Document:

SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE

                                    AGREEMENT

                          Dated as of September 7, 2006

                                      among

                               DOLCE VENTURES INC.

                                       and

                       THE PURCHASERS LISTED ON EXHIBIT A

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                                TABLE OF CONTENTS

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<CAPTION>
                                                                                                               PAGE
<S>                        <C>                                                                                   <C>
ARTICLE I Purchase and Sale of Preferred Stock....................................................................1

         Section 1.1       Purchase and Sale of Stock and Warrants................................................1

         Section 1.2       Regulation D...........................................................................1

         Section 1.3       Conversion Shares......................................................................1

         Section 1.4       Closing................................................................................2

         Section 1.5       Share Exchange Transaction ............................................................2

ARTICLE II Representations and Warranties.........................................................................3

         Section 2.1       Representations and Warranties of the Company..........................................3

         Section 2.2       Representations and Warranties of the Purchasers......................................13

ARTICLE III Covenants............................................................................................16

         Section 3.1       Securities Compliance.................................................................16

         Section 3.2       Registration and Listing..............................................................16

         Section 3.3       Compliance with Laws..................................................................16

         Section 3.4       Keeping of Records and Books of Account...............................................17

         Section 3.5       Reporting Requirements................................................................17

         Section 3.6       Amendments............................................................................17

         Section 3.7       Other Agreements......................................................................17

         Section 3.8       Use of Proceeds.......................................................................18

         Section 3.9       Reservation of Shares.................................................................18

         Section 3.10      Transfer Agent Instructions...........................................................18

         Section 3.11      Disposition of Assets.................................................................18

         Section 3.12      Reporting Status......................................................................19

         Section 3.13      Disclosure of Transaction ............................................................19

         Section 3.14      Disclosure of Material Information....................................................19

         Section 3.15      Pledge of Securities..................................................................19

         Section 3.16      Form SB-2 Eligibility.................................................................19

         Section 3.17      Board Observer Rights ................................................................20

         Section 3.18      DTC...................................................................................20

         Section 3.19      Investor and Public Relations.........................................................20

         Section 3.20      Lock-Up Agreement.....................................................................20

         Section 3.21      Revenue Targets ......................................................................20

         Section 3.22      Adjustments for Issuance of Additional Shares ........................................21

         Section 3.23      Subsequent Financings.................................................................21

ARTICLE IV Conditions............................................................................................22

         Section 4.1       Conditions Precedent to the Obligation of the Company to Sell the Shares..............22
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<S>                        <C>                                                                                   <C>
         Section 4.2       Conditions Precedent to the Obligation of the Purchasers to Purchase the Shares.......23

ARTICLE V Stock Certificate Legend...............................................................................25

         Section 5.1       Legend................................................................................25

ARTICLE VI Indemnification.......................................................................................27

         Section 6.1       General Indemnity.....................................................................27

         Section 6.2       Indemnification Procedure.............................................................27

ARTICLE VII Miscellaneous........................................................................................28

         Section 7.1       Fees and Expenses.....................................................................28

         Section 7.2       Specific Enforcement, Consent to Jurisdiction.........................................28

         Section 7.3       Entire Agreement; Amendment...........................................................29

         Section 7.4       Notices...............................................................................29

         Section 7.5       Waivers...............................................................................30

         Section 7.6       Headings..............................................................................29

         Section 7.7       Successors and Assigns................................................................29

         Section 7.8       No Third Party Beneficiaries..........................................................30

         Section 7.9       Governing Law.........................................................................31

         Section 7.10      Survival..............................................................................31

         Section 7.11      Counterparts..........................................................................31

         Section 7.12      Publicity.............................................................................31

         Section 7.13      Severability..........................................................................31

         Section 7.14      Further Assurances....................................................................31
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                                       ii
<PAGE>

             SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

      This  SERIES  B  CONVERTIBLE   PREFERRED  STOCK  PURCHASE  AGREEMENT  (the
"Agreement") is dated as of September 7, 2006 by and among Dolce Ventures, Inc.,
a Utah  corporation  (the  "Company"),  and each of the  Purchasers of shares of
Series B Convertible Preferred Stock of the Company whose names are set forth on
Exhibit  A  hereto   (individually,   a  "Purchaser"   and   collectively,   the
"Purchasers").

      The parties hereto agree as follows:

                                    ARTICLE I

                      Purchase and Sale of Preferred Stock

            Section 1.1 Purchase and Sale of Stock and Warrants.  Subject to the
terms and conditions hereof and in consideration of and in express reliance upon
the  representations,  warranties,  covenants,  terms  and  conditions  of  this
Agreement, the Company agrees to issue and sell, for an aggregate purchase price
of $6,876,800 (the "Purchase  Price"),  to the  Purchasers,  and the Purchasers,
severally but not jointly, agree to purchase:

                  (i) the number of shares of the Company's Series B Convertible
Preferred  Stock,  par value  $.001 per share and a purchase  price of $2.74 per
share (the "Preferred Shares"),  convertible into shares of the Company's common
stock, par value $.001 per share (the "Common Stock"),  in the amounts set forth
opposite such  Purchaser's name on Exhibit A hereto.  The  designation,  rights,
preferences and other terms and provisions of the Series B Convertible Preferred
Stock are set forth in the Certificate of Designation of the Relative Rights and
Preferences  of the Series B  Convertible  Preferred  Stock  attached  hereto as
Exhibit B (the "Certificate of Designation"),

                  (ii) Series A Warrants,  in  substantially  the form  attached
hereto as Exhibit  C-1 (the  "Series A  Warrants"),  to  purchase  the number of
shares of Common  Stock  equal to one  hundred  percent  (100%) of the number of
Preferred  Shares  purchased  by each  Purchaser  pursuant  to the terms of this
Agreement, as set forth opposite such Purchaser's name on Exhibit A hereto, and

                  (iii) Series B Warrants,  in  substantially  the form attached
hereto as Exhibit  C-2 (the  "Series B  Warrants"),  to  purchase  the number of
shares of Common Stock equal to fifty  percent  (50%) of the number of Preferred
Shares purchased by each Purchaser  pursuant to the terms of this Agreement,  as
set forth opposite such Purchaser's name on Exhibit A hereto.

                  (iv) Series J Warrants,  in  substantially  the form  attached
hereto as Exhibit  C-3 (the  "Series J  Warrants"),  to  purchase  the number of
shares of Common  Stock  equal to one  hundred  percent  (100%) of the number of
Preferred  Shares  purchased  by each  Purchaser  pursuant  to the terms of this
Agreement, as set forth opposite such Purchaser's name on Exhibit A hereto,

                  (v) Series C  Warrants,  in  substantially  the form  attached
hereto as Exhibit  C-4 (the  "Series C  Warrants"),  to  purchase  the number of
shares of Common  Stock  equal to one  hundred  percent  (100%) of the number of
Preferred  Shares  purchased  by each  Purchaser  pursuant  to the terms of this
Agreement, as set forth opposite such Purchaser's name on Exhibit A hereto, and

                  (vi) Series D Warrants,  in  substantially  the form  attached
hereto as Exhibit C-5 (the "Series D Warrants"  and,  together with the Series A
Warrants,  the  Series B  Warrants,  the  Series  J  Warrants  and the  Series C
Warrants,  the  "Warrants"),  to purchase  the number of shares of Common  Stock
equal to fifty percent (50%) of the number of Preferred Shares purchased by each
Purchaser  pursuant to the terms of this  Agreement,  as set forth opposite such
Purchaser's name on Exhibit A hereto.

            (b) Each of the Series A,  Series B,  Series C and Series D Warrants
shall  expire five (5) years  following  the Closing Date (as defined in Section
1.3 below). The Series J Warrant shall expire one (1) year following the Closing
Date.  Each of the Warrants  shall have an exercise price per share equal to the
Warrant Price (as defined in the applicable Warrant).

                  Section 1.2  Regulation D. The Company and the  Purchasers are
executing and delivering  this Agreement in accordance with and in reliance upon
the exemption from securities  registration afforded by Rule 506 of Regulation D
("Regulation  D") as  promulgated  by the United States  Securities and Exchange
Commission (the "Commission")  under the Securities Act of 1933, as amended (the
"Securities Act") or Section 4(2) of the Securities Act.

                  Section 1.3 Conversion  Shares. The Company has authorized and
has reserved and covenants to continue to reserve, free of preemptive rights and
other  similar  contractual  rights of  stockholders,  such  number of shares of
Common Stock as shall from time to time be sufficient  to effect the  conversion
of all of the Preferred  Shares and exercise of the Warrants  then  outstanding.
Any shares of Common Stock issuable upon conversion of the Preferred  Shares and
exercise of the Warrants (and such shares when issued) are herein referred to as
the "Conversion  Shares" and the "Warrant Shares",  respectively.  The Preferred
Shares, the Conversion Shares and the Warrant Shares are sometimes  collectively
referred to as the "Shares".

<PAGE>

            Section 1.4  Closing.  The closing of the  purchase  and sale of the
Preferred  Shares and the  Warrants to be acquired  by the  Purchasers  from the
Company  under this  Agreement  shall take place at the offices of Kramer  Levin
Naftalis & Frankel LLP ("KL"),  1177 Avenue of the Americas,  New York, New York
10036 (the  "Closing")  at 10:00 a.m.,  New York time on or before  September 7,
2006;  provided,  that all of the  conditions set forth in Article IV hereof and
applicable  to the Closing  shall have been  fulfilled  or waived in  accordance
herewith (the "Closing  Date").  The Purchasers  acknowledge  and agree that the
Company may consummate the sale of additional  Preferred  Shares and Warrants to
other purchasers,  on terms substantially similar to the terms of this Agreement
and the other Transaction Documents (as defined in Section 2.1(b) hereof), which
closing(s) shall occur no later than October 3, 2006, for an aggregate  purchase
price  of up to  $5,923,200  and  a  per  share  purchase  price  of  $2.74  (an
"Additional  Series B  Financing").  Subject to the terms and conditions of this
Agreement,  at the Closing the Company shall deliver or cause to be delivered to
each  Purchaser (x) a certificate  for the number of Preferred  Shares set forth
opposite  the name of such  Purchaser  on Exhibit A hereto,  (y) its Warrants to
purchase such number of shares of Common Stock as is set forth opposite the name
of such  Purchaser  on  Exhibit A attached  hereto  and (z) any other  documents
required to be delivered  pursuant to Article IV hereof.  At the  Closing,  each
Purchaser  shall direct that KL, as escrow agent,  deliver its Purchase Price by
wire transfer to an account designated by the Company. In addition,  the parties
acknowledge that Five Hundred Thousand Dollars  ($500,000) of the Purchase Price
funded on the Closing Date shall be deposited in a separate  escrow account with
a separate  escrow agent to be used by the Company in  connection  with investor
and public relations in accordance with Section 3.19 hereof.

            Section 1.5 Share Exchange Transaction. The parties acknowledge that
immediately  prior to the consummation of the transactions  contemplated by this
Agreement,  the Company will issue shares of its Series A Preferred Stock to the
shareholders of GAS Investment China Co. Ltd., a British Virgin Islands company,
pursuant to that certain Share Exchange  Agreement  dated as of the date hereof,
and  upon  the  consummation  of the  transactions  contemplated  by such  Share
Exchange  Agreement,  GAS  Investment  China Co. Ltd. will become a wholly-owned
subsidiary of the Company (the "Share Exchange Transaction").

                                      -2-
<PAGE>

                                   ARTICLE II

                         Representations and Warranties

            Section 2.1  Representations  and  Warranties  of the  Company.  The
Company hereby represents and warrants to the Purchasers,  as of the date hereof
and the Closing Date (except as set forth on the Schedule of Exceptions attached
hereto with each numbered Schedule  corresponding to the section number herein),
as follows:

            (a)  Organization,  Good  Standing  and  Power.  The  Company  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the State of Utah and has the requisite  corporate  power to own,  lease
and operate its  properties  and assets and to conduct its business as it is now
being conducted.  The Company does not have any subsidiaries except as set forth
in the Company's Form 10-KSB for the year ended December 31, 2005, including the
accompanying  financial statements (the "Form 10-KSB"), or in the Company's Form
10-QSB for the fiscal quarters ended June 30, 2006, March 31, 2006 and September
30, 2005  (collectively,  the "Form 10-QSB"),  or on Schedule 2.1(g) hereto. The
Company and each such  subsidiary is duly qualified as a foreign  corporation to
do business and is in good standing in every jurisdiction in which the nature of
the  business  conducted  or  property  owned  by it  makes  such  qualification
necessary  except for any  jurisdiction(s)  (alone or in the aggregate) in which
the  failure  to be so  qualified  will not have a Material  Adverse  Effect (as
defined in Section 2.1(c) hereof) on the Company's financial condition.

            (b)  Authorization;  Enforcement.  The  Company  has  the  requisite
corporate  power and  authority  to enter into and perform this  Agreement,  the
Registration  Rights  Agreement  in the form  attached  hereto as Exhibit D (the
"Registration  Rights Agreement"),  the Lock-Up Agreement (as defined in Section
3.20 hereof) in the form attached hereto as Exhibit H, the Irrevocable  Transfer
Agent Instructions (as defined in Section 3.10), the Certificate of Designation,
and the Warrants  (collectively,  the "Transaction  Documents") and to issue and
sell the  Shares and the  Warrants  in  accordance  with the terms  hereof.  The
execution,  delivery and performance of the Transaction Documents by the Company
and the consummation by it of the transactions  contemplated  hereby and thereby
have been duly and validly authorized by all necessary  corporate action, and no
further  consent or  authorization  of the Company or its Board of  Directors or
stockholders is required. This Agreement has been duly executed and delivered by
the Company.  The other  Transaction  Documents will have been duly executed and
delivered  by the  Company at the  Closing.  Each of the  Transaction  Documents
constitutes,  or shall  constitute  when  executed  and  delivered,  a valid and
binding obligation of the Company  enforceable against the Company in accordance
with its terms,  except as such  enforceability  may be  limited  by  applicable
bankruptcy,     insolvency,     reorganization,     moratorium,     liquidation,
conservatorship,   receivership  or  similar  laws  relating  to,  or  affecting
generally  the  enforcement  of,  creditor's  rights  and  remedies  or by other
equitable principles of general application.

            (c) Capitalization.  The authorized capital stock of the Company and
the shares thereof  currently  issued and  outstanding as of the date hereof are
set forth on Schedule 2.1(c) hereto. All of the outstanding shares of the Common
Stock and the Preferred Shares have been duly and validly authorized.  Except as
set forth on Schedule  2.1(c) hereto,  no shares of Common Stock are entitled to
preemptive rights or registration  rights and there are no outstanding  options,
warrants,  scrip,  rights to subscribe to, call or  commitments of any character
whatsoever  relating to, or securities or rights convertible into, any shares of
capital   stock  of  the   Company.   There  are  no   contracts,   commitments,
understandings,  or  arrangements by which the Company is or may become bound to

                                      -3-
<PAGE>

issue  additional  shares  of the  capital  stock  of the  Company  or  options,
securities  or rights  convertible  into shares of capital stock of the Company.
The  Company  is  not  a  party  to  any  agreement  granting   registration  or
anti-dilution  rights to any  person  with  respect to any of its equity or debt
securities.  The  Company  is not a party to,  and it has no  knowledge  of, any
agreement  restricting the voting or transfer of any shares of the capital stock
of the Company. The offer and sale of all capital stock, convertible securities,
rights, warrants, or options of the Company issued prior to the Closing complied
with all applicable  Federal and state securities laws, and no stockholder has a
right of rescission or claim for damages with respect thereto which would have a
Material  Adverse Effect (as defined  below).  The Company has furnished or made
available to the Purchasers true and correct copies of the Company's Articles of
Incorporation  as in  effect  on the  date  hereof  (the  "Articles"),  and  the
Company's  Bylaws  as in  effect  on the date  hereof  (the  "Bylaws").  For the
purposes of this Agreement, "Material Adverse Effect" means any material adverse
effect  on  the  business,  operations,   properties,  prospects,  or  financial
condition   of  the  Company  and  its   subsidiaries   and/or  any   condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the  ability of the Company to perform  any of its  obligations  under this
Agreement in any material respect.

            (d) Issuance of Shares.  The Preferred Shares and the Warrants to be
issued at the  Closing  have been duly  authorized  by all  necessary  corporate
action and the Preferred Shares,  when paid for or issued in accordance with the
terms  hereof,  shall  be  validly  issued  and  outstanding,   fully  paid  and
nonassessable  and  entitled  to the  rights  and  preferences  set forth in the
Certificate of  Designation.  When the Conversion  Shares and the Warrant Shares
are issued in accordance  with the terms of the  Certificate of Designation  and
the Warrants, respectively, such shares will be duly authorized by all necessary
corporate   action  and  validly   issued  and   outstanding,   fully  paid  and
nonassessable,  and the holders  shall be  entitled to all rights  accorded to a
holder of Common Stock.

            (e) No Conflicts.  The  execution,  delivery and  performance of the
Transaction  Documents by the Company and the consummation by the Company of the
transactions contemplated herein and therein do not and will not (i) violate any
provision of the Company's Articles or Bylaws, (ii) 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,  mortgage,  deed of  trust,
indenture,  note, bond,  license,  lease agreement,  instrument or obligation to
which the  Company  is a party or by which it or its  properties  or assets  are
bound, (iii) create or impose a lien,  mortgage,  security  interest,  charge or
encumbrance  of any nature on any property of the Company under any agreement or
any  commitment to which the Company is a party or by which the Company is bound
or by which any of its respective properties or assets are bound, or (iv) result
in  a  violation  of  any  federal,  state,  local  or  foreign  statute,  rule,
regulation,  order,  judgment or decree (including  Federal and state securities
laws and regulations) applicable to the Company or any of its subsidiaries or by

                                      -4-
<PAGE>

which any property or asset of the Company or any of its  subsidiaries are bound
or affected,  except, in all cases other than violations pursuant to clauses (i)
and  (iv)  above,  for  such  conflicts,  defaults,  terminations,   amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate,  have a Material Adverse Effect.  The business of the Company and its
subsidiaries  is not being  conducted in violation  of any laws,  ordinances  or
regulations of any  governmental  entity,  except for possible  violations which
singularly  or in the  aggregate  do not and will not  have a  Material  Adverse
Effect.  The Company is not required under Federal,  state or local law, rule or
regulation to obtain any consent,  authorization or order of, or make any filing
or  registration  with,  any  court or  governmental  agency  in order for it to
execute,  deliver  or  perform  any of its  obligations  under  the  Transaction
Documents,  or issue and sell the Shares and the Warrants in accordance with the
terms hereof or thereof (other than any filings which may be required to be made
by the Company with the Commission or state securities administrators subsequent
to the Closing,  any registration  statement which may be filed pursuant hereto,
and  the  Certificate  of  Designation);  provided  that,  for  purposes  of the
representation  made in this sentence,  the Company is assuming and relying upon
the accuracy of the relevant  representations  and  agreements of the Purchasers
herein.

            (f) Commission Documents,  Financial Statements. The Common Stock is
registered  pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of
1934,  as amended the  "Exchange  Act"),  and the  Company has timely  filed all
reports,  schedules,  forms, statements and other documents required to be filed
by it with the Commission pursuant to the reporting requirements of the Exchange
Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange
Act (all of the foregoing  including  filings  incorporated by reference therein
being  referred  to herein  as the  "Commission  Documents").  The  Company  has
delivered  or made  available to each of the  Purchasers  at the request of such
Purchaser true and complete copies of the Commission Documents.  The Company has
not provided to the  Purchasers  any material  non-public  information  or other
information which, according to applicable law, rule or regulation, was required
to have  been  disclosed  publicly  by the  Company  but  which  has not been so
disclosed,  other than with  respect to the  transactions  contemplated  by this
Agreement.  At the times of their  respective  filings,  the Form 10-KSB and the
Form 10-QSB  complied in all  material  respects  with the  requirements  of the
Exchange  Act  and the  rules  and  regulations  of the  Commission  promulgated
thereunder  and  other  federal,  state and local  laws,  rules and  regulations
applicable to such documents,  and, as of their  respective  dates,  none of the
Form 10-KSB and the Form 10-QSB  contained  any untrue  statement  of a material
fact or  omitted  to state a  material  fact  required  to be stated  therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made,  not  misleading.  The  financial  statements of the
Company  included in the Commission  Documents comply as to form in all material
respects with  applicable  accounting  requirements  and the published rules and
regulations of the Commission or other  applicable  rules and  regulations  with
respect thereto. Such financial statements have been prepared in accordance with
United States generally  accepted  accounting  principles  ("GAAP") applied on a
consistent  basis  during the periods  involved  (except (i) as may be otherwise
indicated in such financial  statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be  condensed  or summary  statements),  and fairly  present in all material
respects the financial  position of the Company and its  subsidiaries  as of the
dates thereof and the results of operations  and cash flows for the periods then
ended (subject,  in the case of unaudited  statements,  to normal year-end audit
adjustments).

                                      -5-
<PAGE>

            (g) Subsidiaries.  Schedule 2.1(g) hereto sets forth each subsidiary
of the Company,  showing the  jurisdiction of its  incorporation or organization
and showing the percentage of the Company's ownership.  For the purposes of this
Agreement,  "subsidiary"  shall mean any corporation or other entity of which at
least a majority of the securities or other  ownership  interest having ordinary
voting power (absolutely or contingently) for the election of directors or other
persons  performing  similar  functions  are  at  the  time  owned  directly  or
indirectly  by the  Company  and/or  any of its other  subsidiaries.  All of the
outstanding  shares of capital stock of each subsidiary  directly and indirectly
held by the Company have been duly authorized and validly issued,  and are fully
paid and nonassessable. Other than as contemplated by the Transaction Documents,
there  are no  outstanding  preemptive,  conversion  or other  rights,  options,
warrants or agreements  granted or issued by or binding upon any  subsidiary for
the purchase or  acquisition of any shares of capital stock of any subsidiary or
any other securities convertible into, exchangeable for or evidencing the rights
to subscribe for any shares of such capital stock. Other than as contemplated by
the Transaction Documents,  neither the Company nor any subsidiary is subject to
any obligation  (contingent or otherwise) to repurchase or otherwise  acquire or
retire any shares of the  capital  stock of any  subsidiary  or any  convertible
securities,  rights,  warrants or options of the type described in the preceding
sentence.  Neither  the  Company  nor any  subsidiary  is party to,  nor has any
knowledge of, any agreement  restricting the voting or transfer of any shares of
the capital stock of any subsidiary.

            (h) No Material Adverse Change. Since December 31, 2005, the Company
has not experienced or suffered any Material Adverse Effect.

            (i) No Undisclosed  Liabilities.  Neither the Company nor any of its
subsidiaries  has  any  liabilities,  obligations,  claims  or  losses  (whether
liquidated or unliquidated,  secured or unsecured, absolute, accrued, contingent
or otherwise)  other than those incurred in the ordinary course of the Company's
or its  subsidiaries  respective  businesses  since December 31, 2005 and which,
individually  or in the aggregate,  do not or would not have a Material  Adverse
Effect on the Company or its subsidiaries.

            (j)  No  Undisclosed  Events  or  Circumstances.  To  the  Company's
knowledge,  no event or circumstance  has occurred or exists with respect to the
Company  or  its  subsidiaries  or  their  respective  businesses,   properties,
prospects,  operations or financial condition, which, under applicable law, rule
or regulation,  requires  public  disclosure or  announcement by the Company but
which has not been so publicly announced or disclosed.

            (k)  Indebtedness.  The Form 10-KSB,  Form 10-QSB and the financials
statements of Beijing Zhong Ran Wei Ye Gas Co., Ltd. ("Beijing Gas") for the six
months  ended June 30,  2006 and the fiscal  years ended  December  31, 2005 and
2004,  sets  forth  as of the  dates  and  periods  indicated  on such  form and
financial statements,  all outstanding secured and unsecured Indebtedness of the
Company  or any  subsidiary,  or for which the  Company  or any  subsidiary  has
commitments.  For the purposes of this Agreement,  "Indebtedness" shall mean (a)
any  liabilities for borrowed money or amounts owed in excess of $100,000 (other
than trade accounts  payable  incurred in the ordinary course of business),  (b)
all  guaranties,  endorsements  and other  contingent  obligations in respect of
Indebtedness  of others,  whether or not the same are or should be  reflected in

                                      -6-
<PAGE>

the  Company's  balance  sheet  (or the notes  thereto),  except  guaranties  by
endorsement  of  negotiable  instruments  for deposit or  collection  or similar
transactions  in the ordinary  course of business;  and (c) the present value of
any lease  payments  in excess  of  $25,000  due  under  leases  required  to be
capitalized  in accordance  with GAAP.  Except as set forth on Schedule  2.1(k),
neither  the  Company  nor any  subsidiary  is in  default  with  respect to any
Indebtedness.

            (l) Title to Assets.  Each of the Company and the  subsidiaries  has
good and marketable title to, or valid leasehold  interest in, free and clear of
all  mortgages,   pledges,   charges,   liens,   security   interests  or  other
encumbrances, all properties and assets (i) purportedly owned or used by them as
reflected  in the Form  10-KSB,  or (ii) or  necessary  for the conduct of their
business as currently  conducted,  except for those disclosed in the Form 10-KSB
or such that,  individually or in the aggregate, do not cause a Material Adverse
Effect.

            (m) Actions Pending. There is no action, suit, claim, investigation,
arbitration,  alternate  dispute  resolution  proceeding or any other proceeding
pending or, to the knowledge of the Company,  threatened  against the Company or
any  subsidiary  which  questions  the validity of this  Agreement or any of the
other Transaction  Documents or the transactions  contemplated hereby or thereby
or any  action  taken or to be taken  pursuant  hereto or  thereto.  There is no
action, suit, claim,  investigation,  arbitration,  alternate dispute resolution
proceeding or any other proceeding  pending or, to the knowledge of the Company,
threatened,  against or involving  the Company,  any  subsidiary or any of their
respective  properties or assets.  There are no outstanding  orders,  judgments,
injunctions,  awards or decrees  of any court,  arbitrator  or  governmental  or
regulatory body against the Company or any subsidiary or any executive  officers
or directors of the Company or subsidiary in their capacities as such.

            (n)  Compliance  with  Law.  The  business  of the  Company  and the
subsidiaries  has been and is presently  being  conducted in accordance with all
applicable  federal,  state and local governmental laws, rules,  regulations and
ordinances,   except  for  such  noncompliance  that,  individually  or  in  the
aggregate,  would not cause a Material  Adverse Effect.  The Company and each of
its  subsidiaries  have all franchises,  permits,  licenses,  consents and other
governmental  or  regulatory  authorizations  and  approvals  necessary  for the
conduct of its  business  as now being  conducted  by it unless  the  failure to
possess such franchises,  permits, licenses,  consents and other governmental or
regulatory authorizations and approvals, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

            (o) Taxes.  The Company and each of the  subsidiaries has accurately
prepared and filed all federal,  state and other tax returns  required by law to
be filed by it, has paid or made  provisions  for the payment of all taxes shown
to be due and all additional assessments,  and adequate provisions have been and
are  reflected in the financial  statements of the Company and the  subsidiaries
for all current taxes and other  charges to which the Company or any  subsidiary
is subject  and which are not  currently  due and  payable.  None of the federal
income tax returns of the  Company or any  subsidiary  have been  audited by the
Internal  Revenue  Service.  The  Company  has no  knowledge  of any  additional
assessments,  adjustments or contingent tax liability (whether federal or state)
of any nature  whatsoever,  whether pending or threatened against the Company or
any  subsidiary  for any  period,  nor of any  basis  for any  such  assessment,
adjustment or contingency.

                                      -7-
<PAGE>

            (p) Certain Fees.  Except as set forth on Schedule 2.1(p) hereto, no
brokers,  finders or financial  advisory fees or commissions  will be payable by
the Company or any subsidiary or any Purchaser with respect to the  transactions
contemplated by this Agreement.

            (q)  Disclosure.  Except as set  forth on  Schedule  2.1(q)  hereto,
neither  this  Agreement  or the  Schedules  hereto  nor  any  other  documents,
certificates  or instruments  furnished to the Purchasers by or on behalf of the
Company or any subsidiary in connection  with the  transactions  contemplated by
this Agreement  contain any untrue statement of a material fact or omit to state
any  material  fact  necessary  in order to make the  statements  made herein or
therein,  in the light of the circumstances under which they were made herein or
therein, not false or misleading.

            (r) Operation of Business.  The Company and each of the subsidiaries
owns  or  possesses  all  patents,  trademarks,  domain  names  (whether  or not
registered) and any patentable  improvements or  copyrightable  derivative works
thereof,  websites and intellectual  property rights relating  thereto,  service
marks, trade names, copyrights,  licenses and authorizations as set forth in the
Form 10-KSB,  and all rights with respect to the foregoing,  which are necessary
for the conduct of its business as now  conducted  without any conflict with the
rights of others, except where the failure to so own or possess would not have a
Material Adverse Effect.

            (s)  Environmental  Compliance.  Since their inception,  neither the
Company,  nor any of its subsidiaries  have been, in violation of any applicable
law relating to the  environment or occupational  health and safety,  where such
violation  would have a material  adverse  effect on the  business or  financial
condition  of any of the Company and its  Subsidiaries.  Each of Company and its
Subsidiaries  has  operated  all  facilities  and  properties  owned,  leased or
operated by it in  material  compliance  with the  Environmental  Laws.  As used
herein, "Environmental Laws" means all applicable laws governing,  regulating or
otherwise affecting the environment, health or safety.

            (t) Books and Record  Internal  Accounting  Controls.  The books and
records of the Company and its subsidiaries  accurately  reflect in all material
respects  the  information  relating  to the  business  of the  Company  and the
subsidiaries, the location and collection of their assets, and the nature of all
transactions  giving  rise to the  obligations  or  accounts  receivable  of the
Company or any subsidiary.  The Company and each of its subsidiaries  maintain a
system of  internal  accounting  controls  sufficient,  in the  judgment  of the
Company,  to provide reasonable  assurance that (i) transactions are executed in
accordance  with   management's   general  or  specific   authorizations,   (ii)
transactions  are  recorded as  necessary  to permit  preparation  of  financial
statements in conformity with GAAP and to maintain asset  accountability,  (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization  and (iv) the  recorded  accountability  for  assets  is
compared  with the  existing  assets at  reasonable  intervals  and  appropriate
actions is taken with respect to any differences.

            (u) Material  Agreements.  The Company and each of its  subsidiaries
has in all  material  respects  performed  all the  obligations  required  to be
performed  by them to date  under  any  written  or oral  contract,  instrument,
agreement, commitment, obligation, plan or arrangement (a copy of which would be
required  to be filed  with  the  Commission  as an  exhibit  to a  registration

                                      -8-
<PAGE>

statement on Form S-3 or applicable  form if the Company or any subsidiary  were
registering  securities  under the Securities  Act),  have received no notice of
default  and are not in default  under any such  agreement  now in  effect,  the
result of which  could cause a Material  Adverse  Effect.  Except as  restricted
under applicable laws and regulations, the incorporation documents, certificates
of  designations  or the  Transaction  Documents,  no written or oral  contract,
instrument,  agreement,  commitment,  obligation,  plan  or  arrangement  of the
Company or of any  subsidiary  limits or shall limit the payment of dividends on
the Preferred Shares, the Company's other preferred stock, if any, or its Common
Stock.

            (v)  Transactions  with  Affiliates.  Except  as  set  forth  in the
Commission Documents, there are no loans, leases, agreements, contracts, royalty
agreements,   management   contracts  or   arrangements   or  other   continuing
transactions  between (a) the Company or any subsidiary on the one hand, and (b)
on the other hand, any officer, employee, consultant or director of the Company,
or any of its  subsidiaries,  or any  person  owning  any  capital  stock of the
Company or any subsidiary or any member of the immediate family of such officer,
employee, consultant, director or stockholder or any corporation or other entity
controlled by such officer, employee, consultant,  director or stockholder, or a
member of the immediate family of such officer, employee,  consultant,  director
or stockholder.

            (w)  Securities  Act of  1933.  Based  in  material  part  upon  the
representations  herein of the  Purchasers,  the Company has  complied  and will
comply with all applicable  federal and state securities laws in connection with
the offer,  issuance and sale of the Shares and the Warrants hereunder.  Neither
the Company nor anyone acting on its behalf, directly or indirectly, has or will
sell, offer to sell or solicit offers to buy any of the Shares,  the Warrants or
similar  securities  to, or solicit  offers with respect  thereto from, or enter
into any preliminary  conversations  or negotiations  relating thereto with, any
person,  or has taken or will take any  action so as to bring the  issuance  and
sale of any of the Shares and the  Warrants  in  violation  of the  registration
provisions of the Securities Act and applicable state  securities laws.  Neither
the Company  nor any of its  affiliates,  nor any person  acting on its or their
behalf, has engaged in any form of general  solicitation or general  advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of any of the Shares and the Warrants.

            (x)  Governmental  Approvals.  Except  for the  filing of any notice
prior or  subsequent to the Closing Date that may be required  under  applicable
state and/or  Federal  securities  laws (which if required,  shall be filed on a
timely  basis) of the  United  States  and/or  applicable  laws of the  People's
Republic  of China,  including,  without  limitation,  the filing of a Form D, a
current report on Form 8-K, a registration  statement or statements  pursuant to
the  Registration  Rights  Agreement,  and  the  filing  of the  Certificate  of
Designation with the Secretary of State for the State of Utah, no authorization,
consent, approval,  license, exemption of, filing or registration with any court
or   governmental   department,    commission,    board,   bureau,   agency   or
instrumentality,  domestic  or  foreign,  is or will  be  necessary  for,  or in
connection  with,  the  execution  or delivery of the  Preferred  Shares and the
Warrants,  or for the  performance by the Company of its  obligations  under the
Transaction Documents.

                                      -9-
<PAGE>

            (y)  Employees;  Labor  Relations.   Neither  the  Company  nor  any
subsidiary has any collective bargaining arrangements or agreements covering any
of its employees, except as set forth on Schedule 2.1(y) hereto and as disclosed
in the Commission  Documents.  Except as set forth on Schedule 2.1(y) hereto and
as disclosed in the Commission Documents, neither the Company nor any subsidiary
has  any  employment  contract,  agreement  regarding  proprietary  information,
non-competition   agreement,    non-solicitation   agreement,    confidentiality
agreement,  or any other similar contract or restrictive  covenant,  relating to
the right of any officer,  employee or  consultant  to be employed or engaged by
the  Company or such  subsidiary  required  to be  disclosed  in the  Commission
Documents  that is not so  disclosed.  Since  December  31,  2005,  no  officer,
consultant or key employee of the Company or any subsidiary  whose  termination,
either  individually or in the aggregate,  would be reasonably  likely to have a
Material Adverse Effect, has terminated or, to the knowledge of the Company, has
any present  intention of terminating  his or her employment or engagement  with
the Company or any  subsidiary.  Except as could not  reasonably  be expected to
have  a  Material  Adverse  Effect,  (i)  neither  the  Company  nor  any of its
Subsidiaries is engaged in any unfair labor  practice,  (ii) there is no strike,
labor dispute, slowdown or stoppage pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries, and (iii) neither the
Company  nor any of its  Subsidiaries  is a party to any  collective  bargaining
agreement or contract.

            (z) Absence of Certain  Developments.  Except as may be disclosed in
the Commission  Documents,  since December 31, 2005, neither the Company nor any
subsidiary has:

                  (i) issued any stock,  bonds or other corporate  securities or
any rights, options or warrants with respect thereto;

                  (ii) borrowed any amount or incurred or become  subject to any
liabilities  (absolute or contingent) except current liabilities incurred in the
ordinary  course of business  which are  comparable  in nature and amount to the
current  liabilities  incurred in the  ordinary  course of  business  during the
comparable  portion of its prior fiscal year, as adjusted to reflect the current
nature and volume of the Company's or such subsidiary's business;

                  (iii)  discharged or satisfied any lien or encumbrance or paid
any  obligation  or  liability  (absolute  or  contingent),  other than  current
liabilities paid in the ordinary course of business;

                  (iv) declared or made any payment or  distribution  of cash or
other  property to  stockholders  with  respect to its stock,  or  purchased  or
redeemed,  or made any  agreements  so to purchase or redeem,  any shares of its
capital stock;

                  (v) sold,  assigned or transferred any other tangible  assets,
or canceled any debts or claims, except in the ordinary course of business;

                  (vi)  sold,   assigned  or  transferred   any  patent  rights,
trademarks, trade names, copyrights, trade secrets or other intangible assets or
intellectual   property  rights,  or  disclosed  any  proprietary   confidential
information to any person except to customers in the ordinary course of business
or to the Purchasers or their representatives;

                                      -10-
<PAGE>

                  (vii) suffered any substantial  losses or waived any rights of
material value,  whether or not in the ordinary course of business,  or suffered
the loss of any material amount of prospective business;

                  (viii) made any changes in employee compensation except in the
ordinary course of business and consistent with past practices;

                  (ix) made capital  expenditures  or commitments  therefor that
aggregate in excess of $100,000;

                  (x)  entered  into any  other  transaction  other  than in the
ordinary  course of business,  or entered into any other  material  transaction,
whether or not in the ordinary course of business;

                  (xi) made  charitable  contributions  or  pledges in excess of
$25,000;

                  (xii)  suffered any material  damage,  destruction or casualty
loss, whether or not covered by insurance;

                  (xiii)   experienced  any  material  problems  with  labor  or
management in connection with the terms and conditions of their employment;

                  (xiv)  effected any two or more events of the  foregoing  kind
which in the aggregate would be material to the Company or its subsidiaries; or

                  (xv) entered into an agreement,  written or otherwise, to take
any of the foregoing actions.

            (aa) Public Utility Holding  Company Act and Investment  Company Act
Status.  The Company is not a "holding company" or a "public utility company" as
such terms are defined in the Public  Utility  Holding  Company Act of 1935,  as
amended. The Company is not, and as a result of and immediately upon the Closing
will not be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.

            (bb) ERISA. No liability to the Pension Benefit Guaranty Corporation
has been incurred with respect to any Plan (as defined  below) by the Company or
any of its subsidiaries  which is or would be materially  adverse to the Company
and its  subsidiaries.  The  execution  and delivery of this  Agreement  and the
issuance and sale of the Preferred Shares will not involve any transaction which
is subject to the  prohibitions  of Section 406 of ERISA or in  connection  with
which a tax could be imposed  pursuant to Section 4975 of the  Internal  Revenue
Code of 1986, as amended, provided that, if any of the Purchasers, or any person
or entity  that  owns a  beneficial  interest  in any of the  Purchasers,  is an
"employee  pension  benefit  plan" (within the meaning of Section 3(2) of ERISA)
with respect to which the Company is a "party in  interest"  (within the meaning
of Section 3(14) of ERISA), the requirements of Sections 407(d)(5) and 408(e) of
ERISA, if applicable,  are met. As used in this Section 2.1(ac), the term "Plan"
shall mean an "employee pension benefit plan" (as defined in Section 3 of ERISA)
which is or has been established or maintained, or to which contributions are or
have been made,  by the Company or any  subsidiary  or by any trade or business,
whether or not incorporated, which, together with the Company or any subsidiary,
is under common control, as described in Section 414(b) or (c) of the Code.

                                      -11-
<PAGE>

            (cc) Dilutive Effect. The Company  understands and acknowledges that
its  obligation  to issue  Conversion  Shares upon  conversion  of the Preferred
Shares in accordance  with this Agreement and the Certificate of Designation and
its obligations to issue the Warrant Shares upon the exercise of the Warrants in
accordance with this Agreement and the Warrants,  is, in each case, absolute and
unconditional  regardless of the dilutive  effect that such issuance may have on
the ownership interest of other stockholders of the Company.

            (dd) No  Integrated  Offering.  Neither the Company,  nor any of its
affiliates,  nor any  person  acting on its or their  behalf,  has  directly  or
indirectly  made any offers or sales of any security or solicited  any offers to
buy any security under circumstances that would cause the offering of the Shares
pursuant to this Agreement to be integrated  with prior offerings by the Company
for purposes of the  Securities Act which would prevent the Company from selling
the Shares  pursuant to Rule 506 under the  Securities  Act,  or any  applicable
exchange-related stockholder approval provisions, nor will the Company or any of
its  affiliates  or  subsidiaries  take any action or steps that would cause the
offering of the Shares to be integrated with other  offerings.  The Company does
not have any registration  statement  pending before the Commission or currently
under the  Commission's  review and since  February 1, 2006, the Company has not
offered or sold any of its equity securities or debt securities convertible into
shares of Common Stock.

            (ee)  Sarbanes-Oxley  Act.  The  Company is in  compliance  with the
applicable  provisions of the  Sarbanes-Oxley  Act of 2002 (the  "Sarbanes-Oxley
Act"), and the rules and regulations promulgated thereunder, that are effective,
and intends to comply with other  applicable  provisions  of the  Sarbanes-Oxley
Act,  and  the  rules  and   regulations   promulgated   thereunder,   upon  the
effectiveness of such provisions.

            (ff) Independent Nature of Purchasers. The Company acknowledges that
the obligations of each Purchaser  under the  Transaction  Documents are several
and not joint with the  obligations  of any other  Purchaser,  and no  Purchaser
shall be  responsible in any way for the  performance of the  obligations of any
other Purchaser under the Transaction  Documents.  The Company acknowledges that
the decision of each Purchaser to purchase securities pursuant to this Agreement
has  been  made  by such  Purchaser  independently  of any  other  purchase  and
independently  of any information,  materials,  statements or opinions as to the
business,  affairs,  operations,  assets,  properties,  liabilities,  results of
operations, condition (financial or otherwise) or prospects of the Company or of
its  Subsidiaries  which may have made or given by any other Purchaser or by any
agent or employee of any other Purchaser,  and no Purchaser or any of its agents
or employees  shall have any  liability to any  Purchaser  (or any other person)
relating  to or arising  from any such  information,  materials,  statements  or
opinions.  The Company  acknowledges  that nothing  contained  herein, or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant hereto or
thereto,  shall be deemed to  constitute  the  Purchasers as a  partnership,  an
association,  a  joint  venture  or any  other  kind  of  entity,  or  create  a

                                      -12-
<PAGE>

presumption  that the  Purchasers are in any way acting in concert or as a group
with  respect  to  such  obligations  or the  transactions  contemplated  by the
Transaction  Documents.  The Company  acknowledges  that each Purchaser shall be
entitled to  independently  protect and  enforce its rights,  including  without
limitation,  the  rights  arising  out of  this  Agreement  or out of the  other
Transaction Documents,  and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. The Company
acknowledges   that  for  reasons  of   administrative   convenience  only,  the
Transaction  Documents  have been prepared by counsel for one of the  Purchasers
and such  counsel  does  not  represent  all of the  Purchasers  but  only  such
Purchaser and the other  Purchasers  have retained their own individual  counsel
with respect to the transactions  contemplated  hereby. The Company acknowledges
that  it has  elected  to  provide  all  Purchasers  with  the  same  terms  and
Transaction  Documents for the convenience of the Company and not because it was
required or requested to do so by the Purchasers.

            (gg)  Transfer  Agent.  The name,  address,  telephone  number,  fax
number, contact person and email address of the Company's current transfer agent
is set forth on Schedule 2.1(gg) hereto.

            Section 2.2 Representations  and Warranties of the Purchasers.  Each
of the Purchasers hereby makes the following  representations  and warranties to
the  Company  with  respect  solely to itself and not with  respect to any other
Purchaser:

            (a) Organization and Standing of the Purchasers. If the Purchaser is
an entity,  such Purchaser is a corporation or partnership duly  incorporated or
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its incorporation or organization.

            (b)  Authorization and Power. Each Purchaser has the requisite power
and  authority  to enter into and perform this  Agreement  and each of the other
Transaction  Documents to which such  Purchaser is a party,  and to purchase the
Preferred  Shares  and  Warrants  being  sold to it  hereunder.  The  execution,
delivery and  performance  of this  Agreement and each of the other  Transaction
Documents  to  which  such  Purchaser  is a  party,  by such  Purchaser  and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate or partnership action, and no further
consent  or   authorization  of  such  Purchaser  or  its  Board  of  Directors,
stockholders,  or  partners,  as the  case  may  be,  is  required.  Each of the
Transaction  Documents  to  which  such  Purchaser  is a  party  has  been  duly
authorized,  executed and delivered by such Purchaser and constitutes,  or shall
constitute  when executed and delivered,  a valid and binding  obligation of the
Purchaser  enforceable  against  the  Purchaser  in  accordance  with the  terms
thereof.

            (c) No Conflicts.  The execution,  delivery and  performance of this
Agreement and each of the other Transaction Documents to which such Purchaser is
a party and the consummation by such Purchaser of the transactions  contemplated
hereby  and  thereby  or  relating  hereto  do not and will not (i)  result in a
violation   of  such   Purchaser's   charter   documents   or  bylaws  or  other
organizational  documents or (ii) 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 or obligation to which
such  Purchaser is a party or by which its  properties  or assets are bound,  or
result in a violation of any law, rule, or regulation, or any order, judgment or
decree of any court or governmental  agency  applicable to such Purchaser or its
properties  (except for such  conflicts,  defaults and  violations as would not,

                                      -13-
<PAGE>

individually  or in the  aggregate,  have a  material  adverse  effect  on  such
Purchaser). Such Purchaser is not required to obtain any consent,  authorization
or order of, or make any filing or registration  with, any court or governmental
agency in order for it to  execute,  deliver or perform  any of its  obligations
under this  Agreement or each of the other  Transaction  Documents to which such
Purchaser is a party or to purchase the Preferred Shares or acquire the Warrants
in  accordance  with  the  terms  hereof,  provided  that  for  purposes  of the
representation  made in this  sentence,  such  Purchaser is assuming and relying
upon the accuracy of the relevant  representations and agreements of the Company
herein.

            (d)  Acquisition  for  Investment.  Each  Purchaser is acquiring the
Preferred  Shares and the Warrants solely for its own account for the purpose of
investment and not with a view to or for sale in connection  with  distribution.
Each Purchaser does not have a present intention to sell the Preferred Shares or
the  Warrants,  nor a present  arrangement  (whether or not legally  binding) or
intention to effect any  distribution of the Preferred Shares or the Warrants to
or  through  any  person  or  entity;  provided,  however,  that by  making  the
representations  herein and subject to Section 2.2(h) below, such Purchaser does
not agree to hold the Shares or the Warrants  for any minimum or other  specific
term and reserves the right to dispose of the Shares or the Warrants at any time
in  accordance  with  Federal  and  state  securities  laws  applicable  to such
disposition.  Each Purchaser  acknowledges that it is able to bear the financial
risks associated with an investment in the Preferred Shares and the Warrants and
that it has been  given  full  access to such  records  of the  Company  and the
subsidiaries  and to the  officers  of the  Company  and  the  subsidiaries  and
received such  information as it has deemed  necessary or appropriate to conduct
its due diligence  investigation and has sufficient  knowledge and experience in
investing in companies similar to the Company in terms of the Company's stage of
development  so as to be able to evaluate the risks and merits of its investment
in  the  Company.  Each  Purchaser  further  acknowledges  that  such  Purchaser
understands the risks of investing in companies  domiciled  and/or which operate
primarily in the People's  Republic of China and that the purchase of the Shares
and Warrants involves substantial risks.

            (e) Status of Purchasers. Such Purchaser is an "accredited investor"
as defined in Regulation D promulgated  under the Securities Act. Such Purchaser
is not required to be  registered  as a  broker-dealer  under  Section 15 of the
Exchange Act and such Purchaser is not a broker-dealer.

            (f) Disclosure of Information.  Each Purchaser  hereby  specifically
acknowledges  that  such  Purchaser  has been  provided  a copy of the  document
attached hereto as Exhibit G (the "Disclosure  Document"),  and has reviewed and
fully  understands  the  information   contained  in  the  Disclosure  Document,
including,  without limitation,  the risks associated in making an investment in
the Company and its business.  Each Purchaser  acknowledges  that such Purchaser
has had full access to all the information it considers necessary or appropriate
to make an informed  investment decision with respect to the Shares and Warrants
to be purchased under this Agreement.  Each Purchaser further  acknowledges that
such Purchaser has had the  opportunity to ask questions of and receive  answers
from, or obtain  additional  information  from,  the  executive  officers of the
Company  concerning  the  financial and other affairs of the Company and each of

                                      -14-
<PAGE>

its  subsidiaries,  and  to  the  extent  deemed  necessary  in  light  of  such
Purchaser's  personal  knowledge  of the  affairs of the Company and each of its
subsidiaries,  such Purchaser has asked such  questions and received  answers to
the full satisfaction of such Purchaser, and such Purchaser desires to invest in
the Company.  In making the decision to invest in the Company and its  business,
each Purchaser  hereby  specifically  acknowledges  that such  Purchaser  relied
solely on the Disclosure  Document and has not relied on any oral representation
made by the Company,  or any  subsidiary or any officer,  director,  employee or
agent of any of them.

            (g) No General  Solicitation.  Each Purchaser  acknowledges that the
Preferred Shares and the Warrants were not offered to such Purchaser by means of
any form of general or public solicitation or general  advertising,  or publicly
disseminated   advertisements   or   sales   literature,   including   (i)   any
advertisement,   article,   notice  or  other  communication  published  in  any
newspaper, magazine, or similar media, or broadcast over television or radio, or
(ii) any  seminar or meeting to which such  Purchaser  was invited by any of the
foregoing means of communications.

            (h) Rule 144.  Such  Purchaser  understands  that the Shares must be
held indefinitely  unless such Shares are registered under the Securities Act or
an exemption from  registration is available.  Such Purchaser  acknowledges that
such  Purchaser is familiar  with Rule 144 of the rules and  regulations  of the
Commission, as amended, promulgated pursuant to the Securities Act ("Rule 144"),
and that such person has been advised  that Rule 144 permits  resales only under
certain  circumstances.  Such Purchaser understands that to the extent that Rule
144 is not  available,  such Purchaser will be unable to sell any Shares without
either  registration  under  the  Securities  Act or the  existence  of  another
exemption from such registration requirement.

            (i) No  Registration.  Other than as contemplated  herein and in the
Registration  Rights Agreement,  such Purchaser  understands that the Conversion
Shares and the Warrants Shares have not been registered under the Securities Act
or any state  securities  laws. Such Purchaser  understands  that the Shares are
being  offered  and  sold in  reliance  on a  transactional  exemption  from the
registration requirement of Federal and state securities laws and the Company is
relying  upon  the  truth  and  accuracy  of  the  representations,  warranties,
agreements,  acknowledgments  and  understandings  of such  Purchaser  set forth
herein  in order to  determine  the  applicability  of such  exemptions  and the
suitability of such Purchaser to acquire the Shares.

            (j)  Independent  Investment.  Except  as  may be  disclosed  in any
filings with the Commission by the Purchasers under Section 13 and/or Section 16
of the Exchange Act, no Purchaser has agreed to act with any other Purchaser for
the purpose of acquiring,  holding,  voting or disposing of the Shares purchased
hereunder  for  purposes  of Section  13(d)  under the  Exchange  Act,  and each
Purchaser is acting independently with respect to its investment in the Shares.

                                   ARTICLE III

                                    Covenants

      The  Company  covenants  with each of the  Purchasers  as  follows,  which
covenants are for the benefit of the  Purchasers and their  permitted  assignees
(as defined herein).

                                      -15-
<PAGE>

            Section 3.1  Securities  Compliance.  The Company  shall  notify the
Commission in accordance with their rules and  regulations,  of the transactions
contemplated by any of the Transaction Documents, including filing a Form D with
respect to the Preferred Shares, Warrants,  Conversion Shares and Warrant Shares
as required  under  Regulation  D, filing of a current  report on Form 8-K,  and
shall take all other  necessary  action and  proceedings  as may be required and
permitted  by  applicable  law,  rule and  regulation,  for the  legal and valid
issuance of the Preferred  Shares,  the Warrants,  the Conversion Shares and the
Warrant Shares to the Purchasers or subsequent holders.

            Section 3.2  Registration  and Listing.  The Company shall cause its
Common Stock to continue to be registered  under  Sections 12(b) or 12(g) of the
Exchange  Act,  to  comply  in  all  respects  with  its  reporting  and  filing
obligations  under the Exchange Act, to comply with all requirements  related to
any registration statement filed pursuant to this Agreement, and to not take any
action or file any document  (whether or not permitted by the  Securities Act or
the rules  promulgated  thereunder) to terminate or suspend such registration or
to terminate or suspend its reporting and filing  obligations under the Exchange
Act or Securities  Act,  except as permitted  herein.  The Company will take all
action  necessary  to  continue  the  quotation  of its Common  Stock on the OTC
Bulletin Board or other exchange or market on which the Common Stock is trading.
Subject to the terms of the Transaction Documents, the Company further covenants
that it will take such further action as the Purchasers may reasonably  request,
all to the extent  required  from time to time to enable the  Purchasers to sell
the Shares without  registration  under the Securities Act within the limitation
of the exemptions  provided by Rule 144  promulgated  under the Securities  Act.
Upon the request of the Purchasers,  the Company shall deliver to the Purchasers
a written  certification  of a duly  authorized  officer  as to  whether  it has
complied with such requirements.

            Section 3.3  Compliance  with Laws.  The Company shall  comply,  and
cause each subsidiary to comply,  with all applicable laws,  rules,  regulations
and orders, noncompliance with which could have a Material Adverse Effect.

            Section 3.4  Keeping of Records  and Books of  Account.  The Company
shall keep and cause  each  subsidiary  to keep  adequate  records  and books of
account,  in  which  complete  entries  will  be made in  accordance  with  GAAP
consistently applied,  reflecting all financial  transactions of the Company and
its  subsidiaries,  and in which,  for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence,  amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

            Section 3.5 Reporting Requirements.  If the Commission ceases making
periodic  reports filed under the Exchange Act available via the Internet,  then
at a  Purchaser's  request  the Company  shall  furnish  the  following  to such
Purchaser so long as such Purchaser shall be obligated hereunder to purchase the
Preferred Shares or shall beneficially own any Shares:

            (a) Quarterly  Reports  filed with the  Commission on Form 10-QSB as
soon as practical  after the document is filed with the  Commission,  and in any
event within five (5) days after the document is filed with the Commission;

                                      -16-
<PAGE>

            (b) Annual  Reports filed with the Commission on Form 10-KSB as soon
as practical after the document is filed with the  Commission,  and in any event
within five (5) days after the document is filed with the Commission; and

            (c)  Copies  of  all  notices  and  information,  including  without
limitation  notices and proxy  statements in connection with any meetings,  that
are provided to holders of shares of Common  Stock,  contemporaneously  with the
delivery of such notices or information to such holders of Common Stock.

            Section 3.6  Amendments.  The  Company  shall not amend or waive any
provision  of the  Articles  or  Bylaws  of the  Company  in any way that  would
adversely  affect the  liquidation  preferences,  dividends  rights,  conversion
rights,  voting rights or redemption rights of the Preferred  Shares;  provided,
however,  that while the  Preferred  Shares are  outstanding,  any  creation and
issuance of another  series of Junior  Stock (as defined in the  Certificate  of
Designation)  or any other  class or series  of equity  securities  which by its
terms  shall rank on parity  with the  Preferred  Shares  shall not be deemed to
materially and adversely affect such rights, preferences or privileges.

            Section 3.7 Other  Agreements.  The Company shall not enter into any
agreement  in which the terms of such  agreement  would  restrict  or impair the
right  or  ability  to  perform  of the  Company  or any  subsidiary  under  any
Transaction Document.

            Section 3.8 Use of Proceeds.  The net proceeds  from the sale of the
Shares hereunder and any cash exercise of the Warrants issued hereunder shall be
used  by the  Company  for  capital  expenditures  on  tangible  assets  and gas
distribution  rights  and land  rights  and not to redeem  any  Common  Stock or
securities  convertible,  exercisable  or  exchangeable  into Common Stock or to
settle  any  outstanding  litigation.  The  proceeds  of the sale of the  Shares
hereunder  shall be used as set forth on Schedule 3.8 hereto.  In addition,  the
Company shall provide to VOMF monthly  reports  detailing how such proceeds have
been used by the Company.

            Section 3.9  Reservation of Shares.  So long as any of the Preferred
Shares or  Warrants  remain  outstanding,  the  Company  shall  take all  action
necessary  to at all times have  authorized,  and  reserved  for the  purpose of
issuance, such number of shares of Common Stock as sufficient to provide for the
issuance of the Conversion Shares and the Warrant Shares.

            Section 3.10 Transfer  Agent  Instructions.  The Company shall issue
irrevocable  instructions  to its transfer  agent,  and any subsequent  transfer
agent,  to issue  certificates,  registered in the name of each Purchaser or its
respective nominee(s),  for the Conversion Shares and the Warrant Shares in such
amounts as  specified  from time to time by each  Purchaser  to the Company upon
conversion  of the  Preferred  Shares or exercise of the Warrants in the form of
Exhibit E attached hereto (the "Irrevocable Transfer Agent Instructions"). Prior
to  registration  of the  Conversion  Shares and the  Warrant  Shares  under the
Securities  Act,  all  such  certificates  shall  bear  the  restrictive  legend
specified  in  Section  5.1 of this  Agreement.  The  Company  warrants  that no
instruction other than the Irrevocable  Transfer Agent Instructions  referred to
in this Section 3.10 will be given by the Company to its transfer agent and that
the Shares shall  otherwise be freely  transferable  on the books and records of
the Company as and to the extent provided in this Agreement and the Registration
Rights  Agreement.  If a  Purchaser  provides  the  Company  with an  opinion of

                                      -17-
<PAGE>

counsel,  in a generally  acceptable  form,  to the effect  that a public  sale,
assignment or transfer of the Shares may be made without  registration under the
Securities Act or the Purchaser provides the Company with reasonable  assurances
that the Shares can be sold pursuant to Rule 144 without any  restriction  as to
the  number of  securities  acquired  as of a  particular  date that can then be
immediately sold, the Company shall permit the transfer, and, in the case of the
Conversion  Shares and the Warrant Shares,  promptly instruct its transfer agent
to issue  one or more  certificates  in such name and in such  denominations  as
specified by such  Purchaser  and without any  restrictive  legend.  The Company
acknowledges that a breach by it of its obligations under this Section 3.10 will
cause  irreparable harm to the Purchasers by vitiating the intent and purpose of
the transaction contemplated hereby. Accordingly,  the Company acknowledges that
the remedy at law for a breach of its  obligations  under this Section 3.10 will
be inadequate and agrees,  in the event of a breach or threatened  breach by the
Company of the  provisions of this Section 3.10,  that the  Purchasers  shall be
entitled,  in  addition  to all other  available  remedies,  to an order  and/or
injunction restraining any breach and requiring immediate issuance and transfer,
without the  necessity  of showing  economic  loss and without any bond or other
security being required.

            Section 3.11 Disposition of Assets.  So long as the Preferred Shares
remain outstanding,  neither the Company nor any subsidiary shall sell, transfer
or  otherwise  dispose of any of its  properties,  assets and rights  including,
without limitation, its software and intellectual property, to any person except
for sales to  customers  in the  ordinary  course of  business or with the prior
written  consent of the  holders  of a majority  of the  Preferred  Shares  then
outstanding.

            Section 3.12 Reporting Status.  So long as a Purchaser  beneficially
owns any of the Shares, the Company shall timely file all reports required to be
filed with the  Commission  pursuant to the Exchange  Act, and the Company shall
not  terminate  its  status  as an issuer  required  to file  reports  under the
Exchange Act even if the Exchange  Act or the rules and  regulations  thereunder
would permit such termination.

            Section 3.13  Disclosure of  Transaction.  The Company shall issue a
press release  describing  the material terms of the  transactions  contemplated
hereby (the "Press Release") as soon as practicable  after the Closing but in no
event later than 9:00 A.M.  Eastern Time on the first Trading Day following such
Closing.  The Company  shall also file with the  Commission a Current  Report on
Form 8-K (the "Form 8-K")  describing  the  material  terms of the  transactions
contemplated  hereby (and  attaching  as exhibits  thereto this  Agreement,  the
Registration  Rights  Agreement,  the  Certificate of  Designation,  the Lock-Up
Agreement,  the form of each series of Warrant and the Press Release) as soon as
practicable  following  the  Closing  Date but in no event  more  than  four (4)
Trading Day following such Closing Date,  which Press Release and Form 8-K shall
be subject to prior review and comment by the  Purchasers.  "Trading  Day" means
any day during  which the OTC  Bulletin  Board (or other  principal  exchange on
which the Common Stock is traded) shall be open for trading.

            Section  3.14  Disclosure  of  Material  Information.   The  Company
covenants  and agrees that neither it nor any other person  acting on its behalf
has  provided or will  provide any  Purchaser  or its agents or counsel with any
information  that  the  Company   believes   constitutes   material   non-public
information,  unless prior thereto such Purchaser  shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands  and confirms that each Purchaser  shall be relying on the foregoing
representations in effecting transactions in securities of the Company.

                                      -18-
<PAGE>

            Section  3.15 Pledge of  Securities.  The Company  acknowledges  and
agrees that the Shares may be pledged by a Purchaser in  connection  with a bona
fide margin agreement or other loan or financing  arrangement that is secured by
the  Common  Stock.  The  pledge  of  Common  Stock  shall not be deemed to be a
transfer,  sale or  assignment of the Common Stock  hereunder,  and no Purchaser
effecting a pledge of Common Stock shall be required to provide the Company with
any notice  thereof or otherwise  make any  delivery to the Company  pursuant to
this Agreement or any other Transaction Document;  provided that a Purchaser and
its pledgee shall be required to comply with the  provisions of Article V hereof
in order to  effect a sale,  transfer  or  assignment  of  Common  Stock to such
pledgee.  At the Purchasers'  expense,  the Company hereby agrees to execute and
deliver  such  documentation  as a pledgee  of the Common  Stock may  reasonably
request in  connection  with a pledge of the Common  Stock to such  pledgee by a
Purchaser.

            Section 3.16 Form SB-2 Eligibility.  The Company currently meets the
"registrant  eligibility" and transaction  requirements set forth in the general
instructions to Form SB-2 applicable to "resale"  registrations on Form SB-2 and
the Company shall file all reports  required to be filed by the Company with the
Commission in a timely manner.

            Section  3.17 Board  Observer  Rights.  VOMF shall have the right to
have a representative (the "Vision  Representative") serve as an observer of the
Company's  Board  of  Directors;   provided  that,  upon  request,   the  Vision
Representative shall enter into a confidentiality agreement in a form reasonably
satisfactory to the Company. The Company shall provide the Vision Representative
at least  forty-eight  (48) hours prior  written  notice of any  meetings of the
Company's Board of Directors.  The Vision  Representative  may elect in its sole
discretion to attend such meetings of the Company's Board of Directors.

            Section  3.18  DTC.  Not  later  than  the  effective  date  of  the
Registration  Statement (as defined in the Registration  Rights Agreement),  the
Company  shall  cause its Common  Stock to be  eligible  for  transfer  with its
transfer  agent pursuant to the Depository  Trust Company  Automated  Securities
Transfer Program.

            Section  3.19  Investor  and Public  Relations.  The  Company  shall
deposit or cause to be deposited Five Hundred Thousand Dollars ($500,000) of the
Purchase  Price funded on the Closing Date in a separate  escrow  account with a
separate  escrow agent to be used by the Company in connection with investor and
public relations.

            Section 3.20 Lock-Up Agreement.  The persons listed on Schedule 3.20
attached  hereto  shall be  subject  to the  terms and  provisions  of a lock-up
agreement  in  substantially   the  form  of  Exhibit  H  hereto  (the  "Lock-Up
Agreement"),  which  shall  provide  the manner in which such  persons may sell,
transfer or dispose of their shares of Common Stock.

                                      -19-
<PAGE>

            Section  3.21  Revenue  Targets.  The  Company  shall  establish  an
adjustment  escrow account (the  "Adjustment  Account") in its name in which the
Company  shall  deposit  3,245,784  shares of  Common  Stock to be issued to the
Purchasers,  along with each other  purchaser of Series B Convertible  Preferred
Stock  in  an  Additional  Series  B  Financing  (collectively,  the  "Series  B
Purchasers"), as adjustment shares (the "Adjustment Shares") with respect to the
Company's audited earnings after taxes. The Adjustment  Account shall be managed
by a third party law firm acting as escrow agent for such purpose.  In the event
that (A) the  Company's  earnings  after  taxes for its 2006 fiscal year is less
than  $5,795,000  or (B) (i) if, by the end of its 2007  fiscal year the Company
has raised not less than $20,000,000 through the exercise of warrants or through
an equity or debt  offering (the "Capital  Condition"),  the Company's  earnings
after  taxes for its 2007  fiscal  year is less than  $9,120,000  or (ii) if the
Capital  Condition has not been met, the Company's  earnings after taxes for its
2007 fiscal year is less than $7,900,000, the Company shall issue or cause to be
issued from the Adjustment Account in each instance 1,622,892 Adjustment Shares;
provided,  however,  that if by the end of its 2007  fiscal year the Company has
met the  Capital  Condition  by  procuring  not less  then  $20,000,000  in debt
financing,  the  Company  shall  issue  or cause to be  issued  one-half  of the
Adjustment  Shares that would  otherwise be due. The Adjustment  Shares shall be
issued to the  Series B  Purchasers  in  proportion  to their  purchases  of the
Preferred Shares promptly  following public  disclosure that such revenue target
has not been achieved.  In addition,  if the Company shall  determine to proceed
with the preparation and filing of a registration statement under the Securities
Act in connection  with the proposed  offer and sale of any of its securities by
it or any of its security  holders (other than a registration  statement on Form
S-4,  S-8 or other  limited  purpose  form),  then the  Company  will  cause all
Adjustment  Shares  issued  pursuant to this Section 3.21 to be included in such
registration statement,  all to the extent requisite to permit the resale by the
Series B Purchasers of such Adjustment Shares.

            Section 3.22 Adjustments for Issuance of Additional Shares of Common
Stock.  In the  event  the  Company,  shall,  at any time  within  two (2) years
following the date hereof,  issue or sell any additional  shares of Common Stock
("Additional  Shares of Common Stock"),  at a price per share less than $2.74 or
without  consideration,  then the Conversion Rate (as defined in the Certificate
of  Designation)  will be adjusted so that the number of shares of Common  Stock
issuable  upon such  conversion  of the  Preferred  Shares shall be increased in
proportion to such increase in outstanding  shares of Common Stock and to ensure
the Series B Purchasers, in the aggregate,  acquired the Required Percentage (as
defined in the  Certificate of  Designation)  of Common Stock.  In the event the
Company,  shall,  at any time within two (2) years  following  the date  hereof,
shall issue any securities  convertible  into or exchangeable  for,  directly or
indirectly,  Common Stock ("Convertible  Securities"),  other than the Preferred
Shares or the Company's  Series A Preferred  Stock, or any rights or warrants or
options  to  purchase   any  such  Common   Stock  or   Convertible   Securities
(collectively,  the "Common Stock Equivalents") shall be issued or sold, and the
price  per share for which  Additional  Shares of Common  Stock may be  issuable
pursuant to any such Common Stock  Equivalent  shall be less than $2.74,  or if,
after any such  issuance of Common  Stock  Equivalents,  the price per share for
which Additional Shares of Common Stock may be issuable thereafter is amended or
adjusted,  and such  price as so  amended  shall be less  than  $2.74,  then the
Conversion  Rate will be adjusted  so that the number of shares of Common  Stock
issuable on such  Conversion  of the  Preferred  Shares  shall be  increased  in
proportion to such increase in outstanding  shares of Common Stock and to ensure
the Series B Purchasers,  in the aggregate,  acquired the Required Percentage of
Common  Stock.  The terms of this  Section  3.21  shall not apply to  securities
issued in connection with a Permitted  Financing (as defined in Section 3.23 (b)
below).

                                      -20-
<PAGE>

            Section  3.23  Subsequent  Financings.  (a) For a period  of two (2)
years following the effective date of the registration  statement  providing for
the  resale  of the  Conversion  Shares  and the  Warrant  Shares,  the  Company
covenants  and  agrees  to  promptly  notify  (in no event  later  than five (5)
business  days after  making or  receiving  an  applicable  offer) in writing (a
"Rights  Notice") the Series B  Purchasers  of the terms and  conditions  of any
proposed offer or sale to any third party by the Company, of Common Stock or any
debt or equity securities  convertible,  exercisable or exchangeable into Common
Stock  (a  "Subsequent  Financing").   The  Rights  Notice  shall  describe,  in
reasonable detail, the proposed Subsequent  Financing,  the names and investment
amounts of all investors participating in the Subsequent Financing, the proposed
closing  date of the  Subsequent  Financing,  which shall be within  twenty (20)
calendar  days  from the date of the  Rights  Notice,  and all of the  terms and
conditions thereof and proposed  definitive  documentation to be entered into in
connection therewith. The Rights Notice shall provide each Series B Purchaser an
option (the "Rights Option") during the ten (10) Trading Days following delivery
of the Rights  Notice (the "Option  Period") to inform the Company  whether such
Series B Purchaser  will purchase up to its pro rata portion of all or a portion
of the  securities  being  offered  in such  Subsequent  Financing  on the same,
absolute terms and conditions as contemplated by such Subsequent  Financing.  If
any Series B Purchaser  elects not to participate in such Subsequent  Financing,
the other Series B Purchasers  may  participate  on a pro-rata  basis so long as
such  participation  in the aggregate  does not exceed the total  Purchase Price
hereunder. For purposes of this Section, all references to "pro rata" means, for
any Series B Purchaser electing to participate in such Subsequent Financing, the
percentage  obtained by dividing (x) the number of Preferred Shares purchased by
such  Purchaser at the Closing plus the number of shares of Series B Convertible
Preferred  Stock  purchased by the Series B Purchasers  at the  closing(s) of an
Additional  Series B Financing by (y) the total  number of all of the  Preferred
Shares purchased by all of the participating  Purchasers at the Closing plus the
number of shares of Series B Convertible Preferred Stock purchased by the Series
B Purchasers at the closing(s) of an Additional Series B Financing.  Delivery of
any Rights Notice  constitutes a representation and warranty by the Company that
there are no other material terms and  conditions,  arrangements,  agreements or
otherwise except for those disclosed in the Rights Notice, to provide additional
compensation to any party  participating in any proposed  Subsequent  Financing,
including,  but not limited to, additional  compensation based on changes in the
Purchase  Price or any type of reset or  adjustment  of a purchase or conversion
price or to issue additional  securities at any time after the closing date of a
Subsequent Financing.  If the Company does not receive notice of exercise of the
Rights Option from the Series B Purchasers within the Option Period, the Company
shall have the right to close the Subsequent  Financing on the scheduled closing
date with a third party;  provided that all of the material terms and conditions
of the closing are the same as those  provided to the Series B Purchasers in the
Rights  Notice.  If the closing of the proposed  Subsequent  Financing  does not
occur on that date, any closing of the contemplated  Subsequent Financing or any
other  Subsequent  Financing  shall be subject to all of the  provisions of this
Section 3.23(a),  including,  without  limitation,  the delivery of a new Rights
Notice.  The provisions of this Section  3.23(a) shall not apply to issuances of
securities in a Permitted Financing.

                                      -21-
<PAGE>

            (b) For  purposes  of this  Agreement,  a  Permitted  Financing  (as
defined  hereinafter)  shall  not  be  considered  a  Subsequent  Financing.   A
"Permitted  Financing" shall mean (i) securities  issued pursuant to a bona fide
firm underwritten public offering of the Company's  securities,  (ii) securities
issued  pursuant to the  conversion or exercise of  convertible  or  exercisable
securities  issued  or  outstanding  on or prior to the date  hereof  or  issued
pursuant to this  Agreement (so long as the conversion or exercise price in such
securities  are not  amended  to lower such price  and/or  adversely  affect the
Series B Purchasers),  (iii) the Warrant Shares,  (iv) securities  issued (other
than  for  cash) in  connection  with an  acquisition  of the  Company,  (v) any
warrants issued to the placement agent for the transactions contemplated by this
Agreement,   (vi)  securities   issued  in  connection  with  strategic  license
agreements and other  partnering  arrangements so long as such issuances are not
for the  purpose of raising  capital  and the  Company  has  received  the prior
written  consent of the Series B  Purchasers,  and (vii) the  issuance of Common
Stock or the issuance or grants of options to purchase  Common Stock pursuant to
the Company's  stock option plans and employee  stock  purchase  plans and which
have been approved by the Company's Board of Directors so long as such issuances
in the  aggregate do not exceed ten percent  (10%) of the  Company's  issued and
outstanding Common Stock as of the Closing Date.

                                   ARTICLE IV

                                   CONDITIONS

            Section 4.1 Conditions Precedent to the Obligation of the Company to
Sell the Shares.  The obligation  hereunder of the Company to issue and sell the
Preferred  Shares  and  the  Warrants  to  the  Purchasers  is  subject  to  the
satisfaction or waiver, at or before the Closing,  of each of the conditions set
forth below.  These  conditions  are for the  Company's  sole benefit and may be
waived by the Company at any time in its sole discretion.

            (a) Accuracy of Each  Purchaser's  Representations  and  Warranties.
Each of the  representations  and warranties of each Purchaser in this Agreement
and each of the other  Transaction  Documents to which such Purchaser is a party
shall be true and correct in all material  respects as of the date when made and
as of the Closing Date as though made at that time,  except for  representations
and warranties that are expressly made as of a particular  date,  which shall be
true and correct in all material respects as of such date.

            (b)  Performance  by  the  Purchasers.  Each  Purchaser  shall  have
performed, satisfied and complied in all respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by such Purchaser at or prior to the Closing.

            (c) No Injunction.  No statute, rule,  regulation,  executive order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

            (d) Delivery of Purchase Price. The Purchase Price for the Preferred
Shares and Warrants has been delivered to the Company at the Closing Date.

                                      -22-
<PAGE>

            (e) Delivery of Transaction  Documents.  The  Transaction  Documents
have been duly executed and delivered by the Purchasers to the Company.

            (f) Share Exchange Transaction. The Share Exchange Transaction shall
have been consummated.

            Section 4.2 Conditions Precedent to the Obligation of the Purchasers
to Purchase the Shares.  The  obligation  hereunder of each Purchaser to acquire
and pay for the Preferred Shares and the Warrants is subject to the satisfaction
or waiver, at or before the Closing,  of each of the conditions set forth below.
These conditions are for each Purchaser's sole benefit and may be waived by such
Purchaser at any time in its sole discretion.

            (a) Accuracy of the Company's  Representations and Warranties.  Each
of the  representations and warranties of the Company in this Agreement and each
of the other Transaction  Documents shall be true and correct in all respects as
of the date when  made and as of the  Closing  Date as though  made at that time
(except for  representations  and  warranties  that are  expressly  made as of a
particular  date),  which shall be true and  correct in all  respects as of such
date.

            (b)  Performance by the Company.  The Company shall have  performed,
satisfied  and  complied in all  respects  with all  covenants,  agreements  and
conditions  required by this  Agreement to be  performed,  satisfied or complied
with by the Company at or prior to the Closing.

            (c) No Suspension, Etc. Quotation of the Common Stock shall not have
been  suspended  by the  Commission  or the OTC Bulletin  Board  (except for any
suspension  of trading  of  limited  duration  agreed to by the  Company,  which
suspension shall be terminated prior to the Closing),  and, at any time prior to
the Closing  Date,  trading in  securities  generally  as reported by  Bloomberg
Financial  Markets  ("Bloomberg")  shall not have been suspended or limited,  or
minimum prices shall not have been  established  on securities  whose trades are
reported by Bloomberg,  or on the New York Stock  Exchange,  nor shall a banking
moratorium  have been  declared  either by the  United  States or New York State
authorities,  nor shall there have occurred any material  outbreak or escalation
of  hostilities or other  national or  international  calamity or crisis of such
magnitude  in its effect on, or any  material  adverse  change in any  financial
market  which,  in each  case,  in the  judgment  of such  Purchaser,  makes  it
impracticable or inadvisable to purchase the Preferred Shares.

            (d) No Injunction.  No statute, rule,  regulation,  executive order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

            (e) No  Proceedings  or  Litigation.  No action,  suit or proceeding
before any arbitrator or any  governmental  authority shall have been commenced,
and no investigation  by any governmental  authority shall have been threatened,
against the Company or any  subsidiary,  or any of the  officers,  directors  or
affiliates  of the Company or any  subsidiary  seeking to  restrain,  prevent or
change the  transactions  contemplated by this Agreement,  or seeking damages in
connection with such transactions.

                                      -23-
<PAGE>

            (f) Certificate of Designation of Rights and  Preferences.  Prior to
the Closing,  the  Certificate  of Designation in the form of Exhibit B attached
hereto shall have been filed with the Secretary of State of Utah.

            (g) Opinion of Counsel.  At the Closing,  the Purchasers  shall have
received an opinion of counsel to the Company,  dated the date of such  Closing,
in the form of Exhibit F hereto,  and such other  certificates  and documents as
the Purchasers or its counsel shall reasonably require incident to such Closing.

            (h) Registration Rights Agreement. At the Closing, the Company shall
have executed and delivered the Registration Rights Agreement to each Purchaser.

            (i) Stock  Certificates;  Warrants.  The Company shall have executed
and delivered to the Purchasers the certificates (in such  denominations as such
Purchaser  shall  request)  for the  Preferred  Shares  and the  Warrants  being
acquired  by such  Purchaser  at the  Closing  (in  such  denominations  as such
Purchaser shall request).

            (j)  Resolutions.  The Board of Directors of the Company  shall have
adopted  resolutions  consistent with Section 2.1(b) hereof in a form reasonably
acceptable to such Purchaser (the "Resolutions").

            (k) Reservation of Shares. As of the Closing Date, the Company shall
have reserved out of its  authorized and unissued  Common Stock,  solely for the
purpose of effecting the conversion of the Preferred  Shares and the exercise of
the Warrants,  a number of shares of Common Stock equal to the aggregate  number
of Conversion  Shares issuable upon conversion of the Preferred Shares issued or
to be  issued  pursuant  to this  Agreement  and the  number of  Warrant  Shares
issuable upon exercise of the number of Warrants issued or to be issued pursuant
to this Agreement.

            (l)  Transfer  Agent  Instructions.  As of  the  Closing  Date,  the
Irrevocable  Transfer  Agent  Instructions,  in the form of  Exhibit E  attached
hereto,  shall  have  been  delivered  to and  acknowledged  in  writing  by the
Company's transfer agent.

            (m)  Secretary's  Certificate.  The Company shall have  delivered to
such  Purchaser a secretary's  certificate,  dated as of the Closing Date, as to
(i) the Resolutions,  (ii) the Articles,  (iii) the Bylaws, (iv) the Certificate
of  Designation,  each as in effect at the Closing,  and (iv) the  authority and
incumbency of the officers of the Company  executing the  Transaction  Documents
and any other  documents  required  to be executed or  delivered  in  connection
therewith.

            (n) Officer's  Certificate.  The Company shall have delivered to the
Purchasers a certificate of an executive officer of the Company, dated as of the
Closing  Date,  confirming  the  accuracy  of  the  Company's   representations,
warranties  and covenants as of such Closing Date and  confirming the compliance
by the Company with the conditions precedent set forth in this Section 4.2 as of
such Closing Date.

                                      -24-
<PAGE>

            (o) Material  Adverse Effect.  No Material Adverse Effect shall have
occurred at or before the Closing Date.

            (p) Share Exchange Transaction. On or prior to the Closing Date, the
Share Exchange Transaction shall have been consummated.

            (q) Audited Financial  Statements.  On or prior to the Closing Date,
the  Company  shall have  delivered  to the  Purchasers  the  audited  financial
statements of Beijing Gas for the fiscal years ended  December 31, 2005 and 2004
prepared by Samuel H. Wong & Co., LLP.

            (r) Form 8-K. On or prior to the  Closing  Date,  the Company  shall
have delivered to the Purchasers  the Form 8-K  substantially  in the form to be
filed with the Commission pursuant to Section 3.13 hereof.

            (s) Lock-Up Agreement.  On or prior to the Closing Date, the persons
listed on Schedule  3.20  attached  hereto shall have executed and delivered the
Lock-Up Agreement to the Purchasers.

                                    ARTICLE V

                            Stock Certificate Legend

            Section 5.1 Legend.  Each  certificate  representing  the  Preferred
Shares and the Warrants, and, if appropriate,  securities issued upon conversion
thereof,  shall be stamped or otherwise imprinted with a legend substantially in
the  following  form (in  addition to any legend  required by  applicable  state
securities or "blue sky" laws):

            THESE SECURITIES  REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES")
            HAVE  NOT BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS
            AMENDED (THE "SECURITIES  ACT") OR ANY STATE SECURITIES LAWS AND MAY
            NOT BE SOLD,  TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
            UNDER THE SECURITIES ACT AND UNDER  APPLICABLE STATE SECURITIES LAWS
            OR DOLCE  VENTURES  INC.  SHALL HAVE  RECEIVED AN OPINION OF COUNSEL
            THAT  REGISTRATION OF SUCH  SECURITIES  UNDER THE SECURITIES ACT AND
            UNDER THE  PROVISIONS OF  APPLICABLE  STATE  SECURITIES  LAWS IS NOT
            REQUIRED.

      The  Company  agrees  to  reissue  certificates  representing  any  of the
Conversion Shares and the Warrant Shares,  without the legend set forth above if
at such time, prior to making any transfer of any such  securities,  such holder
thereof shall give written notice to the Company describing the manner and terms
of such  transfer  and  removal as the  Company  may  reasonably  request.  Such
proposed  transfer  and removal will not be effected  until:  (a) either (i) the

                                      -25-
<PAGE>

Company  has  received  an  opinion of counsel  reasonably  satisfactory  to the
Company,  to the effect that the  registration  of the Conversion  Shares or the
Warrant Shares under the Securities Act is not required in connection  with such
proposed  transfer,  (ii) a  registration  statement  under the  Securities  Act
covering  such  proposed  disposition  has been  filed by the  Company  with the
Commission and has become  effective under the Securities Act, (iii) the Company
has received other  evidence  reasonably  satisfactory  to the Company that such
registration  and  qualification  under the Securities Act and state  securities
laws are not required,  or (iv) the holder  provides the Company with reasonable
assurances  that  such  security  can be sold  pursuant  to Rule 144  under  the
Securities  Act;  and (b)  either (i) the  Company  has  received  an opinion of
counsel reasonably  satisfactory to the Company, to the effect that registration
or  qualification  under the  securities  or "blue sky" laws of any state is not
required in connection with such proposed  disposition,  or (ii) compliance with
applicable  state  securities  or "blue sky" laws has been  effected  or a valid
exemption  exists with  respect  thereto.  The Company  will respond to any such
notice from a holder within five (5) business  days. In the case of any proposed
transfer  under this Section 5.1,  the Company  will use  reasonable  efforts to
comply with any such applicable  state  securities or "blue sky" laws, but shall
in no event be required,  (x) to qualify to do business in any state where it is
not then  qualified,  (y) to take any action that would  subject it to tax or to
the general service of process in any state where it is not then subject, or (z)
to  comply  with  state  securities  or "blue  sky"  laws of any state for which
registration by coordination is unavailable to the Company.  The restrictions on
transfer  contained  in this Section 5.1 shall be in addition to, and not by way
of  limitation  of, any other  restrictions  on transfer  contained in any other
section of this Agreement.  Whenever a certificate  representing  the Conversion
Shares or  Warrant  Shares is  required  to be issued to a  Purchaser  without a
legend, in lieu of delivering physical certificates  representing the Conversion
Shares or Warrant  Shares  (provided  that a  registration  statement  under the
Securities  Act  providing for the resale of the Warrant  Shares and  Conversion
Shares  is then in  effect),  the  Company  shall  cause its  transfer  agent to
electronically  transmit the Conversion  Shares or Warrant Shares to a Purchaser
by crediting the account of such  Purchaser's  Prime Broker with the  Depository
Trust Company ("DTC") through its Deposit  Withdrawal Agent Commission  ("DWAC")
system (to the extent not inconsistent with any provisions of this Agreement).

                                   ARTICLE VI

                                 Indemnification

            Section 6.1 General  Indemnity.  The Company agrees to indemnify and
hold  harmless  the  Purchasers  (and  their  respective  directors,   officers,
managers, partners, members,  shareholders,  affiliates,  agents, successors and
assigns) from and against any and all losses, liabilities,  deficiencies, costs,
damages and expenses (including, without limitation, reasonable attorneys' fees,
charges  and  disbursements)  incurred  by the  Purchasers  as a  result  of any
inaccuracy in or breach of the representations,  warranties or covenants made by
the Company herein. Each Purchaser severally but not jointly agrees to indemnify
and hold harmless the Company and its directors, officers, managers, affiliates,
agents, successors and assigns from and against any and all losses, liabilities,
deficiencies,  costs,  damages  and  expenses  (including,  without  limitation,
reasonable  attorneys' fees, charges and disbursements)  incurred by the Company
as result of any inaccuracy in or breach of the  representations,  warranties or
covenants made by such Purchaser herein. The maximum aggregate liability of each
Purchaser  pursuant to its  indemnification  obligations  under this  Article VI
shall not  exceed  the  portion of the  Purchase  Price  paid by such  Purchaser
hereunder.

                                      -26-
<PAGE>

            Section  6.2  Indemnification   Procedure.  Any  party  entitled  to
indemnification under this Article VI (an "indemnified party") will give written
notice  to the  indemnifying  party of any  matters  giving  rise to a claim for
indemnification;   provided,   that  the  failure  of  any  party   entitled  to
indemnification  hereunder  to give notice as provided  herein shall not relieve
the  indemnifying  party of its obligations  under this Article VI except to the
extent that the  indemnifying  party is actually  prejudiced  by such failure to
give  notice.  In case any  action,  proceeding  or claim is brought  against an
indemnified party in respect of which  indemnification is sought hereunder,  the
indemnifying  party  shall be  entitled  to  participate  in and,  unless in the
reasonable  judgment of the indemnified  party a conflict of interest between it
and the indemnifying party may exist with respect of such action,  proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified  party.  In  the  event  that  the  indemnifying  party  advises  an
indemnified  party  that  it  will  contest  such a  claim  for  indemnification
hereunder,  or fails,  within thirty (30) days of receipt of any indemnification
notice to notify, in writing,  such person of its election to defend,  settle or
compromise,  at its sole cost and expense,  any action,  proceeding or claim (or
discontinues its defense at any time after it commences such defense),  then the
indemnified party may, at its option,  defend, settle or otherwise compromise or
pay such action or claim. In any event,  unless and until the indemnifying party
elects in writing to assume  and does so assume the  defense of any such  claim,
proceeding or action, the indemnified  party's costs and expenses arising out of
the defense,  settlement or  compromise of any such action,  claim or proceeding
shall be losses subject to  indemnification  hereunder.  The  indemnified  party
shall  cooperate  fully  with  the  indemnifying  party in  connection  with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information  reasonably available to
the indemnified  party which relates to such action or claim.  The  indemnifying
party shall keep the  indemnified  party  fully  apprised at all times as to the
status of the defense or any settlement  negotiations  with respect thereto.  If
the  indemnifying  party  elects to defend  any such  action or claim,  then the
indemnified  party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense.  The indemnifying party shall not be
liable for any settlement of any action,  claim or proceeding  effected  without
its prior written  consent.  Notwithstanding  anything in this Article VI to the
contrary,  the  indemnifying  party shall not,  without the indemnified  party's
prior written consent, settle or compromise any claim or consent to entry of any
judgment  in  respect  thereof  which  imposes  any  future  obligation  on  the
indemnified party or which does not include,  as an unconditional  term thereof,
the  giving by the  claimant  or the  plaintiff  to the  indemnified  party of a
release  from all  liability  in  respect  of such  claim.  The  indemnification
required  by this  Article VI shall be made by  periodic  payments of the amount
thereof  during the course of  investigation  or defense,  as and when bills are
received or expense,  loss,  damage or  liability  is  incurred,  so long as the
indemnified party  irrevocably  agrees to refund such moneys if it is ultimately
determined by a court of competent jurisdiction that such party was not entitled
to  indemnification.  The  indemnity  agreements  contained  herein  shall be in
addition to (a) any cause of action or similar rights of the  indemnified  party
against  the  indemnifying   party  or  others,  and  (b)  any  liabilities  the
indemnifying party may be subject to pursuant to the law.

                                      -27-
<PAGE>

                                   ARTICLE VII

                                  Miscellaneous

            Section 7.1 Fees and Expenses. Except as otherwise set forth in this
Agreement and the other Transaction Documents, each party shall pay the fees and
expenses of its advisors,  counsel,  accountants and other experts,  if any, and
all  other  expenses,  incurred  by  such  party  incident  to the  negotiation,
preparation,  execution,  delivery and performance of this  Agreement,  provided
that the Company shall pay all actual  attorneys'  fees and expenses  (including
disbursements and out-of-pocket expenses) actually incurred by VOMF in retaining
one legal  counsel,  KL, in connection  with (i) the  preparation,  negotiation,
execution and delivery of this Agreement and the other Transaction Documents and
the  transactions  contemplated  thereunder,  including  review of the documents
relating to the Share Exchange  Transaction,  which payment shall be made at the
Closing,  (ii) the filing and declaration of  effectiveness by the Commission of
the Registration Statement (as defined in the Registration Rights Agreement) and
(iii) any amendments,  modifications  or waivers of this Agreement or any of the
other Transaction Documents. The Company shall also pay $100,000 in cash to VOMF
or its affiliates at the Closing in connection  with all due diligence  expenses
incurred by VOMF or its affiliates and all reasonable fees and expenses incurred
by the Purchasers in connection with the enforcement of this Agreement or any of
the other Transaction Documents,  including,  without limitation, all reasonable
attorneys' fees and expenses. Notwithstanding the foregoing to the contrary, any
amounts  having been paid by the Company in relation  thereto  prior to the date
hereof shall be deducted from the amounts owed by the Company to the Purchasers,
and any  amounts to be paid by the  Company to the  Purchasers  pursuant to this
Section  7.1 shall be paid out of the  proceeds  held in escrow  pursuant to the
Escrow  Agreement  dated as of September 7, 2006, by and between GAS  Investment
China Co., Ltd. and the Purchasers at the Closing.

            Section 7.2 Specific Enforcement, Consent to Jurisdiction.

            (a) The  Company  and the  Purchasers  acknowledge  and  agree  that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement or the other  Transaction  Documents  were not performed in accordance
with their specific terms or were otherwise  breached.  It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure breaches of the  provisions of this  Agreement and to enforce  specifically
the terms and provisions hereof or thereof,  this being in addition to any other
remedy to which any of them may be entitled by law or equity.

            (b) Each of the Company and the  Purchasers  (i) hereby  irrevocably
submits to the  jurisdiction  of the United States District Court sitting in the
Southern District of New York and the courts of the State of New York located in
New York county for the purposes of any suit,  action or proceeding  arising out
of or relating to this  Agreement or any of the other  Transaction  Documents or
the  transactions  contemplated  hereby or thereby and (ii) hereby  waives,  and
agrees not to assert in any such suit,  action or proceeding,  any claim that it
is not  personally  subject to the  jurisdiction  of such court,  that the suit,
action or  proceeding is brought in an  inconvenient  forum or that the venue of
the  suit,  action  or  proceeding  is  improper.  Each of the  Company  and the
Purchasers  consents  to  process  being  served  in any such  suit,  action  or
proceeding  by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and  sufficient  service of process  and  notice  thereof.  Nothing in this
Section 7.2 shall affect or limit any right to serve process in any other manner
permitted by law.

                                      -28-
<PAGE>

            Section 7.3 Entire  Agreement;  Amendment.  This  Agreement  and the
Transaction  Documents  contains the entire  understanding  and agreement of the
parties  with  respect to the  matters  covered  hereby and  thereby,  except as
specifically  set forth  herein or in the  Transaction  Documents,  neither  the
Company nor any of the Purchasers makes any representations,  warranty, covenant
or  undertaking  with  respect  to such  matters  and they  supersede  all prior
understandings  and agreements with respect to said subject matter, all of which
are merged herein. No provision of this Agreement may be waived or amended other
than by a written  instrument  signed by the Company and the holders of at least
seventy-five  percent (75%) of the  Preferred  Shares then  outstanding,  and no
provision hereof may be waived other than by an a written  instrument  signed by
the party against whom enforcement of any such amendment or waiver is sought. No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Preferred Shares then outstanding.  No consideration shall
be offered or paid to any person to amend or consent to a waiver or modification
of  any  provision  of  any  of  the  Transaction   Documents  unless  the  same
consideration is also offered to all of the parties to the Transaction Documents
or holders of Preferred Shares, as the case may be.

            Section 7.4 Notices. Any notice,  demand,  request,  waiver or other
communication  required or permitted to be given  hereunder  shall be in writing
and shall be effective (a) upon hand delivery by telex (with correct answer back
received),  telecopy or facsimile at the address or number  designated below (if
delivered on a business day during normal business hours where such notice is to
be received),  or the first  business day following  such delivery (if delivered
other than on a business day during normal  business  hours where such notice is
to be received) or (b) on the second  business day following the date of mailing
by express courier service,  fully prepaid,  addressed to such address,  or upon
actual receipt of such mailing,  whichever shall first occur.  The addresses for
such communications shall be:

            If to the Company:      Dolce Ventures Inc.
                                    N0.18 Zhong Guan Cun Dong St.
                                    Haidian District
                                    Beijing, China
                                    Attention: Chen Fang
                                    Tel. No.: 011-86-10-82600527
                                    Fax No.: 011-010-82600042

            with copies to:         GUZOV OFSINK, LLC
                                    600 Madison Avenue, 14th Floor
                                    New York, New York 10022
                                    Attention: Darren Ofsink
                                    Tel. No.: (212) 371-8008, ext. 127
                                    Fax No.: (212) 688-7273

            If to any Purchaser:    At the address of such  Purchaser  set forth
                                    on Exhibit A to this Agreement,  with copies
                                    to  Purchaser's  counsel  as  set  forth  on
                                    Exhibit A or as specified in writing by such
                                    Purchaser with copies to:

                                      -29-
<PAGE>

                                    Kramer Levin Naftalis & Frankel LLP
                                    1177 Avenue of the Americas
                                    New York, New York 10036
                                    Attention: Christopher S. Auguste
                                    Tel No.: (212) 715-9100
                                    Fax No.: (212) 715-8000

      Any party  hereto may from time to time  change its address for notices by
giving at least ten (10) days  written  notice of such  changed  address  to the
other party hereto.

            Section 7.5  Waivers.  No waiver by either party of any default with
respect to any provision,  condition or  requirement of this Agreement  shall be
deemed  to be a  continuing  waiver  in the  future  or a  waiver  of any  other
provisions,  condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right  hereunder in any manner  impair the exercise of
any such right accruing to it thereafter.

            Section 7.6 Headings.  The article,  section and subsection headings
in this  Agreement are for  convenience  only and shall not constitute a part of
this  Agreement for any other purpose and shall not be deemed to limit or affect
any of the provisions hereof.

            Section 7.7 Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.

            Section 7.8 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.

            Section 7.9 Governing Law. This  Agreement  shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving  effect to any of the conflicts of law  principles  which would result in
the application of the substantive law of another  jurisdiction.  This Agreement
shall not be  interpreted or construed  with any  presumption  against the party
causing this Agreement to be drafted.

            Section 7.10  Survival.  The  representations  and warranties of the
Company and the Purchasers  shall survive the execution and delivery  hereof and
the Closings hereunder for a period of two years following the Closing Date.

            Section 7.11  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.

                                      -30-
<PAGE>

            Section  7.12  Publicity.  The  Company  agrees  that  it  will  not
disclose,  and will not  include  in any  public  announcement,  the name of the
Purchasers  without  the  consent  of  the  Purchasers  unless  and  until  such
disclosure  is required by law or  applicable  regulation,  and then only to the
extent of such requirement.

            Section 7.13 Severability.  The provisions of this Agreement and the
Transaction  Documents  are  severable  and,  in the  event  that  any  court of
competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement or the Transaction  Documents
shall,  for any reason,  be held to be invalid,  illegal or unenforceable in any
respect,  such invalidity,  illegality or unenforceability  shall not affect any
other  provision  or part of a provision of this  Agreement  or the  Transaction
Documents and such provision  shall be reformed and construed as if such invalid
or illegal or unenforceable provision, or part of such provision, had never been
contained herein, so that such provisions would be valid,  legal and enforceable
to the maximum extent possible.

            Section  7.14  Further  Assurances.  From and after the date of this
Agreement, upon the request of any Purchaser or the Company, each of the Company
and the  Purchasers  shall  execute and deliver such  instrument,  documents and
other writings as may be reasonably  necessary or desirable to confirm and carry
out and to effectuate  fully the intent and purposes of this  Agreement and each
of the other Transaction Documents.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -31-
<PAGE>

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

                                        DOLCE VENTURES INC.

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        PURCHASER

                                        By: ____________________________________
                                            Name:
                                            Title:

                                      -32-
<PAGE>

                                        SEI PRIVATE TRUST CO. FAO -
                                        THE JM SMUCKER CO. MASTER TRUST

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        CORONADO CAPITAL PARTNERS LP

                                        By: ____________________________________
                                            Name:
                                            Title:

                                      -33-
<PAGE>

                                EXHIBIT A to the

           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR

                               DOLCE VENTURES INC.

<TABLE>
<CAPTION>
Names and Addresses                     Number of Preferred Shares          Dollar Amount of
of Purchasers                           & Warrants Purchased                Investment
-------------                           --------------------                ----------
<S>                                     <C>                                 <C>
Vision Opportunity Master Fund, Ltd.    Preferred Shares: 2,189,782         $6,000,000
20 W 55th St., 5th floor                Series A Warrants: 2,189,782
New York, NY 10019                      Series B Warrants: 1,094,891
Tax ID: 27-0120759                      Series J Warrants: 1,993,355
                                        Series C Warrants: 1,993,355
                                        Series D Warrants: 996,678

SEI Private Trust Co. FAO
The JM Smucker Co. Master Trust         Preferred Shares: 140,000           $383,600
1 Freedom Valley Dr                     Series A Warrants: 140,000
Oaks, PA 19456                          Series B Warrants: 70,000
Attn: Suzanne Rokosny                   Series J Warrants: 127,442
Tax ID: 23-3060382                      Series C Warrants: 127,442
                                        Series D Warrants: 63,721

Coronado Capital Partners LP            Preferred Shares: 180,000           $493,200
c/o MS Howells                          Series A Warrants: 180,000
20555 N Pima Rd, Suite 100              Series B Warrants: 90,000
Scottsdale, AZ 85255                    Series J Warrants: 163,854
Attn: Christine Nichols                 Series C Warrants: 163,854
Tax ID: 20-2427088                      Series D Warrants: 81,927
</TABLE>

<PAGE>

                                EXHIBIT B to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                       FORM OF CERTIFICATE OF DESIGNATION

<PAGE>

                               EXHIBIT C-1 to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                            FORM OF SERIES A WARRANT

<PAGE>

                               EXHIBIT C-2 to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                            FORM OF SERIES B WARRANT

<PAGE>

                               EXHIBIT C-3 to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                            FORM OF SERIES J WARRANT

<PAGE>

                               EXHIBIT C-4 to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                            FORM OF SERIES C WARRANT

<PAGE>

                               EXHIBIT C-5 to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                            FORM OF SERIES D WARRANT

<PAGE>

                                EXHIBIT D to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                      FORM OF REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                EXHIBIT E to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                 FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                               DOLCE VENTURES INC.

                                                        as of September 7, 2006

[Name and address of Transfer Agent]
Attn:  _____________

Ladies and Gentlemen:

      Reference is made to that certain  Series B  Convertible  Preferred  Stock
Purchase Agreement (the "Purchase Agreement"), dated as of September 7, 2006, by
and among Dolce  Ventures  Inc., a Utah  corporation  (the  "Company"),  and the
purchasers named therein (collectively,  the "Purchasers") pursuant to which the
Company  is  issuing  to the  Purchasers  shares  of its  Series  B  Convertible
Preferred  Stock,  par value  $.001 per  share,  (the  "Preferred  Shares")  and
warrants (the  "Warrants") to purchase shares of the Company's common stock, par
value  $.001 per share (the  "Common  Stock").  This  letter  shall serve as our
irrevocable  authorization  and  direction  to you  provided  that  you  are the
transfer agent of the Company at such time) to issue shares of Common Stock upon
conversion of the Preferred Shares (the "Conversion Shares") and exercise of the
Warrants (the "Warrant Shares") to or upon the order of a Purchaser from time to
time  upon (i)  surrender  to you of a  properly  completed  and  duly  executed
Conversion  Notice or Exercise Notice,  as the case may be, in the form attached
hereto  as  Exhibit  I and  Exhibit  II,  respectively,  (ii) in the case of the
conversion of Preferred  Shares, a copy of the  certificates  (with the original
certificates  delivered  to the  Company)  representing  Preferred  Shares being
converted or, in the case of Warrants  being  exercised,  a copy of the Warrants
(with the original  Warrants  delivered to the Company) being  exercised (or, in
each  case,  an   indemnification   undertaking   with  respect  to  such  share
certificates or the warrants in the case of their loss,  theft or  destruction),
and (iii) delivery of a treasury order or other  appropriate order duly executed
by a duly  authorized  officer of the  Company.  So long as you have  previously
received  (x)  written   confirmation   from  counsel  to  the  Company  that  a
registration  statement  covering  resales of the  Conversion  Shares or Warrant
Shares,  as  applicable,  has been  declared  effective  by the  Securities  and
Exchange  Commission  (the "SEC") under the  Securities  Act of 1933, as amended
(the "1933 Act"), and no subsequent  notice by the Company or its counsel of the
suspension  or  termination  of  its  effectiveness  and  (y)  a  copy  of  such
registration  statement,  and if the  Purchaser  represents  in writing that the
Conversion  Shares or the Warrant Shares, as the case may be, were sold pursuant
to the Registration  Statement,  then  certificates  representing the Conversion
Shares and the  Warrant  Shares,  as the case may be,  shall not bear any legend
restricting  transfer of the Conversion  Shares and the Warrant  Shares,  as the
case may be, thereby and should not be subject to any stop-transfer restriction.
Provided,  however,  that if you have not  previously  received  those items and
representations  listed above,  then the certificates for the Conversion  Shares
and the Warrant Shares shall bear the legend substantially as follows:

                        "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
                  BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
                  (THE SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS AND MAY

<PAGE>

                  NOT BE SOLD,  TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  UNLESS
                  REGISTERED  UNDER  THE  SECURITIES  ACT  OR  APPLICABLE  STATE
                  SECURITIES  LAWS,  OR AN OPINION OF COUNSEL HAS BEEN  PROVIDED
                  THAT  REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT
                  AND UNDER THE PROVISIONS OF APPLICABLE  STATE  SECURITIES LAWS
                  IS NOT REQUIRED."

and,  provided  further,  that the  Company  may from time to time notify you to
place  stop-transfer  restrictions on the certificates for the Conversion Shares
and the  Warrant  Shares  in the event a  registration  statement  covering  the
Conversion Shares and the Warrant Shares is subject to amendment for events then
current.

      A  form  of  written  confirmation  from  counsel  to the  Company  that a
registration statement covering resales of the Conversion Shares and the Warrant
Shares has been  declared  effective  by the SEC under the 1933 Act is  attached
hereto as  Exhibit  III.  Further,  the legal  opinion  should  indicate  if the
Conversion  Shares or Warrant  Shares can be issued  directly  from the transfer
agent without restrictive legend as an original issue.

      Please be advised that the  Purchasers  are relying upon this letter as an
inducement to enter into the Purchase Agreement and, accordingly, each Purchaser
is a third party beneficiary to these instructions.

      Please  execute  this letter in the space  indicated to  acknowledge  your
agreement  to act in  accordance  with these  instructions.  Should you have any
questions concerning this matter, please contact me at ___________.

                                        Very truly yours,

                                        DOLCE VENTURES INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

ACKNOWLEDGED AND AGREED:

[TRANSFER AGENT]

By: ____________________________________
Name: __________________________________
Title: _________________________________
Date: _____________

<PAGE>

                                    EXHIBIT I

                               DOLCE VENTURES INC.
                                CONVERSION NOTICE

Reference is made to the  Certificate of Designation of the Relative  Rights and
Preferences  of  the  Series  B  Preferred   Stock  of  (the   "Certificate   of
Designation").   In  accordance   with  and  pursuant  to  the   Certificate  of
Designation,  the  undersigned  hereby elects to convert the number of shares of
Series B Preferred Stock, par value $.001 per share (the "Preferred Shares"), of
Dolce Ventures Inc., a Utah corporation  (the  "Company"),  indicated below into
shares of Common Stock, par value $.001 per share (the "Common  Stock"),  of the
Company,  by tendering  the stock  certificate(s)  representing  the share(s) of
Preferred Shares specified below as of the date specified below.

      Date of Conversion:                          _____________________________

      Number of Preferred Shares to be converted:  ________

      Stock certificate no(s). of Preferred Shares to be converted:  ________

The Common  Stock have been sold  pursuant  to the  Registration  Statement  (as
defined in the Registration Rights Agreement): YES ____         NO____

Please confirm the following information:

      Conversion Price:                            _____________________________

      Number of shares of Common Stock
      to be issued:                                _____________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the Date of Conversion: _________________________

Please  issue the  Common  Stock  into  which  the  Preferred  Shares  are being
converted  and, if  applicable,  any check drawn on an account of the Company in
the following name and to the following address:

      Issue to:                                    _____________________________
                                                   _____________________________

      Facsimile Number:                            _____________________________

      Authorization:                               _____________________________

                                                   By: _________________________
                                                   Title: ______________________

      Dated:

<PAGE>

                                   EXHIBIT II

                             FORM OF EXERCISE NOTICE

                               DOLCE VENTURES INC.

The  undersigned  _______________,  pursuant  to the  provisions  of the  within
Warrant,  hereby  elects to  purchase  _____  shares  of  Common  Stock of Dolce
Ventures Inc. covered by the within Warrant.

Dated: _________________                Signature _____________________________

                                        Address   _____________________
                                                  _____________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise: _________________________

                                   ASSIGNMENT

FOR VALUE RECEIVED,  _________________  hereby sells, assigns and transfers unto
__________________  the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________                Signature _____________________________

                                        Address   _____________________
                                                  _____________________

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED,  _________________  hereby sells, assigns and transfers unto
__________________  the right to  purchase  _________  shares of  Warrant  Stock
evidenced  by the within  Warrant  together  with all rights  therein,  and does
irrevocably  constitute and appoint  ___________________,  attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________                Signature _____________________________

                                        Address   _____________________
                                                  _____________________

                           FOR USE BY THE ISSUER ONLY:

This Warrant No. W-_____  canceled (or  transferred or exchanged) this _____ day
of  ___________,  _____,  shares of Common Stock issued  therefor in the name of
_______________,  Warrant No.  W-_____ issued for ____ shares of Common Stock in
the name of _______________.

<PAGE>

                                   EXHIBIT III

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Name and address of Transfer Agent]
Attn: _____________

            Re:   Dolce Ventures Inc.

Ladies and Gentlemen:

      We are counsel to Dolce Ventures Inc., a Utah corporation (the "Company"),
and have  represented  the  Company in  connection  with that  certain  Series B
Convertible Preferred Stock Purchase Agreement (the "Purchase Agreement"), dated
as of  September  7, 2006,  by and among the  Company and the  purchasers  named
therein (collectively, the "Purchasers") pursuant to which the Company issued to
the Purchasers  shares of its Series B Convertible  Preferred  Stock,  par value
$.001 per share,  (the  "Preferred  Shares") and warrants  (the  "Warrants")  to
purchase  shares of the Company's  common stock,  par value $.001 per share (the
"Common  Stock").  Pursuant  to the  Purchase  Agreement,  the  Company has also
entered  into  a  Registration   Rights   Agreement  with  the  Purchasers  (the
"Registration  Rights  Agreement"),  dated as of September 7, 2006,  pursuant to
which the Company  agreed,  among other  things,  to  register  the  Registrable
Securities  (as defined in the  Registration  Rights  Agreement),  including the
shares of Common Stock  issuable upon  conversion  of the  Preferred  Shares and
exercise of the  Warrants,  under the  Securities  Act of 1933,  as amended (the
"1933 Act"). In connection with the Company's obligations under the Registration
Rights Agreement,  on  ________________,  2006, the Company filed a Registration
Statement on Form SB-2 (File No.  333-________) (the  "Registration  Statement")
with the Securities and Exchange  Commission  (the "SEC") relating to the resale
of the Registrable  Securities  which names each of the present  Purchasers as a
selling stockholder thereunder.

      In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by  telephone  that the SEC has entered an order  declaring
the  Registration  Statement  effective  under  the 1933 Act at  [ENTER  TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,  after
telephonic  inquiry  of a  member  of the  SEC's  staff,  that  any  stop  order
suspending its  effectiveness  has been issued or that any  proceedings for that
purpose are pending  before,  or  threatened  by, the SEC and  accordingly,  the
Registrable  Securities  are available for resale under the 1933 Act pursuant to
the Registration Statement.

                                        Very truly yours,

                                        [COMPANY COUNSEL]

                                        By: ____________________________________

cc:   [LIST NAMES OF PURCHASERS]

<PAGE>

                                EXHIBIT F to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                           FORM OF OPINION OF COUNSEL

            1. The Company is a corporation duly incorporated,  validly existing
and in good  standing  under the laws of the State of Utah and has the requisite
corporate  power to own,  lease and operate its  properties  and assets,  and to
carry on its business as presently conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary.

            2. The Company has the  requisite  corporate  power and authority to
enter into and perform its obligations  under the  Transaction  Documents and to
issue the  Preferred  Stock,  the Warrants and the Common  Stock  issuable  upon
conversion of the Preferred  Stock and exercise of the Warrants.  The execution,
delivery and performance of each of the Transaction Documents by the Company and
the consummation by it of the transactions  contemplated  thereby have been duly
and validly authorized by all necessary  corporate action and no further consent
or  authorization  of the Company or its Board of Directors or  stockholders  is
required.  Each  of the  Transaction  Documents  have  been  duly  executed  and
delivered,  and the Preferred  Stock and the Warrants  have been duly  executed,
issued  and  delivered  by the  Company  and each of the  Transaction  Documents
constitutes a legal,  valid and binding  obligation  of the Company  enforceable
against the Company in accordance  with its respective  terms.  The Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants are
not subject to any preemptive  rights under the Articles of Incorporation or the
Bylaws.

            3. The Preferred  Stock and the Warrants  have been duly  authorized
and,  when  delivered  against  payment  in full  as  provided  in the  Purchase
Agreement,  will be validly issued, fully paid and nonassessable.  The shares of
Common Stock issuable upon conversion of the Preferred Stock and exercise of the
Warrants,  have been duly  authorized  and  reserved  for  issuance,  and,  when
delivered  upon  conversion  or  against  payment  in  full as  provided  in the
Certificate of  Designation  and the Warrants,  as  applicable,  will be validly
issued, fully paid and nonassessable.

            4. The execution,  delivery and  performance of and compliance  with
the terms of the Transaction  Documents and the issuance of the Preferred Stock,
the Warrants and the Common Stock  issuable  upon  conversion  of the  Preferred
Stock and  exercise of the  Warrants do not (i)  violate  any  provision  of the
Articles of Incorporation or Bylaws, (ii) 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 material  agreement,  mortgage,  deed of trust,  indenture,
note,  bond,  license,  lease  agreement,  instrument or obligation to which the
Company is a party,  (iii) create or impose a lien, charge or encumbrance on any
property of the  Company  under any  agreement  or any  commitment  to which the
Company  is a party  or by which  the  Company  is bound or by which  any of its
respective  properties or assets are bound, or (iv) result in a violation of any
federal,  state, local or foreign statute,  rule,  regulation,  order, judgment,
injunction  or  decree   (including   Federal  and  state  securities  laws  and
regulations)  applicable to the Company or by which any property or asset of the
Company  is bound or  affected,  except,  in all  cases  other  than  violations
pursuant  to  clauses  (i)  and  (iv)  above,   for  such  conflicts,   default,
terminations,  amendments,  acceleration,  cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect.

            5.  No  consent,   approval  or  authorization  of  or  designation,
declaration or filing with any governmental authority on the part of the Company
is required under Federal,  state or local law, rule or regulation in connection
with the valid  execution  and  delivery of the  Transaction  Documents,  or the
offer, sale or issuance of the Preferred Stock, the Warrants or the Common Stock
issuable upon  conversion  of the  Preferred  Stock and exercise of the Warrants
other than the Certificate of Designation and the Registration Statement.

<PAGE>

            6. There is no action,  suit,  claim,  investigation  or  proceeding
pending or threatened  against the Company which  questions the validity of this
Agreement or the transactions  contemplated  hereby or any action taken or to be
taken pursuant hereto or thereto. There is no action, suit, claim, investigation
or proceeding pending, or to our knowledge, threatened, against or involving the
Company or any of its properties or assets and which,  if adversely  determined,
is  reasonably  likely to  result in a  Material  Adverse  Effect.  There are no
outstanding  orders,  judgments,  injunctions,  awards or  decrees of any court,
arbitrator  or  governmental  or  regulatory  body  against  the  Company or any
officers or directors of the Company in their capacities as such.

            7. The  offer,  issuance  and sale of the  Preferred  Stock  and the
Warrants and the offer, issuance and sale of the shares of Common Stock issuable
upon conversion of the Preferred Stock and exercise of the Warrants  pursuant to
the Purchase  Agreement,  the  Certificate of Designation  and the Warrants,  as
applicable, are exempt from the registration requirements of the Securities Act.

            8. The  Company  is not,  and as a result  of and  immediately  upon
Closing will not be, an  "investment  company" or a company  "controlled"  by an
"investment  company," within the meaning of the Investment Company Act of 1940,
as amended.

                                        Very truly yours,

<PAGE>

                                EXHIBIT G to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                               DISCLOSURE DOCUMENT

                           [To insert draft Form 8-K]

<PAGE>

                                EXHIBIT H to the
           SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                               DOLCE VENTURES INC.

                            FORM OF LOCK-UP AGREEMENTREGISTRATION RIGHTS AGREEMENT

      This Registration  Rights Agreement (this "Agreement") is made and entered
into  as of  September  7,  2006,  by and  among  Dolce  Ventures  Inc.,  a Utah
corporation (the "Company"), and the purchasers listed on Schedule I hereto (the
"Purchasers").

      This  Agreement is being entered into pursuant to the Series B Convertible
Preferred Stock Purchase Agreement dated as of the date hereof among the Company
and the Purchasers (the "Purchase Agreement").

      The Company and the Purchasers hereby agree as follows:

      1. Definitions.

      Capitalized  terms used and not  otherwise  defined  herein shall have the
meanings given such terms in the Purchase Agreement.  As used in this Agreement,
the following terms shall have the following meanings:

      "Advice" shall have meaning set forth in Section 3(m).

      "Affiliate"  means,  with  respect to any  Person,  any other  Person that
directly or indirectly controls or is controlled by or under common control with
such Person.  For the  purposes of this  definition,  "control,"  when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the  direction  of the  management  and policies of such Person,
whether  through the ownership of voting  securities,  by contract or otherwise;
and the terms of  "affiliated,"  "controlling"  and  "controlled"  have meanings
correlative to the foregoing.

      "Board" shall have meaning set forth in Section 3(n).

      "Business  Day"  means any day except  Saturday,  Sunday and any day which
shall be a legal holiday or a day on which banking  institutions in the state of
New York generally are authorized or required by law or other government actions
to close.

      "Closing  Date" means the date of the Closing of the  purchase and sale of
the Preferred Stock and the Warrants pursuant to the Purchase Agreement.

      "Commission" means the Securities and Exchange Commission.

      "Common  Stock"  means the  Company's  Common  Stock,  par value $.001 per
share.

      "Effectiveness Date" means with respect to the Registration  Statement the
earlier of (A) the one hundred  twentieth (120th) day following the Closing Date
(or in the event the  Registration  Statement  receives  a "full  review" by the
Commission, the one hundred eightieth (180th) day following the Closing Date) or
(B) the date which is within three (3) Business Days after the date on which the
Commission  informs  the  Company  that (i) the  Commission  will not review the
Registration  Statement or (ii) the Company may request the  acceleration of the
effectiveness of the Registration  Statement and the Company makes such request;
provided  that,  if the  Effectiveness  Date falls on a Saturday,  Sunday or any
other day which  shall be a legal  holiday or a day on which the  Commission  is
authorized  or  required  by law or  other  government  actions  to  close,  the
Effectiveness Date shall be the following Business Day.

<PAGE>

      "Effectiveness Period" shall have the meaning set forth in Section 2.

      "Event" shall have the meaning set forth in Section 7(e).

      "Event Date" shall have the meaning set forth in Section 7(e).

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Filing Date" means the  thirtieth  (30th) day following the Closing Date;
provided  that, if the Filing Date falls on a Saturday,  Sunday or any other day
which shall be a legal holiday or a day on which the Commission is authorized or
required by law or other  government  actions to close, the Filing Date shall be
the following Business Day.

      "Holder" or  "Holders"  means the holder or  holders,  as the case may be,
from time to time of Registrable Securities.

      "Indemnified Party" shall have the meaning set forth in Section 5(c).

      "Indemnifying Party" shall have the meaning set forth in Section 5(c).

      "Losses" shall have the meaning set forth in Section 5(a).

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

      "Preferred  Stock"  means  shares of the  Company's  Series B  Convertible
Preferred Stock issued to the Purchasers pursuant to the Purchase Agreement.

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

      "Prospectus" means the prospectus  included in the Registration  Statement
(including,  without  limitation,  a prospectus  that  includes any  information
previously omitted from a prospectus filed as part of an effective  registration
statement in reliance upon Rule 430A  promulgated  under the Securities Act), as
amended or supplemented by any prospectus supplement,  with respect to the terms
of the  offering of any  portion of the  Registrable  Securities  covered by the
Registration  Statement,  and  all  other  amendments  and  supplements  to  the
Prospectus,  including post-effective  amendments, and all material incorporated
by reference in such Prospectus.

                                      -2-
<PAGE>

      "Registrable  Securities"  (i) the shares of Common  Stock  issuable  upon
conversion of the Preferred  Stock and (ii) the shares of Common Stock  issuable
upon exercise of the Warrants.

      "Registration   Statement"  means  the  registration  statements  and  any
additional registration statements contemplated by Section 2, including (in each
case) the Prospectus,  amendments and supplements to such registration statement
or  Prospectus,  including  pre- and  post-effective  amendments,  all  exhibits
thereto,  and all  material  incorporated  by  reference  in  such  registration
statement.

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

      "Rule 158" means Rule 158  promulgated by the  Commission  pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Rule 415" means Rule 415  promulgated by the  Commission  pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Rule 424" means Rule 424  promulgated by the  Commission  pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Securities Act" means the Securities Act of 1933, as amended.

      "Special Counsel" means Kramer Levin Naftalis & Frankel LLP, for which the
Holders will be reimbursed by the Company pursuant to Section 4.

      "Warrants" means the separate  warrants to purchase shares of Common Stock
issued to the Purchasers pursuant to the Purchase Agreement.

      2. Resale Registration.

      On or prior to the Filing Date the Company shall prepare and file with the
Commission a "resale"  Registration  Statement  providing  for the resale of all
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415.  The  Registration  Statement  shall be on Form SB-2 (except if the
Company is not then eligible to register for resale the  Registrable  Securities
on Form SB-2, in which case such  registration  shall be on another  appropriate
form in accordance  herewith and the  Securities  Act and the rules  promulgated
thereunder).  Such  Registration  Statement shall cover to the extent  allowable
under the Securities Act and the rules  promulgated  thereunder  (including Rule
416), such  indeterminate  number of additional shares of Common Stock resulting
from stock splits,  stock dividends or similar  transactions with respect to the
Registrable  Securities.  The Company shall (i) not permit any securities  other
than the  Registrable  Securities and the securities to be listed on Schedule II
hereto  to be  included  in the  Registration  Statement  and  (ii) use its best
efforts to cause the Registration  Statement to be declared  effective under the
Securities  Act as  promptly as possible  after the filing  thereof,  but in any
event prior to the Effectiveness  Date, and to keep such Registration  Statement
continuously  effective  under  the  Securities  Act  until  such date as is the
earlier  of (x)  the  date  when  all  Registrable  Securities  covered  by such
Registration  Statement have been sold or (y) the date on which the  Registrable
Securities  may be sold  without  any  restriction  pursuant  to Rule  144(k) as
determined by the counsel to the Company  pursuant to a written  opinion letter,
addressed to the  Company's  transfer  agent to such effect (the  "Effectiveness
Period").  The Company shall request that the effective time of the Registration
Statement is 4:00 p.m.  Eastern Time on the  effective  date. If at any time and
for any reason,  an  additional  Registration  Statement is required to be filed
because at such time the actual  number of shares of Common Stock into which the
Preferred Stock is convertible and the Warrants are exercisable  plus the number
of shares of Common Stock exceeds the number of Registrable Securities remaining
under the  Registration  Statement,  the Company shall have twenty (20) Business
Days to file such additional Registration  Statement,  and the Company shall use
its best efforts to cause such additional  Registration Statement to be declared
effective  by the  Commission  as soon as  possible,  but in no event later than
sixty (60) days after filing.

                                      -3-
<PAGE>

      3. Registration Procedures.

      In connection with the Company's registration  obligations hereunder,  the
Company shall:

      (a) Prepare and file with the Commission on or prior to the Filing Date, a
Registration  Statement on Form SB-2 (or if the Company is not then  eligible to
register for resale the  Registrable  Securities on Form SB-2 such  registration
shall be on another  appropriate form in accordance  herewith and the Securities
Act and the  rules  promulgated  thereunder)  in  accordance  with  the  plan of
distribution  as set forth on Exhibit A hereto and in accordance with applicable
law,  and cause  the  Registration  Statement  to become  effective  and  remain
effective as provided  herein;  provided,  however,  that not less than five (5)
Business Days prior to the filing of the  Registration  Statement or any related
Prospectus or any amendment or supplement  thereto  (including any document that
would be  incorporated  therein by reference),  the Company shall (i) furnish to
the Holders and any Special Counsel, copies of all such documents proposed to be
filed,  which  documents  (other than those  incorporated  by reference) will be
subject to the review of such Holders and such Special  Counsel,  and (ii) cause
its officers and directors, counsel and independent certified public accountants
to respond to such inquiries as shall be necessary, in the reasonable opinion of
Special Counsel,  to conduct a reasonable review of such documents.  The Company
shall  not  file  the  Registration  Statement  or any  such  Prospectus  or any
amendments  or  supplements  thereto to which the  Holders of a majority  of the
Registrable Securities or any Special Counsel shall reasonably object in writing
within three (3) Business Days of their receipt thereof.

      (b) (i) Prepare and file with the Commission  such  amendments,  including
post-effective  amendments, to the Registration Statement as may be necessary to
keep the  Registration  Statement  continuously  effective as to the  applicable
Registrable  Securities for the  Effectiveness  Period and prepare and file with
the Commission such additional  Registration Statements as necessary in order to
register for resale under the Securities Act all of the Registrable  Securities;
(ii) cause the related  Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule  424 (or any  similar  provisions  then in  force)  promulgated  under  the
Securities  Act;  (iii)  respond as promptly as possible,  but in no event later
than ten (10) Business Days, to any comments  received from the Commission  with
respect to the  Registration  Statement or any amendment  thereto and to provide
the Holders,  within such ten (10) Business Day period, true and complete copies
of all  correspondence  from and to the Commission  relating to the Registration
Statement; (iv) file the final prospectus pursuant to Rule 424 of the Securities
Act no later than 1:00 p.m.  Eastern Time on the Business Day following the date
the  Registration  Statement is declared  effective by the  Commission;  and (v)
comply in all material  respects with the  provisions of the  Securities Act and
the Exchange Act with respect to the disposition of all  Registrable  Securities
covered  by the  Registration  Statement  during  the  Effectiveness  Period  in
accordance  with the intended  methods of disposition by the Holders thereof set
forth in the  Registration  Statement as so amended or in such  Prospectus as so
supplemented.

                                      -4-
<PAGE>

      (c) Notify the Holders of Registrable  Securities and any Special  Counsel
as promptly as possible  (and, in the case of (i)(A) below,  not less than three
(3) Business Days prior to such filing,  and in the case of (iii) below,  on the
same day of receipt by the Company of such notice from the  Commission)  and (if
requested by any such  Person)  confirm such notice in writing no later than one
(1) Business Day following  the day (i)(A) when a Prospectus  or any  Prospectus
supplement or post-effective  amendment to the Registration  Statement is filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration  Statement and whenever the Commission  comments in writing on
such Registration  Statement and (C) with respect to the Registration  Statement
or any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state  governmental  authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional  information;  (iii) of the  issuance by the  Commission  of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the  Registrable  Securities  or the  initiation  or  threatening  of any
Proceedings for that purpose; (iv) if at any time any of the representations and
warranties of the Company contained in any agreement  contemplated hereby ceases
to be true and  correct  in all  material  respects;  (v) of the  receipt by the
Company of any notification  with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any  jurisdiction,  or the  initiation or threatening of any Proceeding for such
purpose;  and (vi) of the  occurrence of any event that makes any statement made
in the  Registration  Statement or  Prospectus or any document  incorporated  or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration  Statement,  Prospectus or other
documents so that, in the case of the Registration  Statement or the Prospectus,
as the case may be, it will not contain any untrue  statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements  therein, in the light of the circumstances under which they
were made, not misleading.

      (d) Use its best efforts to avoid the  issuance of, or, if issued,  obtain
the  withdrawal  of, as  promptly  as  possible,  (i) any order  suspending  the
effectiveness  of the  Registration  Statement  or (ii)  any  suspension  of the
qualification  (or  exemption  from  qualification)  of any  of the  Registrable
Securities for sale in any jurisdiction.

                                      -5-
<PAGE>

      (e)  If  requested  by  the  Holders  of a  majority  in  interest  of the
Registrable  Securities,  (i) promptly incorporate in a Prospectus supplement or
post-effective  amendment to the Registration  Statement such information as the
Company  reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus  supplement or such post-effective  amendment as soon
as practicable after the Company has received  notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.

      (f) If  requested  by any  Holder,  furnish to such Holder and any Special
Counsel,  without  charge,  at least  one  conformed  copy of each  Registration
Statement  and  each  amendment  thereto,  including  financial  statements  and
schedules,  all documents  incorporated or deemed to be incorporated  therein by
reference,  and all exhibits to the extent  requested by such Person  (including
those  previously  furnished or  incorporated  by reference)  promptly after the
filing of such documents with the Commission.

      (g)  Promptly  deliver to each  Holder and any  Special  Counsel,  without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus)  and each  amendment  or  supplement  thereto  as such  Persons  may
reasonably request; and subject to the provisions of Sections 3(m) and 3(n), the
Company  hereby  consents to the use of such  Prospectus  and each  amendment or
supplement  thereto  by each of the  selling  Holders  in  connection  with  the
offering and sale of the Registrable  Securities  covered by such Prospectus and
any amendment or supplement thereto.

      (h) Prior to any public offering of Registrable  Securities,  use its best
efforts to register  or qualify or  cooperate  with the selling  Holders and any
Special  Counsel  in  connection  with the  registration  or  qualification  (or
exemption  from  such   registration  or   qualification)  of  such  Registrable
Securities  for offer and sale  under  the  securities  or Blue Sky laws of such
jurisdictions  within the United  States as any Holder  requests in writing,  to
keep each such registration or qualification (or exemption  therefrom) effective
during  the  Effectiveness  Period  and to do any and all  other  acts or things
necessary or advisable to enable the  disposition in such  jurisdictions  of the
Registrable Securities covered by a Registration Statement;  provided,  however,
that the Company  shall not be required to qualify  generally  to do business in
any  jurisdiction  where it is not then so  qualified or to take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject or subject  the Company to any  material  tax in any such
jurisdiction where it is not then so subject.

      (i) Cooperate  with the Holders to facilitate the timely  preparation  and
delivery of certificates representing Registrable Securities to be sold pursuant
to a Registration Statement, which certificates,  to the extent permitted by the
Purchase  Agreement and applicable  federal and state  securities laws, shall be
free of all restrictive legends, and to enable such Registrable Securities to be
in such  denominations and registered in such names as any Holder may request in
connection with any sale of Registrable Securities.

      (j) Upon the occurrence of any event contemplated by Section 3(c)(vi),  as
promptly  as  possible,   prepare  a  supplement  or   amendment,   including  a
post-effective  amendment,  to the Registration Statement or a supplement to the
related  Prospectus or any document  incorporated  or deemed to be  incorporated
therein  by  reference,  and file  any  other  required  document  so  that,  as
thereafter  delivered,  neither the  Registration  Statement nor such Prospectus
will contain an untrue  statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements  therein,
in the light of the circumstances under which they were made, not misleading.

                                      -6-
<PAGE>

      (k) Use its best efforts to cause all Registrable  Securities  relating to
the  Registration  Statement to be listed on the OTC Bulletin Board or any other
securities  exchange,  quotation  system or  market,  if any,  on which  similar
securities  issued by the Company are then listed or traded as and when required
pursuant to the Purchase Agreement.

      (l)  Comply  in all  material  respects  with  all  applicable  rules  and
regulations  of the  Commission  and make  generally  available  to its security
holders  all  documents  filed  or  required  to be filed  with the  Commission,
including,  but not limited, to, earning statements satisfying the provisions of
Section  11(a) of the  Securities  Act and Rule 158 not later than 45 days after
the end of any 12-month  period (or 90 days after the end of any 12-month period
if such period is a fiscal year) commencing on the first day of the first fiscal
quarter of the Company after the effective date of the  Registration  Statement,
which statement shall conform to the requirements of Rule 158.

      (m) The Company may require each selling  Holder to furnish to the Company
information  regarding  such  Holder and the  distribution  of such  Registrable
Securities as is required by law to be disclosed in the Registration  Statement,
Prospectus,  or any amendment or supplement thereto, and the Company may exclude
from  such  registration  the  Registrable  Securities  of any such  Holder  who
unreasonably  fails to furnish such  information  within a reasonable time after
receiving such request.

      If the Registration Statement refers to any Holder by name or otherwise as
the holder of any  securities  of the  Company,  then such Holder shall have the
right to require (if such  reference  to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force) the
deletion of the  reference to such Holder in any  amendment or supplement to the
Registration  Statement  filed or  prepared  subsequent  to the time  that  such
reference ceases to be required.

      Each Holder  covenants  and agrees  that it will not sell any  Registrable
Securities under the Registration Statement until the Company has electronically
filed the Prospectus as then amended or  supplemented as contemplated in Section
3(g)  and  notice  from the  Company  that the  Registration  Statement  and any
post-effective  amendments  thereto  have become  effective as  contemplated  by
Section 3(c).

      Each Holder agrees by its acquisition of such Registrable Securities that,
upon receipt of a notice from the Company of the  occurrence of any event of the
kind described in Section 3(c)(ii),  3(c)(iii),  3(c)(iv),  3(c)(v), 3(c)(vi) or
3(n),  such Holder will forthwith  discontinue  disposition of such  Registrable
Securities under the  Registration  Statement until such Holder's receipt of the
copies of the  supplemented  Prospectus  and/or amended  Registration  Statement
contemplated  by Section 3(j), or until it is advised in writing (the  "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental  filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.

                                      -7-
<PAGE>

      (n) At any time  following  the date that the  Registration  Statement  is
declared  effective  by the  Commission,  if (i)  there is  material  non-public
information  regarding the Company which the Company's  Board of Directors  (the
"Board")  determines  not to be in the  Company's  best interest to disclose and
which the  Company  is not  otherwise  required  to  disclose,  (ii)  there is a
significant business opportunity (including, but not limited to, the acquisition
or disposition of assets (other than in the ordinary  course of business) or any
merger,  consolidation,  tender offer or other similar transaction) available to
the Company which the Board  determines not to be in the Company's best interest
to disclose, or (iii) the Company is required to file a post-effective amendment
to the Registration  Statement to incorporate the Company's quarterly and annual
reports and audited  financial  statements on Forms 10-QSB and 10-KSB,  then the
Company may postpone or suspend effectiveness of a registration  statement for a
period not to exceed twenty (20) consecutive days; provided that the Company may
not suspend  effectiveness  of a registration  statement under this Section 3(n)
for more than  forty-five  (45) days in the  aggregate  during any three hundred
sixty (360) day period;  provided,  however,  that no such  suspension  shall be
permitted for consecutive twenty (20) day periods arising out of the same set of
facts, circumstances or transactions.

      4. Registration Expenses.

      All fees and expenses  incident to the  performance of or compliance  with
this  Agreement  by the Company,  except as and to the extent  specified in this
Section  4,  shall be  borne  by the  Company  whether  or not the  Registration
Statement  is filed or becomes  effective  and  whether  or not any  Registrable
Securities  are  sold  pursuant  to the  Registration  Statement.  The  fees and
expenses  referred  to  in  the  foregoing   sentence  shall  include,   without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses  (A) with respect to filings  required to be made with the OTC
Bulletin Board and each other securities exchange or market on which Registrable
Securities  are  required  hereunder  to be listed,  if any, (B) with respect to
filing  fees  required  to be paid to the  National  Association  of  Securities
Dealers,  Inc. and the NASD  Regulation,  Inc. and (C) in compliance  with state
securities  or  Blue  Sky  laws  (including,   without   limitation,   fees  and
disbursements   of  counsel  for  the  Holders  in  connection   with  Blue  Sky
qualifications   of  the  Registrable   Securities  and   determination  of  the
eligibility of the Registrable  Securities for investment under the laws of such
jurisdictions  as the  Holders  of a  majority  of  Registrable  Securities  may
designate)), (ii) printing expenses (including, without limitation,  expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the  printing of  prospectuses  is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses,  (iv) fees and disbursements of counsel for the
Company and Special Counsel for the Holders, in the case of the Special Counsel,
up to a maximum amount of $7,500, (v) Securities Act liability insurance, if the
Company so  desires  such  insurance,  and (vi) fees and  expenses  of all other
Persons  retained  by the Company in  connection  with the  consummation  of the
transactions contemplated by this Agreement,  including, without limitation, the
Company's independent public accountants  (including the expenses of any comfort
letters or costs associated with the delivery by independent  public accountants
of a comfort  letter or comfort  letters).  In  addition,  the Company  shall be
responsible  for all of its internal  expenses  incurred in connection  with the
consummation  of the  transactions  contemplated  by this Agreement  (including,
without  limitation,  all salaries  and  expenses of its officers and  employees
performing  legal or accounting  duties),  the expense of any annual audit,  the
fees and expenses  incurred in  connection  with the listing of the  Registrable
Securities on any securities exchange as required hereunder.

                                      -8-
<PAGE>

      5. Indemnification.

      (a) Indemnification by the Company. The Company shall, notwithstanding any
termination  of this  Agreement,  indemnify and hold  harmless each Holder,  the
officers, directors, managers, partners, members, shareholders, agents, brokers,
investment  advisors and employees of each of them, each Person who controls any
such Holder  (within the meaning of Section 15 of the  Securities Act or Section
20 of the Exchange  Act) and the  officers,  directors,  agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law,
from  and  against  any and all  losses,  claims,  damages,  liabilities,  costs
(including,  without  limitation,  costs of preparation and attorneys' fees) and
expenses (collectively,  "Losses"),  as incurred,  arising out of or relating to
any  violation of  securities  laws or untrue or alleged  untrue  statement of a
material fact  contained in the  Registration  Statement,  any Prospectus or any
form  of  prospectus  or in  any  amendment  or  supplement  thereto  or in  any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact  required to be stated  therein or necessary to make
the  statements  therein (in the case of any Prospectus or form of prospectus or
supplement  thereto,  in the light of the  circumstances  under  which they were
made) not misleading,  except to the extent,  but only to the extent,  that such
untrue statements or omissions are based solely upon information  regarding such
Holder or such other  Indemnified  Party  furnished in writing to the Company by
such Holder  expressly  for use  therein.  The Company  shall notify the Holders
promptly of the institution,  threat or assertion of any Proceeding of which the
Company  is  aware in  connection  with the  transactions  contemplated  by this
Agreement.

      (b)  Indemnification  by Holders.  Each Holder  shall,  severally  and not
jointly,  indemnify  and hold  harmless the Company,  its  directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents and employees of such controlling  Persons, to the
fullest  extent  permitted by  applicable  law,  from and against all Losses (as
determined by a court of competent  jurisdiction in a final judgment not subject
to appeal or review),  as incurred,  arising  solely out of or based solely upon
any untrue statement of a material fact contained in the Registration Statement,
any  Prospectus,  or any form of  prospectus,  or arising solely out of or based
solely upon any  omission of a material  fact  required to be stated  therein or
necessary to make the statements  therein (in the case of any Prospectus or form
of prospectus or supplement  thereto,  in the light of the  circumstances  under
which they were made) not  misleading,  to the  extent,  but only to the extent,
that such untrue  statement  or  omission is  contained  in any  information  so
furnished in writing by such Holder or other  Indemnifying  Party to the Company
specifically  for inclusion in the  Registration  Statement or such  Prospectus.
Notwithstanding  anything to the contrary contained herein, each Holder shall be
liable  under this  Section 5(b) for only that amount as does not exceed the net
proceeds  to such  Holder  as a  result  of the sale of  Registrable  Securities
pursuant to such Registration Statement.

                                      -9-
<PAGE>

      (c) Conduct of  Indemnification  Proceedings.  If any Proceeding  shall be
brought or asserted  against  any Person  entitled to  indemnity  hereunder  (an
"Indemnified  Party"),  such Indemnified  Party promptly shall notify the Person
from whom  indemnity  is sought (the  "Indemnifying  Party) in writing,  and the
Indemnifying  Party shall be entitled to assume the defense  thereof,  including
the employment of counsel  reasonably  satisfactory to the Indemnified Party and
the  payment  of all fees and  expenses  incurred  in  connection  with  defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve  the  Indemnifying  Party of its  obligations  or  liabilities
pursuant  to this  Agreement,  except  (and only) to the extent that it shall be
finally determined by a court of competent  jurisdiction (which determination is
not  subject  to  appeal  or  further  review)  that  such  failure  shall  have
proximately and materially adversely prejudiced the Indemnifying Party.

      An Indemnified  Party shall have the right to employ  separate  counsel in
any such Proceeding and to participate in the defense thereof,  but the fees and
expenses of such counsel  shall be at the expense of such  Indemnified  Party or
Parties  unless:  (1) the  Indemnifying  Party has agreed in writing to pay such
fees and expenses;  or (2) the Indemnifying  Party shall have failed promptly to
assume  the  defense  of  such  Proceeding  and  to  employ  counsel  reasonably
satisfactory to such Indemnified Party in any such Proceeding;  or (3) the named
parties to any such Proceeding  (including any impleaded  parties)  include both
such Indemnified  Party and the Indemnifying  Party, and such parties shall have
been  advised by counsel  that a conflict  of interest is likely to exist if the
same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such  Indemnified  Party notifies the  Indemnifying  Party in
writing  that it  elects  to  employ  separate  counsel  at the  expense  of the
Indemnifying  Party, the  Indemnifying  Party shall not have the right to assume
the defense thereof and such counsel shall be at the expense of the Indemnifying
Party).  The  Indemnifying  Party shall not be liable for any  settlement of any
such Proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed. No Indemnifying Party shall, without the prior
written consent of the Indemnified  Party,  effect any settlement of any pending
or threatened  Proceeding in respect of which any  Indemnified  Party is a party
and  indemnity has been sought  hereunder,  unless such  settlement  includes an
unconditional  release of such  Indemnified  Party from all  liability on claims
that are the subject matter of such Proceeding.

      All fees and expenses of the Indemnified Party (including  reasonable fees
and  expenses  to the  extent  incurred  in  connection  with  investigating  or
preparing  to defend  such  Proceeding  in a manner not  inconsistent  with this
Section) shall be paid to the Indemnified  Party,  as incurred,  within ten (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder;  provided, that the Indemnified Party shall reimburse
all such fees and  expenses  to the extent it is finally  judicially  determined
that such Indemnified Party is not entitled to indemnification hereunder).

                                      -10-
<PAGE>

      (d)  Contribution.  If a claim for  indemnification  under Section 5(a) or
5(b) is due but  unavailable  to an  Indemnified  Party  because of a failure or
refusal  of  a  governmental   authority  to  enforce  such  indemnification  in
accordance  with its terms (by reason of public policy or otherwise),  then each
Indemnifying  Party,  in lieu of  indemnifying  such  Indemnified  Party,  shall
contribute to the amount paid or payable by such  Indemnified  Party as a result
of such Losses,  in such  proportion as is  appropriate  to reflect the relative
benefits received by the Indemnifying  Party on the one hand and the Indemnified
Party on the other from the offering of the  Preferred  Stock and the  Warrants.
If,  but only if, the  allocation  provided  by the  foregoing  sentence  is not
permitted by applicable  law, the  allocation of  contribution  shall be made in
such  proportion  as is  appropriate  to reflect not only the relative  benefits
referred  to  in  the  foregoing  sentence  but  also  the  relative  fault,  as
applicable,  of the Indemnifying  Party and Indemnified Party in connection with
the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and  Indemnified  Party shall be  determined  by reference to, among other
things,  whether any action in question,  including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been  taken  or made  by,  or  relates  to  information  supplied  by,  such
Indemnifying  Party or  Indemnified  Party,  and the parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include,  subject to the  limitations set forth
in Section 5(c), any reasonable  attorneys' or other reasonable fees or expenses
incurred  by such party in  connection  with any  Proceeding  to the extent such
party   would  have  been   indemnified   for  such  fees  or  expenses  if  the
indemnification  provided  for in this  Section was  available  to such party in
accordance  with its terms.  In no event shall any selling Holder be required to
contribute  an amount  under  this  Section  5(d) in excess of the net  proceeds
received  by such  Holder  upon  sale of such  Holder's  Registrable  Securities
pursuant  to  the  Registration  Statement  giving  rise  to  such  contribution
obligation.

      The  parties  hereto  agree  that it would  not be just and  equitable  if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent  misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any Person
who was not  guilty of such  fraudulent  misrepresentation.  The  indemnity  and
contribution  agreements  contained  in  this  Section  are in  addition  to any
liability  that the  Indemnifying  Parties may have to the  Indemnified  Parties
pursuant to the law.

      6. Rule 144.

      As long as any  Holder  owns  Preferred  Stock,  Warrants  or  Registrable
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the Company  after the date hereof  pursuant to Section
13(a) or 15(d) of the Exchange Act. As long as any Holder owns Preferred  Stock,
Warrants  or  Registrable  Securities,  if the  Company is not  required to file
reports  pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare
and furnish to the Holders and make publicly  available in accordance  with Rule
144(c)  promulgated  under the  Securities  Act annual and  quarterly  financial
statements, together with a discussion and analysis of such financial statements
in form and  substance  substantially  similar to those that would  otherwise be
required  to be included  in reports  required by Section  13(a) or 15(d) of the
Exchange Act, as well as any other  information  required  thereby,  in the time
period that such  filings  would have been  required to have been made under the
Exchange  Act.  The Company  further  covenants  that it will take such  further
action as any Holder may  reasonably  request,  all to the extent  required from
time to time to enable such Person to sell Conversion  Shares and Warrant Shares
without  registration  under the  Securities  Act within the  limitation  of the
exemptions  provided by Rule 144 promulgated under the Securities Act, including
providing  any legal  opinions  relating to such sale pursuant to Rule 144. Upon
the request of any Holder,  the Company  shall  deliver to such Holder a written
certification  of a duly  authorized  officer as to whether it has complied with
such requirements.

                                      -11-
<PAGE>

      7. Miscellaneous.

      (a) Remedies.  In the event of a breach by the Company or by a Holder,  of
any of their  obligations under this Agreement,  such Holder or the Company,  as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific  performance of its rights under this  Agreement.  The Company and each
Holder agree that monetary damages would not provide  adequate  compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement  and  hereby  further  agrees  that,  in the event of any  action  for
specific  performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

      (b)  No  Inconsistent  Agreements.  Neither  the  Company  nor  any of its
subsidiaries  has, as of the date hereof  entered into and  currently in effect,
nor shall the Company or any of its  subsidiaries,  on or after the date of this
Agreement,  enter into any  agreement  with  respect to its  securities  that is
inconsistent  with the  rights  granted  to the  Holders  in this  Agreement  or
otherwise conflicts with the provisions hereof.  Except as disclosed in Schedule
2.1(c) of the Purchase Agreement or Schedule II hereto,  neither the Company nor
any of its subsidiaries has previously  entered into any agreement  currently in
effect granting any registration rights with respect to any of its securities to
any Person.  Without  limiting  the  generality  of the  foregoing,  without the
written consent of the Holders of a majority of the then outstanding Registrable
Securities,  the Company  shall not grant to any Person the right to request the
Company to register any  securities  of the Company,  under the  Securities  Act
unless the rights so granted are subject in all  respects to the prior rights in
full of the Holders set forth herein, and are not otherwise in conflict with the
provisions of this Agreement.

      (c) No  Piggyback  on  Registrations.  Neither  the Company nor any of its
security holders (other than the Holders in such capacity  pursuant hereto or as
disclosed on Schedule  2.1(c) of the  Purchase  Agreement or Schedule II hereto)
may include  securities of the Company in the  Registration  Statement,  and the
Company shall not after the date hereof enter into any agreement  providing such
right to any of its  securityholders,  unless the right so granted is subject in
all respects to the prior rights in full of the Holders set forth herein, and is
not otherwise in conflict with the provisions of this Agreement.

                                      -12-
<PAGE>

      (d)  Piggy-Back  Registrations.  If at  any  time  when  there  is  not an
effective  Registration  Statement  providing for the resale of the  Registrable
Securities,  the Company shall determine to prepare and file with the Commission
a  registration  statement  relating to an  offering  for its own account or the
account of others  under the  Securities  Act of any of its  equity  securities,
other  than on Form S-4 or Form S-8 (each as  promulgated  under the  Securities
Act) or their then equivalents relating to equity securities to be issued solely
in  connection  with  any  acquisition  of any  entity  or  business  or  equity
securities  issuable in connection  with stock option or other employee  benefit
plans, the Company shall send to each holder of Registrable  Securities  written
notice of such  determination  and, if within  thirty (30) days after receipt of
such notice,  or within such  shorter  period of time as may be specified by the
Company in such  written  notice as may be  necessary  for the Company to comply
with  its  obligations  with  respect  to the  timing  of  the  filing  of  such
registration  statement,  any such  holder  shall so request  in writing  (which
request shall specify the Registrable  Securities  intended to be disposed of by
the Purchasers),  the Company will cause the  registration  under the Securities
Act of all  Registrable  Securities  which the Company has been so  requested to
register by the holder, to the extent requisite to permit the disposition of the
Registrable  Securities so to be registered,  provided that if at any time after
giving  written  notice of its intention to register any securities and prior to
the effective date of the  registration  statement filed in connection with such
registration,  the Company shall  determine for any reason not to register or to
delay  registration of such securities,  the Company may, at its election,  give
written notice of such determination to such holder and,  thereupon,  (i) in the
case of a determination not to register,  shall be relieved of its obligation to
register any Registrable  Securities in connection with such  registration  (but
not from its  obligation to pay expenses in  accordance  with Section 4 hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay  registering any Registrable  Securities being  registered  pursuant to
this  Section  7(d) for the same period as the delay in  registering  such other
securities.  The Company shall include in such registration statement all or any
part of such  Registrable  Securities  such holder  requests  to be  registered;
provided,  however,  that the Company  shall not be  required  to  register  any
Registrable  Securities pursuant to this Section 7(d) that are eligible for sale
pursuant to Rule 144(k) of the  Securities  Act. In the case of an  underwritten
public  offering,  if  the  managing  underwriter(s)  or  underwriter(s)  should
reasonably  object  to the  inclusion  of the  Registrable  Securities  in  such
registration statement, then if the Company after consultation with the managing
underwriter  should reasonably  determine that the inclusion of such Registrable
Securities would materially  adversely affect the offering  contemplated in such
registration statement,  and based on such determination recommends inclusion in
such  registration  statement of fewer or none of the Registrable  Securities of
the  Holders,  then (x) the  number of  Registrable  Securities  of the  Holders
included in such  registration  statement  shall be reduced  pro-rata among such
Holders  (based  upon the  number  of  Registrable  Securities  requested  to be
included  in the  registration),  if the  Company  after  consultation  with the
underwriter(s)  recommends the inclusion of fewer Registrable Securities, or (y)
none of the  Registrable  Securities  of the  Holders  shall be included in such
registration   statement,   if  the   Company   after   consultation   with  the
underwriter(s)  recommends the inclusion of none of such Registrable Securities;
provided, however, that if securities are being offered for the account of other
persons or entities as well as the Company, such reduction shall not represent a
greater fraction of the number of Registrable  securities intended to be offered
by the Holders  than the  fraction of similar  reductions  imposed on such other
persons or entities (other than the Company).

                                      -13-
<PAGE>

      (e) Failure to File Registration  Statement and Other Events.  The Company
and  the  Purchasers   agree  that  the  Holders  will  suffer  damages  if  the
Registration  Statement  is not  filed on or prior  to the  Filing  Date and not
declared  effective by the Commission on or prior to the Effectiveness  Date and
maintained in the manner contemplated herein during the Effectiveness  Period or
if certain other events occur. The Company and the Holders further agree that it
would not be feasible to ascertain  the extent of such  damages with  precision.
Accordingly,  if (A) the Registration  Statement is not filed on or prior to the
Filing Date, or (B) the Registration  Statement is not declared effective by the
Commission on or prior to the Effectiveness  Date (or in the event an additional
Registration  Statement is filed  because the actual  number of shares of Common
Stock into which the  Warrants are  exercisable  exceeds the number of shares of
Common Stock initially  registered is not filed and declared  effective with the
time periods set forth in Section 2), or (C) the Company  fails to file with the
Commission a request for  acceleration  in accordance  with Rule 461 promulgated
under the  Securities  Act within three (3)  Business  Days of the date that the
Company  is  notified  (orally  or in  writing,  whichever  is  earlier)  by the
Commission that a Registration  Statement will not be "reviewed," or not subject
to further review, or (D) the Registration  Statement is filed with and declared
effective  by the  Commission  but  thereafter  ceases to be effective as to all
Registrable  Securities at any time prior to the expiration of the Effectiveness
Period, without being succeeded promptly by a subsequent  Registration Statement
filed with and declared effective by the Commission in accordance with Section 2
hereof,  or (E) the Company has  breached  Section  3(n),  or (F) trading in the
Common Stock shall be  suspended  or if the Common Stock is delisted  from or no
longer quoted on the OTC Bulletin  Board (or other  principal  exchange on which
the  Common  Stock is listed or  traded)  for any reason for more than three (3)
Business Days in the aggregate  (any such failure or breach being referred to as
an "Event," and for purposes of clauses (A) and (B) the date on which such Event
occurs,  or for purposes of clause (C) the date on which such three (3) Business
Day period is  exceeded,  or for  purposes of clause (D) after more than fifteen
(15)  Business  Days, or for purposes of clause (F) the date on which such three
(3) Business Day period is exceeded,  being  referred to as "Event  Date"),  the
Company shall pay an amount in cash as  liquidated  damages to each Holder equal
to two percent (2%) for each calendar  month  (prorated for shorter  periods) of
the Holder's initial investment in the Preferred Stock from the Event Date until
the applicable  Event is cured;  provided,  however,  that in no event shall the
amount of  liquidated  damages  payable at any time and from time to time to any
Holder pursuant to this Section 7(e) exceed an aggregate of twenty percent (20%)
of the  amount  of the  Holder's  initial  investment  in the  Preferred  Stock.
Notwithstanding  anything to the contrary in this  paragraph  (e), if (i) any of
the Events  described in clauses (A), (B), (C), (D) or (F) shall have  occurred,
(II) on or prior to the applicable  Event Date, the Company shall have exercised
its rights under  Section 3(n) hereof and (III) the  postponement  or suspension
permitted  pursuant  to such  Section  3(n) shall  remain  effective  as of such
applicable Event Date, then the applicable Event Date shall be deemed instead to
occur on the second Business Day following the termination of such  postponement
or  suspension.  Liquidated  damages  payable by the  Company  pursuant  to this
Section  7(e) shall be payable on the first  (1st)  Business  Day of each thirty
(30) day  period  following  the Event  Date.  Notwithstanding  anything  to the
contrary  contained herein, in no event shall any liquidated  damages be payable
with respect to the Warrants or the Warrant Shares.

      (f) Amendments and Waivers.  The provisions of this  Agreement,  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
Holders of a majority of the Registrable Securities outstanding.

                                      -14-
<PAGE>

      (g) Notices.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and  effective on the earlier of (i) the date of  transmission,  if
such  notice or  communication  is  delivered  via  facsimile  at the  facsimile
telephone number specified for notice prior to 5:00 p.m., New York City time, on
a Business  Day, (ii) the Business Day after the date of  transmission,  if such
notice or  communication  is delivered via facsimile at the facsimile  telephone
number  specified  for notice later than 5:00 p.m.,  New York City time,  on any
date and earlier than 11:59 p.m.,  New York City time,  on such date,  (iii) the
Business Day  following  the date of mailing,  if sent by overnight  delivery by
nationally  recognized  overnight  courier service or (iv) actual receipt by the
party to whom  such  notice is  required  to be given.  The  addresses  for such
communications  shall be with  respect to each  Holder at its  address set forth
under its name on Schedule I attached  hereto  with copies to its legal  counsel
named therein, or with respect to the Company, addressed to:

                                    Dolce Ventures Inc.
                                    N0.18 Zhong Guan Cun Dong St.
                                    Haidian District
                                    Beijing, China
                                    Attention: Chen Fang
                                    Tel. No.: 011-86-10-82600527
                                    Fax No.: 011-010-82600042

with copies (which copies
shall not constitute notice
to the Company) to:                 GUZOV OFSINK, LLC
                                    600 Madison Avenue, 14th Floor
                                    New York, New York 10022
                                    Attention:  Darren Ofsink
                                    Tel. No.:  (212) 371-8008, ext. 127
                                    Fax No.:  (212) 688-7273

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have  designated in writing to the other parties  hereto
by such  notice.  Copies of notices to each  Holder  (in  addition  to the legal
counsel set forth on Schedule I hereto) shall be sent to Kramer Levin Naftalis &
Frankel LLP,  Kramer Levin  Naftalis & Frankel LLP, 1177 Avenue of the Americas,
New York,  New York 10036,  Attention:  Christopher  S. Auguste,  Telephone No.:
(212) 715-9100, Facsimile No.: (212) 715-8000.

      (h) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their  successors  and  permitted  assigns and
shall inure to the benefit of each Holder and its  successors  and assigns.  The
Company  may not  assign  this  Agreement  or any of its  rights or  obligations
hereunder  without the prior written consent of each Holder.  Each Purchaser may
assign its rights  hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.

                                      -15-
<PAGE>

      (i)  Assignment  of  Registration   Rights.  The  rights  of  each  Holder
hereunder,  including  the  right  to  have  the  Company  register  for  resale
Registrable Securities in accordance with the terms of this Agreement,  shall be
automatically assignable by each Holder to any Person of all or a portion of the
Preferred  Stock or Registrable  Securities if: (i) the Holder agrees in writing
with the  transferee  or  assignee  to assign  such  rights,  and a copy of such
agreement  is  furnished  to the  Company  within a  reasonable  time after such
assignment, (ii) the Company is, within a reasonable time after such transfer or
assignment,  furnished  with written  notice of (a) the name and address of such
transferee  or  assignee,  and (b) the  securities  with  respect  to which such
registration  rights are being  transferred  or assigned,  (iii)  following such
transfer  or  assignment  the  further  disposition  of such  securities  by the
transferee or assignees is restricted  under the  Securities  Act and applicable
state  securities  laws,  (iv) at or before the time the  Company  receives  the
written notice  contemplated  by clause (ii) of this Section,  the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
of this Agreement, and (v) such transfer shall have been made in accordance with
the applicable requirements of the Purchase Agreement.  The rights to assignment
shall apply to the Holders (and to subsequent) successors and assigns.

      (j)  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.

      (k) Governing Law;  Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving  effect to any of the conflicts of law  principles  which would result in
the application of the substantive law of another  jurisdiction.  This Agreement
shall not be  interpreted or construed  with any  presumption  against the party
causing  this  Agreement to be drafted.  The Company and the Holders  agree that
venue for any dispute  arising under this Agreement will lie  exclusively in the
state or federal  courts  located in New York County,  New York, and the parties
irrevocably  waive any right to raise forum non conveniens or any other argument
that New York is not the proper venue.  The Company and the Holders  irrevocably
consent to personal jurisdiction in the state and federal courts of the state of
New York.  The Company and the Holders  consent to process  being  served in any
such suit,  action or  proceeding by mailing a copy thereof to such party at the
address in effect for  notices to it under this  Agreement  and agrees that such
service  shall  constitute  good and  sufficient  service of process  and notice
thereof.  Nothing in this  Section 7(k) shall affect or limit any right to serve
process in any other manner permitted by law. The Company and the Holders hereby
agree that the prevailing party in any suit, action or proceeding arising out of
or relating to this  Agreement or the Purchase  Agreement,  shall be entitled to
reimbursement  for  reasonable  legal fees from the  non-prevailing  party.  The
parties hereby waive all rights to a trial by jury.

      (l) Cumulative  Remedies.  The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

      (m) Severability.  If any term, provision, covenant or restriction of this
Agreement is held to be invalid,  illegal, void or unenforceable in any respect,
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  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.

                                      -16-
<PAGE>

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

      (o) Shares Held by the Company and its Affiliates. Whenever the consent or
approval of Holders of a  specified  percentage  of  Registrable  Securities  is
required hereunder, Registrable Securities held by the Company or its Affiliates
(other than any Holder or transferees  or successors or assigns  thereof if such
Holder is deemed to be an  Affiliate  solely by reason of its  holdings  of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

      (p) Independent  Nature of Purchasers.  The Company  acknowledges that the
obligations of each Purchaser  under the  Transaction  Documents are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under the Transaction  Documents.  The Company  acknowledges  that the
decision of each  Purchaser  to  purchase  Securities  pursuant to the  Purchase
Agreement has been made by such Purchaser  independently  of any other Purchaser
and  independently of any information,  materials,  statements or opinions as to
the business, affairs, operations, assets, properties,  liabilities,  results of
operations, condition (financial or otherwise) or prospects of the Company or of
its  Subsidiaries  which may have made or given by any other Purchaser or by any
agent or employee of any other Purchaser,  and no Purchaser or any of its agents
or employees  shall have any  liability to any  Purchaser  (or any other person)
relating  to or arising  from any such  information,  materials,  statements  or
opinions.  The Company  acknowledges  that nothing  contained  herein, or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant hereto or
thereto (including,  but not limited to, the (i) inclusion of a Purchaser in the
Registration  Statement  and (ii) review by, and  consent to, such  Registration
Statement by a Purchaser)  shall be deemed to  constitute  the  Purchasers  as a
partnership,  an  association,  a joint venture or any other kind of entity,  or
create a presumption  that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction  Documents.  The Company  acknowledges  that each Purchaser shall be
entitled to  independently  protect and  enforce its rights,  including  without
limitation,  the  rights  arising  out of  this  Agreement  or out of the  other
Transaction Documents,  and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. The Company
acknowledges   that  for  reasons  of   administrative   convenience  only,  the
Transaction  Documents  have been prepared by counsel for one of the  Purchasers
and  such  counsel  does  not  represent  the  other  Purchasers  and the  other
Purchasers  have  retained  their own  individual  counsel  with  respect to the
transactions  contemplated  hereby. The Company acknowledges that it has elected
to provide all Purchasers with the same terms and Transaction  Documents for the
convenience of the Company and not because it was required or requested to do so
by the Purchasers.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -17-
<PAGE>

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

                                            DOLCE VENTURES, INC.

                                            By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                            PURCHASER:

                                            By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                      -18-
<PAGE>

                                   Schedule I
                               List of Purchasers

<TABLE>
<CAPTION>
Names and Addresses                         Number of Preferred Shares          Dollar Amount of
of Purchasers                               & Warrants Purchased                Investment
-------------                               --------------------                ----------
<S>                                         <C>                                 <C>
Vision Opportunity Master Fund, Ltd.        Preferred Shares: 2,189,782         $6,000,000
20 W 55th St., 5th floor                    Series A Warrants: 2,189,782
New York, NY 10019                          Series B Warrants: 1,094,891
                                            Series J Warrants: 1,993,355
                                            Series C Warrants: 1,993,355
                                            Series D Warrants: 996,678

SEI Private Trust Co. FAO
The JM Smucker Co. Master Trust             Preferred Shares: 140,000           $383,600
1 Freedom Valley Dr                         Series A Warrants: 140,000
Oaks, PA 19456                              Series B Warrants: 70,000
Attn: Suzanne Rokosny                       Series J Warrants: 127,442
Tax ID: 23-3060382                          Series C Warrants: 127,442
                                            Series D Warrants: 63,721

Coronado Capital Partners LP                Preferred Shares: 180,000           $493,200
c/o MS Howells                              Series A Warrants: 180,000
20555 N Pima Rd, Suite 100                  Series B Warrants: 90,000
Scottsdale, AZ 85255                        Series J Warrants: 163,854
Attn: Christine Nichols                     Series C Warrants: 163,854
Tax ID: 20-2427088                          Series D Warrants: 81,927
</TABLE>

                                      -19-
<PAGE>

                                   Schedule II
          Securities Permitted to be Included on Registration Statement

                           [SEE ATTACHED SPREADSHEET]

                                      -20-
<PAGE>

                                    Exhibit A
                              Plan of Distribution

      The selling security holders and any of their pledgees,  donees, assignees
and  successors-in-interest  may,  from  time to time,  sell any or all of their
shares  of  common  stock  being  offered  under  this  prospectus  on any stock
exchange,  market or trading  facility on which  shares of our common  stock are
traded or in private  transactions.  These  sales may be at fixed or  negotiated
prices.  The selling  security  holders may use any one or more of the following
methods when disposing of shares:

o     ordinary   brokerage   transactions   and   transactions   in  which   the
      broker-dealer solicits purchasers;

o     block trades in which the broker-dealer will attempt to sell the shares as
      agent but may  position  and resell a portion of the block as principal to
      facilitate the transaction;

o     purchases by a broker-dealer as principal and resales by the broker-dealer
      for its account;

o     an exchange  distribution  in accordance  with the rules of the applicable
      exchange;

o     privately negotiated transactions;

o     to cover short sales made after the date that the  registration  statement
      of  which  this  prospectus  is  a  part  is  declared  effective  by  the
      Commission;

o     broker-dealers  may agree  with the  selling  security  holders  to sell a
      specified number of such shares at a stipulated price per share;

o     a combination of any of these methods of sale; and

o     any other method permitted pursuant to applicable law.

      The shares may also be sold  under  Rule 144 under the  Securities  Act of
1933,  as amended  ("Securities  Act"),  if  available,  rather  than under this
prospectus.  The selling security holders have the sole and absolute  discretion
not to  accept  any  purchase  offer or make any sale of shares if they deem the
purchase price to be unsatisfactory at any particular time.

      The selling  security  holders may pledge  their  shares to their  brokers
under the margin provisions of customer agreements. If a selling security holder
defaults on a margin loan, the broker may, from time to time, offer and sell the
pledged shares.

      Broker-dealers  engaged by the  selling  security  holders may arrange for
other  broker-dealers  to  participate  in  sales.  Broker-dealers  may  receive
commissions  or  discounts  from  the  selling  security  holders  (or,  if  any
broker-dealer acts as agent for the purchaser of shares,  from the purchaser) in
amounts to be negotiated,  which commissions as to a particular broker or dealer
may be in excess of customary  commissions to the extent permitted by applicable
law.

                                      -21-
<PAGE>

      If  sales  of  shares   offered   under  this   prospectus   are  made  to
broker-dealers  as  principals,  we would be required  to file a  post-effective
amendment to the  registration  statement of which this prospectus is a part. In
the post-effective  amendment, we would be required to disclose the names of any
participating  broker-dealers and the compensation arrangements relating to such
sales.

      The selling  security  holders and any  broker-dealers  or agents that are
involved in selling the shares offered under this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with these
sales.  Commissions received by these broker-dealers or agents and any profit on
the  resale of the  shares  purchased  by them may be deemed to be  underwriting
commissions or discounts under the Securities Act. Any  broker-dealers or agents
that are  deemed to be  underwriters  may not sell  shares  offered  under  this
prospectus  unless and until we set forth the names of the  underwriters and the
material  details of their  underwriting  arrangements  in a supplement  to this
prospectus  or,  if  required,  in  a  replacement   prospectus  included  in  a
post-effective  amendment to the registration statement of which this prospectus
is a part.

      The selling  security  holders and any other persons  participating in the
sale or distribution of the shares offered under this prospectus will be subject
to  applicable  provisions  of the Exchange  Act, and the rules and  regulations
under that act, including Regulation M. These provisions may restrict activities
of,  and limit the  timing of  purchases  and sales of any of the shares by, the
selling security holders or any other person.  Furthermore,  under Regulation M,
persons   engaged  in  a  distribution   of  securities   are  prohibited   from
simultaneously  engaging in market making and other  activities  with respect to
those  securities for a specified  period of time prior to the  commencement  of
such distributions,  subject to specified exceptions or exemptions. All of these
limitations may affect the marketability of the shares.

      If any of the shares of common  stock  offered  for sale  pursuant to this
prospectus are transferred  other than pursuant to a sale under this prospectus,
then  subsequent  holders could not use this prospectus  until a  post-effective
amendment or prospectus  supplement is filed,  naming such holders.  We offer no
assurance as to whether any of the selling security holders will sell all or any
portion of the shares offered under this prospectus.

      We have  agreed  to pay all fees and  expenses  we incur  incident  to the
registration of the shares being offered under this  prospectus.  However,  each
selling  security  holder and purchaser is responsible for paying any discounts,
commissions and similar selling expenses they incur.

      We and the selling  security  holders have agreed to indemnify one another
against certain losses,  damages and liabilities arising in connection with this
prospectus, including liabilities under the Securities Act.

                                      -22-

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