Document:

Unassociated Document

    

    THIRD
AMENDMENT TO CREDIT AGREEMENT

    

    

    This
Third Amendment to Credit Agreement is entered into as of October 1, 2009, by
and between Highbury Financial
Inc., a Delaware corporation ("Borrower") and City National Bank, a national
banking association ("CNB").

    

    RECITALS

    

    A.           Borrower
and CNB are parties to that certain Credit Agreement, dated as of November 9,
2006, as amended by that certain First Amendment to Credit Agreement dated as of
October 31, 2007 and that certain Second Amendment to Credit Agreement dated
October 1, 2008 (the Credit Agreement, as herein amended, hereinafter the
"Credit Agreement").

    

    B.           Borrower
and CNB desire to supplement and amend the Credit Agreement as hereinafter set
forth.

    

    NOW, THEREFORE, the parties
agree as follows:

    

    
      	
              1.

            	
              Definitions.  Capitalized
      terms used in this Amendment without definition shall have the meanings
      set forth in the Credit Agreement.

            

    

    

    
      	
              2.

            	
              Amendments.  The
      Credit Agreement is amended as
follows:

            

    

    

    2.1           Section
1.11 (Demand Deposit
Account) of the Credit Agreement is deleted in its entirety and the
number is reserved.

    

    2.2           Section
1.30 (Termination Date)
of the Credit Agreement is amended by deleting the date “September 30, 2009” and
inserting in its place and stead the date “September 30, 2010”.

    

    2.3           Sections
1.33 (Liquid Assets) and
1.34 (Marketable Securities) are deleted in their entirety and the numbers are
reserved.

    

    2.3           Section
2.1 (Revolving Credit
Loan) is stricken and replaced with the following:

    

    “2.1           Revolving Credit
Loan.  Subject to the terms of this Agreement, CNB agrees to
make loans (“Revolving Credit Loans”) to Borrower, from the date of this
Agreement up to and including the Termination Date, at such times as Borrower
may request, up to the amount of the lesser of (a) the Revolving Credit
Commitment, or (b) twice the amount of EBITDA at the time of such request. The
Revolving Credit Loans may be repaid and reborrowed at any time up to the
Termination Date.”

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    2.4           Section
2.1.1 (Interest) is
stricken and replaced with the following:

    

    “2.1.1                      Interest.  The
Revolving Credit Loans will bear interest from disbursement until due (whether
at stated maturity, by acceleration or otherwise) at a rate equal to, at
Borrower's option, either (a) for a LIBOR Loan, the greater of (i) three and
one-half percent (3.50%) per year, or (ii) the LIBOR Interest Rate plus two and
three-quarters percent (2.75%) per year, or (b) for a Prime Revolving Loan, the
greater of (i) three and one-half percent (3.50%) per year, or (ii) the
fluctuating Prime Rate plus one-half percent (.50%) per
year.  Interest on the Revolving Credit Loans and other charges
incurred under this Agreement will accrue daily and be payable (a) in the case
of a LIBOR Loan in which the Interest Period is (i) 3 months or less, the last
day of such Interest Period and (ii) more than 3 months, the date that is 3
months from the first day of such Interest Period, then 3 months after each such
date if applicable, and, in addition, the last day of such Interest Period and
(b) in the case of a Prime Loan, monthly in arrears, on the last day of each
month, commencing on the first such date following disbursement; (c) if a LIBOR
Loan, upon any prepayment of any LIBOR Loan (to extent accrued on the amount
prepaid); and (d) at the Termination Date.  A Revolving Credit Loan
will be a Prime Loan any time it is not a LIBOR Loan.”

    

    2.5           Section
2.3 (Loans and Payments)
is stricken and replaced with the following:

    

    “2.3           Loans and
Payments.  All payments will be in United States Dollars and in
immediately available funds.  Interest will be computed on the basis
of a 360 day year, actual days elapsed.    Any Loan will be
conclusively presumed to have been made to or for the benefit of Borrower when
CNB, in its sole discretion, believes that the request therefor has been made by
authorized persons (whether in fact that is the case), or when the Loan is
advanced via wire transfers as requested by Borrower, regardless of whether any
Person other than Borrower may have authority to draw against such
account.”

    

    2.6           Section
2.5 (Unused Facility
Fee) is stricken and replaced with the following:

    

    “2.5           Unused Facility
Fee.  Borrower will pay the Unused Facility Fee on the last day
of each calendar quarter; such fee will be non-refundable and fully earned when
paid.”

    

    2.7           Sections
6.8.2 and 6.8.4 are deleted in their entirety and the numbers are
reserved.

    

    
      	
              3.

            	
              Existing
      Agreement.  Except as expressly amended herein, the
      Credit Agreement shall remain in full force and effect, and in all other
      respects is affirmed.

            

    

    

    
      	
              4.

            	
              Conditions
      Precedent.  This Amendment shall become effective upon
      the fulfillment of all of the following conditions to CNB’s
      satisfaction:

            

    

    

    4.1           CNB
shall have received this Amendment duly executed by Borrower; and

    

    4.2           CNB
shall have received the Unused Facility Fee in the approximate amount of
$7,666.67.

    

    
      	
              5.

            	
              Counterparts.  This
      Amendment may be executed in any number of counterparts, and all such
      counterparts taken together shall be deemed to constitute one and the same
      instrument.

            

    

    

    
      	
              6.

            	
              Governing
      Law.  This Amendment and the rights and obligations of
      the parties hereto shall be construed in accordance with, and governed by
      the laws of the State of
California.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    IN WITNESS WHEREOF, the
parties have executed this Amendment as of the day and year first above
written.

    

    
      
        	
                "Borrower"

              

      

    

    

    
      
        	
                Highbury Financial Inc.,
      a Delaware corporation

              

      

    

    

    

    
      
        	
                By:   /s/ Richard
      Foote                     
      

              

      

    

    
      
        	
                        
      Richard Foote, Chief Executive
Officer

              

      

    

    

    

    "CNB"

    

    City National Bank, a
national

    banking
association

    

    

    By:   /s/ Brandon
Feitelson            

            
Brandon Feitelson, Vice President

    
      
         

      

      
        3SECURITIES PURCHASE AGREEMENT

          SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of October 7, 2009, by and among Orient Paper, Inc., a Nevada
corporation, with headquarters located at Nansan Gongli, Nanhuan Road, Xushui
County, Baoding City, Hebei Province, The People’s Republic of China 072550
(the “Company”),
and the investors listed on the Schedule of Buyers attached hereto
(individually, a “Buyer” and
collectively, the “Buyers”). The
Company and the Buyers shall collectively be referred to as the “Parties”
and individually, a “Party”.

BACKGROUND

          A.
The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation
D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the 1933 Act.

          B.
Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, (i) that aggregate number of shares of
the Common Stock, par value $0.001 per share, of the Company (the
“Common Stock”), set forth
opposite such Buyer’s name in column (3) on the Schedule of Buyers (which
aggregate amount for all Buyers together shall be 8,333,332 shares of Common
Stock and shall collectively be referred to herein as the “Common Shares”). 

          C.
Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”) pursuant to
which the Company has agreed to provide certain registration rights with
respect to the Common Shares under the 1933 Act and the rules and regulations
promulgated thereunder, and applicable state securities laws.

          D.
Contemporaneously with the execution and delivery of this Agreement, the
parties hereto, together with Sichenzia Ross Friedman Ference LLP (“Escrow Agent”),
are executing and delivering a Closing Escrow Agreement, substantially in the
form attached hereto as Exhibit B (the “Closing Escrow Agreement”) pursuant to which the Buyers shall
deposit their Purchase Price (as defined below) with the Escrow Agent to be
applied to the transactions contemplated hereunder.

          E.
Contemporaneously with the execution and delivery of this Agreement, the
Company, the Buyers and the Company’s CEO, Mr. Zhenyong Liu, and Sichenzia Ross
Friedman Ference LLP (“Make Good Escrow Agent”), are executing
and delivering a Make Good Escrow Agreement, substantially in the form attached
hereto as Exhibit C (the “Make Good
Escrow Agreement”); and the Company and its CEO, Mr. Zhenyong Liu,
are executing and delivering a Lock-Up Agreement, substantially in the form
attached hereto as Exhibit D. 

          NOW,
THEREFORE, the Company and each Buyer hereby agree as
follows:

          1.
PURCHASE AND SALE OF COMMON SHARES.

               (a)
Purchase of Common Shares. Subject to the satisfaction (or waiver) of
the conditions set forth in Sections 6 and 7 below, the Company shall issue and
sell to each Buyer, and each Buyer severally, but not jointly, agrees to
purchase from the Company on the Closing Date (as defined below), the number of
Common Shares as is set forth opposite such Buyer’s name in column (3) on the
Schedule of Buyers (the “Closing”).
The Closing shall occur on the Closing Date at the offices of Sichenzia Ross
Friedman Ference LLP, located at 61 Broadway, 32nd Floor, New York,
NY 10006 or such other venue as the Parties may so designate.

               (b)
Purchase Price. The purchase price for the Common Shares to be purchased
by each Buyer at the Closing shall be the amount set forth opposite such
Buyer’s name in column (4) of the Schedule of Buyers (the “Purchase Price”) which shall be equal to
the amount of $0.60per Common Share times the number of
Common Shares purchased. 

               (c)
Closing Date. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New
York City Time, on October 7, 2009 (or such other date and time as is mutually
agreed to by the Company and each Buyer).

               (d)
Form of Payment. On the Closing Date, (i) each Buyer shall pay its
respective Purchase Price to the Company for the Common Shares to be issued and
sold to such Buyer at the Closing, either (A) by wire transfer of immediately
available funds in accordance with the Company’s written wire instructions, or
(B) by bank certified checks made payable to the Company and (ii) the
Company shall deliver to each Buyer one or more stock certificates, evidencing
the number of Common Shares such Buyer is purchasing as is set forth opposite
such Buyer’s name in column (3) of the Schedule of Buyers, duly executed on
behalf of the Company and registered in the name of such Buyer. 

          2.
BUYER’S REPRESENTATIONS AND WARRANTIES.

               Each
Buyer represents and warrants with respect to only itself that: 

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

2

               (b)
Authorization and Power. Each Buyer has the requisite power and
authority to enter into and perform the Transaction Documents (as defined
below) to which such Buyer is a party and to purchase the Common Stock being
sold to it hereunder. The execution, delivery and performance of the
Transaction Documents to which such Buyer is a party by such Buyer 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 Buyer or its Board of Directors,
stockholders, or partners, as the case may be, is required. The Transaction
Documents to which such Buyer is a party have been duly authorized, executed
and delivered by such Buyer and constitutes, or shall constitute when executed
and delivered, a valid and binding obligation of such Buyer enforceable against
such Buyer in accordance with the terms thereof.

               (c)
No Public Sale or Distribution. Such Buyer is (i) acquiring the Common
Shares in the ordinary course of business for its own account and not with a
view towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the 1933 Act and
such Buyer does not have a present arrangement to effect any distribution of
the Common Shares to or through any Person or entity; provided, however,
that by making the representations herein, such Buyer does not agree to hold
any of the Common Shares for any minimum or other specific term and reserves
the right to dispose of the Common Shares at any time in accordance with or
pursuant to a registration statement or an exemption under the 1933 Act. 

               (d)
Accredited Investor Status. Such Buyer is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D. Such Buyer is not required
to be registered as a broker-dealer under Section 15 of the Exchange Act and
such Buyer is not a broker-dealer, nor an affiliate of a broker-dealer.

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

               (f)
Information. Such Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Common Shares which
have been requested by such Buyer 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. Such Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. Neither
such inquiries nor any other due diligence investigations conducted by such
Buyer or its advisors, if any, or its representatives shall modify, amend or
affect such Buyer’s right to rely on the Company’s representations and
warranties contained herein. Each Buyer further acknowledges that such Buyer
understands the high risks of investing in companies domiciled and/or which
operate primarily in the People’s Republic of China and that the purchase of
the Common Shares involves substantial risks and is able to afford a complete
loss of such investment. Such Buyer has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Common Shares.

3

               (g)
No Governmental Review. Such Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Common Shares or the
fairness or suitability of the investment in the Common Shares nor have such
authorities passed upon or endorsed the merits of the offering of the Common
Shares.

               (h)
Transfer or Resale. Such Buyer understands that except as provided in
the Registration Rights Agreement: (i) the Common Shares have not been and are
not being registered under the 1933 Act or any state securities laws, and may
not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company an
opinion of counsel, in a generally acceptable form, to the effect that such
Common Shares to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) such Buyer
provides the Company with reasonable assurance that such Common Shares can be
sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Common
Shares made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the
Common Shares under circumstances in which the seller (or the Person (as
defined in Section 3(r)) through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of
the SEC thereunder; and (iii) neither the Company nor any other Person is under
any obligation to register the Common Shares under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder. Notwithstanding the foregoing, the Common Shares may be pledged in
connection with a bona fide margin account or other loan secured by the Common
Shares and such pledge of Common Shares shall not be deemed to be a transfer,
sale or assignment of the Common Shares hereunder, and no Buyer effecting a
pledge of Common Shares 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 (as defined below), including,
without limitation, this Section 2(h); provided, that in order to make any
sale, transfer or assignment of Common Shares, such Buyer and its pledgee makes
such disposition in accordance with or pursuant to a registration statement or
an exemption under the 1933 Act. 

               (i)
Legends. Such Buyer understands that the certificates or other
instruments representing the Common Shares and, until such time as the resale
of the Common Shares have been registered under the 1933 Act as contemplated by
the Registration Rights Agreement, the stock certificates representing the
Common Shares, except as set forth below, shall bear any legend as required by
the “blue sky” laws of any state and a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of
such stock certificates):

4

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

The legend set
forth above shall be removed and the Company shall issue a certificate without
such legend to the holder of the Common Shares upon which it is stamped or
issue to such holder by electronic delivery at the applicable balance account
at The Depository Trust Company (“DTC”),
if, unless otherwise required by state securities laws, (i) such Common Shares
are registered for resale under the 1933 Act, (ii) in connection with a sale,
assignment or other transfer, such holder provides the Company with an opinion
of counsel reasonably satisfactory to the Company, in a generally acceptable
form, to the effect that such sale, assignment or transfer of the Common Shares
may be made without registration under the applicable requirements of the 1933
Act and that such legend is no longer required, or (iii) such holder provides
the Company with reasonable assurance that the Common Shares can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A. The Company shall be
responsible for the fees of its transfer agent and all DTC fees associated with
such issuance. If the Company shall fail for any reason or for no reason to
issue to the holder of the Common Shares within three (3) Trading Days after
the occurrence of any of (i) through (iii) above, a certificate without such
legend or to issue such Common Shares to such holder by electronic delivery at
the applicable balance account at DTC, and if on or after such Trading Day the
holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the holder of such Common Shares
that the holder anticipated receiving without legend from the Company (a “Buy-In”), then the Company shall, within
three (3) Business Days after
the holder’s request, pay cash to the holder in an amount equal to the holder’s
total purchase price (including brokerage commissions, if any) for the shares
of Common Stock so purchased (the “Buy-In Price”), at which point the
Company’s obligation to deliver such unlegended Common Shares shall terminate.
“Trading
Day” is defined as a day on which securities are generally traded in
real-time (and not under any delayed or pre-market or post-market trading) in
any of the following markets: the Nasdaq Capital Market, the American Stock
Exchange, the New York Stock Exchange, the Nasdaq National Market or the OTC
Bulletin Board.

5

               (j)
Validity; Enforcement. This Agreement and other Transaction Documents as
they apply to each Buyer have been duly and validly authorized, executed and
delivered on behalf of such Buyer and shall constitute the legal, valid and
binding obligations of such Buyer enforceable against such Buyer in accordance
with their respective terms, except as such enforceability may be limited by
general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies. 

               (k)
No Conflicts. The execution, delivery and performance by such Buyer of
this Agreement and the Transaction Documents as they apply to each Buyer and
the consummation by such Buyer of the transactions contemplated hereby and
thereby will not (i) result in a violation of the organizational documents of
such Buyer 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 to which such Buyer is a party or by
which its properties or assets are bound, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of such Buyer to perform its obligations
hereunder. Such Buyer 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 the other Transaction Documents to which such Buyer is
a party or to purchase the Common Shares.

               (l)
Residency. Such Buyer is a resident of that jurisdiction specified below
its address on the Schedule of Buyers.

               (m)
Prohibited Transactions. Since the Buyer was approached by the Company
with respect to the transactions contemplated hereby, neither such Buyer nor
any Person acting on behalf of or pursuant to any understanding with such Buyer
has, directly or indirectly, effected or agreed to effect any transaction in
the Common Stock, including any short sale, whether or not against the box,
established any “put equivalent position” (as defined in Rule 16a-1(h) under
the Exchange Act) with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock or otherwise
sought to hedge its position in the Common Shares (but not including any
actions to secure available shares to borrow in order to effect short sales or
similar transactions in the future) (each, a “Prohibited Transaction”).
Prior to the earliest to occur of (i) the termination of this Agreement or (ii)
the date of the 8-K Filing as described in Section 4(h), such Buyer shall not,
and shall cause any Person acting on behalf of or pursuant to any understanding
with such Buyer not to, engage, directly or indirectly, in a Prohibited
Transaction.

               (n)
No General Solicitation. Each Buyer acknowledges that the Common were
not offered to such Buyer 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, website, or similar media,
or broadcast over television or radio, or (ii) any seminar or meeting to which
such Buyer was invited by any of the foregoing means of communications.

6

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

               (p)
Brokers. Save for Chinamerica Holdings, LLC, each Buyer has no knowledge
of any brokerage or finder’s fees or commissions that are or will be payable by
the Company or any of its Subsidiaries to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person or
entity with respect to the transactions contemplated by this Agreement

               (q)
Listing of Common Shares. Immediately upon the effectiveness of a
registration statement with the SEC covering the Common Shares, the Buyers
shall use reasonable efforts to assist the Company in making an immediate
application to a United States stock exchange, such as the Nasdaq Capital
Market or the NYSE American Stock Exchange, for the listing of the Common
Shares.

          3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

               The
Company represents and warrants to each of the Buyers that:

               (a)
Organization and Qualification. Each of the Company and its “Subsidiaries” (which for purposes of this
Agreement means any entity in which the Company, directly or indirectly, owns
capital stock or holds an equity or similar interest) are corporations duly
organized and validly existing in good standing under the laws of the
jurisdiction in which they are incorporated, and have the requisite corporate
power and authorization to own their properties and to carry on their business
as now being conducted. Each of the Company and its Subsidiaries is duly
qualified to do business and is in good standing in every jurisdiction in which
its ownership of property or the nature of the business conducted by it makes
such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, “Material Adverse
Effect” means any material adverse effect on the business,
properties, assets, operations, results of operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole,
or on the transactions contemplated hereby and the other Transaction Documents
or by the agreements and instruments to be entered into in connection herewith
or therewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined below). The Company has
no Subsidiaries except as set forth on Schedule 3(a). 

7

               (b)
Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Registration Rights Agreement, the Irrevocable Transfer
Agent Instructions (as defined in Section 5), the Closing Escrow Agreement, the
Make Good Escrow Agreement, the Lock-Up Agreement and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the
Common Shares in accordance with the terms hereof and thereof. The execution
and delivery of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby, including,
without limitation, the issuance of the Common Shares have been duly authorized
by the Company’s Board of Directors and no further consent or authorization is
required by the Company, its Board of Directors or its stockholders. This Agreement
and the other Transaction Documents have been duly executed and delivered by
the Company, and constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.

               (c)
Issuance of Common Shares. The Common Shares are duly authorized and,
upon issuance in accordance with the terms hereof, shall be validly issued and
free from all taxes, liens and charges with respect to the issue thereof and
the Common Shares shall be fully paid and nonassessable with the holders being
entitled to all rights accorded to a holder of Common Stock. The offer and
issuance by the Company of the Common Shares is exempt from registration under
the 1933 Act.

               (d)
No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Common Shares) will not (i) result in a violation of the
Articles of Incorporation (as defined below) or Bylaws (as defined below) of
the Company or any of its Subsidiaries or (ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or
other instrument (evidencing a Company or Subsidiary debt or otherwise) or
other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) result in a violation
of any U.S. law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and
regulations and the rules and regulations of the Over-The-Counter Bulletin
Board (“OTCBB”)), or by which any property or asset of the Company
or a Subsidiary is bound or affected, except in the case of clause (ii) such as
could not, individually or in the aggregate, have or reasonably be expected to
have a Material Adverse Effect.

8

               (e)
Consents. The Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its obligations
under or contemplated by the Transaction Documents, in each case in accordance
with the terms hereof or thereof (other than (x) any consent, authorization or
order that has been obtained as of the date hereof, (y) any filing or
registration that has been made as of the date hereof or (z) any filings which
may be required to be made by the Company with the Commission or state
securities administrators subsequent to the Closing; 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 Buyers herein). All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the Closing Date. The
Company and its Subsidiaries are unaware of any facts or circumstances that
might prevent the Company from obtaining or effecting any of the registration,
application or filings pursuant to the preceding sentence. The Company is not
in violation of any requirements of the OTCBB and has no knowledge of any facts
that would reasonably lead to the cessation of quotations for the Common Stock
on the OTCBB in the foreseeable future

               (f)
Acknowledgment Regarding Buyer’s Purchase of Common Shares. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an
officer or director of the Company, (ii) an “affiliate” of the Company (as
defined in Rule 144) or (iii) to the knowledge of the Company, a “beneficial
owner” of more than 10% of the shares of Common Stock (as defined for purposes
of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934 Act”)). The Company further
acknowledges that no Buyer is acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby, and any advice given by a
Buyer or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely
incidental to such Buyer’s purchase of the Common Shares. The Company further
represents to each Buyer that the Company’s decision to enter into the
Transaction Documents has been based solely on the independent evaluation by
the Company and its representatives.

               (g)
No General Solicitation; Placement Agent’s Fees. 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) in connection with the offer or sale of the Common
Shares. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for
persons engaged by any Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby. The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without
limitation, attorney’s fees and out-of-pocket expenses) arising in connection
with any such claim. For the purposes of this Agreement and the other
Transaction Documents and the transactions contemplated hereby and thereby, the
Parties agree and acknowledge, jointly and severally, that no agent’s fees,
financial advisory fees or brokers’ commission whatsoever is/are due to any
third party by the Company, except to Chinamerica Holdings LLC.

9

               (h)
No Integrated Offering. None of the Company, its Subsidiaries, any of
their affiliates, and any Person acting on 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 require registration of any of
the Common Shares under the 1933 Act or cause this offering of the Common
Shares to be integrated with prior offerings by the Company for purposes of the
1933 Act or any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated. None of the Company, its Subsidiaries, their affiliates and any
Person acting on their behalf will take any action or steps referred to in the
preceding sentence that would require registration of any of the Common Shares
under the 1933 Act or cause the offering of the Common Shares to be integrated
with other offerings.

               (i)
Application of Takeover Protections; Rights Agreement. The Company and
its board of directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Articles of Incorporation or the laws of the
State of Nevada which is or could become applicable to any Buyer as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Common Shares and any Buyer’s ownership of the
Common Shares. The Company has not adopted a stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of Common Stock
or a change in control of the Company.

               (j)
SEC Documents; Financial Statements. During the two (2) years prior to
the date hereof, the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the 1934 Act (all of the foregoing filed prior
to the date hereof or prior to the date of the Closing, along with the Current
Report of the Company being filed in connection with the transactions
contemplated hereby, and all exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”).
The Company has delivered to the Buyers or their respective representatives
true, correct and complete copies of the SEC Documents not available on the
EDGAR system. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have
been prepared in accordance with generally accepted accounting principles, consistently
applied, 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 exclude footnotes or may
be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results
of its operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC Documents, including, without limitation, information
referred to in this Section 2(j) of this Agreement, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstance under
which they are or were made, not misleading.

10

               (k)
Absence of Certain Changes. Except as disclosed in Schedule 3(k),
since December 31, 2008, there has been no material adverse change and no
material adverse development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company or
its Subsidiaries. Except as disclosed in Schedule 3(k), since December
31, 2008, the Company has not (i) declared or paid any dividends, (ii) sold any
assets, individually or in the aggregate, in excess of $25,000 outside of the
ordinary course of business or (iii) had capital expenditures, individually or
in the aggregate, in excess of $25,000. The Company has not taken any steps to
seek protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings or any actual knowledge of any fact which
would reasonably lead a creditor to do so. The Company is not as of the date
hereof, and after giving effect to the transactions contemplated hereby to
occur at the Closing, will not be Insolvent (as defined below). For purposes of
this Section 3(k), “Insolvent”
means, with respect to any Person (i) the present fair saleable value of such
Person’s assets is less than the amount required to pay such Person’s total
Indebtedness (as defined in Section 3(r)), (ii) such Person is unable to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured, (iii) such Person intends to incur
or believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) such Person has unreasonably small capital with which
to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted.

               (l)
No Undisclosed Events, Liabilities, Developments or Circumstances. No
event, liability, development or circumstance has occurred or exists, or is
contemplated to occur, with respect to the Company or its Subsidiaries or their
respective business, properties, prospects, operations or financial condition,
that would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly announced.

               (m)
Conduct of Business; Regulatory Permits. Neither the Company nor its
Subsidiaries is in material violation of any term of or in default under the
Articles of Incorporation or Bylaws or their organizational charter or articles
of incorporation or bylaws, respectively. Neither the Company nor any of its
Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or its Subsidiaries,
and neither the Company nor any of its Subsidiaries will conduct its business
in violation of any of the foregoing, except for possible violations which
would not, individually or in the aggregate, have a Material Adverse Effect.
Without limiting the generality of the foregoing, the Company is not in
violation of any of the rules, regulations or requirements of the OTCBB and has
no knowledge of 

11

any facts or
circumstances that would reasonably lead to delisting or suspension of the
Common Stock by the OTCBB in the foreseeable future except for possible
violations which would not, individually or in the aggregate, have a Material
Adverse Effect and would not, individually or in the aggregate, reasonably lead
to delisting or suspension from trading of the Common Stock by the OTCBB, FINRA
or the SEC. During the two (2) years prior to the date hereof, (i) the Common
Stock has been quoted on the OTCBB, (ii) trading in the Common Stock has not
been suspended by the SEC or FINRA and (iii) the Company has received no
communication, written or oral, from the SEC or the OTCBB regarding the
suspension or cessation of quotation of the Common Stock on the OTCBB. The
Company and its Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit

               (n)
Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor any director, officer, agent, employee or other Person acting
on behalf of the Company or any of its Subsidiaries has, in the course of its
actions for, or on behalf of, the Company (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.

               (o)
Sarbanes-Oxley Act. The Company is in, and will be in continued
compliance with any and all applicable requirements of the Sarbanes-Oxley Act
of 2002 that are effective as of the date hereof, and any and all applicable
rules and regulations promulgated by the SEC thereunder that are effective as
of the date hereof, except for possible violations which would not,
individually or in the aggregate, have a Material Adverse Effect.

               (p)
Transactions With Affiliates. Except as otherwise provided in the SEC
Documents, none of the officers, directors or employees of the Company
is presently a party to any transaction with the Company or any of its
Subsidiaries (other than for ordinary course services as employees, officers or
directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
such officer, director or employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee or partner.

12

               (q)
Equity Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 500,000,000 shares of Common Stock, of which
as of the date hereof, 49,984,349 shares are issued and outstanding,no shares are reserved for issuance
pursuant to options and warrants outstanding and no shares are reserved for
issuance pursuant to securities exercisable or exchangeable for, or convertible
into, shares of Common Stock. All of such outstanding shares have been, or upon
issuance will be, validly issued and are fully paid and nonassessable. Except
as set forth on Schedule 3(q) and in the SEC Documents: (i) no shares of
the Company’s capital stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the
Company; (ii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
shares of capital stock of the Company or any of its Subsidiaries, or
contracts, commitments, understandings or arrangements by which the Company or
any of its Subsidiaries is or may become bound to issue additional shares of capital
stock of the Company or any of its Subsidiaries or options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any shares of capital stock of the Company or any of its
Subsidiaries; (iii) there are no outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness (as defined in Section 3(r)) of the Company or any of
its Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound; (iv) there are no financing statements securing obligations in
any material amounts, either singly or in the aggregate, filed in connection with
the Company or any of its Subsidiaries; (v) there are no agreements or
arrangements under which the Company or any of its Subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act (except the
Registration Rights Agreement); (vi) there are no outstanding securities or
instruments of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (vii) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Common Shares; (viii) the Company does not have any stock appreciation
rights or “phantom stock” plans or agreements or any similar plan or agreement;
and (ix) the Company and its Subsidiaries have no liabilities or obligations
required to be disclosed in the SEC Documents but not so disclosed in the SEC
Documents, other than those incurred in the ordinary course of the Company’s or
any Subsidiary’s respective businesses and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect. The Company has
furnished or made available to the Buyer upon such Buyer’s request, true,
correct and complete copies of the Company’s Articles of Incorporation, as
amended and as in effect on the date hereof (the “Articles of Incorporation”), and the Company’s Bylaws, as
amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible into, or
exercisable or exchangeable for, shares of Common Stock and the material rights
of the holders thereof in respect thereto. 

               (r)
Indebtedness and Other Contracts. Except as disclosed in Schedule
3(r) and the SEC Documents, neither the Company nor any of its Subsidiaries
(i) has any outstanding Indebtedness (as defined below), (ii) is a party to any
contract, agreement or instrument, the material violation of which, or default
under which, by the other party(ies) to such contract, agreement or instrument,
in the judgment of the Company’s officers, would result in a Material Adverse
Effect, (iii) is in material violation of any term of or in default under any
contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, in the judgment of the Company’s
officers, individually or in the aggregate, in a 

13

Material
Adverse Effect, or (iv) is a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse Effect. For
purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services (other than trade payables entered into in
the ordinary course of business), (C) all reimbursement or payment obligations
with respect to letters of credit, surety bonds and other similar instruments,
(D) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (E) all indebtedness created or
arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to any property or assets
acquired with the proceeds of such indebtedness (even though the rights and
remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations
under any leasing or similar arrangement which, in connection with generally
accepted accounting principles, consistently applied for the periods covered
thereby, is classified as a capital lease, (G) all indebtedness referred to in
clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, lien, pledge, charge, security interest or other encumbrance upon
or in any property or assets (including accounts and contract rights) owned by
any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of other kinds
referred to in clauses (A) through (G) above; (y) “Contingent Obligation” means, as to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with respect
thereto; and (z) “Person” means an
individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization and a government or any department or
agency thereof.

               (s)
Absence of Litigation. Except as set forth on Schedule 3(s) and
the SEC Documents, there is no action, suit, proceeding, inquiry or investigation
before the SEC, FINRA, any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, the Common Stock or any
of its Subsidiaries or any of the Company’s or the Company’s Subsidiaries’
officers or directors, whether of a civil or criminal nature or otherwise. 

               (t)
Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Except as set forth on Schedule 3(t), neither the Company nor any
Subsidiary has been refused any insurance coverage sought or applied for.
Neither the Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse
Effect.

14

               (u)
Employee Relations. (i) Neither the Company nor any of its Subsidiaries
is a party to any collective bargaining agreement or employs any member of a
union. The Company and its Subsidiaries believe that their relations with their
employees are good. No executive officer of the Company or any of its
Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the
Company or any such Subsidiary that such officer intends to leave the Company
or any such Subsidiary or otherwise terminate such officer’s employment with
the Company or any such Subsidiary. No executive officer of the Company, to the
knowledge of the Company or any of its Subsidiaries, is, or is now expected to
be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any
liability with respect to any of the foregoing matters.

                    (ii)
The Company and its Subsidiaries are in compliance with all federal, state,
local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages
and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

               (v)
Title. The Company and its Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the
Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the Company and any of its Subsidiaries. Any real property and
facilities held under lease by the Company and any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its Subsidiaries.

               (w)
Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and other intellectual property rights (“Intellectual Property Rights”) necessary to conduct their
respective businesses as now conducted. None of the Company’s Intellectual
Property Rights have expired or terminated, or are expected to expire or
terminate within three years from the date of this Agreement. The Company does
not have any knowledge of any infringement by the Company or its Subsidiaries
of Intellectual Property Rights of others. There is no claim, action or
proceeding being made or brought, or to the knowledge of the Company, being
threatened, against the Company or any of its Subsidiaries regarding its
Intellectual Property Rights. The Company is unaware of any facts or
circumstances which might give rise to any of the foregoing infringements or
claims, actions or proceedings. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their Intellectual Property Rights.

15

               (x)
Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all Environmental Laws (as hereinafter defined), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses (iii) are
in compliance with all terms and conditions of any such permit, license or
approval and (iv) do not have any unresolved environmental complaints or issues
in any of the jurisdictions in which they operate where, in each of the
foregoing clauses (i), (ii), (iii) and (iv), the failure to so comply could be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect. Further, to the knowledge of the Company, it and its Subsidiaries
are not in violation of any applicable anti-dumping laws in the jurisdiction(s)
in which it carries out business, where the failure to so comply would
reasonably have in the aggregate a Material Adverse Effect. The term “Environmental Laws” means all federal,
state, local or foreign laws relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous
substances or wastes (collectively, “Hazardous
Materials”)into the
environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands or
demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved
thereunder. The Company further undertakes that it shall notify the Buyers
promptly if it or any of its Subsidiaries were to receive an environmental
complaint.

               (y)
Subsidiary Rights. The Company, or one of its Subsidiaries, has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary.

               (z)
Tax Status. The Company and each of its Subsidiaries (i) has made or
filed all federal, foreign and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set
aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

16

               (aa)
Internal Accounting and Disclosure Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient, in
its reasonable belief, 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 generally accepted
accounting principles and to maintain asset and liability accountability, (iii)
access to assets or incurrence of liabilities is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with
respect to any difference. The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the 1934 Act) that are
effective in ensuring that information required to be disclosed by the Company
in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in the
rules and forms of the SEC, including, without limitation, controls and
procedures designed in to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the 1934 Act is
accumulated and communicated to the Company’s management, including its
principal executive officer or officers and its principal financial officer or
officers, as appropriate, to allow timely decisions regarding required
disclosure. During the twelve months prior to the date hereof neither the
Company nor any of its Subsidiaries have received any notice or correspondence
from any accountant relating to any potential material weakness in any part of
the system of internal accounting controls of the Company or any of its Subsidiaries.

               (bb)
Off Balance Sheet Arrangements. Save as otherwise provided in the SEC
Documents, there is no transaction, arrangement, or other relationship between
the Company and an unconsolidated or other off balance sheet entity that is required
to be disclosed by the Company in its Exchange Act filings and is not so
disclosed or that otherwise would be reasonably likely to have a Material
Adverse Effect.

               (cc)
Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Common
Shares. 

               (dd)
Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income or similar taxes) which are required to be paid in
connection with the sale and transfer of the Common Shares to be sold to each
Buyer hereunder will be, or will have been, fully paid or provided for by the
Company, and all laws imposing such taxes will be or will have been complied
with.

               (ee)
Investment Company Status. The Company is not, and upon consummation of
the sale of the Common Shares will not be, an “investment company,” a company
controlled by an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company” as such
terms are defined in the Investment Company Act of 1940, as amended.

17

               (ff)
Acknowledgement Regarding Buyers’ Trading Activity. Except as is set
forth in Section 2(m), it is understood and acknowledged by the Company
(i) that neither the Company nor any of its Subsidiaries has asked any Buyer
nor has any Buyer agreed with the Company or its Subsidiaries, to desist from
purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold
the Common Shares for any specified term; (ii) to the Company’s knowledge, that
any Buyer, and counterparties in “derivative” transactions to which any such
Buyer is a party, directly or indirectly, presently do not have a “short”
position in the Common Stock, and (iii) that each Buyer shall not be deemed to
have any affiliation with or control over any arm’s length counterparty in any
“derivative” transaction. The Company further understands and acknowledges that
(a) one or more Buyers may engage in hedging and/or trading activities at various
times during the period that the Common Shares are outstanding and (b) such
hedging and/or trading activities, if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the
hedging and/or trading activities are being conducted. The Company acknowledges
that such aforementioned hedging and/or trading activities do not constitute a
breach of this Agreement or any of the documents executed in connection
herewith. The Company is not aware of any of the aforementioned hedging and/or
trading activities of any of the Buyers. The Company may not be informed of,
and will not monitor, any such aforementioned hedging and/or trading activities
by one or more Buyers in the future. 

               (gg)
U.S. Real Property Holding Corporation. The Company is not, has never
been, and so long as any Common Shares remain outstanding, shall not become, a
U.S. real property holding corporation within the meaning of Section 897 of the
Internal Revenue Code of 1986, as amended, and the Company shall so certify
upon Buyer’s request.

               (hh)
Bank Holding Company Act. Neither the Company nor any of its
Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended
(the “BHCA”)
and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal
Reserve”). Neither the Company nor any of its Subsidiaries owns or
controls, directly or indirectly, five percent (5%) or more of the outstanding
shares of any class of voting securities or twenty-five percent or more of the
total equity of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve. Neither the Company nor any of its
Subsidiaries or Affiliates exercises a controlling influence over the management
or policies of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve.

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

               (jj)
Disclosure. The Company understands and confirms that each of the Buyers
will rely on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided to the Buyers regarding the
Company, its business and the transactions contemplated hereby, including the
Schedules to this Agreement, furnished by or on behalf of the Company are
materially true and correct and do not contain any untrue statement of a
material fact 

18

or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading
except any non-disclosure would not, individually or in the aggregate, have a
Material Adverse Effect . Each press release issued by the Company during the
twelve (12) months preceding the date of this Agreement did not at the time of
release contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they are
made, not misleading. No event or circumstance has occurred or information
exists with respect to the Company or any Subsidiary or either of its or their
respective business, properties, prospects, operations or financial conditions,
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
(assuming for this purpose that the Company’s reports filed under the Exchange
Act of 1934, as amended, are being incorporated into an effective registration
statement filed by the Company under the 1933 Act) except any non-disclosure
would not, individually or in the aggregate, have a Material Adverse Effect.
The Company acknowledges and agrees that no Buyer makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.

               (kk)
 Related Party Transactions.
Except as set out in Schedule 3(kk), neither the Company or its Subsidiaries is
involved in any related party transactions. The Company undertakes that all
future related party transactions shall be negotiated and entered into at arm’s
length and shall be pre-approved by the Board of Directors of the Company.

               (ll)
Non-Competition. Save for the Company’s Chief Financial Officer, Winston Yen,
the Company shall procure that all key members of its management shall devote
substantially all their time and effort in the Company’s business and that they
shall not be involved, directly or indirectly, in any business that is similar
or in competition with the Company’s business.

          4.
COVENANTS.

               (a)
Best Efforts. Each Party shall use its commercially reasonable efforts
timely to satisfy each of the covenants and the conditions to be satisfied by
it as provided in Sections 5, 6 and 7 of this Agreement.

               (b)
Form D and Blue Sky. The Company agrees to file a Form D with respect to
the Common Shares as required under Regulation D and to provide a copy thereof
to each Buyer promptly after such filing. The Company, on or before the Closing
Date, shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for or to qualify the Common Shares
for sale to the Buyers at the Closing pursuant to this Agreement under
applicable securities or “Blue Sky” laws of the states of the United States (or
to obtain an exemption from such qualification), and shall provide evidence of
any such action so taken to the Buyers on or prior to the Closing Date. The
Company shall make all filings and reports relating to the offer and sale of
the Common Shares required under applicable securities or “Blue Sky” laws of
the states of the United States following the Closing Date.

19

               (c)
Reporting Status. Until the date on which the Investors (as defined in
the Registration Rights Agreement) shall have sold all the Common Shares (the “Reporting Period”), the Company shall
timely file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as an issuer required to
file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would otherwise permit such termination.

               (d)
Use of Proceeds. The Company will use the proceeds from the sale of the
Common Shares for general corporate purposes, including general and
administrative expenses, and in connection with acquisitions and not for (i)
the repayment of any outstanding Indebtedness of the Company or any of its
Subsidiaries, or (ii) the redemption or repurchase of any of its or its
Subsidiaries’ equity securities. The Company agrees that it will deposit
$300,000 of the proceeds in escrow under the Escrow Agreement to pay the fees
and expenses in connection with a public relations and investor relations
campaign of a design and type satisfactory to a representative of the Buyers
designated in the Escrow Agreement. Such amount shall be released only upon the
dual signatures of the CEO of the Company and such representative of the Buyers
designated in the Escrow Agreement. The Company agrees that the public
relations and investor relations campaign shall include a “retail component”
involving the use of direct mail to assist in the repositioning of the Company
in the minds of the general public. Additionally, the Company agrees that it
will deposit $2,000,000 of the proceeds in escrow under the Escrow Agreement on
account of the Company appointing a Board of Director comprising a majority of
independent Board of Directors acceptable to the Buyers. Such amount shall also
be released only upon the dual signatures of the CEO of the Company and such
representative of the Buyers designated in the Escrow Agreement. 

               (e)
Financial Information. The Company agrees to send the following to each
Investor during the Reporting Period (i) unless the following are filed with
the SEC through EDGAR and are available to the public through the EDGAR system,
within one (1) Business Day after the filing thereof with the SEC, a copy of
its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any
Current Reports on Form 8-K and any registration statements (other than on Form
S-8) or amendments filed pursuant to the 1933 Act, (ii) on the same day as the
release thereof, facsimile copies or email copies of all press releases issued
by the Company or any of its Subsidiaries, and (iii) copies of any notices and
other information made available or given to the stockholders of the Company
generally, contemporaneously with the making available or giving thereof to the
stockholders. As used herein, “Business Day”
means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to remain
closed.

               (f)
Listing. Neither the Company nor any of its Subsidiaries shall take any
action which would be reasonably expected to result in the delisting or
suspension of the Common Stock on the national securities exchange, automated
quotation system or OTCBB upon which the Common Stock is then listed or quoted.

20

               (g)
Pledge of Common Shares. The Company acknowledges and agrees that the
Common Shares may be pledged by an Investor (as defined in the Registration
Rights Agreement) in connection with a bona fide margin agreement or other loan
or financing arrangement that is secured by the Common Shares. The pledge of
Common Shares shall not be deemed to be a transfer, sale or assignment of the
Common Shares hereunder, and no Investor effecting a pledge of Common Shares
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, including, without limitation, Section 2(h) of this Agreement;
provided that an Investor and its pledgee shall be required to comply with the
provisions of Section 2(h) of this Agreement in order to effect a sale,
transfer or assignment of Common Shares to such pledgee. The Company hereby
agrees to execute and deliver such documentation as a pledgee of the Common
Shares may reasonably request in connection with a pledge of the Common Shares
to such pledgee by an Investor provided that any and all costs to effect the
pledge of the Common Shares are borne by pledgor and/or pledgee and not
Company.

               (h)
Disclosure of Transactions and Other Material Information. The Company shall, on or before 8:30 a.m., New York
City time, within the fourth Business Day after the date of this Agreement, (A)
issue a press release (the “Press Release”)
reasonably acceptable to the Buyers disclosing all material terms of the
transactions contemplated hereby and (B) file a Current Report on
Form 8-K describing the terms of the transactions contemplated by the
Transaction Documents in the form required by the 1934 Act, and attaching the
material Transaction Documents (including, without limitation, this Agreement
(and all schedules to this Agreement), and the Registration Rights Agreement)
as exhibits to such filing (including all attachments, the “8-K Filing”). From and after the issuance
of the Press Release, no Buyer shall be in possession of any material,
nonpublic information received from the Company, any of its Subsidiaries or any
of its respective officers, directors, employees or agents, that is not
disclosed in the Press Release. The Company shall not, and shall cause each of
its Subsidiaries and each of their respective officers, directors, employees
and agents, not to, provide any Buyer with any material, nonpublic information
regarding the Company or any of its Subsidiaries from and after the filing of
the Press Release without the express written consent of such Buyer. If a Buyer
has, or believes it has, received any such material, nonpublic information
regarding the Company or any of its Subsidiaries from the Company, any of its
Subsidiaries or any of the respective officers, directors, or agents, other
than as required in writing by such Buyer, it may provide the Company with
written notice thereof. The Company shall, within five (5) Trading Days of
receipt of such notice, make public disclosure of such material, nonpublic
information. In the event of a breach of the foregoing covenant by the Company,
any of its Subsidiaries, or any of its or their respective officers, directors,
employees and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Buyer shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise,
of such material, nonpublic information without the prior approval by the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. No Buyer shall have any liability to the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, stockholders or agents for any such disclosure. Subject
to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall
issue any press releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of any Buyer, to make any press release or
other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations, including the applicable rules and
regulations of the OTCBB (provided that in the case of clause (i) each Buyer
shall be consulted by the Company in connection with any such press release or
other public disclosure prior to its release). Without the prior written
consent of any applicable Buyer, neither the Company nor any of its
Subsidiaries or affiliates shall disclose the name of such Buyer in any filing,
announcement, release or otherwise, unless such disclosure is required by law
or regulation.

21

               (i)
Registration Statements. The Company shall file a registration statement
with the SEC to register the Common Shares (“Registrable Securities”) pursuant
to the terms set forth in the Registration Rights Agreement within ninety (90)
days after the Closing Date. No other securities shall be included in the
registration statement. The Company shall use its commercially reasonable
efforts to cause the registration statement to become effective within one
hundred and eighty (180) days after filing. In the event that the number of
Common Shares to be registered on the initial registration statement as
permitted by the Commission is less than the full amount of the Registrable as
a result of Rule 415 of the Securities Act or its interpretation, the Company
shall file one or more subsequent registration statements to register the rest
of the Registrable Securities until all Registrable Securities are registered,
pursuant to the provisions of the Registration Rights Agreement; provided that
the Company’s obligation to file subsequent registration statements shall cease
on the first anniversary of the Closing Date. Each Buyer’s shares shall be
registered in the subsequent registrations on a pro rata basis. Until the date
that is forty-five days after the effective date of the initial registration
statement, the Company will not file a registration statement (other than on
Form S-8 or solely to register shares of Common Stock issued pursuant to an
acquisition with non-affiliated third parties on an arm’s length basis, the
primary purpose of which is not to raise additional capital (the “Acquisition Shares”)) under the 1933
Act relating to securities that are not the Common Shares. Until the effective
date of the initial registration statement, the Company will not file a
registration statement under the 1933 Act relating to Acquisition Shares.

               (j)
Corporate Existence. So long as any Buyer beneficially owns any Common
Shares, the Company shall maintain its corporate existence and shall not sell
all or substantially all of the Company’s assets, except in the event of a
merger or consolidation or sale of all or substantially all of the Company’s assets,
where the surviving or successor entity in such transaction (i) assumes the
Company’s obligations hereunder and under the agreements and instruments
entered into in connection herewith and (ii) is a publicly traded corporation
whose common stock is quoted on or listed for trading on the OTCBB, The NASDAQ
Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, the
American Stock Exchange or The New York Stock Exchange, Inc (each referred to
herein as a “Trading Market”).

               (k)
Conduct of Business. The business of the Company and its Subsidiaries
shall not be conducted in violation of any law, ordinance or regulation of any
governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.

22

               (l)
Closing Documents. On or prior to fourteen (14) calendar days after the
Closing Date, the Company agrees to deliver, or cause to be delivered, to each
Buyer a complete closing set of the Transaction Documents, Common Share
certificates and any other document required to be delivered to any party
pursuant to Section 7 hereof or otherwise.

               (m)
No Change in Control. For a period of twelve (12) months from the
Closing Date, the Company will not enter into a transaction that would result
in a Change in Control of the Company without the unanimous approval of the
Company’s independent directors and the written approval of the Buyers, such
approval not to be unreasonably withheld. For the purposes of this Section
4(m), “Change
in Control” shall be deemed to have occurred (a) on the date that
any one Person, or more than one Person acting in concert, acquires beneficial
ownership of voting securities the Company that, together with the voting
securities previously held or beneficially owned by such Person or Persons
acting in concert, constitutes more than fifty percent (50%) of the voting
rights of any class of securities issued by the Company; or (b) on the date
that any one Person or Persons acting in concert acquires (or has acquired
during the twelve month period ending on the date of the most recent
acquisition of such Person or Persons) assets from the Company that have a
total gross fair market value equal to or more than fifty percent (50%) of the
total gross fair market value of all of the assets of the Company immediately
prior to such acquisition or acquisitions; for this purpose, the term “gross
fair market value” means the value of the assets of the Company, or the value
of the assets being disposed of, determined without regard to any liabilities
associated with such assets. The determination of whether persons are acting in
concert, and of beneficial ownership, shall be made in accordance with
Regulation 13D under the Exchange Act. 

               (n)
Sale and Further Encumbrance. For a period of twelve (12) months from
the Closing Date, the Company shall not sell more than 10% of its Net Equity or
encumber itself with a debt amounting to more than 50% of its Net Equity. For
the purposes of Section 4(n), “Net Equity” means that amount reflected as
Stockholder’s Equity of the Company on the most recent financial statements
filed with the SEC.

               (o)
Expenses. The Company shall bear all of its own legal, accounting and other
expenses, including those relating to the preparation of this Agreement and the
other Transaction Documents, and the preparation and filing of any current
report, quarterly or annual report or document. In addition, the Company agrees
that it will reimburse Access America Investments, Inc. $100,000 in
transactional expenses from the proceeds of the sale of Common Shares herein on
or within a reasonable period of time after Closing. 

               (p)
Employee Stock Option Plan. On or prior to the expiration of sixty (60)
days after the Closing Date, the Company shall enact an employee stock option
plan for its directors and employees certain key members of management covering
options to purchase a total of 1,500,000 shares of Common Stock of the Company
at an exercise price of $.60 per share. The options to purchase such shares
shall vest in three equal installments on each of the first, second and third
anniversary of the grant.

23

          5.
REGISTER; TRANSFER AGENT INSTRUCTIONS.

               (a)
Register. The Company shall maintain at its principal executive offices
(or such other office or agency of the Company as it may designate by notice to
each holder of Common Shares), a register for the Common Shares, in which the
Company shall record the name and address of the Person in whose name the
Common Shares have been issued
(including the name and address of each transferee), and the number of Common
Shares held by such Person. The Company shall keep the register open and
available at all times during business hours for inspection of any Buyer or its
legal representatives.

               (b)
Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at DTC,
registered in the name of each Buyer or its respective nominee(s), for the
Common Shares, issued at the Closing in the form of Exhibit E attached
hereto (the “Irrevocable Transfer Agent
Instructions”). The Company warrants that no instruction other than
the Irrevocable Transfer Agent Instructions referred to in this Section 5(b),
and stop transfer instructions to give effect to Section 2(h) hereof, will be
given by the Company to its transfer agent, and that the Common 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 other Transaction Documents.
If a Buyer effects a sale, assignment or transfer of the Common Shares in
accordance with Section 2(h), the Company shall permit the transfer and shall
promptly instruct its transfer agent to issue one or more certificates or
credit shares to the applicable balance accounts at DTC in such name and in
such denominations as specified by such Buyer to effect such sale, transfer or
assignment. In the event that such sale, assignment or transfer involves Common
Shares sold, assigned or transferred pursuant to an effective registration
statement or pursuant to Rule 144, the transfer agent shall issue such Common
Shares to the Buyer, assignee or transferee, as the case may be, without any
restrictive legend. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5(b) will be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section 5(b),
that a Buyer 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.

          6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

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

                    (i)
Such Buyer shall have executed each of the Transaction Documents to which it is
a party and delivered the same to the Company.

24

                    (ii)
Such Buyer shall have delivered to the Escrow Agent, in accordance with the
terms of the Escrow Agreement, the Purchase Price for the Common Shares being
purchased by such Buyer and each other Buyer at the Closing by wire transfer of
immediately available funds pursuant to the wire instructions provided by the
Company or by means of a check made payable to the Escrow Agent which has been
cleared and made freely available prior to the Closing.

                    (iii)
The representations and warranties of such Buyer 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 speak
as of a specific date which shall be true and correct as of such specified
date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by such Buyer at or
prior to the Closing Date.

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

                    (v)
Each Buyer has completed an Accredited Investor Questionnaire to the
satisfaction of the Company and has delivered the same to the Company. 

          7.
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

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

                    (i)
The Company shall have executed and delivered to such Buyer (i) each of the
Transaction Documents and (ii) the Common Shares (in such amounts as such Buyer
shall request)being purchased by
such Buyer at the Closing pursuant to this Agreement.

                    (ii)
The Company shall have executed the Make Good Escrow Agreement together with
the Buyers and Mr. Zhenyong Liu, the Company’s CEO.

                    (iii)
The Company shall have executed the Lock-Up Agreement with Mr. Zhenyong Liu. 

                    (iv)
Such Buyer shall have received the opinion of Sichenzia Ross Friedman Ference
LLP, the Company’s outside counsel (“Company
Counsel”), dated as of the Closing Date, in substantially the form of Exhibit
F attached hereto.

                    (v)
The Company shall have delivered to such Buyer a copy of the Irrevocable
Transfer Agent Instructions, in the form of Exhibit E attached hereto,
which instructions shall have been delivered to and acknowledged in writing by
the Company’s transfer agent.

25

                    (vi)
The Company shall have delivered to such Buyer a certificate evidencing the
incorporation and good standing of the Company and each of its operating
Subsidiaries in such corporation’s state of incorporation issued by the
Secretary of State of such state of incorporation as of a date within 10 days
of the Closing Date.

                    (vii)
The Company shall have delivered to such Buyer a certificate evidencing the
Company’s qualification as a foreign corporation and good standing issued by
the Secretary of State (or comparable office) of each jurisdiction in which the
Company conducts business and is required to so qualify, as of a date within 10
days of the Closing Date.

                    (viii)
The Common Stock (I) shall be quoted on the OTCBB and (II) shall not have been
suspended, as of the Closing Date, by the SEC or FINRA from trading on the
OTCBB nor shall suspension by the SEC or FINRA have been threatened.

                    (ix)
The Company shall have delivered to such Buyer a certified copy of the Articles
of Incorporation as certified by the Secretary of State of the State of Nevada
within 10 days of the Closing Date.

                    (x)
The Company shall have delivered to such Buyer a certificate, executed by the
Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Company’s Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Articles of
Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
form attached hereto as Exhibit G.

                    (xi)
The representations and warranties of the Company shall be true and correct as
of the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date
which shall be true and correct as of such specified date) and the Company
shall have performed, satisfied and complied in all respects with the
covenants, agreements and conditions required by the Transaction Documents to
be performed, satisfied or complied with by the Company at or prior to the
Closing Date. Such Buyer shall have received a certificate, executed by the
Chief Executive Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by
such Buyer in the form attached hereto as Exhibit H.

                    (xii)
The Company shall have delivered to such Buyer a letter from the Company’s
transfer agent certifying the number of shares of Common Stock outstanding as
of a date within five days of the Closing Date.

                    (xiii)
The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Common Shares.

                    (xiv)
The Company shall have delivered to such Buyer such other documents relating to
the transactions contemplated by this Agreement as such Buyer or its counsel
may reasonably request.

26

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

          8.
TERMINATION. In the event that the closing shall not have occurred with
respect to a buyer on or before ten (10) business days from the date hereof due to
the company’s or such buyer’s failure to satisfy the conditions set forth in
sections 6 and 7 above (and the nonbreaching party’s failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party.

          9.
MISCELLANEOUS.

               (a)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the City of New York, Borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. The Company hereby appoints Sichenzia Ross Friedman Ference LLP
with offices at 61 Broadway, 32nd Floor, New York, NY 10006 as its
agent for service of process in New York. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted
by law. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

               (b)
Counterparts. This Agreement may be executed in two or more identical counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party; provided that a facsimile signature shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile signature.

27

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

               (d)
Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

               (e)
Entire Agreement; Amendments. This Agreement supersedes all other prior
oral or written agreements between the Buyers, the Company, their affiliates
and Persons acting on their behalf with respect to the matters discussed
herein, and this Agreement and the instruments referenced herein contain the
entire understanding of the parties with respect to the matters covered herein
and therein and, except as specifically set forth herein or therein, neither
the Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
holders of Common Shares representing at least a majority of the amount of the
Common Shares, or, if prior to the Closing Date, the Buyers listed on the Schedule
of Buyers as being obligated to purchase at least a majority of the amount of
the Common Shares. No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought.
No such amendment shall be effective to the extent that it applies to less than
all of the holders of the Common 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 also is offered to all of the parties to the Transaction
Documents or holders of Common Shares, as the case may be. The Company has not,
directly or indirectly, made any agreements with any Buyers relating to the
terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents. Without limiting
the foregoing, the Company confirms that, except as set forth in this
Agreement, no Buyer has made any commitment or promise or has any other
obligation to provide any financing to the Company or otherwise. 

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

28

	
 

	
 

	
If to the
  Company:

	
 

	
Orient Paper, Inc.

	
Attention:

	
Mr. Zhenyong
  Liu

	
Address:

	
Nansan
  Gongli, Nanhuan Road, Xushui County, Baoding City, 

	
City & State:

	
Hebei
  Province, The People’s Republic of China 072550

	
Telephone:

	
011 - (86)
  312-8605508

	
Fax:

	
011 - (86) 312-8605530

	
Email:

	
liu@orientalpapercorporation.com/
  wyen@orientalpapercorporation.com

	
 

	
 

	
With a copy (which will not constitute
  notice) to:

	
 

	
Sichenzia Ross Friedman Ference LLP

	
Attention:

	
Gregory
  Sichenzia, Esq.

	
Telephone:

	
(212) 930
  9700

	
Fax:

	
(212) 930
  9725

	
Email:

	
gsichenzia@srff.com

If to the Transfer
Agent:

	
Empire Stock Transfer, Inc.

	
Address: 1859 Whitney Mesa Drive,
  Henderson, NV 89014

	
Telephone: 702-818-5898

	
Facsimile: 702-974-1444

	
Attention: Patrick Mokros

	
Email: patrick@empirestock.com

If to a Buyer,
to its address, facsimile number and email address set forth on the Schedule of
Buyers, or to such other address, facsimile number and/or email address and/or
to the attention of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt
from an overnight courier service in accordance with clause (i), (ii) or (iii)
above, respectively.

               (g)
Currency. Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in United States Dollars. All amounts owing under this
Agreement or any Transaction Document shall be paid in US dollars. All amounts
denominated in other currencies shall be converted in the US dollar equivalent
amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted
into US dollars pursuant to this Agreement, the US dollar exchange rate as
published in the Wall Street Journal on the relevant date of calculation.

               (h)
Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Common Shares. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the holders of Common Shares representing at least a majority of the
number of the Common Shares, including by merger or consolidation. A Buyer may
assign some or all of its rights hereunder without the consent of the Company,
in which event such assignee shall be deemed to be a Buyer hereunder with
respect to such assigned rights.

29

               (i)
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.

               (j)
Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and 9
shall survive the Closing and the delivery of Common Shares, as applicable.
Each Buyer shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.

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

               (l)
Indemnification. In consideration of each Buyer’s execution and delivery
of the Transaction Documents and acquiring the Common Shares thereunder and in
addition to all of the Company’s other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each other holder of the Common Shares and all of their stockholders,
partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of
whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and
disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to
(a) any misrepresentation or breach of any representation or warranty made by
the Company in the Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents
or any other certificate, instrument or document contemplated hereby or thereby
or (c) any cause of action, suit or claim brought or made against such
Indemnitee by a third party (including for these purposes a derivative action
brought on behalf of the Company) and arising out of or resulting from (i) the
execution, delivery, performance or enforcement of the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(ii) any transaction financed or to be financed in whole or in part, directly
or indirectly, with the proceeds of the issuance of the Common Shares, or (iii)
the status of such Buyer or holder of the Common Shares as an investor in the
Company. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Except as otherwise set forth herein, the
mechanics and procedures with respect to the rights and obligations under this
Section 9(l) shall be the same as those set forth in Section 6 of the
Registration Rights Agreement.

30

               (m)
No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

               (n)
Remedies. Each Buyer and each holder of the Common Shares shall have all
rights and remedies set forth in the Transaction Documents and all rights and
remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any Person having any rights under any provision of this Agreement shall
be entitled to enforce such rights specifically (without posting a bond or
other security), to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law. Furthermore,
the Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under the Transaction Documents, any
remedy at law may prove to be inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.

               (o)
Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Buyer exercises a right, election, demand
or option under a Transaction Document and the Company does not timely perform
its related obligations within the periods therein provided, then such Buyer
may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights

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

               (q)
Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way
for the performance of the obligations 

31

of any other
Buyer under any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Buyer pursuant hereto or
thereto, shall be deemed to constitute the Buyers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Buyers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents and the Company acknowledges that the Buyers are not acting in
concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Buyer confirms
that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer
shall be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose.

               (r)
Judgment Currency.

               If
for the purpose of obtaining or enforcing judgment against the Company in any
court in any jurisdiction it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 9(r) referred to
as the “Judgment Currency”) an
amount due in US dollars under this Agreement, the conversion shall be made at
the Exchange Rate prevailing on the Business Day immediately preceding:

               (1)
the date of actual payment of the amount due, in the case of any proceeding in
the courts of New York or in the courts of any other jurisdiction that will
give effect to such conversion being made on such date: or 

               (2)
the date on which the foreign court determines, in the case of any proceeding
in the courts of any other jurisdiction (the date as of which such conversion
is made pursuant to this Section being hereinafter referred to as the “Judgment Conversion Date”).

               If
in the case of any proceeding in the court of any jurisdiction referred to in
Section 9(r)(1) and (2) above, there is a change in the Exchange Rate
prevailing between the Judgment Conversion Date and the date of actual payment
of the amount due, the applicable party shall pay such adjusted amount as may
be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the Exchange Rate prevailing on the date of payment, will produce
the amount of US dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial order at the Exchange
Rate prevailing on the Judgment Conversion Date.

               Any
amount due from the Company under this provision shall be due as a separate
debt and shall not be affected by judgment being obtained for any other amounts
due under or in respect of this Agreement.

[Signature Pages Follow]

32

          IN
WITNESS WHEREOF, each Buyer and the Company have
caused its respective signature page to this Securities Purchase Agreement to
be duly executed as of the date first written above.

	
 

	
 

	
 

	
 

	
COMPANY:

	
 

	
 

	
 

	
 

	
ORIENT PAPER, INC.

	
 

	
 

	
 

	
By:

	
/s/ Zhenyong
  Liu

	
 

	
 

	 

	
 

	
 

	
Name:
  Zhenyong Liu

	
 

	
 

	
Title: Chief
  Executive Officer

33

          IN
WITNESS WHEREOF, each Buyer and the Company have
caused their respective signature page to this Securities Purchase Agreement to
be duly executed as of the date first written above.

	
 

	
 

	
 

	
 

	
BUYER:

	
 

	
 

	
 

	
ACCESS AMERICA FUND, LP

	
 

	
 

	
 

	
By:

	
/s/
  Christopher Efird

	
 

	
 

	 

	
 

	
 

	
Name:
  Christopher Efird

	
 

	
 

	
Title:
  President

	
 

	
 

	
 

	
 

	
BUYER:

	
 

	
 

	
 

	
RENAISSANCE US GROWTH INVESTMENT TRUST PLC

	
 

	
 

	
 

	
By:

	
/s/ Russell
  Cleveland

	
 

	
 

	 

	
 

	
 

	
Name:
  Russell Cleveland

	
 

	
 

	
Title:
  Director

	
 

	
 

	
 

	
 

	
BUYER:

	
 

	
 

	
 

	
RENN GLOBAL ENTREPRENEURS FUND, INC.

	
 

	
 

	
 

	
By:

	
/s/ Russell
  Cleveland

	
 

	
 

	 

	
 

	
 

	
Name:
  Russell Cleveland

	
 

	
 

	
Title:
  President

34

	
 

	
 

	
 

	
 

	
BUYER:

	
 

	
 

	
 

	
PREMIER RENN ENTREPRENEURIAL FUND LIMITED

	
 

	
 

	
 

	
By:

	
/s/ Russell
  Cleveland

	
 

	
 

	 

	
 

	
 

	
Name:
  Russell Cleveland

	
 

	
 

	
Title:
  Investment Manager

	
 

	
 

	
 

	
 

	
BUYER:

	
 

	
 

	
 

	
POPE INVESTMENTS II, LLC

	
 

	
 

	
 

	
By:

	
/s/ William
  P. Weller

	
 

	
 

	 

	
 

	
 

	
Name:
  William P. Weller

	
 

	
 

	
Title: Managing
  Member

	
 

	
 

	
 

	
 

	
BUYER:

	
 

	
 

	
 

	
STEVE MAZUR

	
 

	
 

	
 

	
By:

	
/s/ Steve
  Mazur

	
 

	
 

	 

	
 

	
 

	
Name: Steve
  Mazur 

	
 

	
 

	
Title: 

35

SCHEDULE OF
BUYERS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Buyer

	
 

	
Address
  and Facsimile Number

	
 

	
Number of
  Common Shares

	
 

	
Purchase
  Price

	
 

	
Legal
  Representative’s Address and Facsimile Number

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Access America Fund, LP

	
 

	
11,200 Westheimer

  Suite 508
Houston, Texas 77069
Fax:713-599-1304

	
 

	
2,500,000

	
 

	
$1,500,000

	
 

	
Access America Fund, LP
 11,200 Westheimer
Suite 508
Houston, Texas 77069
Fax:713-599-1304

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Renaissance US Growth
  Investment Trust Plc

	
 

	
8080 N. Central Expressway,
  Suite 210, LB-59

  Dallas, TX 75206
Fax: 214-891-8291

	
 

	
1,333,333

	
 

	
$800,000

	
 

	
Access America Fund, LP

  11,200 Westheimer
Suite 508
Houston, Texas 77069
Fax:713-599-1304

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
RENN Global Entrepreneurs
  Fund, Inc.

	
 

	
8080 N. Central Expressway,
  Suite 210, LB-59

  Dallas, TX 75206
Fax: 214-891-8291

	
 

	
500,000

	
 

	
$300,000

	
 

	
Access America Fund, LP

  11,200 Westheimer
Suite 508
Houston, Texas 77069
Fax:713-599-1304

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Premier RENN
  Entrepreneurial Fund Limited

	
 

	
8080 N. Central Expressway,
  Suite 210, LB-59

  Dallas, TX 75206
Fax: 214-891-8291

	
 

	
500,000

	
 

	
$300,000

	
 

	
Access America Fund, LP

  11,200 Westheimer
Suite 508
Houston, Texas 77069
Fax:713-599-1304

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Pope Investments II, LLC

	
 

	
5100 Poplar Avenue Suite
  805, Memphis, TN 38137

  Fax: 901-763-4229

	
 

	
3,333,333

	
 

	
$2,000,000

	
 

	
Access America Fund, LP

  11,200 Westheimer
Suite 508
Houston, Texas 77069
Fax:713-599-1304

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
Steve Mazur

	
 

	
66 Glenbrook Road - 2121

  Stamford, Connecticut 06902
Fax:631-598-4723

	
 

	
166,666

	
 

	
$100,000

	
 

	
Access America Fund, LP

  11,200 Westheimer
Suite 508
Houston, Texas 77069
Fax: 713-599-1304

	 

	 

	 

	 

	 

	 

	 

	 

	 

	
TOTAL

	
 

	
 

	
 

	
8,333,332

	
 

	
$5,000,000

	
 

	
 

	 

	 

	 

	 

	 

	 

	 

	 

	 

36

EXHIBITS

	
 

	
 

	
Exhibit A

	
Form of
  Registration Rights Agreement – Please refer to Exhibit 10.4 of this 8-K

	
Exhibit B

	
Form of
  Closing Escrow Agreement – Please refer to Exhibit 10.3 of this 8-K

	
Exhibit C

	
Form of Make
  Good Escrow Agreement – Please refer to Exhibit 10.2 of this 8-K

	
Exhibit D

	
Form of
  Lock-Up Agreement – Please refer to Exhibit 10.5 of this 8-K

	
Exhibit E

	
Form of
  Irrevocable Transfer Agent Instructions

	
Exhibit F

	
Form of
  Company Counsel Opinion

	
Exhibit G

	
Form of
  Secretary’s Certificate

	
Exhibit H

	
Form of
  Officer’s Certificate

SCHEDULES

Schedule 3(a)
- List of Subsidiaries

Schedule 3(k) - Absence of Certain Changes

Schedule 3(q) - Equity Capitalization

Schedule 3(r) - Indebtedness and Other Contracts

Schedule 3(s) - Absence of Litigation

Schedule 3(t) – Insurance

Schedule 3(kk) – Related Party Transactions

Schedule 3(a) - List
of Subsidiaries

Dongfang Zhiye
Holding Limited (a BVI company, not serving any purpose after the 6/26/09 PRC
legal restructuring with the following “Shengde” entities)

Shengde Holdings
Inc. (a Nevada corporation)

Baoding
Shengde Paper Co., Ltd. (a PRC company)

Schedule 3(k) -
Absence of Certain Changes

Since December
31, 2008, there has been no material adverse change and no material adverse
development in the business, properties, operations, condition (financial or
otherwise), results of operations or prospects of the Company or its
Subsidiaries except for the followings:

On August 26,
2009 the Company entered into a Short-Term Loan Deferred Payment Agreement with
the United Commercial Bank (China) Ltd. under which the Company agreed to repay
the outstanding loan balance in the amount of $2,816,476.39, due originally due
January 23, 2009 and extended to June 30, 2009, in the following installments:

	
 

	
 

	
 

	
8/31/09:
  $400,000

	
 

	
9/15/09: all
  accrued interest up to 8/31/09

	
 

	
9/30/09:
  $400,000

	
 

	
10/31/09:
  $200,000

	
 

	
11/30/09:
  $300,000

	
 

	
12/31/09:
  $300,000

	
 

	
1/31/10:
  $200,000

	
 

	
2/28/10:
  $200,000

	
 

	
3/31/10:
  $200,000

	
 

	
4/30/10:
  $200,000

	
 

	
5/31/10:
  $200,000

	
 

	
6/30/10:
  $216,476.39

Schedule 3(q) -
Equity Capitalization

	
 

	
 

	
1.

	
The Company
  agreed to issue warrants to CCG Investor Relations Partners LLC to purchase
  up to 100,000 shares the Company’s common stock at a price of $1.0 per share.
  The warrants have a term of two (2) years and are with cashless exercise
  option and piggyback registration rights.

	
 

	
 

	
2.

	
The
  Chinamerica consultant warrants (to be determined)

	
 

	
 

	
3.

	
Employee
  Incentive Stock Option Plan (to be determined)

Schedule 3(r) -
Indebtedness and Other Contracts

Schedule 3(kk) – Related Party Transactions

The Company
had the following bank loans payable as of June 30, 2009:

	
 

	
 

	
 

	
 

	
 

	
Description

	
 

	
June 30,

  2009

	
 

	
 

	
 

	 

	
 

	
Working
  capital loan provided by Industrial & Commercial Bank of China, secured
  by certain manufacturing equipments of the Company. Interest is payable
  monthly at the fixed rate of 6.372% per annum. The entire principal is due
  and payable at maturity on January 20, 2010. The note is renewable upon
  maturity.

	
 

	
$

	
1,899,252

	
 

	
 

	
 

	
 

	
 

	
 

	
Working
  capital loan provided by the Industrial & Commercial Bank of China.
  Interest is payable monthly at 8.217% per annum. The entire principal was due
  and payable at maturity on June 4, 2009. The Company was granted a grace
  period of one month by the bank. The loan was renewed on July 1, 2009.

	
 

	
 

	
876,578

	
 

	
 

	
 

	
 

	
 

	
 

	
Short-term
  credit facility provide by the United Commercial Bank (China) Limited,
  including a revolving credit facility of $2,000,000 and a non-revolving
  import loan facility of $816,976. The credit facility is secured by the
  Company’s building, land use rights and is personally guaranteed by the Chief
  Executive Officer and Director Mr. Zhenyong Liu. Interest is paid monthly
  with a floating rate indexed to 5% plus the three-month LIBOR, adjusted every
  three months, and was 5.6207% per annum on June 30, 2009. The note is
  renewable upon maturity, which was extended to June 30, 2009, according to a
  Short-Term Credit Facility Extension Agreement entered into by the Company
  and the Bank on January 23, 2009. On August 26, 2009 the Company entered into
  a Short-Term Loan Deferred Payment Agreement with the United Commercial Bank
  (China) Ltd. under which the Company agreed to repay the outstanding loan
  balance in the amount of $2,816,477 in eleven (11) uneven monthly
  installments, starting from August 31, 2009 to June 30, 2010. See Schedule
  3(k) for details of the installment payment schedule.

	
 

	
 

	
2,816,977

	
 

	
 

	
 

	
 

	
 

	
 

	
Loan payable
  to Rural Credit Cooperative of Xushui, guaranteed by an unrelated third party
  company. The entire principal is due and payable at maturity on September 16,
  2011. Interest is paid monthly at the rate of 0.774% per month.

	
 

	
 

	
1,940,159

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
Total bank loans payable

	
 

	
 

	
7,532,966

	
 

	
 

	
 

	 

	 

	
 

	
 

	
 

	
 

	
 

	
 

Mr. Zhenyong
Liu, Chief Executive Officer of Orient Paper, loaned money (over a period of
time) to the Company for working capital purposes, amounting to $6,131,761 and
$2,131,761 as of June 30, 2009 and August 31, 2009. On July 24, 2008, Mr. Liu
agreed to change the term of the loan from payable on demand to a period of
three years, maturing on July 23, 2011, and with no stated interest.

On August 1,
2008, Mr. Shuangxi Zhao, a member of the Board of Directors of HBOP, loaned
money to the Company for working capital purposes which amounted to $876,578 as
of June 30, 2009. The amount owed bears interest at 7.56 percent per annum and
is due on July 31, 2011.

On August 5,
2008, Mr. Xiaodong Liu, a member of the Board of Directors of Orient Paper
loaned money to the Company for working capital purposes which amounted to
$1,095,722 as of June 30, 2009. The amount owed bears interest at 7.56 percent
per annum and is due on August 4, 2011.

Schedule 3(s) -
Absence of Litigation

To the
knowledge of the Company’s management, there is NO legal action, suit,
proceeding, inquiry or investigation before the SEC, FINRA, any court, public
board, government agency, self-regulatory organization or body pending or
threatened against or affecting the Company, the Common Stock or any of its
Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or
directors, whether of a civil or criminal nature or otherwise. 

Schedule 3(t) -
Insurance

The Company
hereby acknowledges that it has never been rejected any insurance coverage
sought or applied for. The Company’s current insurance policies include the following:

Du-Bang
Property & Casualty Insurance Co., Ltd.

Insurance
policy number is 20101213000009000011 for basic property insurance.

Insurance period is from July
9th, 2009 to July 9th, 2010.

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