shall
        be 10:00 a.m., New York City time, on June 11, 2008 (or such other date(s)
        as is
        mutually agreed to by the Seller and the applicable Purchasers).

       

      (d)
        Form
        of Payment.
        On each
        Closing Date, (i) each Purchaser shall pay its portion of the applicable
        Purchase Price set forth on the Schedule of Buyers as follows: (A) 90% of
        such
        Purchaser's portion of the applicable Purchase Price to the Seller for the
        applicable Purchased Shares to be sold to such Purchaser at such Closing,
        by
        wire transfer of immediately available funds in accordance with the Seller's
        written wire instructions and (B) 10% of such Purchaser's portion of such
        applicable Purchase Price to the Escrow Agent (as defined below) by wire
        transfer of immediately available funds pursuant to the wire instructions
        set
        forth in Section 3.1 of the Escrow Agreement or as otherwise provided by
        the
        Escrow Agent, and (ii) the Seller shall deliver or caused to be delivered
        to each Purchaser the applicable Purchased Shares (for the account of such
        Purchaser as such Purchaser shall instruct) which such Purchaser is then
        purchasing, duly registered in the name of such Purchaser or its
        designee.

       

      (e)
        Definitions.
        As used
        herein, "Trading
        Day"
        means
        any day on which the Ordinary Stock is traded on the Principal Market, or,
        if
        the Principal Market is not the principal trading market for the Ordinary
        Stock,
        then on the principal securities exchange or securities market on which the
        Ordinary Stock is then traded; provided that "Trading Day" shall not include
        any
        day on which the Ordinary Stock is scheduled to trade on such exchange or
        market
        for less than 4.5 hours or any day that the Ordinary Stock is suspended from
        trading during the final hour of trading on such exchange or market (or if
        such
        exchange or market does not designate in advance the closing time of trading
        on
        such exchange or market, then during the hour ending at 4:00:00 p.m., New
        York
        Time). As used herein "Business
        Day"
        means
        any day other than a Saturday, Sunday or other day on which commercial banks
        in
        The city of New York are authorized or required by law to remain
        closed.

       

      ARTICLE
        II

      REPRESENTATIONS
        AND WARRANTIES OF THE SELLER

       

      The
        Seller represents and warrants to the Purchasers as of the date hereof as
        set
        forth below.

      
        
          
          

        

        
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      2.1 Legal
        Capacity 

       

      The
        Seller has the legal capacity and right to execute, deliver, enter into,
        consummate and perform this Agreement.

       

      2.2 Title
        to Purchased Shares. 

       

      The
        Seller is the sole record and beneficial owner of the Purchased Shares to
        be
        sold by it pursuant to this Agreement and owns such shares free from all
        taxes,
        liens, claims, encumbrances and charges. There are no outstanding rights,
        options, subscriptions or other agreements or commitments obligating the
        Seller
        to sell or transfer the Purchased Shares and the Purchased Shares are not
        subject to any lock-up or other restriction on their transfer or on the ability
        of the Purchasers to sell or transfer the Purchased Shares (except that the
        Purchased Shares are restricted securities and may not be sold by the Purchasers
        except pursuant to a registration statement or an exemption from
        registration).

       

      2.3 Authority 

       

      The
        Seller has the requisite power and authority to execute and deliver this
        Agreement and to carry out and perform all of its obligations under the terms
        of
        this Agreement, including, without limitation, the full power and authority
        to
        sell and transfer such Purchased Shares. This Agreement has been duly executed
        and delivered by the Seller, and this Agreement constitutes the valid and
        legally binding obligation of the Seller enforceable against the Seller in
        accordance with its terms, except as such enforceability may be limited by
        general principles of equity or to applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation and other similar laws relating to,
        or
        affecting generally, the enforcement of applicable creditors' rights and
        remedies.

       

      2.4 Accredited
        Investor Status; Affiliate Status.

       

      The
        Seller is an "accredited investor" as that term is defined in Rule 501(a)
        of
        Regulation D under the Securities Act of 1933, as amended (the "Securities
        Act").
        The
        Seller is an "affiliate" of the Company, as such term is defined in Rule
        144 of
        the Securities Act.

       

      2.5 Noncontravention. 

       

      The
        execution, delivery and performance by the Seller of this Agreement and the
        consummation by the Seller of the transactions contemplated hereby will not
        (a)
        conflict with, or constitute a default (or an event which with notice or
        lapse
        of time or both would become a default) under, or give to others any rights
        of
        termination, amendment, acceleration or cancellation of, any agreement,
        indenture or instrument to which the Seller is a party, or (b) result in
        a
        violation of any law, rule, regulation, order, judgment or decree (including
        federal and state securities laws) applicable to the Seller, except for such
        conflicts, defaults, rights or violations which would not, individually or
        in
        the aggregate, reasonably be expected to have a material adverse effect on
        the
        ability of the Seller to perform its obligations hereunder.

      
        
          
          

        

        
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      2.6 Consents. 

       

      Except
        for the approvals required to be obtained by Closing in accordance with Article
        IV, no consent, approval, permit, order, notification or authorization of,
        or
        any exemption from registration, declaration or filing with, any person
        (governmental or private) is required in connection with the execution, delivery
        and performance by the Seller of this Agreement or the consummation by the
        Seller of the transactions contemplated hereby.

       

      2.7 Seller
        Status.

       

      The
        Seller (a) is a sophisticated person with respect to the sale of the Purchased
        Shares; (b) has adequate information concerning the business and financial
        condition of the Company to make an informed decision regarding the sale
        of the
        Purchased Shares; and (c) has independently and without reliance upon the
        Purchasers, and based on such information as the Seller has deemed appropriate,
        made its own analysis and decision to enter into this Agreement, except that
        the
        Seller has relied upon the Purchasers' express representations, warranties
        and
        covenants in this Agreement. The Seller acknowledges that the Purchasers
        have
        not given the Seller any investment advice, credit information or opinion
        on
        whether the sale of the Purchased Shares is prudent.

       

      2.8 Absence
        of Litigation. 

       

      There
        is
        no action, suit, claim, proceeding, inquiry or investigation before or by
        any
        court, public board, government agency or self regulatory organization or
        body
        pending or, to the knowledge of the Seller, threatened against or affecting
        the
        Seller that could reasonably be expected to have a material adverse affect
        on
        the ability of the Seller to perform its obligations hereunder.

       

      2.9 No
        Brokers.

       

      Other
        than Primary Capital, LLC (the "Agent"),
        whose
        fees, in the amount of 1.5% of the aggregate Purchase Price, shall be paid
        by
        the Seller, directly from the Escrow Account when the assets in the Escrow
        Account are otherwise to be released to the Seller, the Seller has taken
        no
        action that would give rise to any claim by any person for brokerage
        commissions, finder's fees or similar payments relating to this Agreement
        or the
        transactions contemplated hereby.

       

      2.10 Outstanding
        Amounts.

       

      The
        Seller has paid any and all amounts and charges due and owing to the Company
        with respect to the Purchased Shares and there are no unpaid amounts or charges
        claimed to be due to the Company from the Seller with respect to the Purchased
        Shares.

       

      2.11 Material
        Nonpublic Information.

       

      The
        Seller confirms that neither it, the Company nor any other person or entity
        acting on either of their behalf has provided any of the Purchasers or their
        respective agents or counsel with any information that constitutes or could
        reasonably be expected to constitute material, non-public information. The
        Seller further confirms that its is not selling the Purchase Shares hereunder
        on
        the basis of material non-public information. The Seller understands and
        confirms that each of the Purchasers will rely on the foregoing representations
        in effecting transactions in securities of the Company. 

      
        
          
          

        

        
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      ARTICLE
        III

      REPRESENTATIONS
        AND WARRANTIES OF THE PURCHASER

       

      Each
        Purchaser severally and not jointly, represents and warrants to the Seller
        as of
        the date hereof as set forth below.

       

      3.1 Organization
        and Existence. 

       

      Such
        Purchaser is an entity duly organized and validly existing under the laws
        of the
        jurisdiction of its formation.

       

      3.2 No
        Public Sale or Distribution. 

       

      Such
        Purchaser is acquiring the Purchased Shares in the ordinary course of business
        for its own account and not with a view towards, or for resale in connection
        with, the public sale or distribution thereof, except pursuant to sales
        registered or exempted under the Securities Act, and such Purchaser does
        not
        have a present arrangement to effect any distribution of the Purchased Shares
        to
        or through any person or entity; provided,
        however,
        that by
        making the representations herein, such Purchaser does not agree to hold
        any of
        the Purchased Shares for any minimum or other specific term and reserves
        the
        right to dispose of the Purchased Shares at any time in accordance with or
        pursuant to a registration statement or an exemption under the Securities
        Act.

       

      3.3 Accredited
        Investor Status.

       

      Such
        Purchaser is an "accredited investor" as that term is defined in Rule 501(a)
        of
        Regulation D under the Securities Act. 

       

      3.4 Authority.

       

      Such
        Purchaser has all requisite power and authority to execute, deliver and perform
        its obligations under this Agreement. This Agreement has been duly and validly
        authorized, executed and delivered on behalf of such Purchaser and shall
        constitute the legal, valid and binding obligation of such Purchaser enforceable
        against it in accordance with its terms, except as such enforceability may
        be
        limited by general principles of equity or to applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation and other similar laws relating to,
        or
        affecting generally, the enforcement of applicable creditors' rights and
        remedies.

       

      3.5 Noncontravention.
        

       

      The
        execution, delivery and performance by such Purchaser of this Agreement and
        the
        consummation by such Purchaser of the transactions contemplated hereby will
        not
        (a) result in a violation of the organizational documents of such Purchaser,
        (b)
        conflict with, or constitute a default (or an event which with notice or
        lapse
        of time or both would become a default) under, or give to others any rights
        of
        termination, amendment, acceleration or cancellation of, any agreement,
        indenture or instrument to which such Purchaser is a party, or (c) result
        in a
        violation of any law, rule, regulation, order, judgment or decree (including
        federal and state securities laws) applicable to such Purchaser, except in
        the
        case of clauses (b) and (c) above, for such conflicts, defaults, rights or
        violations which would not, individually or in the aggregate, reasonably
        be
        expected to have a material adverse effect on the ability of such Purchaser
        to
        perform its obligations hereunder.

      
        
          
          

        

        
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      3.6 Purchaser
        Status.

       

      Such
        Purchaser (a) is a sophisticated person with respect to the sale of the
        Purchased Shares; (b) has adequate information concerning the business and
        financial condition of the Company to make an informed decision regarding
        the
        purchase of the Purchased Shares; and (c) has independently and without reliance
        upon the Seller, and based on such information as such Purchaser has deemed
        appropriate, made its own analysis and decision to enter into this Agreement,
        except that such Purchaser has relied upon the Seller's express representations,
        warranties and covenants in this Agreement. Such Purchaser acknowledges that
        the
        Seller has not given such Purchaser any investment advice, credit information
        or
        opinion on whether the purchase of the Purchased Shares is prudent.

       

      3.7 Absence
        of Litigation. 

       

      There
        is
        no action, suit, claim, proceeding, inquiry or investigation before or by
        any
        court, public board, government agency or self-regulatory organization or
        body
        pending or, to the knowledge of such Purchaser, threatened against or affecting
        such Purchaser that could reasonably be expected to have a material adverse
        affect on the ability of such Purchaser to perform its obligations
        hereunder.

       

      3.8 No
        Brokers.

       

      Such
        Purchaser has taken no action that would give rise to any claim by any person
        for brokerage commissions, finder's fees or similar payments relating to
        this
        Agreement or the transactions contemplated hereby.

       

      ARTICLE
        IV

      CONDITIONS
        TO CLOSING

       

      4.1 Conditions
        to the Seller's Obligation to Sell at the Initial Closing.

       

      The
        obligation of the Seller hereunder to sell the Initial Purchased Shares to
        the
        Purchasers on the Initial Closing Date is subject to the satisfaction, on
        or
        before the Initial Closing Date, of each of the following conditions,
provided,
        that
        these conditions are for the Seller's sole benefit and may be waived by the
        Seller at any time in its sole discretion by providing the Purchasers with
        prior
        written notice thereof:

       

      (a) Such
        Purchaser shall have delivered (i) 90% of such Purchaser's portion of the
        Purchase Price due on the Initial Closing to the Seller (less any amounts
        withheld by a Purchaser pursuant to Section 5.2) by wire transfer of immediately
        available funds pursuant to the wire instructions provided by the Seller
        and
        (ii) 10% of such Purchaser's portion of the Purchase Price due on the Initial
        Closing to the Escrow Account (as defined below) by wire transfer of immediately
        available funds pursuant to wire instructions provided by the Escrow
        Agent.

      
        
          
          

        

        
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      (b) The
        representations and warranties of the Purchasers shall be true and correct
        in
        all material respects as of the date when made and as of the Initial Closing
        Date as though made at that time (except for representations and warranties
        that
        speak as of a specific date), and the Purchasers shall have performed, satisfied
        and complied in all material respects with the covenants, agreements and
        conditions required by this Agreement to be performed, satisfied or complied
        with by the Purchasers at or prior to the Initial Closing Date.

       

      4.2 Conditions
        to each Purchaser's Obligation to Purchase at the Initial
        Closing.

       

      The
        obligation of each Purchaser hereunder to purchase the Initial Purchased
        Shares
        on the Initial Closing Date is subject to the satisfaction, on or before
        the
        Initial Closing Date, of each of the following conditions, provided,
        that
        these conditions are for each Purchaser's sole benefit and may be waived
        by such
        Purchaser at any time in its sole discretion by providing the Seller with
        prior
        written notice thereof:

       

      (a) The
        Seller shall have caused the Initial Purchased Shares to be delivered to
        the
        Purchasers in the denominations and registered in the names requested by
        the
        Purchasers.

       

      (b) The
        representations and warranties of the Seller shall be true and correct in
        all
        material respects as of the date when made and as of the Initial Closing
        Date as
        though made at that time (except for representations and warranties that
        speak
        as of a specific date), and the Seller shall have performed, satisfied and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Seller at or prior to the Initial Closing Date.

       

      (c) The
        Seller shall have obtained all governmental, regulatory or third party consents
        and approvals, if any, necessary for the sale of the Initial Purchased
        Shares.

       

      4.3 Conditions
        to the Seller's Obligation to Sell at the Additional
        Closing.

       

      The
        obligation of the Seller hereunder to sell the Additional Purchased Shares
        to
        the Purchasers on the Additional Closing Date is subject to the satisfaction,
        on
        or before the Additional Closing Date, of each of the following conditions,
        provided,
        that
        these conditions are for the Seller's sole benefit and may be waived by the
        Seller at any time in its sole discretion by providing the Purchasers with
        prior
        written notice thereof:

       

      (a) Such
        Purchaser shall have delivered (i) 90% of such Purchaser's portion of the
        purchase price due on the Additional Closing to the Seller (less any amounts
        withheld by a Purchaser pursuant to Section 5.2) by wire transfer of immediately
        available funds pursuant to the wire instructions provided by the Seller
        and
        (ii) 10% of such Purchaser's portion of the purchase price due on the Additional
        Closing to the Escrow Account (as defined below) by wire transfer of immediately
        available funds pursuant to wire instructions provided by the Escrow Agent
        (as
        defined below).

      
        
          
          

        

        
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      (b) The
        representations and warranties of the Purchasers shall be true and correct
        in
        all material respects as of the date when made and as of the Additional Closing
        Date as though made at that time (except for representations and warranties
        that
        speak as of a specific date), and the Purchasers shall have performed, satisfied
        and complied in all material respects with the covenants, agreements and
        conditions required by this Agreement to be performed, satisfied or complied
        with by the Purchasers at or prior to the Additional Closing Date.

       

      4.4 Conditions
        to each Purchaser's Obligation to Purchase at the Additional
        Closing.

       

      The
        obligation of each Purchaser hereunder to purchase the Additional Purchased
        Shares on the Additional Closing Date is subject to the satisfaction, on
        or
        before the Additional Closing Date, of each of the following conditions,
        provided,
        that
        these conditions are for each Purchaser's sole benefit and may be waived
        by such
        Purchaser at any time in its sole discretion by providing the Seller with
        prior
        written notice thereof:

       

      (a) The
        Seller shall have caused the Additional Purchased Shares to be delivered
        to the
        Purchasers in the denominations and registered in the names requested by
        the
        Purchasers.

       

      (b) The
        representations and warranties of the Seller shall be true and correct in
        all
        material respects as of the date when made and as of the Additional Closing
        Date
        as though made at that time (except for representations and warranties that
        speak as of a specific date), and the Seller shall have performed, satisfied
        and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Seller at or prior to the Additional Closing Date.

       

      (c) The
        Seller shall have obtained all governmental, regulatory or third party consents
        and approvals, if any, necessary for the sale of the Additional Purchased
        Shares.

       

      ARTICLE
        V

      COVENANTS

       

      5.1 Disclosure
        of Transactions and Other Material Information. 

       

      The
        Seller shall cause the Company, on or before 9:00 a.m., New York City time,
        on
        the first Trading Day after the date of this Agreement, (A) to issue a press
        release (the "Press
        Release")
        reasonably acceptable to the Purchasers disclosing all material terms of
        the
        transactions contemplated hereby and (B) to file
        a
        Current Report on Form 8-K describing the terms of the transactions contemplated
        by this Agreement, the Escrow Agreement and the Registration Rights Agreement
        in
        the form required by the Securities Exchange Act of 1934, as amended (the
        "Exchange
        Act"),
        and
        attaching as exhibits to such filing (including all attachments, the
        "8-K
        Filing").
        From
        and after the issuance of the Press Release, no Purchaser shall be in possession
        of any material, nonpublic information received from the Seller or any person
        or
        entity acting on its behalf (including the Company, any of its subsidiaries
        or
        any of its respective officers, directors, employees or agents) that is not
        disclosed in the Press Release. The Seller shall not, and shall cause the
        Company and each of the Company's subsidiaries and each of their respective
        officers, directors, employees and agents, not to, provide the Purchasers
        with
        any material, nonpublic information regarding the Company or any of its
        subsidiaries from and after the filing of the Press Release without the express
        written consent of such Purchasers. If a Purchaser has, or believes it has,
        received any such material, nonpublic information regarding the Company or
        any
        of its subsidiaries from the Seller, the Company, any of its subsidiaries
        or any
        of the respective officers, directors, or agents, other than as requested
        in
        writing by such Purchaser, it may provide Seller and the Company with written
        notice thereof. The Seller shall cause the Company, within five (5) Trading
        Days
        of receipt of such notice, cause the Company to make public disclosure of
        such
        material, nonpublic information. Subject to the foregoing, neither the Seller,
        the Company, its subsidiaries nor any Purchaser shall issue any press releases
        or any other public statements with respect to the transactions contemplated
        hereby; provided,
        however,
        that
        the Company shall be entitled, without the prior approval of any Purchaser,
        to
        make any press release or other public disclosure with respect to such
        transactions (i) in substantial conformity with the 8-K Filing and
        contemporaneously therewith and (ii) as is required by applicable law and
        regulations, including the applicable rules and regulations of the Principal
        Market (provided that in the case of clause (i) the Seller shall cause the
        Company to consult with each Purchaser in connection with any such press
        release
        or other public disclosure prior to its release). Without the prior written
        consent of any applicable Purchaser, neither the Company nor any of its
        subsidiaries or affiliates shall disclose the name of such Purchaser in any
        filing, announcement, release or otherwise, unless such disclosure is required
        by law or regulation.

      
        
          
          

        

        
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      5.2 Fees.
        

       

      The
        Seller shall reimburse Hudson
        Bay Fund LP
        (a
        Purchaser) or its designee(s) for all reasonable costs and expenses, incurred
        in
        connection with the transactions contemplated hereby (including all reasonable
        legal fees and disbursements in connection therewith, documentation and
        implementation of the transactions contemplated hereby and due diligence
        in
        connection therewith) in an amount not to exceed $25,000, which amount may
        be
        withheld by such Purchaser from its portion of the Purchase Price at a Closing.
        The Seller shall be responsible for the payment of any placement agent's
        fees,
        financial advisory fees, or broker's commissions (other than a fee equal
        to 1.5%
        of each Purchaser's portion of the Initial Purchase Price and Additional
        Purchase Price payable to Primary Capital LLC contemporaneously with the
        applicable Closing when such portion of the Purchase Price is paid and other
        than for other Persons engaged by any Purchaser) relating to or arising out
        of
        the transactions contemplated hereby, including, without limitation, any
        fees or
        commissions payable to the Agent. The Seller shall pay, and hold each Purchaser
        harmless against, any liability, loss or expense (including, without limitation,
        reasonable attorney's fees and out-of-pocket expenses) arising in connection
        with any claim relating to any such payment.

       

      5.3 Escrow.

       

      Simultaneously,
        with the execution of this Agreement, the Seller, the Purchasers and Tri-State
        Title & Escrow, LLC, as escrow agent (the "Escrow
        Agent"),
        shall
        execute and deliver an amended and restated escrow agreement, in the form
        attached hereto as Exhibit
        A
        (the
        "Escrow
        Agreement"),
        pursuant to which 10% of the Purchase Price to be paid by the Purchasers
        at the
        Initial Closing and the Additional Closing shall be delivered to the Escrow
        Agent to be held in an account (the "Escrow
        Account")
        pursuant to the terms of the Escrow Agreement.

      
        
          
          

        

        
          -
            9 -

          
            

          

        

        
          
          

        

      

      5.4 Best
        Efforts.
        

       

      Each
        party shall use its best efforts timely to satisfy each of the covenants
        and
        conditions to be satisfied by it as provided in Sections 4 and 5 of this
        Agreement.

      

      5.5 Registration
        Rights Agreement.

       

      Simultaneously,
        with the execution of this Agreement, the Seller and the Purchasers shall
        enter
        into the Amended and Restated Registration Rights Agreement annexed hereto
        as
        Exhibit B (the "Registration
        Rights Agreement").

       

      5.6 Removal
        of Legends.

       

      The
        Seller shall cause the Company upon receipt of a representation letter from
        the
        Purchaser that it is not an "affiliate" of the Company for purposes of Rule
        144
        of the Securities Act, to remove all restrictive securities law legends on
        the
        Purchased Shares upon request of any Purchaser from and after the six month
        anniversary of each Closing Date, and shall cause the Company to take all
        steps
        necessary to facilitate the resale of the Purchased Shares by the Purchasers
        pursuant to Rule 144 under the Securities Act, including issuing all necessary
        legal opinions.

       

      ARTICLE
        VI

      MISCELLANEOUS
        PROVISIONS

       

      6.1 Securities
        Filings.

       

      The
        Seller shall make any filings with the Securities and Exchange Commission
        required to be filed by the Seller pursuant to the Securities Exchange Act
        of
        1934, as amended (the "Exchange
        Act")
        with
        respect sale of the Purchased Shares contemplated hereby within the time
        periods
        required for such filings under the Exchange Act.

       

      6.2 Governing
        Law; Jurisdiction; Jury Trial. 

       

      All
        questions concerning the construction, validity, enforcement and interpretation
        of this Agreement shall be governed by the internal laws of the State of
        New
        York, without giving effect to any choice of law or conflict of law provision
        or
        rule (whether of the State of New York or any other jurisdictions) that would
        cause the application of the laws of any jurisdictions other than the State
        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,
        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 brought in an
        inconvenient forum or that the venue of such suit, action or proceeding is
        improper. 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 to such party at the address for such notices to it
        under
        this Agreement and agrees that such service shall constitute good and sufficient
        service of process and notice thereof. The Seller hereby appoints Guzov Ofsink,
        LLC, 600 Madison Avenue, 14th Floor, New York, New York 10022, as its agent
        for
        service of process in New York. Nothing contained herein shall be deemed
        to
        limit in any way any right to serve process in any manner permitted by law.
        EACH
        PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
        REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
        CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
        HEREBY.

      
        
          
          

        

        
          -
            10 -

          
            

          

        

        
          
          

        

      

      6.3 Headings.
        

       

      The
        headings of this Agreement are for convenience of reference and shall not
        form
        part of, or affect the interpretation of, this Agreement.

       

      6.4 Severability.

       

      If
        any
        provision of this Agreement is prohibited by law or otherwise determined
        to be
        invalid or unenforceable by a court of competent jurisdiction, the provision
        that would otherwise be prohibited, invalid or unenforceable shall be deemed
        amended to apply to the broadest extent that it would be valid and enforceable,
        and the invalidity or unenforceability of such provision shall not affect
        the
        validity of the remaining provisions of this Agreement so long as this Agreement
        as so modified continues to express, without material change, the original
        intentions of the parties as to the subject matter hereof and the prohibited
        nature, invalidity or unenforceability of the provision(s) in question does
        not
        substantially impair the respective expectations or reciprocal obligations
        of
        the parties or the practical realization of the benefits that would otherwise
        be
        conferred upon the parties. The parties will endeavor in good faith negotiations
        to replace the prohibited, invalid or unenforceable provision(s) with a valid
        provision(s), the effect of which comes as close as possible to that of the
        prohibited, invalid or unenforceable provision(s).

       

      6.5 Entire
        Agreement; Amendments.

       

      This
        Agreement supersedes all other prior oral or written agreements among the
        Purchasers and the Seller, their affiliates and persons acting on their behalf
        with respect to the matters discussed herein, and this Agreement and the
        instruments referenced herein contain the entire understanding of the parties
        with respect to the matters covered herein and therein and, except as
        specifically set forth herein or therein, neither the Seller nor the Purchasers
        makes any representation, warranty, covenant or undertaking with respect
        to such
        matters. No provision of this Agreement may be amended other than by an
        instrument in writing signed by the Seller and the Purchasers. No provision
        hereof may be waived other than by an instrument in writing signed by the
        party
        against whom enforcement is sought.

       

      6.6 Notices.

       

      Any
        notices, consents, waivers or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered: (a) upon receipt, when delivered personally; (b) upon
        receipt, when sent by facsimile (provided confirmation of transmission is
        mechanically or electronically generated and kept on file by the sending
        party);
        or (c) one Business Day after deposit with an overnight courier service,
        in each
        case properly addressed to the party to receive the same. The addresses and
        facsimile numbers for such communications shall be:

      
        
          
          

        

        
          -
            11 -

          
            

          

        

        
          
          

        

      

      If
        to the
        Seller:

      

      Wo
        Hing
        Li

      c/o
        China
        Precision Steel, Inc.

      8th
        Floor, Teda Building

      87
        Wing
        Lok Street

      Sheung
        Wan

      Hong
        Kong, The People's Republic of China

      Telephone:
        +852-2543-8223

      Facsimile:
        +021-59940382

      

      with
        a
        copy to (for information purposes only):

      

      Guzov
        Ofsink, LLC

      600
        Madison Avenue, 14th Floor

      New
        York,
        New York 10022

      Attention:
        Darren L. Ofsink, Esq.

      Telephone:
        (212) 371-8008

      Facsimile:
        (212) 688-7273

      

      If
        to the
        Purchasers:

       

      Hudson
        Bay Fund LP

      120
        Broadway, 40th Floor

      New
        York,
        New York 10271

      Attention:
        Yoav Roth

      Telephone:
        (212) 571-1244

      Facsimile:
        (212) 571-1279

      

      Hudson
        Bay Overseas Fund LTD

      120
        Broadway, 40th
        Floor

      New
        York,
        NY 10271

      Attention:
        Yoav Roth

      Telephone:
        (212) 571-1244

      Facsimile:
        (212) 571-1279

      

      with
        a
        copy to (for information purposes only):

       

      Schulte
        Roth & Zabel LLP

      919
        Third
        Avenue

      New
        York,
        New York 10022

      Attention:
        Eleazer Klein, Esq.

      Telephone:
        (212) 756-2000

      Facsimile:
        (212) 593-5955

      
        
          
          

        

        
          -
            12 -

          
            

          

        

        
          
          

        

      

      Written
        confirmation of receipt (A) given by the recipient of such notice, consent,
        waiver or other communication, (B) mechanically or electronically generated
        by
        the sender's facsimile machine containing the time, date, recipient facsimile
        number and an image of the first page of such transmission or (C) provided
        by an
        overnight courier service shall be rebuttable evidence of personal service,
        receipt by facsimile or receipt from an overnight courier service in accordance
        with clause (a) or (c) above, respectively.

       

      6.7 Termination.

       

      In
        the
        event that any Closing shall not have occurred with respect to a Purchaser
        on or
        before five (5) Business Days from the date contemplated in Section 1.1(c)
        due
        to the Seller's or such Purchaser's failure to satisfy the conditions set
        forth
        in Section 4 above (and the nonbreaching party's failure to waive such
        unsatisfied condition(s)), the nonbreaching party shall have the option to
        terminate this Agreement with respect to such breaching party at the close
        of
        business on such date without liability of any party to any other party;
        provided,
        however,
        this if
        this Agreement is terminated pursuant to this Section 6.7, the Seller shall
        remain obligated to reimburse the non-breaching Purchasers for the expenses
        described in Section 5.2 above.

       

      6.8 Successors
        and Assigns.

       

      This
        Agreement shall be binding upon and inure to the benefit of the parties and
        their respective successors and assigns. Neither the Seller nor the Purchasers
        shall assign this Agreement or any of their respective rights or obligations
        hereunder without the prior written consent of the other party.

       

      6.9 No
        Third Party Beneficiaries.

       

      This
        Agreement is intended for the benefit of the parties hereto and their respective
        permitted successors and assigns, and is not for the benefit of, nor may
        any
        provision hereof be enforced by, any other person. 

       

      6.10 Survival.

       

      Unless
        this Agreement is terminated by mutual consent of the Seller and the Purchasers,
        the representations and warranties of the Seller and the Purchasers contained
        in
        Articles II and III shall survive each Closing Date and the delivery of the
        Purchased Shares.

       

      6.11 Further
        Assurances.

       

      Each
        party shall use its commercially reasonable efforts to do and perform, or
        cause
        to be done and performed, all such further acts and things, and shall execute
        and deliver all such other agreements, certificates, instruments and documents,
        as any other party may reasonably request in order to carry out the intent
        and
        accomplish the purposes of this Agreement and the consummation of the
        transactions contemplated hereby.

      
        
          
          

        

        
          -
            13 -

          
            

          

        

        
          
          

        

      

      

      6.12 No
        Strict Construction.

       

      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.

       

      [The
        remainder of the page is intentionally left blank]

      
        
          
          

        

        
          -
            14 -

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have executed this Stock Purchase Agreement as of the date
        first
        written above.

      

       

      
        	
                SELLER:

              
	 
	  

	
                WO
                  HING LI

              
	 
	
                PURCHASERS:

              
	 
	
                HUDSON
                  BAY FUND, LP

              
	 
	
                By:  

              	  

	 	
                Name:

              
	 	
                Title:

              
	 
	
                HUDSON
                  BAY OVERSEAS FUND, LTD.

              
	 
	
                By:

              	 

	 	
                Name:

              
	 	
                Title:

              
	 
	
                ENABLE
                  GROWTH PARTNERS LP

              
	 
	
                By:

              	 

	 	
                Name:

              
	 	
                Title:

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        OF BUYERS

      

      
        	
                (1)

              	 	
                (2)

              	 	
                (3)

              	 	
                (4)

              	 	
                (5)

              	 	
                (6)

              	 	
                (7)

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Buyer

              	 	 	
                Address and

                Facsimile Number

              	 	 	
                Number of 

                Initial 

                Purchased 

                Shares

              	 	 	
                Number of 

                Additional 

                Purchased 

                Shares

              	 	
                 

              	
                Purchaser's 

                Portion of Initial 

                Purchase Price

              	 	 	
                Purchaser's 

                Portion of 

                Additional 

                Purchase Price

              	 	 	
                Legal Representative's 

                Address and Facsimile 

                Number

              	 
	
                Hudson Bay Fund, LP

              	 	 	
                
                

                120
                  Broadway, 40th Floor

                New
                  York, New York 10271

                Attention:
                  Yoav Roth

                 May
                  Lee

                Facsimile:
                  212-571-1279

                Telephone:
                  212-571-12444

                Residence:
                  United States

                E-mail:
                  investments @hudsonbaycapital.com

              	 	 	
                
                

                1,140,000

              	 	 	
                
                

                0

              	 	
                
                

                $

              	
                
                

                4,275,000.00

              	 	
                
                

                $

              	
                
                

                0

              	 	 	
                Schulte
                  Roth & Zabel LLP

                919
                  Third Avenue

                New
                  York, New York 10022

                Attention:
                  Eleazer Klein, Esq.

                Facsimile:
                  (212) 593-5955

                Telephone:
                  (212) 756-2376

                Email:
                  Eleazer.Klein@srz.com

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Hudson
                  Bay Overseas Fund, Ltd.

              	 	 	
                
                

                120
                  Broadway, 40th Floor

                New
                  York, New York 10271

                Attention:
                  Yoav Roth

                 May
                  Lee

                Facsimile:
                  212-571-1279

                Telephone:
                  212-571-12444

                E-mail:
                  investments @hudsonbaycapital.com

              	 	 	
                
                

                1,860,000

              	 	 	
                
                

                851,110

              	 	
                
                

                $

              	
                
                

                6,975,000.00

              	 	
                
                

                $

              	
                
                

                5,702,437.00

              	 	 	
                Schulte
                  Roth & Zabel LLP

                919
                  Third Avenue

                New
                  York, New York 10022

                Attention:
                  Eleazer Klein, Esq.

                Facsimile:
                  (212) 593-5955

                Telephone:
                  (212) 756-2376

                Email:
                  Eleazer.Klein@srz.com

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Enable
                  Growth Partners LP

              	 	 	
                
                

                One
                  Ferry Building, Suite 255

                San
                  Francisco, CA 94111

                Attention:
                  Adam Epstein

                Facsimile:
                  415-677-1580

                Telephone
                  415-677-1579

                Email:
                  aepstein@enablecapital.com

              	 	 	
                
                

                524,810

              	 	 	
                
                

                148,890

              	 	
                
                

                $

              	
                
                

                1,968,037.50

              	 	
                
                

                $

              	
                
                

                997,563.00

              	 	 	
                  

              	 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Exhibit
        AAMENDED
      AND RESTATED ESCROW AGREEMENT

    

    This
      Amended and Restated Escrow Agreement, dated as of May 20, 2008 (this
“Agreement”),
      is
      entered into by and among Wo Hing Li, (the “Seller”),
      Hudson Bay Fund, LP, a Delaware limited partnership and Hudson Bay Overseas
      Fund, Ltd., a
      company
      with limited liability organized under the laws of the Cayman Islands
      (collectively, "Hudson"
      and
      together with the Seller sometimes referred to collectively as the "Parties")
      and
      Tri-State Title & Escrow, LLC (the “Escrow
      Agent”).
      The
      principal address of each party hereto is set forth on Exhibit
      A.
      

    

    WITNESSETH:

    

    WHEREAS,
      the Seller owns shares of Ordinary Stock, $0.001 par value per share (the
      "Ordinary
      Stock"),
      of
      China Precision Steel, Inc., a Delaware corporation (the "Company")
      and is
      the Chairman of the Board, Chief Executive Officer and President of the
      Company.

    

    WHEREAS,
      Hudson and Enable Growth Partners LP ("Enable")
      seek
      to purchase from the Seller, and the Seller seeks to sell to Hudson and Enable,
      Three Million, Five Hundred Twenty Four Thousand, Eight Hundred Ten (3,524,810)
      shares of Ordinary Stock currently owned by the Seller (the "Initial
      Purchased Shares")
      and an
      additional One Million (1,000,000) shares of Ordinary Stock currently owned
      by
      the Seller (the "Additional
      Purchased Shares",
      and
      collectively with the Initial Purchased Shares, the "Purchased
      Shares")
      in
      reliance upon available exemptions from the registration requirements of the
      U.S. Securities Act of 1933, as amended (the “Act”)
      and
      pursuant to the Amended and Restated Stock Purchase Agreement (the “Stock
      Purchase Agreement”)
      by and
      among the Seller, Hudson and Enable, for an aggregate amount of $13,218,037.50
      for the Initial Purchased Shares and an aggregate amount of $6,700,000 for
      the
      Additional Purchased Shares (each, a “Purchase
      Price”).
      Capitalized items, not defined herein, shall have the same meanings as set
      forth
      in the Stock Purchase Agreement; and

    

    WHEREAS,
      upon each Closing pursuant to by Stock Purchase Agreement, Hudson and Enable
      each desire to deposit with the Escrow Agent 10% of the applicable Purchase
      Price (the “Escrowed
      Funds”)
      to be
      paid at such Closing, to be held in escrow until written instructions are
      received by the Escrow Agent from Hudson, at which time the Escrow Agent will
      disburse the Escrowed Funds in accordance with such instructions (the
“Escrow
      Release");
      and

    

    WHEREAS,
      pursuant to that certain existing Escrow Agreement, dated as of March 13, 2008
      (the "Existing
      Escrow Agreement")
      entered into by and among the Parties and the Escrow Agent, the Initial
      Purchased Shares (the "Escrow
      Shares")
      have
      been deposited into escrow on the terms and conditions set forth in the Existing
      Escrow Agreement; and

    

    WHEREAS,
      the Parties have agreed to amend and restate the Existing Escrow Agreement
      in
      its entirety to (a) provide for the release of the Escrow Shares from the escrow
      created in Section 2 thereof in accordance with the terms and conditions of
      the
      Existing Escrow Agreement and (b) include in the Escrowed Funds to be deposited
      with the Escrow Agent 10% of the Purchase Price paid by Hudson and Enable in
      connection with the purchase of the Additional Purchased Shares simultaneously
      with the consummation of the purchase of the Additional Purchased Shares, 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
      Seller and Hudson 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. [Intentionally
      Omitted.]

    

    3.
       Delivery
      of the Escrowed Funds. 

    

    3.1
       At
      each
      of the Initial Closing and the Additional Closing, Hudson will deliver, and
      will
      request Enable to deliver, the Escrowed Funds to the Escrow Agent’s account as
      follows:

    
      	
              Bank
                Name:

            	
              Cardinal
                Bank

            
	
              Bank
                Address:

            	
              8270
                Greensboro Dr., McLean, VA

            
	
              Account
                Name:

            	
              Tri-State
                Title & Escrow, LLC

            
	
              ABA
                Number:

            	
              056
                008 849

            
	
              Account
                Number:

            	
              5060024931

            

    

     

    3.2 Escrowed
      Funds shall be forwarded to the Escrow Agent by check or by wire transfer,
      together with the written account of the applicable Purchase Price in the form
      attached hereto as Exhibit B (the “Purchase
      Price Information”),
      in
      accordance with the following:

    

    (a)
      Escrowed Funds to be deposited by check 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 the Purchase
      Price Information.
      The
      Escrow
      Agent shall, upon receipt of the Purchase Price Information, together with
      the
      Escrowed Funds, deposit the monies so received in the Escrow Account.

    

    (b)
      Escrowed Funds to be wired shall be wired to the account set forth in Section
      3.1 above and the Purchase Price Information shall be faxed or emailed to the
      Escrow Agent in accordance with the information provided on Exhibit
      A.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    3.3 Any
      checks which are received by the Escrow Agent that are made payable to a party
      other than the Escrow Agent shall be returned directly to the sender together
      with any documents delivered therewith. Simultaneously with each deposit, Hudson
      shall provide the Escrow Agent with the Purchase Price Information, including
      the name, address and taxpayer identification number of each Purchaser and
      the
      applicable Purchase Price. The Escrow Agent is not obligated, and may refuse,
      to
      accept checks that are not accompanied by the Purchase Price Information
      containing the requisite information.

    

    3.4 In
      the
      event a wire transfer is received by the Escrow Agent and the Escrow Agent
      has
      not received Purchase Price Information, the Escrow Agent shall notify Hudson.
      If the Escrow Agent does not receive the Purchase Price Information from Hudson
      prior to close of business on the fifth 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 Hudson of receipt of said wire, the Escrow
      Agent shall return the funds to the sender.

    

    4.
       Release
      of Escrow Shares.
      On the
      date hereof, the Escrow Agent shall immediately forward the Escrow Shares to
      the
      Company’s Transfer Agent for reissuance to Hudson and/or Enable as set forth in
      column (3) to the Schedule of Buyers of the Stock Purchase Agreement. As used
      in
      this Agreement, “Transfer Agent” means Tri-State Title & Escrow, LLC, or
      such other entity hereafter retained by the Company as its stock transfer agent
      as specified in a writing from the Seller to the Escrow Agent and
      Hudson.

    

    5.
       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: 

    

    5.1 Hudson
      may deliver written instructions to the Escrow Agent and the Seller instructing
      the Escrow Agent to release some or all of the Escrowed Funds to satisfy any
      payment obligations of the Seller to Hudson and/or Enable pursuant to the Stock
      Purchase Agreement and/or the Registration Rights Agreement. Upon receipt of
      written instructions from Hudson, in substantially the form of Exhibit
      C
      hereto,
      the Escrow Agent shall release the Escrowed Funds as directed in such
      instructions. 

    

    5.2 This
      Agreement shall terminate and be of no further force or effect as to the
      Escrowed Funds at such time as all of the Escrowed Funds have been disbursed.
      

    

    5.3 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 Parties hereby authorize 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 Parties hereby also authorize the Escrow
      Agent, if it 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

        
          

        

      

      
         

      

    

    6.
       Exculpation
      and Indemnification of Escrow Agent

    

    6.1
       The
      Escrow Agent shall have 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 (other than payments or deliveries set forth hereunder),
      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 Hudson relating to the Escrowed Funds, the Escrow Agent
      shall not be obligated to recognize any other agreement by the Parties,
      notwithstanding that references hereto may be made herein and whether or not
      it
      has knowledge thereof. 

    

    6.2 Absent
      gross negligence, willful misconduct, bad faith or fraud by the Escrow Agent,
      the Escrow Agent shall not be liable to Parties 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.

    

    6.3 Absent
      gross negligence, willful misconduct, bad faith or fraud by the Escrow Agent,
      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
      Seller 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.

    

    6.4 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 Seller 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

        
          

        

      

      
         

      

    

    6.5 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 6.6

    

    6.6 The
      Escrow Agent will be indemnified and held harmless by the Seller 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, willful misconduct, bad faith or fraud 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 by 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 the
      Seller, notify it thereof in writing, but the failure by the Escrow Agent to
      give such notice shall not relieve any such party from any liability which
      the
      Seller 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 9.

    

    6.7 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.

    

    7.
       Termination
      of Agreement and Resignation of Escrow Agent 

    

    7.1 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 Seller
      under Section 6 shall survive the termination hereof.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    7.2 The
      Escrow Agent may resign at any time and be discharged from its duties as Escrow
      Agent hereunder by giving the Seller 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 a joint notice from the Parties within the Notice Period, turn over
      to
      a successor escrow agent appointed jointly by the Parties all Escrowed Funds
      (less such amount as the Escrow Agent is entitled to retain pursuant to Section
      9) 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 deduction. 

    

    8.
       Form
      of Payments by Escrow Agent

    

    8.1 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 Seller.

    

    8.2
       All
      amounts referred to herein are expressed in United States Dollars and all
      payments by the Escrow Agent shall be made in such dollars.

    

    9. Compensation.
      Escrow
      Agent shall be entitled to the following compensation from the
      Seller:

     

    9.1 Documentation
      Fee:
      The
      Seller has paid a documentation fee to the Escrow Agent of $4,000.00 receipt
      of
      which is hereby acknowledged by Escrow Agent.

    

    9.2 Closing
      Fee:
      The
      Seller shall pay a fee of $500 to the Escrow Agent at the Escrow Release.

    

    9.3 Interest :
      During
      the term of this Agreement, the Escrowed Funds shall be invested in a money
      market deposit account, unless otherwise instructed in writing by the Parties
      and shall be acceptable to the Escrow Agent. The
      Escrowed Funds shall accrue interest (the “Accrued
      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 3.1
      above. In connection with an Escrow Release, the Seller shall be paid Accrued
      Interest determined by multiplying the available rate obtained by the Escrow
      Agent by 0.5 per annum on the aggregate amount of Escrowed Funds in the Escrow
      Agent’s account on the date of such Escrow Release; provided,
      that,
      the
      Escrowed Funds will have been held by the Escrow Agent for at least one (1)
      day
      (the “Accrual
      Period”).
      No
      Accrued Interest shall be paid to the Seller if the Escrowed Funds have been
      held by the Escrow Agent for a period of time less than the Accrual
      Period.

    

    10. 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.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    11. Further
      Assurances. From
      time
      to time on and after the date hereof, the Seller 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.

    

    12. Consent
      to Service of Process .
      The
      Seller hereby irrevocably consents 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.

    

    13. Miscellaneous

    

    13.1 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. 

    

    13.2 This
      Escrow Agreement and the rights and obligations hereunder of the Seller may
      not
      be assigned. This Escrow Agreement and the rights and obligations hereunder
      of
      the Escrow Agent may be assigned by the Escrow Agent, with the prior joint
      consent of the Parties. 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 Seller and Hudson. 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. The Parties further hereby waive any right to a trial by jury with
      respect to any lawsuit or judicial proceeding arising or relating to this
      Agreement. All signatures of the parties to this Agreement may be transmitted
      by
      facsimile, and such facsimile will, for all purposes, be deemed to be the
      original signature of such party whose signature it reproduces, and will be
      binding upon such party. A person who is not a party to this Agreement shall
      have no right to enforce any term of this Agreement. 

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    13.3 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. 

    

    13.4 If
      any
      provision of this Agreement is prohibited by law or otherwise determined to
      be
      invalid or unenforceable by a court of competent jurisdiction, the provision
      that would otherwise be prohibited, invalid or unenforceable shall be deemed
      amended to apply to the broadest extent that it would be valid and enforceable,
      and the invalidity or unenforceability of such provision shall not affect the
      validity of the remaining provisions of this Agreement so long as this Agreement
      as so modified continues to express, without material change, the original
      intentions of the parties as to the subject matter hereof and the prohibited
      nature, invalidity or unenforceability of the provision(s) in question does
      not
      substantially impair the respective expectations or reciprocal obligations
      of
      the parties or the practical realization of the benefits that would otherwise
      be
      conferred upon the parties. The parties will endeavor in good faith negotiations
      to replace the prohibited, invalid or unenforceable provision(s) with a valid
      provision(s), the effect of which comes as close as possible to that of the
      prohibited, invalid or unenforceable provision(s).

    

    14.
       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.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    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:
                

            	
               

            
	 	
              Name:

            
	 	
              Title:

            
	 	 
	
               

            
	
              Wo
                Hing Li

            
	 
	
              HUDSON
                BAY FUND, LP

            
	 	 
	
              By:

            	
               

            
	 	
              Name:

            
	 	
              Title:

            
	 	 
	
              HUDSON
                BAY OVERSEAS FUND, LTD.

            
	 	 
	
              By:
                

            	
               

            
	 	
              Name:

            
	 	
              Title:

            

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    EXHIBIT
      A  

    PARTIES
      TO AGREEMENT

    

    Tri-State
      Title & Escrow, LLC

    360
      Main
      Street

    P.O.
      Box
      391 

    Washington,
      VA 22747

    (800)
      984-2155 

    Attention:
      Johnnie L. Zarecor

    

    Telephone:
      (540) 675-2155

    Fax:             (540)
      675-2155

    Email
      escrow@tristatetitle.net

     

    Wo
      Hing
      Li

    c/o
      China
      Precision Steel, Inc.

    8th
      Floor, Teda Building

    87
      Wing
      Lok Street

    Sheung
      Wan

    Hong
      Kong, The People's Republic of China

    Telephone:
      +852-2543-8223

    Facsimile:
      +021-59940382

    

    Hudson
      Bay Fund, LP

    120
      Broadway, 40th Floor

    New
      York,
      New York 10271

    Telephone:
      212-571-1244

    Facsimile:
      212-571-1279

    Attention:
      Yoav Roth

    

    Hudson
      Bay Overseas Fund, Ltd.

    120
      Broadway, 40th Floor

    New
      York,
      New York 10271

    Telephone:
      212-571-1244

    Facsimile:
      212-571-1279

    Attention:
      Yoav Roth

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    EXHIBIT
      B

    

    PURCHASE
      PRICE INFORMATION

    

    
      	
              Name
                of Purchaser

            	
               

            
	 	 
	
              Address
                of Purchaser

            	
               

            
	 	 
	 	
               

            
	 	 
	 	
               

            
	 	 
	
              Purchase
                Price (US$)

            	
               

            
	 	 
	
              Amount
                Submitted

            	 
	
              Herewith
                (US$) 

            	
               

            
	 	 
	
              Taxpayer
                ID Number 

            	
               

            

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    EXHIBIT
      C

    

    DISBURSEMENT
      REQUEST

    

    Pursuant
      to that certain Amended and Restated Escrow Agreement dated effective as of
      May
      20, 2008, among Wo Hing Li, (the “Seller”),
      Hudson Bay Fund, LP, a Delaware limited partnership and Hudson Bay Overseas
      Fund, Ltd., a
      company
      with limited liability organized under the laws of the Cayman Islands
      (collectively, "Hudson")
      and
      Tri-State Title & Escrow, LLC (the “Escrow
      Agent”),
      Hudson hereby requests disbursement of funds in the amount and manner described
      below from account number 5060024931, styled Tri-State Title & Escrow, LLC
      Escrow Account.

    

    
      	
              Please
                disburse to:

            	
               

            
	 	 
	
              Amount
                to disburse:

            	
               

            
	 	 
	
              Form
                of distribution:

            	
               

            
	 	 
	
              Payee:

            	 
	
              Name:

            	
               

            
	
              Address:

            	
               

            
	
              City/State:

            	
               

            
	
              Zip:

            	
               

            

    

     

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

            
	
               

            
	
               

            

    

     

    
      	
              Date:

            	
               

            

    

    

    
      	
              HUDSON
                BAY FUND, LP

            
	 	 
	
              By:
                

            	
               

            
	 	
              Name:

            
	 	
              Title:

            
	 	 
	
              HUDSON
                BAY OVERSEAS FUND, LTD.

            
	 	 
	
              By:
                

            	
               

            
	 	
              Name:

            
	 	
              Title:

            

    

    
      
         

      

      
        12

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