Document:

THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
      ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
      UNDER
      THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
      LAWS
      IS NOT REQUIRED.

    

    SERIES
      JJ
      WARRANT TO PURCHASE

    

    SHARES
      OF
      COMMON STOCK

    OF

    

    UNITED
      NATIONAL FILM CORPORATION

    

    Expires
      February 7, 2017

    

    
      	No.: W-JJ-07-01	
              Number
                of Shares: Up to
                935,837

            
	Date of Issuance: February 7, 2007	 

    

     

    FOR
      VALUE
      RECEIVED, the undersigned, United National Film Corporation, a Nevada
      corporation (together with its successors and assigns, the "Issuer"),
      hereby certifies that 1st
      BridgeHouse Securities, LLC or its registered assigns (the “Holder”)
      is
      entitled to subscribe for and purchase, during the Term (as hereinafter
      defined), up to Nine Hundred Thirty-Five Thousand Eight Hundred Thirty-Seven
      (935,837) shares (subject to adjustment as hereinafter provided) of the duly
      authorized, validly issued, fully paid and non-assessable Common Stock of the
      Issuer, at an exercise price per share equal to the Warrant Price then in
      effect, subject, however, to the provisions and upon the terms and conditions
      hereinafter set forth. Capitalized terms used in this Warrant and not otherwise
      defined herein shall have the respective meanings specified in Section 9
      hereof.

    

    1. Term.
      The
      term of this Warrant shall commence on February 7, 2007 and shall expire at
      6:00
      p.m., Eastern Time, on February 7, 2017 (such period being the "Term").

    

    2.  Method
      of Exercise; Payment; Issuance of New Warrant; Transfer and
      Exchange.

    

    (a) Time
      of Exercise.
      The
      purchase rights represented by this Warrant may be exercised in whole or in
      part
      during the Term for such number of shares of Common Stock equal to ten percent
      (10%) of the number of shares of Common Stock issued upon an exercise by any
      holder of the Series J Warrants issued by the Issuer pursuant to the Purchase
      Agreement.

    

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

       

    

    (b) Method
      of Exercise.
      The
      Holder hereof may exercise this Warrant, in whole or in part, by the surrender
      of this Warrant (with the exercise form attached hereto duly executed) at the
      principal office of the Issuer, and by the payment to the Issuer of an amount
      of
      consideration therefor equal to the Warrant Price in effect on the date of
      such
      exercise multiplied by the number of shares of Warrant Stock with respect to
      which this Warrant is then being exercised, payable at such Holder's election
      (i) by certified or official bank check or by
      wire
      transfer to an account designated by the Issuer,
      (ii) by
      "cashless exercise" in accordance with the provisions of subsection (c) of
      this
      Section 2, but only when a registration statement under the Securities Act
      providing for the resale of the Warrant Stock is not then in effect, or (iii)
      by
      a combination of the foregoing methods of payment selected by the Holder of
      this
      Warrant.

    

    (c) Cashless
      Exercise.
      Notwithstanding any provision herein to the contrary and commencing one (1)
      year
      following the Original Issue Date if (i) the Per Share Market Value of one
      share
      of Common Stock is greater than the Warrant Price (at the date of calculation
      as
      set forth below) and (ii) a registration statement under the Securities Act
      providing for the resale of the Warrant Stock (A) has not been declared
      effective by the Securities and Exchange Commission by the date such
      registration statement is required to be effective pursuant to the Registration
      Rights Agreement (as defined in Section 8), or (B) is not effective at the
      time
      of exercise of this Warrant, unless the registration statement is not effective
      as a result of the Issuer exercising its rights under Section 3(n) of the
      Registration Rights Agreement, in lieu of exercising this Warrant by payment
      of
      cash, the Holder may exercise this Warrant by a cashless exercise and shall
      receive the number of shares of Common Stock equal to an amount (as determined
      below) by surrender of this Warrant at the principal office of the Issuer
      together with the properly endorsed Notice of Exercise in which event the Issuer
      shall issue to the Holder a number of shares of Common Stock computed using
      the
      following formula:

    
      

      
        	
              	
                X
                  =

              	Y - (A)(Y)

        	 	 	        
                B

      

       

    

    
      	
              Where

            	
              X
                =

            	
              the
                number of shares of Common Stock to be issued to the
                Holder.

            

    

    

    
      	 	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable upon exercise of all
                of the
                Warrant or, if only a portion of the Warrant is being exercised,
                the
                portion of the Warrant being exercised.

            

    

    

    
      	 	
              A
                =

            	
              the
                Warrant Price. 

            

    

    
      

      
        	 	
                B
                  =

              	
                the
                  Per Share Market Value of one share of Common
                  Stock.

              

      

       

    

    (d) Issuance
      of Stock Certificates.
      In the
      event of any exercise of this Warrant in accordance with and subject to the
      terms and conditions hereof, certificates for the shares of Warrant Stock so
      purchased shall be dated the date of such exercise and delivered to the Holder
      hereof within a reasonable time, not exceeding three (3) Trading Days after
      such
      exercise (the “Delivery
      Date”)
      or, at
      the request of the Holder (provided that a registration statement under the
      Securities Act providing for the resale of the Warrant Stock is then in effect
      or that the shares of Warrant Stock are otherwise exempt from registration),
      issued and delivered to the Depository Trust Company (“DTC”)
      account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
      System (“DWAC”)
      within
      a reasonable time, not exceeding three (3) Trading Days after such exercise,
      and
      the Holder hereof shall be deemed for all purposes to be the holder of the
      shares of Warrant Stock so purchased as of the date of such exercise.
      Notwithstanding the foregoing to the contrary, the Issuer or its transfer agent
      shall only be obligated to issue and deliver the shares to the DTC on the
      Holder’s behalf via DWAC if such exercise is in connection with a sale or other
      exemption from registration by which the shares may be issued without a
      restrictive legend and the
      Issuer and its transfer agent are participating in DTC through the DWAC
      system.
      The
      Holder shall deliver this original Warrant, or an indemnification reasonably
      acceptable to the Issuer undertaking with respect to such Warrant in the case
      of
      its loss, theft or destruction, at such time that this Warrant is fully
      exercised. With respect to partial exercises of this Warrant, the Issuer shall
      keep written records for the Holder of the number of shares of Warrant Stock
      exercised as of each date of exercise.

    

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

       

    

    (e) Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Issuer fails to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Stock pursuant to an exercise on or before the second
      business day following the Delivery Date, and if after such date the Holder
      is
      required by its broker to purchase (in an open market transaction or otherwise)
      shares of Common Stock to deliver in satisfaction of a sale by the Holder of
      the
      Warrant Stock which the Holder anticipated receiving upon such exercise (a
      “Buy-In”),
      then
      the Issuer shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of shares of Warrant Stock that the Issuer was
      required to deliver to the Holder in connection with the exercise at issue
      times
      (B) the price at which the sell order giving rise to such purchase obligation
      was executed, and (2) at the option of the Holder, either reinstate the portion
      of the Warrant and equivalent number of shares of Warrant Stock for which such
      exercise was not honored or deliver to the Holder the number of shares of Common
      Stock that would have been issued had the Issuer timely complied with its
      exercise and delivery obligations hereunder. For example, if the Holder
      purchases Common Stock having a total purchase price of $11,000 to cover a
      Buy-In with respect to an attempted exercise of shares of Common Stock with
      an
      aggregate sale price giving rise to such purchase obligation of $10,000, under
      clause (1) of the immediately preceding sentence the Issuer shall be required
      to
      pay the Holder $1,000. The Holder shall provide the Issuer written notice
      indicating the amounts payable to the Holder in respect of the Buy-In, together
      with applicable confirmations and other evidence reasonably requested by the
      Issuer. Nothing herein shall limit a Holder’s right to pursue any other remedies
      available to it hereunder, at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief with respect to the
      Issuer’s failure to timely deliver certificates representing shares of Common
      Stock upon exercise of this Warrant as required pursuant to the terms
      hereof.

     

    (f) Transferability
      of Warrant.
      Subject
      to Section 2(h) hereof, this Warrant may be transferred by a Holder, in whole
      or
      in part, without the consent of the Issuer. If transferred pursuant to this
      paragraph, this Warrant may be transferred on the books of the Issuer by the
      Holder hereof in person or by duly authorized attorney, upon surrender of this
      Warrant at the principal office of the Issuer, properly endorsed (by the Holder
      executing an assignment in the form attached hereto) and upon payment of any
      necessary transfer tax or other governmental charge imposed upon such transfer.
      This Warrant is exchangeable at the principal office of the Issuer for Warrants
      to purchase the same aggregate number of shares of Warrant Stock, each new
      Warrant to represent the right to purchase such number of shares of Warrant
      Stock as the Holder hereof shall designate at the time of such exchange. All
      Warrants issued on transfers or exchanges shall be dated the Original Issue
      Date
      and shall be identical with this Warrant except as to the number of shares
      of
      Warrant Stock issuable pursuant thereto.

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

       

    

    (g) Continuing
      Rights of Holder.
      The
      Issuer will, at the time of or at any time after each exercise of this Warrant,
      upon the request of the Holder hereof, acknowledge in writing the extent, if
      any, of its continuing obligation to afford to such Holder all rights to which
      such Holder shall continue to be entitled after such exercise in accordance
      with
      the terms of this Warrant, provided
      that if
      any such Holder shall fail to make any such request, the failure shall not
      affect the continuing obligation of the Issuer to afford such rights to such
      Holder.

    

    (h) Compliance
      with Securities Laws.

    

    (i) The
      Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
      and
      the shares of Warrant Stock to be issued upon exercise hereof are being acquired
      solely for the Holder's own account and not as a nominee for any other party,
      and for investment, and that the Holder will not offer, sell or otherwise
      dispose of this Warrant or any shares of Warrant Stock to be issued upon
      exercise hereof except pursuant to an effective registration statement, or
      an
      exemption from registration, under the Securities Act and any applicable state
      securities laws.

    

    (ii) Except
      as
      provided in paragraph (iii) below, this Warrant and all certificates
      representing shares of Warrant Stock issued upon exercise hereof shall be
      stamped or imprinted with a legend in substantially the following
      form:

    

    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
      ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
      UNDER
      THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
      LAWS
      IS NOT REQUIRED.

    

    (iii) The
      Issuer agrees to reissue this Warrant or certificates representing any of the
      Warrant Stock, without the legend set forth above if at such time, prior to
      making any transfer of any such securities, the Holder shall give written notice
      to the Issuer describing the manner and terms of such transfer. Such proposed
      transfer will not be effected until: (a) either (i) the Issuer has received
      an
      opinion of counsel reasonably satisfactory to the Issuer, to the effect that
      the
      registration of such securities under the Securities Act is not required in
      connection with such proposed transfer, (ii) a registration statement under
      the
      Securities Act covering such proposed disposition has been filed by the Issuer
      with the Securities and Exchange Commission and has become effective under
      the
      Securities Act, (iii) the Issuer has received other evidence reasonably
      satisfactory to the Issuer that such registration and qualification under the
      Securities Act and state securities laws are not required, or (iv) the Holder
      provides the Issuer with reasonable assurances that such security can be sold
      pursuant to Rule 144 under the Securities Act; and (b) either (i) the Issuer
      has
      received an opinion of counsel reasonably satisfactory to the Issuer, to the
      effect that registration or qualification under the securities or "blue sky"
      laws of any state is not required in connection with such proposed disposition,
      or (ii) compliance with applicable state securities or "blue sky" laws has
      been
      effected or a valid exemption exists with respect thereto. The Issuer will
      respond to any such notice from the Holder within three (3) Trading Days. In
      the
      case of any proposed transfer under this Section 2(h), the Issuer will use
      reasonable efforts to comply with any such applicable state securities or "blue
      sky" laws, but shall in no event be required, (x) to qualify to do business
      in
      any state where it is not then qualified, (y) to take any action that would
      subject it to tax or to the general service of process in any state where it
      is
      not then subject, or (z) to comply with state securities or “blue sky” laws of
      any state for which registration by coordination is unavailable to the Issuer.
      The restrictions on transfer contained in this Section 2(h) shall be in addition
      to, and not by way of limitation of, any other restrictions on transfer
      contained in any other section of this Warrant. Whenever
      a
      certificate representing the Warrant Stock is required to be issued to the
      Holder without a legend, in lieu of delivering physical certificates
      representing the Warrant Stock, the Issuer shall cause its transfer agent to
      electronically transmit the Warrant Stock to the Holder by crediting the account
      of the Holder or Holder's Prime Broker with DTC through its DWAC system (to
      the
      extent not inconsistent with any provisions of this Warrant or the Purchase
      Agreement). 

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

       

    

    (i) Accredited
      Investor Status.
      In no
      event may the Holder exercise this Warrant in whole or in part unless the Holder
      is an “accredited investor” as defined in Regulation D under the Securities Act.

    

    3. Stock
      Fully Paid; Reservation and Listing of Shares; Covenants.

    

    (a) Stock
      Fully Paid.
      The
      Issuer represents, warrants, covenants and agrees that all shares of Warrant
      Stock which may be issued upon the exercise of this Warrant or otherwise
      hereunder will, when issued in accordance with the terms of this Warrant, be
      duly authorized, validly issued, fully paid and non-assessable and free from
      all
      taxes, liens and charges created by or through the Issuer. The Issuer further
      covenants and agrees that during the period within which this Warrant may be
      exercised, the Issuer will at all times have authorized and reserved for the
      purpose of the issuance upon exercise of this Warrant a number of authorized
      but
      unissued shares of Common Stock equal to at least one hundred fifty (150%)
      of
      the number of shares of Common Stock issuable upon exercise of this Warrant
      without regard to any limitations on exercise.

    

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

       

    

    (b) Reservation.
      If any
      shares of Common Stock required to be reserved for issuance upon exercise of
      this Warrant or as otherwise provided hereunder require registration or
      qualification with any Governmental Authority under any federal or state law
      before such shares may be so issued, the Issuer will in good faith use its
      best
      efforts as expeditiously as possible at its expense to cause such shares to
      be
      duly registered or qualified. If the Issuer shall list any shares of Common
      Stock on any securities exchange or market it will, at its expense, list
      thereon, and maintain and increase when necessary such listing, of, all shares
      of Warrant Stock from time to time issued upon exercise of this Warrant or
      as
      otherwise provided hereunder (provided that such Warrant Stock has been
      registered pursuant to a registration statement under the Securities Act then
      in
      effect), and, to the extent permissible under the applicable securities exchange
      rules, all unissued shares of Warrant Stock which are at any time issuable
      hereunder, so long as any shares of Common Stock shall be so listed. The Issuer
      will also so list on each securities exchange or market, and will maintain
      such
      listing of, any other securities which the Holder of this Warrant shall be
      entitled to receive upon the exercise of this Warrant if at the time any
      securities of the same class shall be listed on such securities exchange or
      market by the Issuer.

    

    (c) Covenants.
      The
      Issuer shall not by any action including, without limitation, amending the
      Articles of Incorporation or the by-laws of the Issuer, or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other action, avoid or seek to avoid the observance
      or
      performance of any of the terms of this Warrant, but will at all times in good
      faith assist in the carrying out of all such terms and in the taking of all
      such
      actions as may be necessary or appropriate to protect the rights of the Holder
      hereof against dilution (to the extent specifically provided herein) or
      impairment. Without limiting the generality of the foregoing, the Issuer will
      (i) not permit the par value, if any, of its Common Stock to exceed the then
      effective Warrant Price, (ii) not amend or modify any provision of the Articles
      of Incorporation or by-laws of the Issuer in any manner that would adversely
      affect the rights of the Holders of the Warrants, (iii) take all such action
      as
      may be reasonably necessary in order that the Issuer may validly and legally
      issue fully paid and nonassessable shares of Common Stock, free and clear of
      any
      liens, claims, encumbrances and restrictions (other than as provided herein)
      upon the exercise of this Warrant, and (iv) use its best efforts to obtain
      all
      such authorizations, exemptions or consents from any public regulatory body
      having jurisdiction thereof as may be reasonably necessary to enable the Issuer
      to perform its obligations under this Warrant.

    

    (d) Loss,
      Theft, Destruction of Warrants.
      Upon
      receipt of evidence satisfactory to the Issuer of the ownership of and the
      loss,
      theft, destruction or mutilation of any Warrant and, in the case of any such
      loss, theft or destruction, upon receipt of indemnity or security satisfactory
      to the Issuer or, in the case of any such mutilation, upon surrender and
      cancellation of such Warrant, the Issuer will make and deliver, in lieu of
      such
      lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
      representing the right to purchase the same number of shares of Common
      Stock.

    

    4. Adjustment
      of Warrant Price.
      The
      price at which such shares of Warrant Stock may be purchased upon exercise
      of
      this Warrant shall be subject to adjustment from time to time as set forth
      in
      this Section 4. The Issuer shall give the Holder notice of any event described
      below which requires an adjustment pursuant to this Section 4 in accordance
      with
      the notice provisions set forth in Section 5.

    

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

       

    

    (a) Recapitalization,
      Reorganization, Reclassification, Consolidation, Merger or Sale.

     

    (i)
      In
      case the Issuer after the Original Issue Date shall do any of the following
      (each, a "Triggering
      Event"):
      (a)
      consolidate or merge with or into any other Person and the Issuer shall not
      be
      the continuing or surviving corporation of such consolidation or merger, or
      (b)
      permit any other Person to consolidate with or merge into the Issuer and the
      Issuer shall be the continuing or surviving Person but, in connection with
      such
      consolidation or merger, any Capital Stock of the Issuer shall be changed into
      or exchanged for Securities of any other Person or cash or any other property,
      or (c) transfer all or substantially all of its properties or assets to any
      other Person, or (d) effect a capital reorganization or reclassification of
      its
      Capital Stock, then, and in the case of each such Triggering Event, proper
      provision shall be made to the Warrant Price and the number of shares of Warrant
      Stock that may be purchased upon exercise of this Warrant so that, upon the
      basis and the terms and in the manner provided in this Warrant, the Holder
      of
      this Warrant shall be entitled upon the exercise hereof at any time after the
      consummation of such Triggering Event, to the extent this Warrant is not
      exercised prior to such Triggering Event, to receive at the Warrant Price in
      effect at the time immediately prior to the consummation of such Triggering
      Event, in lieu of the Common Stock issuable upon such exercise of this Warrant
      prior to such Triggering Event, the Securities, cash and property to which
      such
      Holder would have been entitled upon the consummation of such Triggering Event
      if such Holder had exercised the rights represented by this Warrant immediately
      prior thereto (including the right of a shareholder to elect the type of
      consideration it will receive upon a Triggering Event), subject to adjustments
      (subsequent to such corporate action) as nearly equivalent as possible to the
      adjustments provided for elsewhere in this Section 4, and the Warrant Price
      shall be adjusted to equal the product of (A) the closing price of the common
      stock of the continuing or surviving corporation as a result of such Triggering
      Event as of the date immediately preceding the date of the consummation of
      such
      Triggering Event multiplied by (B) the quotient of (i) the Warrant Price divided
      by (ii) the Per Share Market Value of the Common Stock as of the date
      immediately preceding the Original Issue Date; provided,
      however,
      the
      Holder at its option may elect to receive an amount in cash equal to the value
      of this Warrant calculated in accordance with the Black-Scholes formula.
      Immediately upon the occurrence of a Triggering Event, the Issuer shall notify
      the Holder in writing of such Triggering Event and provide the calculations
      in
      determining the number of shares of Warrant Stock issuable upon exercise of
      the
      new warrant and the adjusted Warrant Price. Upon the Holder’s request, the
      continuing or surviving corporation as a result of such Triggering Event shall
      issue to the Holder a new warrant of like tenor evidencing the right to purchase
      the adjusted number of shares of Warrant Stock and the adjusted Warrant Price
      pursuant to the terms and provisions of this Section 4(a)(i). Notwithstanding
      the foregoing to the contrary, this Section 4(a)(i) shall only apply if the
      surviving entity pursuant to any such Triggering Event is a company that has
      a
      class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board. In the event that the
      surviving entity pursuant to any such Triggering Event is not a public company
      that is
      registered pursuant to the Securities Exchange Act of 1934, as amended, or
      its
      common stock is not listed or quoted on a national securities exchange, national
      automated quotation system or the OTC Bulletin Board, then the Holder shall
      have
      the right to demand that the Issuer pay to the Holder an amount in cash equal
      to
      the value of this Warrant calculated in accordance with the Black-Scholes
      formula.

    

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

       

    

    (ii) In
      the
      event that the Holder has elected not to exercise this Warrant prior to the
      consummation of a Triggering Event and has also elected not to receive an amount
      in cash equal to the value of this Warrant calculated in accordance with the
      Black-Scholes formula pursuant to the provisions of Section 4(a)(i) above,
      so
      long as the surviving entity pursuant to any Triggering Event is a company
      that
      has a class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board,
      the
      surviving entity and/or each Person (other than the Issuer) which may be
      required to deliver any Securities, cash or property upon the exercise of this
      Warrant as provided herein shall assume, by written instrument delivered to,
      and
      reasonably satisfactory to, the Holder of this Warrant, (A) the obligations
      of
      the Issuer under this Warrant (and if the Issuer shall survive the consummation
      of such Triggering Event, such assumption shall be in addition to, and shall
      not
      release the Issuer from, any continuing obligations of the Issuer under this
      Warrant) and (B) the obligation to deliver to such Holder such Securities,
      cash
      or property as, in accordance with the foregoing provisions of this subsection
      (a), such Holder shall be entitled to receive, and the surviving entity and/or
      each such Person shall have similarly delivered to such Holder an opinion of
      counsel for the surviving entity and/or each such Person, which counsel shall
      be
      reasonably satisfactory to such Holder, or in the alternative, a written
      acknowledgement executed by the President or Chief Financial Officer of the
      Issuer, stating that this Warrant shall thereafter continue in full force and
      effect and the terms hereof (including, without limitation, all of the
      provisions of this subsection (a)) shall be applicable to the Securities, cash
      or property which the surviving entity and/or each such Person may be required
      to deliver upon any exercise of this Warrant or the exercise of any rights
      pursuant hereto. 

    

    (b) Stock
      Dividends, Subdivisions and Combinations.
      If at
      any time the Issuer shall:

    

       (i) make
      or
      issue or set a record date for the holders of the Common Stock for the purpose
      of entitling them to receive a dividend payable in, or other distribution of,
      shares of Common Stock, 

    

       (ii)
       subdivide
      its outstanding shares of Common Stock into a larger number of shares of Common
      Stock, or

    

       (iii)
       combine
      its outstanding shares of Common Stock into a smaller number of shares of Common
      Stock,

    

    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      immediately after the occurrence of any such event shall be adjusted to equal
      the number of shares of Common Stock which a record holder of the same number
      of
      shares of Common Stock for which this Warrant is exercisable immediately prior
      to the occurrence of such event would own or be entitled to receive after the
      happening of such event, and (2) the Warrant Price then in effect shall be
      adjusted to equal (A) the Warrant Price then in effect multiplied by the number
      of shares of Common Stock for which this Warrant is exercisable immediately
      prior to the adjustment divided by (B) the number of shares of Common Stock
      for
      which this Warrant is exercisable immediately after such
      adjustment.

    

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

       

    

    (c) Certain
      Other Distributions.
      If at
      any time the Issuer shall make or issue or set a record date for the holders
      of
      the Common Stock for the purpose of entitling them to receive any dividend
      or
      other distribution of:

    

    (i) cash
      (other than a cash dividend payable out of earnings or earned surplus legally
      available for the payment of dividends under the laws of the jurisdiction of
      incorporation of the Issuer),

    

    (ii) any
      evidences of its indebtedness, any shares of stock of any class or any other
      securities or property of any nature whatsoever (other than cash, Common Stock
      Equivalents or Additional Shares of Common Stock), or

    

    (iii) any
      warrants or other rights to subscribe for or purchase any evidences of its
      indebtedness, any shares of stock of any class or any other securities or
      property of any nature whatsoever (other than cash, Common Stock Equivalents
      or
      Additional Shares of Common Stock), 

    

    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      shall
      be adjusted to equal the product of the number of shares of Common Stock for
      which this Warrant is exercisable immediately prior to such adjustment
      multiplied by a fraction (A) the numerator of which shall be the Per Share
      Market Value of Common Stock at the date of taking such record and (B) the
      denominator of which shall be such Per Share Market Value minus the amount
      allocable to one share of Common Stock of any such cash so distributable and
      of
      the fair value (as determined in good faith by the Board of Directors of the
      Issuer and supported by an opinion from an investment banking firm mutually
      agreed upon by the Issuer and the Holder) of any and all such evidences of
      indebtedness, shares of stock, other securities or property or warrants or
      other
      subscription or purchase rights so distributable, and (2) the Warrant Price
      then
      in effect shall be adjusted to equal (A) the Warrant Price then in effect
      multiplied by the number of shares of Common Stock for which this Warrant is
      exercisable immediately prior to the adjustment divided by (B) the number of
      shares of Common Stock for which this Warrant is exercisable immediately after
      such adjustment. A reclassification of the Common Stock (other than a change
      in
      par value, or from par value to no par value or from no par value to par value)
      into shares of Common Stock and shares of any other class of stock shall be
      deemed a distribution by the Issuer to the holders of its Common Stock of such
      shares of such other class of stock within the meaning of this Section 4(c)
      and,
      if the outstanding shares of Common Stock shall be changed into a larger or
      smaller number of shares of Common Stock as a part of such reclassification,
      such change shall be deemed a subdivision or combination, as the case may be,
      of
      the outstanding shares of Common Stock within the meaning of Section
      4(b). 

    

    (d) Issuance
      of Additional Shares of Common Stock.
      For a
      period of two (2) years following the Original Issue Date, in the event the
      Issuer shall issue any Additional Shares of Common Stock (otherwise than as
      provided in the foregoing subsections (a) through (c) of this Section 4), at
      a
      price per share less than the Warrant Price then in effect or without
      consideration, then the Warrant Price upon each such issuance shall be adjusted
      to the price equal to the consideration per share paid for such Additional
      Shares of Common Stock.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

       

    

    (e)  Issuance
      of Common Stock Equivalents.
      For a
      period of two (2) years following the Original Issue Date, in the event the
      Issuer shall take a record of the holders of its Common Stock for the purpose
      of
      entitling them to receive a distribution of, or shall in any manner (whether
      directly or by assumption in a merger in which the Issuer is the surviving
      corporation) issue or sell, any Common Stock Equivalents, whether or not the
      rights to exchange or convert thereunder are immediately exercisable, and the
      price per share for which Common Stock is issuable upon such conversion or
      exchange shall be less than the Warrant Price in effect immediately prior to
      the
      time of such issue or sale, or if, after any such issuance of Common Stock
      Equivalents, the price per share for which Additional Shares of Common Stock
      may
      be issuable thereafter is amended or adjusted, and such price as so amended
      shall be less than the Warrant Price in effect at the time of such amendment
      or
      adjustment, then the Warrant Price then in effect shall be adjusted as provided
      in Section 4(d). No further adjustments of the number of shares of Common Stock
      for which this Warrant is exercisable and the Warrant Price then in effect
      shall
      be made upon the actual issue of such Common Stock upon conversion or exchange
      of such Common Stock Equivalents.

    

    (f) Superseding
      Adjustment.
      If, at
      any time after any adjustment of the Warrant Price then in effect shall have
      been made pursuant to Section 4(e)(i) as the result of any issuance of Common
      Stock Equivalents, and such Common Stock Equivalents, or the right of conversion
      or exchange in such Common Stock Equivalents, shall expire, and all of such
      or
      the right of conversion or exchange with respect to all of such Common Stock
      Equivalents shall not have been converted or exercised, then such previous
      adjustment shall be rescinded and annulled and the Warrant Price then in effect
      shall be adjusted to the Warrant Price in effect immediately prior to the
      issuance of such Common Stock Equivalents, subject to any further adjustments
      pursuant to this Section 4.

    

    (g) Other
      Provisions applicable to Adjustments under this Section.
      The
      following provisions shall be applicable to the making of adjustments of the
      number of shares of Common Stock for which this Warrant is exercisable and
      the
      Warrant Price then in effect provided for in this Section 4:

    

    (i) Computation
      of Consideration.
      To the
      extent that any Additional Shares of Common Stock or any Common Stock
      Equivalents (or any warrants or other rights therefor) shall be issued for
      cash
      consideration, the consideration received by the Issuer therefor shall be the
      amount of the cash received by the Issuer therefor, or, if such Additional
      Shares of Common Stock or Common Stock Equivalents are offered by the Issuer
      for
      subscription, the subscription price, or, if such Additional Shares of Common
      Stock or Common Stock Equivalents are sold to underwriters or dealers for public
      offering without a subscription offering, the initial public offering price
      (in
      any such case subtracting any amounts paid or receivable for accrued interest
      or
      accrued dividends and without taking into account any compensation, discounts
      or
      expenses paid or incurred by the Issuer for and in the underwriting of, or
      otherwise in connection with, the issuance thereof). In connection with any
      merger or consolidation in which the Issuer is the surviving corporation (other
      than any consolidation or merger in which the previously outstanding shares
      of
      Common Stock of the Issuer shall be changed to or exchanged for the stock or
      other securities of another corporation), the amount of consideration therefore
      shall be, deemed to be the fair value, as determined reasonably and in good
      faith by the Board, of such portion of the assets and business of the
      nonsurviving corporation as the Board may determine to be attributable to such
      shares of Common Stock or Common Stock Equivalents, as the case may be. The
      consideration for any Additional Shares of Common Stock issuable pursuant to
      any
      warrants or other rights to subscribe for or purchase the same shall be the
      consideration received by the Issuer for issuing such warrants or other rights
      plus the additional consideration payable to the Issuer upon exercise of such
      warrants or other rights. The consideration for any Additional Shares of Common
      Stock issuable pursuant to the terms of any Common Stock Equivalents shall
      be
      the consideration received by the Issuer for issuing warrants or other rights
      to
      subscribe for or purchase such Common Stock Equivalents, plus the consideration
      paid or payable to the Issuer in respect of the subscription for or purchase
      of
      such Common Stock Equivalents, plus the additional consideration, if any,
      payable to the Issuer upon the exercise of the right of conversion or exchange
      in such Common Stock Equivalents. In the event of any consolidation or merger
      of
      the Issuer in which the Issuer is not the surviving corporation or in which
      the
      previously outstanding shares of Common Stock of the Issuer shall be changed
      into or exchanged for the stock or other securities of another corporation,
      or
      in the event of any sale of all or substantially all of the assets of the Issuer
      for stock or other securities of any corporation, the Issuer shall be deemed
      to
      have issued a number of shares of its Common Stock for stock or securities
      or
      other property of the other corporation computed on the basis of the actual
      exchange ratio on which the transaction was predicated, and for a consideration
      equal to the fair market value on the date of such transaction of all such
      stock
      or securities or other property of the other corporation. In the event any
      consideration received by the Issuer for any securities consists of property
      other than cash, the fair market value thereof at the time of issuance or as
      otherwise applicable shall be as determined in good faith by the Board. In
      the
      event Common Stock is issued with other shares or securities or other assets
      of
      the Issuer for consideration which covers both, the consideration computed
      as
      provided in this Section 4(g)(i) shall be allocated among such securities and
      assets as determined in good faith by the Board.

    

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

       

    

    (ii) When
      Adjustments to Be Made.
      The
      adjustments required by this Section 4 shall be made whenever and as often
      as
      any specified event requiring an adjustment shall occur, except that any
      adjustment of the number of shares of Common Stock for which this Warrant is
      exercisable that would otherwise be required may be postponed (except in the
      case of a subdivision or combination of shares of the Common Stock, as provided
      for in Section 4(b)) up to, but not beyond the date of exercise if such
      adjustment either by itself or with other adjustments not previously made adds
      or subtracts less than one percent (1%) of the shares of Common Stock for which
      this Warrant is exercisable immediately prior to the making of such adjustment.
      Any adjustment representing a change of less than such minimum amount (except
      as
      aforesaid) which is postponed shall be carried forward and made as soon as
      such
      adjustment, together with other adjustments required by this Section 4 and
      not
      previously made, would result in a minimum adjustment or on the date of
      exercise. For the purpose of any adjustment, any specified event shall be deemed
      to have occurred at the close of business on the date of its
      occurrence.

    

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

       

    

    (iii) Fractional
      Interests.
      In
      computing adjustments under this Section 4, fractional interests in Common
      Stock
      shall be taken into account to the nearest one one-hundredth (1/100th)
      of a
      share.

    

    (iv) When
      Adjustment Not Required.
      If the
      Issuer shall take a record of the holders of its Common Stock for the purpose
      of
      entitling them to receive a dividend or distribution or subscription or purchase
      rights and shall, thereafter and before the distribution to stockholders
      thereof, legally abandon its plan to pay or deliver such dividend, distribution,
      subscription or purchase rights, then thereafter no adjustment shall be required
      by reason of the taking of such record and any such adjustment previously made
      in respect thereof shall be rescinded and annulled.

     

    (h) Form
      of Warrant after Adjustments.
      The
      form of this Warrant need not be changed because of any adjustments in the
      Warrant Price or the number and kind of Securities purchasable upon the exercise
      of this Warrant.

    

    (i) Escrow
      of Warrant Stock.
      If
      after any property becomes distributable pursuant to this Section 4 by reason
      of
      the taking of any record of the holders of Common Stock, but prior to the
      occurrence of the event for which such record is taken, and the Holder exercises
      this Warrant, any shares of Common Stock issuable upon exercise by reason of
      such adjustment shall be deemed the last shares of Common Stock for which this
      Warrant is exercised (notwithstanding any other provision to the contrary
      herein) and such shares or other property shall be held in escrow for the Holder
      by the Issuer to be issued to the Holder upon and to the extent that the event
      actually takes place, upon payment of the current Warrant Price. Notwithstanding
      any other provision to the contrary herein, if the event for which such record
      was taken fails to occur or is rescinded, then such escrowed shares shall be
      cancelled by the Issuer and escrowed property returned.

    

    5. Notice
      of Adjustments.
      Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant
      to
      Section 4 hereof (for purposes of this Section 5, each an "adjustment"),
      the
      Issuer shall cause its Chief Financial Officer to prepare and execute a
      certificate setting forth, in reasonable detail, the event requiring the
      adjustment, the amount of the adjustment, the method by which such adjustment
      was calculated (including a description of the basis on which the Board made
      any
      determination hereunder), and the Warrant Price and Warrant Share Number after
      giving effect to such adjustment, and shall cause copies of such certificate
      to
      be delivered to the Holder of this Warrant promptly after each adjustment.
      Any
      dispute between the Issuer and the Holder of this Warrant with respect to the
      matters set forth in such certificate may at the option of the Holder of this
      Warrant be submitted to a national or regional accounting firm reasonably
      acceptable to the Issuer and the Holder, provided
      that the
      Issuer shall have ten (10) days after receipt of notice from such Holder of
      its
      selection of such firm to object thereto, in which case such Holder shall select
      another such firm and the Issuer shall have no such right of objection. The
      firm
      selected by the Holder of this Warrant as provided in the preceding sentence
      shall be instructed to deliver a written opinion as to such matters to the
      Issuer and such Holder within thirty (30) days after submission to it of such
      dispute. Such opinion shall be final and binding on the parties hereto. The
      costs and expenses of the initial accounting firm shall be paid equally by
      the
      Issuer and the Holder and, in the case of an objection by the Issuer, the costs
      and expenses of the subsequent accounting firm shall be paid in full by the
      Issuer.

    

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

       

    

    6. Fractional
      Shares.
      No
      fractional shares of Warrant Stock will be issued in connection with any
      exercise hereof, but in lieu of such fractional shares, the Issuer shall make
      a
      cash payment therefor equal in amount to the product of the applicable fraction
      multiplied by the Per Share Market Value then in effect.

    

    7. Ownership
      Cap and Exercise Restriction.
      Notwithstanding anything to the contrary set forth in this Warrant, at no time
      may a Holder of this Warrant exercise this Warrant if the number of shares
      of
      Common Stock to be issued pursuant to such exercise would exceed, when
      aggregated with all other shares of Common Stock owned by such Holder at such
      time, the number of shares of Common Stock which would result in such Holder
      beneficially owning (as determined in accordance with Section 13(d) of the
      Exchange Act and the rules thereunder) in excess of 9.9% of the then issued
      and
      outstanding shares of Common Stock; provided,
      however,
      that
      upon the Holder of this Warrant providing the Issuer with sixty-one (61) days
      notice (pursuant to Section 13 hereof) (the "Waiver
      Notice")
      that
      such Holder would like to waive this Section 7 with regard to any or all shares
      of Common Stock issuable upon exercise of this Warrant, this Section 7 will
      be
      of no force or effect with regard to all or a portion of the Warrant referenced
      in the Waiver Notice; provided,
      further,
      that
      this provision shall be of no further force or effect during the sixty-one
      (61)
      days immediately preceding the expiration of the term of this
      Warrant.

    

    8. Registration
      Rights.
      The
      Holder of this Warrant is entitled to the benefit of certain registration rights
      with respect to the shares of Warrant Stock issuable upon the exercise of this
      Warrant pursuant to that certain Registration Rights Agreement, of even date
      herewith, by and among the Company and Persons listed on Schedule I thereto
      (the
“Registration
      Rights Agreement”)
      and
      the registration rights with respect to the shares of Warrant Stock issuable
      upon the exercise of this Warrant by any subsequent Holder may only be assigned
      in accordance with the terms and provisions of the Registrations Rights
      Agreement.

    

    9. Definitions.
      For the
      purposes of this Warrant, the following terms have the following
      meanings:

    

    "Additional
      Shares of Common Stock"
      means
      all shares of Common Stock issued by the Issuer after the Original Issue Date,
      and all shares of Other Common, if any, issued by the Issuer after the Original
      Issue Date, except: (i) securities issued (other than for cash) in connection
      with a merger, acquisition, or consolidation, (ii) securities issued pursuant
      to
      the conversion or exercise of convertible or exercisable securities issued
      or
      outstanding on or prior to the date of the Purchase Agreement or issued pursuant
      to the Purchase Agreement (so long as the conversion or exercise price in such
      securities are not amended to lower such price and/or adversely affect the
      Holders), (iii) the Warrant Stock, (iv) securities issued in connection with
      bona fide strategic license agreements or other partnering arrangements so
      long
      as such issuances are not for the purpose of raising capital, (v) Common Stock
      issued or the issuance or grants of options to purchase Common Stock pursuant
      to
      the Issuer’s equity incentive plans outstanding as they exist on the date of the
      Purchase Agreement, (vi) the issuance or grants of options to purchase Common
      Stock to employees, officers or directors of the Issuer pursuant to any equity
      incentive plan duly adopted by the Board or a committee thereof established
      for
      such purpose so long as such issuances in the aggregate do not exceed ten
      percent (10)% of the issued and outstanding shares of Common Stock as of the
      Original Issue Date and the specified price at which the options may be
      exercised is equal to or greater than the Per Share Market Value as of the
      date
      of such grant, and (vii) any warrants, shares of Common Stock or other
      securities issued to a placement agent and its designees for the transactions
      contemplated by the Purchase Agreement or in any other sales of the Issuer’s
      securities and any securities issued in connection with any financial advisory
      agreements of the Issuer and the shares of Common Stock issued upon exercise
      of
      any such warrants or conversions of any such other securities.

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

       

    

    "Articles
      of Incorporation"
      means
      the Articles of Incorporation of the Issuer as in effect on the Original Issue
      Date, and as hereafter from time to time amended, modified, supplemented or
      restated in accordance with the terms hereof and thereof and pursuant to
      applicable law. 

    

    “Board"
      shall
      mean the Board of Directors of the Issuer.

    

    "Capital
      Stock"
      means
      and includes (i) any and all shares, interests, participations or other
      equivalents of or interests in (however designated) corporate stock, including,
      without limitation, shares of preferred or preference stock, (ii) all
      partnership interests (whether general or limited) in any Person which is a
      partnership, (iii) all membership interests or limited liability company
      interests in any limited liability company, and (iv) all equity or ownership
      interests in any Person of any other type.

    

    "Common
      Stock"
      means
      the Common Stock, $0.0001 par value per share, of the Issuer and any other
      Capital Stock into which such stock may hereafter be changed.

    

    "Common
      Stock Equivalent"
      means
      any Convertible Security or warrant, option or other right to subscribe for
      or
      purchase any Additional Shares of Common Stock or any Convertible
      Security.

    

    "Convertible
      Securities"
      means
      evidences of Indebtedness, shares of Capital Stock or other Securities which
      are
      or may be at any time convertible into or exchangeable for Additional Shares
      of
      Common Stock. The term "Convertible Security" means one of the Convertible
      Securities.

    

    "Governmental
      Authority"
      means
      any governmental, regulatory or self-regulatory entity, department, body,
      official, authority, commission, board, agency or instrumentality, whether
      federal, state or local, and whether domestic or foreign.

    

    "Holder"
      means
      1st
      BridgeHouse Securities, LLC or its registered assigns.

    

    "Independent
      Appraiser"
      means a
      nationally recognized or major regional investment banking firm or firm of
      independent certified public accountants of recognized standing (which may
      be
      the firm that regularly examines the financial statements of the Issuer) that
      is
      regularly engaged in the business of appraising the Capital Stock or assets
      of
      corporations or other entities as going concerns, and which is not affiliated
      with either the Issuer or the Holder of any Warrant.

    

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

       

    

    "Issuer"
      means
      United National Film Corporation, a Nevada corporation, and its successors.
      

    

    "Majority
      Holders"
      means
      at any time the Holders of Warrants exercisable for a majority of the shares
      of
      Warrant Stock issuable under the Warrants at the time outstanding.

    

    "Original
      Issue Date"
      means
      February 7, 2007.

    

    "OTC
      Bulletin Board"
      means
      the over-the-counter electronic bulletin board.

    

    "Other
      Common"
      means
      any other Capital Stock of the Issuer of any class which shall be authorized
      at
      any time after the date of this Warrant (other than Common Stock) and which
      shall have the right to participate in the distribution of earnings and assets
      of the Issuer without limitation as to amount.

    

    “Outstanding
      Common Stock”
means,
      at any given time, the aggregate amount of outstanding shares of Common Stock,
      assuming full exercise, conversion or exchange (as applicable) of all options,
      warrants and other Securities which are convertible into or exercisable or
      exchangeable for, and any right to subscribe for, shares of Common Stock that
      are outstanding at such time.

    

    "Person"
      means
      an individual, corporation, limited liability company, partnership, joint stock
      company, trust, unincorporated organization, joint venture, Governmental
      Authority or other entity of whatever nature.

    

    "Per
      Share Market Value"
      means
      on any particular date (a) the last closing bid price per share of the Common
      Stock on such date on the OTC
      Bulletin Board or
      another registered national stock exchange on which the Common Stock is then
      listed, or if there is no such price on such date, then the closing bid price
      on
      such exchange or quotation system on the date nearest preceding such date,
      or
      (b) if the Common Stock is not listed then on the OTC Bulletin Board or any
      registered national stock exchange, the last closing bid price for a share
      of
      Common Stock in the over-the-counter market, as reported by the OTC Bulletin
      Board or in the National Quotation Bureau Incorporated or similar organization
      or agency succeeding to its functions of reporting prices) at the close of
      business on such date, or (c) if the Common Stock is not then reported by the
      OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar
      organization or agency succeeding to its functions of reporting prices), then
      the average of the "Pink Sheet" quotes for the five (5) Trading Days preceding
      such date of determination, or (d) if the Common Stock is not then publicly
      traded the fair market value of a share of Common Stock as determined by an
      Independent Appraiser selected in good faith by the Majority Holders;
provided,
      however,
      that
      the Issuer, after receipt of the determination by such Independent Appraiser,
      shall have the right to select an additional Independent Appraiser, in which
      case, the fair market value shall be equal to the average of the determinations
      by each such Independent Appraiser; and provided,
      further
      that all
      determinations of the Per Share Market Value shall be appropriately adjusted
      for
      any stock dividends, stock splits or other similar transactions during such
      period. The determination of fair market value by an Independent Appraiser
      shall
      be based upon the fair market value of the Issuer determined on a going concern
      basis as between a willing buyer and a willing seller and taking into account
      all relevant factors determinative of value, and shall be final and binding
      on
      all parties. In determining the fair market value of any shares of Common Stock,
      no consideration shall be given to any restrictions on transfer of the Common
      Stock imposed by agreement or by federal or state securities laws, or to the
      existence or absence of, or any limitations on, voting rights.

    

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

       

    

    "Purchase
      Agreement"
      means
      the Series A Convertible Preferred Stock Purchase Agreement dated as of February
      7, 2007, among the Issuer and the purchasers listed on Exhibit
      A
      thereto.

    

    "Securities"
      means
      any debt or equity securities of the Issuer, whether now or hereafter
      authorized, any instrument convertible into or exchangeable for Securities
      or a
      Security, and any option, warrant or other right to purchase or acquire any
      Security. "Security" means one of the Securities.

    

    "Securities
      Act"
      means
      the Securities Act of 1933, as amended, or any similar federal statute then
      in
      effect.

    

    "Subsidiary"
      means
      any corporation at least 50% of whose outstanding Voting Stock shall at the
      time
      be owned directly or indirectly by the Issuer or by one or more of its
      Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

    

    "Term"
      has the
      meaning specified in Section 1 hereof.

    

    "Trading
      Day"
      means
      (a) a day on which the Common Stock is traded on the OTC Bulletin Board, or
      (b)
      if the Common Stock is not traded on the OTC Bulletin Board, a day on which
      the
      Common Stock is quoted in the over-the-counter market as reported by National
      Quotation Bureau Incorporated (or any similar organization or agency succeeding
      its functions of reporting prices); provided,
      however,
      that in
      the event that the Common Stock is not listed or quoted as set forth in (a)
      or
      (b) hereof, then Trading Day shall mean any day except Saturday, Sunday and
      any
      day which shall be a legal holiday or a day on which banking institutions in
      the
      State of New York are authorized or required by law or other government action
      to close.

    

    "Voting
      Stock"
      means,
      as applied to the Capital Stock of any corporation, Capital Stock of any class
      or classes (however designated) having ordinary voting power for the election
      of
      a majority of the members of the Board of Directors (or other governing body)
      of
      such corporation, other than Capital Stock having such power only by reason
      of
      the happening of a contingency.

    

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

       

    

    "Warrants"
      means
      the Series JJ Warrant issued to 1st
      BridgeHouse Securities, LLC on February 7, 2007, and any other warrants of
      like
      tenor issued in substitution or exchange for any thereof pursuant to the
      provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other
      Warrants.

    

    "Warrant
      Price"
      initially means $2.57, as such price may be adjusted from time to time as shall
      result from the adjustments specified in this Warrant, including Section 4
      hereto.

    

    "Warrant
      Share Number"
      means
      at any time the aggregate number of shares of Warrant Stock which may at such
      time be purchased upon exercise of this Warrant, after giving effect to all
      prior adjustments and increases to such number made or required to be made
      under
      the terms hereof.

    

    "Warrant
      Stock"
      means
      Common Stock issuable upon exercise of any Warrant or Warrants or otherwise
      issuable pursuant to any Warrant or Warrants.

    

    10. Other
      Notices.
      In case
      at any time:

    

    
      	 	
              (A)

            	
              the
                Issuer shall make any distributions to the holders of Common Stock;
                or

            

    

    

    
      	 	
              (B)

            	
              the
                Issuer shall authorize the granting to all holders of its Common
                Stock of
                rights to subscribe for or purchase any shares of Capital Stock of
                any
                class or other rights; or

            

    

    

    
      	 	
              (C)

            	
              there
                shall be any reclassification of the Capital Stock of the Issuer;
                or

            

    

    

    
      	 	
              (D)

            	
              there
                shall be any capital reorganization by the Issuer;
                or

            

    

    

    
      	 	
              (E)

            	
              there
                shall be any (i) consolidation or merger involving the Issuer or
                (ii)
                sale, transfer or other disposition of all or substantially all of
                the
                Issuer's property, assets or business (except a merger or other
                reorganization in which the Issuer shall be the surviving corporation
                and
                its shares of Capital Stock shall continue to be outstanding and
                unchanged
                and except a consolidation, merger, sale, transfer or other disposition
                involving a wholly-owned Subsidiary);
                or

            

    

    

    
      	 	
              (F)

            	
              there
                shall be a voluntary or involuntary dissolution, liquidation or winding-up
                of the Issuer or any partial liquidation of the Issuer or distribution
                to
                holders of Common Stock;

            

    

    

    then,
      in
      each of such cases, the Issuer shall give written notice to the Holder of the
      date on which (i) the books of the Issuer shall close or a record shall be
      taken
      for such dividend, distribution or subscription rights or (ii) such
      reorganization, reclassification, consolidation, merger, disposition,
      dissolution, liquidation or winding-up, as the case may be, shall take place.
      Such notice also shall specify the date as of which the holders of Common Stock
      of record shall participate in such dividend, distribution or subscription
      rights, or shall be entitled to exchange their certificates for Common Stock
      for
      securities or other property deliverable upon such reorganization,
      reclassification, consolidation, merger, disposition, dissolution, liquidation
      or winding-up, as the case may be. Such notice shall be given at least twenty
      (20) days prior to the action in question and not less than ten (10) days prior
      to the record date or the date on which the Issuer's transfer books are closed
      in respect thereto. This Warrant entitles the Holder to receive copies of all
      financial and other information distributed or required to be distributed to
      the
      holders of the Common Stock.

    

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

       

    

    11. Amendment
      and Waiver.
      Any
      term, covenant, agreement or condition in this Warrant may be amended, or
      compliance therewith may be waived (either generally or in a particular instance
      and either retroactively or prospectively), by a written instrument or written
      instruments executed by the Issuer and the Majority Holders; provided,
      however,
      that no
      such amendment or waiver shall reduce the Warrant Share Number, increase the
      Warrant Price, shorten the period during which this Warrant may be exercised
      or
      modify any provision of this Section 11 without the consent of the Holder of
      this Warrant. No consideration shall be offered or paid to any person to amend
      or consent to a waiver or modification of any provision of this Warrant unless
      the same consideration is also offered to all Holders of the
      Warrants.

    

    12. Governing
      Law; Jurisdiction.
      This
      Warrant shall be governed by and construed in accordance with the internal
      laws
      of the State of New York, without giving effect to any of the conflicts of
      law
      principles which would result in the application of the substantive law of
      another jurisdiction. This Warrant shall not be interpreted or construed with
      any presumption against the party causing this Warrant to be drafted. The Issuer
      and the Holder agree that venue for any dispute arising under this Warrant
      will
      lie exclusively in the state or federal courts located in New York County,
      New
      York, and the parties irrevocably waive any right to raise forum
      non conveniens
      or any
      other argument that New York is not the proper venue. The Issuer and the Holder
      irrevocably consent to personal jurisdiction in the state and federal courts
      of
      the state of New York. The Issuer and the Holder consent to process being served
      in any such suit, action or proceeding by mailing a copy thereof to such party
      at the address in effect for notices to it under this Warrant and agree that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing in this Section 12 shall affect or limit any right to serve
      process in any other manner permitted by law. The Issuer and the Holder hereby
      agree that the prevailing party in any suit, action or proceeding arising out
      of
      or relating to this Warrant, shall be entitled to reimbursement for reasonable
      legal fees from the non-prevailing party. The parties hereby waive all rights
      to
      a trial by jury.

    

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

       

    

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

     

    
      	If to the Issuer:	 	
              United National Film Corporation 

              
                Canglongdao
                  Science Park of Wuhan 

                East
                  Lake Hi-Tech Development Zone

                Wuhan,
                  Hubei 430200

                People’s
                  Republic of China

                Attention:
                  Xu Jie

                Tel.
                  No.: (86) 138 7113 6999

                Fax
                  No.: (86) 027 5970 0010

              

            
	 	 	 
	
              with
                copies (which copies 

              shall
                not constitute notice) 

              to:

            	 	
               

               

              Troutman Sanders LLP

              
                The
                  Chrysler Building

                405
                  Lexington Avenue

                New
                  York, New York 10174

                Attention:
                  Henry I. Rothman, Esq.

                Tel.
                  No.: (212) 704-6179 

                Fax
                  No.: (212) 704-5950

              

            
	 	 	 
	If to the Holder:	 	
              1st
                BridgeHouse Securities, LLC

              
                161
                  Spring House Road

                Fairfield,
                  Connecticut 06824

                Attention:
                  John H. Starr

                Tel.
                  No.: (203) 209-6351

                Fax
                  No.: (203) 259-4919

              

            

    

     

    Any
      party
      hereto may from time to time change its address for notices by giving written
      notice of such changed address to the other party hereto.

     

    14. Warrant
      Agent.
      The
      Issuer may, by written notice to the Holder of this Warrant, appoint an agent
      having an office in New York, New York for the purpose of issuing shares of
      Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of
      Section 2 hereof, exchanging this Warrant pursuant to subsection (d) of Section
      2 hereof or replacing this Warrant pursuant to subsection (d) of Section 3
      hereof, or any of the foregoing, and thereafter any such issuance, exchange
      or
      replacement, as the case may be, shall be made at such office by such
      agent.

    

    15. Remedies.
      The
      Issuer stipulates that the remedies at law of the Holder of this Warrant in
      the
      event of any default or threatened default by the Issuer in the performance
      of
      or compliance with any of the terms of this Warrant are not and will not be
      adequate and that, to the fullest extent permitted by law, such terms may be
      specifically enforced by a decree for the specific performance of any agreement
      contained herein or by an injunction against a violation of any of the terms
      hereof or otherwise.

    

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

       

    

    16. Successors
      and Assigns.
      This
      Warrant and the rights evidenced hereby shall inure to the benefit of and be
      binding upon the successors and assigns of the Issuer, the Holder hereof and
      (to
      the extent provided herein) the holders of Warrant Stock issued pursuant hereto,
      and shall be enforceable by the Holder or any holder of Warrant
      Stock.

    

    17. Modification
      and Severability.
      If, in
      any action before any court or agency legally empowered to enforce any provision
      contained herein, any provision hereof is found to be unenforceable, then such
      provision shall be deemed modified to the extent necessary to make it
      enforceable by such court or agency. If any such provision is not enforceable
      as
      set forth in the preceding sentence, the unenforceability of such provision
      shall not affect the other provisions of this Warrant, but this Warrant shall
      be
      construed as if such unenforceable provision had never been contained
      herein.

    

    18. Headings.
      The
      headings of the Sections of this Warrant are for convenience of reference only
      and shall not, for any purpose, be deemed a part of this Warrant.

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the Issuer has executed this Series JJ Warrant as of the day
      and year first above written.

     

    
      	 	 	 
	 	UNITED
              NATIONAL
              FILM CORPORATION
	 
 	 
 	 
 
	
            	By:  	/s/
              Xu
              Jie 
	 	
              
Name: Xu
              Jie
	 	Title: President
              and Chief Executive Officer

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

    EXERCISE
      FORM

    SERIES
      JJ
      WARRANT

    

    UNITED
      NATIONAL FILM CORPORATION

    

    The
      undersigned _______________, pursuant to the provisions of the within Warrant,
      hereby elects to purchase _____ shares of Common Stock of United National Film
      Corporation covered by the within Warrant.

     

    
      	Dated: _________________	 	Signature	 	___________________________
	 	 	 	 	 
	 	 	Address	 	___________________________
	 	 	 	 	___________________________

    

     

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

    

    The
      undersigned is an “accredited investor” as defined in Regulation D under the
      Securities Act of 1933, as amended.

     

    The
      undersigned intends that payment of the Warrant Price shall be made as (check
      one): 

     

    Cash
      Exercise_______ 

     

    Cashless
      Exercise_______

     

    If
      the
      Holder has elected a Cash Exercise, the Holder shall pay the sum of $________
      by
      certified or official bank check (or via wire transfer) to the Issuer in
      accordance with the terms of the Warrant. 

     

    If
      the
      Holder has elected a Cashless Exercise, a certificate shall be issued to the
      Holder for the number of shares equal to the whole number portion of the product
      of the calculation set forth below, which is ___________. The Company shall
      pay
      a cash adjustment in respect of the fractional portion of the product of the
      calculation set forth below in an amount equal to the product of the fractional
      portion of such product and the Per Share Market Value on the date of exercise,
      which product is ____________.

     

    X
      = Y -
(A)(Y)

      
      B

    

    Where: 

    

    The
      number of shares of Common Stock to be issued to the Holder
      __________________(“X”).

    

    The
      number of shares of Common Stock purchasable upon exercise of all of the Warrant
      or, if only a portion of the Warrant is being exercised, the portion of the
      Warrant being exercised ___________________________ (“Y”). 

     

    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

     

    The
      Warrant Price ______________ (“A”). 

    

    The
      Per
      Share Market Value of one shares of Common Stock _______________________
      (“B”).

    

    

    ASSIGNMENT

    

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

    
       

      
        	Dated: _________________	 	Signature	 	___________________________
	 	 	 	 	 
	 	 	Address	 	___________________________
	 	 	 	 	___________________________

      

       

    

    PARTIAL
      ASSIGNMENT

    

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

    
       

      
        	Dated: _________________	 	Signature	 	___________________________
	 	 	 	 	 
	 	 	Address	 	___________________________
	 	 	 	 	___________________________

      

       

    

    FOR
      USE
      BY THE ISSUER ONLY:

    

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

    

    
      
         

      

      
        -23-Exhibit
        10.1

    

     

    SERIES
      A CONVERTIBLE PREFERRED STOCK PURCHASE

     

    AGREEMENT

     

    Dated
      as of February 7, 2007

     

    among

     

    UNITED
      NATIONAL FILM CORPORATION

     

    and

     

    THE
      PURCHASERS LISTED ON EXHIBIT A

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    

      
        	 	 	
                PAGE

              
	
                ARTICLE
                  I Purchase and Sale of Preferred Stock

              	 	
                 1

              
	 	 	 	 
	
                Section
                  1.1

              	
                Purchase
                  and Sale of Stock

              	 	
                1

              
	
                Section
                  1.2

              	
                Warrants

              	 	
                1

              
	
                Section
                  1.3

              	
                Conversion
                  Shares

              	 	
                2

              
	
                Section
                  1.4

              	
                Purchase
                  Price and Closing

              	 	
                2

              
	
                Section
                  1.5

              	
                Share
                  Exchange Transaction

              	 	
                2

              
	 	 	 	 
	
                ARTICLE
                  II Representations and Warranties

              	 	
                3

              
	 	 	 
	
                Section
                  2.1

              	
                Representations
                  and Warranties of the Company

              	 	
                3

              
	
                Section
                  2.2

              	
                Representations
                  and Warranties of the Purchasers

              	 	
                13

              
	 	 	 
	
                ARTICLE
                  III Covenants

              	 	
                16

              
	 	 	 
	
                Section
                  3.1

              	
                Securities
                  Compliance

              	 	
                16

              
	
                Section
                  3.2

              	
                Registration
                  and Listing

              	 	
                16

              
	
                Section
                  3.3

              	
                Inspection
                  Rights

              	 	
                16

              
	
                Section
                  3.4

              	
                Compliance
                  with Laws

              	 	
                17

              
	
                Section
                  3.5

              	
                Keeping
                  of Records and Books of Account

              	 	
                17

              
	
                Section
                  3.6

              	
                Reporting
                  Requirements

              	 	
                17

              
	
                Section
                  3.7

              	
                Amendments

              	 	
                17

              
	
                Section
                  3.8

              	
                Other
                  Agreements.

              	 	
                17

              
	
                Section
                  3.9

              	
                Distributions.

              	 	
                17

              
	
                Section
                  3.10

              	
                Status
                  of Dividends

              	 	
                17

              
	
                Section
                  3.11

              	
                Use
                  of Proceeds

              	 	
                18

              
	
                Section
                  3.12

              	
                Reservation
                  of Shares

              	 	
                18

              
	
                Section
                  3.13

              	
                Transfer
                  Agent Instructions

              	 	
                19

              
	
                Section
                  3.14

              	
                Disposition
                  of Assets

              	 	
                19
                  

              
	
                Section
                  3.15

              	
                Reporting
                  Status

              	 	
                19
                  

              
	
                Section
                  3.16

              	
                Disclosure
                  of Transaction 

              	 	
                19
                  

              
	
                Section
                  3.17

              	
                Disclosure
                  of Material Information

              	 	
                19
                  

              
	
                Section
                  3.18

              	
                Pledge
                  of Securities

              	 	
                20

              
	
                Section
                  3.19

              	
                Form
                  SB-2 Eligibility

              	 	
                20

              
	
                Section
                  3.20

              	
                Lock-Up
                  Agreement

              	 	
                21

              
	
                Section
                  3.21

              	
                Investor
                  and Public Relations Firm

              	 	
                21

              
	
                Section
                  3.22

              	
                DTC

              	 	
                21

              
	
                Section
                  3.23

              	
                Subsequent
                  Financings

              	 	
                21

              
	
                Section
                  3.24

              	
                Sarbanes-Oxley
                  Act

              	 	
                23

              
	
                Section
                  3.25

              	
                Nasdaq

              	 	
                23

              
	
                Section
                  3.26

              	
                No
                  Commissions in connection with Conversion of Prefererd
                  Shares

              	 	
                23

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  IV Conditions

              	 	
                273

              
	 	 	 
	
                Section
                  4.1

              	
                Conditions
                  Precedent to the Obligation of the Company to Sell the
                  Shares

              	 	
                23

              
	
                Section
                  4.2

              	
                Conditions
                  Precedent to the Obligation of the Purchasers to Purchase the
                  Shares

              	 	
                24

              
	 	 	 
	
                ARTICLE
                  V Stock Certificate Legend

              	 	
                27

              
	 	 	 
	
                Section
                  5.1

              	
                Legend

              	 	
                27

              
	 	 	 
	
                ARTICLE
                  VI Indemnification

              	 	
                28

              
	 	 	 
	
                Section
                  6.1

              	
                General
                  Indemnity

              	 	
                28

              
	
                Section
                  6.2

              	
                Indemnification
                  Procedure

              	 	
                28

              
	 	 	 
	
                ARTICLE 
                  VII Miscellaneous

              	 	
                29

              
	 	 	 
	
                Section
                  7.1

              	
                Fees
                  and Expenses

              	 	
                29

              
	
                Section
                  7.2

              	
                Specific
                  Enforcement, Consent to Jurisdiction

              	 	
                29

              
	
                Section
                  7.3

              	
                Entire
                  Agreement; Amendment

              	 	
                30

              
	
                Section
                  7.4

              	
                Notices

              	 	
                30

              
	
                Section
                  7.5

              	
                Waivers

              	 	
                31

              
	
                Section
                  7.6

              	
                Headings

              	 	
                31

              
	
                Section
                  7.7

              	
                Successors
                  and Assigns

              	 	
                31

              
	
                Section
                  7.8

              	
                No
                  Third Party Beneficiaries

              	 	
                32

              
	
                Section
                  7.9

              	
                Governing
                  Law

              	 	
                32

              
	
                Section
                  7.10

              	
                Survival

              	 	
                32

              
	
                Section
                  7.11

              	
                Counterparts

              	 	
                32

              
	
                Section
                  7.12

              	
                Publicity

              	 	
                32

              
	
                Section
                  7.13

              	
                Severability

              	 	
                32

              
	
                Section
                  7.14

              	
                Further
                  Assurances

              	 	
                32

              

      

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    SERIES
      A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

     

    This
      SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the “Agreement”)
      is
      dated as of February 7, 2007 by and among United National Film Corporation,
      a
      Nevada corporation (the “Company”),
      and
      each of the Purchasers of shares of Series A Convertible Preferred Stock of
      the
      Company whose names are set forth on Exhibit
      A
      hereto
      (individually, a “Purchaser”
and
      collectively, the “Purchasers”).

    

    The
      parties hereto agree as follows:

     

    ARTICLE
      I

     

    Purchase
      and Sale of Preferred Stock

    

    Section
      1.1   Purchase
      and Sale of Stock.
      Upon
      the following terms and conditions, the Company shall issue and sell to the
      Purchasers and each of the Purchasers shall purchase from the Company, the
      number of shares of the Company’s Series A Convertible Preferred Stock, par
      value $0.0001 per share and at a purchase price of $2.33 per share (the
“Preferred
      Shares”),
      convertible into shares of the Company’s common stock, par value $0.0001 per
      share (the “Common
      Stock”),
      in
      the amounts set forth opposite such Purchaser’s name on Exhibit
      A
      hereto.
      The designation, rights, preferences and other terms and provisions of the
      Series A Convertible Preferred Stock are set forth in the Certificate of
      Designation of the Relative Rights and Preferences of the Series A Convertible
      Preferred Stock attached hereto as Exhibit
      B
      (the
“Certificate
      of Designation”).
      The
      Company and the Purchasers are executing and delivering this Agreement in
      accordance with and in reliance upon the exemption from securities registration
      afforded by Rule 506 of Regulation D (“Regulation
      D”)
      as
      promulgated by the United States Securities and Exchange Commission (the
“Commission”)
      under
      the Securities Act of 1933, as amended (the “Securities
      Act”)
      or
      Section 4(2) of the Securities Act. 

     

    Section
      1.2   Warrants.
      Upon
      the following terms and conditions and for no additional consideration, (i)
      each
      of the Purchasers shall be issued Series A Warrants, in substantially the form
      attached hereto as Exhibit
      C-1
      (the
“Series
      A Warrants”),
      to
      purchase the number of shares of Common Stock equal to sixty percent (60%)
      of
      the number of Preferred Shares purchased by each Purchaser pursuant to the
      terms
      of this Agreement, as set forth opposite such Purchaser’s name on Exhibit
      A
      hereto
      and (ii) provided that Vision Opportunity Master Fund, Ltd. (“Vision”),
      QVT
      Financial LP (“QVT”),
      Old
      Lane, L.P., on behalf of funds advised by it (“Old
      Lane”),
      Blue
      Ridge Investments, L.L.C. (“Blue
      Ridge”),
      TCW
      Americas Development Association LP (“TCW
      Americas”)
      each
      purchases Preferred Shares for a purchase price equal to or greater than
      $2,000,000 pursuant to the terms of this Agreement, Vision, QVT, Old Lane,
      Blue
      Ridge and TCW Americas shall each be issued (x) a Series J Warrant, in
      substantially the form attached hereto as Exhibit
      C-2
      (the
“Series
      J Warrant”),
      to
      purchase the number of shares of Common Stock equal to one hundred percent
      (100%) of the number of Preferred Shares purchased by such Purchaser, as set
      forth opposite such Purchaser’s name on Exhibit
      A
      hereto,
      and (y) a Series B Warrant, in substantially the form attached hereto as
Exhibit
      C-3
      (the
“Series
      B Warrant”
and,
      together with the Series A Warrants and the Series J Warrant, the “Warrants”),
      to
      purchase the number of shares of Common Stock equal to sixty percent (60%)
      of
      the number of shares of Common Stock purchased by Vision, QVT, Old Lane, Blue
      Ridge and TCW Americas pursuant to the Series J Warrant, as set forth opposite
      such Purchaser’s name on Exhibit
      A
      hereto.
      The Warrants shall expire five (5) years following the Closing Date, except
      for
      the Series J Warrants, which shall expire twenty-one (21) months following
      the
      Closing Date. Each of the Warrants shall have an exercise price per share equal
      to the Warrant Price (as defined in the applicable Warrant). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      1.3   Conversion
      Shares.
      The
      Company has authorized and has reserved and covenants to continue
      to reserve, free of preemptive rights and other similar contractual rights
      of
      stockholders, a number of shares of Common Stock equal to one hundred
fifty
      percent (150%) of the number of shares of Common Stock as shall from time to
      time be sufficient to effect the conversion of all of the Preferred Shares
      and
      exercise of the Warrants then outstanding. Any shares of Common Stock issuable
      upon conversion of the Preferred Shares and exercise of the Warrants (and such
      shares when issued) are herein referred to as the “Conversion
      Shares”
and
      the
“Warrant
      Shares”,
      respectively. The Preferred Shares, the Conversion Shares and the Warrant Shares
      are sometimes collectively referred to as the “Shares”.

     

    Section
      1.4   Purchase
      Price and Closing.
      Subject
      to the terms and conditions hereof, the Company agrees to issue and sell to
      the
      Purchasers and, in consideration of and in express reliance upon the
      representations, warranties, covenants, terms and conditions of this Agreement,
      the Purchasers, severally but not jointly, agree to purchase the Preferred
      Shares and the Warrants for an aggregate purchase price of up to $24,000,000
      (the “Purchase
      Price”).
      The
      closing of the purchase and sale of the Preferred Shares and the Warrants to
      be
      acquired by the Purchasers from the Company under this Agreement shall take
      place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of
      the Americas, New York, New York 10036 (the “Closing”)
      at
      10:00 a.m., New York time on such date as the Purchasers and the Company may
      agree upon; provided,
      that
      all of the conditions set forth in Article IV hereof and applicable to the
      Closing shall have been fulfilled or waived in accordance herewith (the
“Closing
      Date”).
      Subject to the terms and conditions of this Agreement, at the Closing the
      Company shall deliver or cause to be delivered to each Purchaser (x) a
      certificate for the number of Preferred Shares set forth opposite the name
      of
      such Purchaser on Exhibit
      A
      hereto,
      (y) its Warrants to purchase such number of shares of Common Stock as is set
      forth opposite the name of such Purchaser on Exhibit
      A
      attached
      hereto and (z) any other documents required to be delivered pursuant to Article
      IV hereof. At the Closing, each Purchaser shall deliver its Purchase Price
      by
      wire transfer to the escrow account pursuant to the Escrow Agreement (as
      hereafter defined). In addition, the parties acknowledge that Seven Hundred
      Fifty Thousand Dollars ($750,000) of the Purchase Price funded on the Closing
      Date shall be deposited in a separate escrow account with a separate escrow
      agent to be used by the Company in connection with investor and public relations
      and securities law compliance, including related legal fees and legal fees
      relating to minor post-closing corporate matters in the British Virgin Islands,
      in accordance with Section 3.21 hereof.

    

    Section
      1.5   Share
      Exchange Transaction.
      The
      parties acknowledge that immediately prior to the consummation of the
      transactions contemplated by this Agreement, the Company will issue shares
      of
      its Common Stock to the sole shareholder of Universe Faith Group Limited (the
      name of which will be changed to Wuhan Blower and Generating Equipment Co.,
      Ltd.) (“Wuhan
      Blower”),
      a
      company organized in the British Virgin Islands, pursuant to that certain Share
      Exchange Agreement dated as of the date hereof, and upon the consummation of
      the
      transactions contemplated by such Share Exchange Agreement, Wuhan Blower will
      become a wholly-owned subsidiary of the Company (the “Share
      Exchange Transaction”).

     

    
      
        
        

      

      
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    ARTICLE
      II

     

    Representations
      and Warranties

     

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

     

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

     

     

    (b)  Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and
      perform this Agreement, the Registration Rights Agreement in the form attached
      hereto as Exhibit
      D
      (the
“Registration
      Rights Agreement”),
      the
      Lock-Up Agreement (as defined in Section 3.20 hereof) in the form attached
      hereto as Exhibit
      E,
      the
      Escrow Deposit Agreement by and among the Company, the Purchasers and the escrow
      agent named therein, dated as of the date hereof, substantially in the form
      of
Exhibit
      F-1
      attached
      hereto (the “Escrow
      Deposit Agreement”),
      the
      Securities Escrow Agreement by and among the Company, the Purchasers and the
      escrow agent named therein, dated as of the date hereof, substantially in the
      form of Exhibit
      F-2
      attached
      hereto (the “Securities
      Escrow Agreement”
and
      together with the Escrow Deposit Agreement, the “Escrow
      Agreements”),
      the
      Irrevocable Transfer Agent Instructions (as defined in Section 3.13), the
      Certificate of Designation, and the Warrants (collectively, the “Transaction
      Documents”)
      and to
      issue and sell the Shares and the Warrants in accordance with the terms hereof.
      The execution, delivery and performance of the Transaction Documents by the
      Company and the consummation by it of the transactions contemplated hereby
      and
      thereby have been duly and validly authorized by all necessary corporate action,
      and no further consent or authorization of the Company or its Board of Directors
      or stockholders is required. This Agreement has been duly executed and delivered
      by the Company. The other Transaction Documents will have been duly executed
      and
      delivered by the Company at the Closing. Each of the Transaction Documents
      constitutes, or shall constitute when executed and delivered, a valid and
      binding obligation of the Company enforceable against the Company in accordance
      with its terms, except as such enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium, liquidation,
      conservatorship, receivership or similar laws relating to, or affecting
      generally the enforcement of, creditor’s rights and remedies or by other
      equitable principles of general application. 

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (c)  Capitalization.
      The
      authorized capital stock of the Company and the shares thereof currently issued
      and outstanding as of the date hereof are set forth on Schedule
      2.1(c)
      hereto.
      All of the outstanding shares of the Common Stock and the Preferred Shares
      have
      been duly and validly authorized. Except as set forth on Schedule
      2.1(c)
      hereto,
      no shares of Common Stock are entitled to preemptive rights or registration
      rights and there are no outstanding options, warrants, scrip, rights to
      subscribe to, call or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, any shares of capital stock of the
      Company. There are no contracts, commitments, understandings, or arrangements
      by
      which the Company is or may become bound to issue additional shares of the
      capital stock of the Company or options, securities or rights convertible into
      shares of capital stock of the Company. Except as set forth on Schedule
      2.1(c)
      hereto,
      the Company is not a party to any agreement granting registration or
      anti-dilution rights to any person with respect to any of its equity or debt
      securities. The Company is not a party to, and it has no knowledge of, any
      agreement restricting the voting or transfer of any shares of the capital stock
      of the Company. The offer and sale of all capital stock, convertible securities,
      rights, warrants, or options of the Company issued prior to the Closing complied
      with all applicable Federal and state securities laws, and no stockholder has
      a
      right of rescission or claim for damages with respect thereto which would have
      a
      Material Adverse Effect (as defined below). The Company has furnished or made
      available to the Purchasers true and correct copies of the Company’s Articles of
      Incorporation as in effect on the date hereof (the “Articles”),
      and
      the Company’s Bylaws as in effect on the date hereof (the “Bylaws”).
      For
      the purposes of this Agreement, “Material
      Adverse Effect”
means
      any material adverse effect on the business, operations, properties, prospects,
      or financial condition of the Company and its subsidiaries and/or any condition,
      circumstance, or situation that would prohibit or otherwise materially interfere
      with the ability of the Company to perform any of its obligations under this
      Agreement in any material respect.

     

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

     

    (e)  No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company,
      the performance by the Company of its obligations under the Certificate of
      Designation and the consummation by the Company of the transactions contemplated
      herein and therein do not and will not (i) violate any provision of the
      Company’s Articles or Bylaws, (ii) conflict with, or constitute a default (or an
      event which with notice or lapse of time or both would become a default) under,
      or give to others any rights of termination, amendment, acceleration or
      cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond,
      license, lease agreement, instrument or obligation to which the Company is
      a
      party or by which it or its properties or assets are bound, (iii) create or
      impose a lien, mortgage, security interest, charge or encumbrance of any nature
      on any property of the Company under any agreement or any commitment to which
      the Company is a party or by which the Company is bound or by which any of
      its
      respective properties or assets are bound, or (iv) result in a violation of
      any
      federal, state, local or foreign statute, rule, regulation, order, judgment
      or
      decree (including Federal and state securities laws and regulations) applicable
      to the Company or any of its subsidiaries or by which any property or asset
      of
      the Company or any of its subsidiaries are bound or affected, except, in all
      cases other than violations pursuant to clauses (i) and (iv) above, for such
      conflicts, defaults, terminations, amendments, accelerations, cancellations
      and
      violations as would not, individually or in the aggregate, have a Material
      Adverse Effect. The business of the Company and its subsidiaries is not being
      conducted in violation of any laws, ordinances or regulations of any
      governmental entity, except for possible violations which singularly or in
      the
      aggregate do not and will not have a Material Adverse Effect. The Company is
      not
      required under Federal, state or local law, rule or regulation to obtain any
      consent, authorization or order of, or make any filing or registration with,
      any
      court or governmental agency in order for it to execute, deliver or perform
      any
      of its obligations under the Transaction Documents, or issue and sell the
      Preferred Shares, the Warrants, the Conversion Shares and the Warrant Shares
      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, any registration
      statement which may be filed pursuant hereto, and the Certificate of
      Designation); provided
      that,
      for purposes of the representation made in this sentence, the Company is
      assuming and relying upon the accuracy of the relevant representations and
      agreements of the Purchasers herein.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

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

     

    (h)  No
      Material Adverse Change.
      Other
      than as disclosed in the Company’s Commission Documents, since June 30, 2006,
      the Company has not experienced or suffered any Material Adverse
      Effect.

     

    (i)  No
      Undisclosed Liabilities.
      Except
      as set forth on Schedule
      2.1(j),
      neither
      the Company nor any of its subsidiaries has any liabilities, obligations, claims
      or losses (whether liquidated or unliquidated, secured or unsecured, absolute,
      accrued, contingent or otherwise) other than those incurred in the ordinary
      course of the Company’s or its subsidiaries respective businesses since June 30,
      2006 and which, individually or in the aggregate, do not or would not have
      a
      Material Adverse Effect on the Company or its subsidiaries.

     

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

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    (k)  Indebtedness.
      The
      Form 10-KSB, Form 10-QSB or Schedule
      2.1(k)
      hereto
      sets forth as of a recent date all outstanding secured and unsecured
      Indebtedness of the Company or any subsidiary, or for which the Company or
      any
      subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
shall
      mean (a) any liabilities for borrowed money or amounts owed in excess of
      $100,000 (other than trade accounts payable incurred in the ordinary course
      of
      business), (b) all guaranties, endorsements and other contingent obligations
      in
      respect of Indebtedness of others, whether or not the same are or should be
      reflected in the Company’s balance sheet (or the notes thereto), except
      guaranties by endorsement of negotiable instruments for deposit or collection
      or
      similar transactions in the ordinary course of business; and (c) the present
      value of any lease payments in excess of $25,000 due under leases required
      to be
      capitalized in accordance with GAAP. Except as set forth on Schedule
      2.1(k),
      neither
      the Company nor any subsidiary is in default with respect to any
      Indebtedness.

     

    (l)  Title
      to Assets.
      Except
      as set forth on Schedule
      2.1(l),
      each of
      the Company and the subsidiaries has good and marketable title to all of its
      real and personal property reflected in the Form 10-KSB, free and clear of
      any
      mortgages, pledges, charges, liens, security interests or other encumbrances,
      except for those disclosed in the Form 10-KSB or such that, individually or
      in
      the aggregate, do not cause a Material Adverse Effect. Except as set forth
      on
Schedule
      2.1(l),
      all
      leases of the Company and each of its subsidiaries are valid and subsisting
      and
      in full force and effect.

     

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

     

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

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    (r)  Operation
      of Business.
      Except
      as set forth in Schedule
      2.1(r),
      the
      Company and each of the subsidiaries owns or possesses all patents, trademarks,
      domain names (whether or not registered) and any patentable improvements or
      copyrightable derivative works thereof, websites and intellectual property
      rights relating thereto, service marks, trade names, copyrights, licenses and
      authorizations, and all rights with respect to the foregoing, which are
      necessary for the conduct of its business as now conducted without any conflict
      with the rights of others.

     

    (s)  Environmental
      Compliance.
      The
      Company and each of its subsidiaries have obtained all material approvals,
      authorization, certificates, consents, licenses, orders and permits or other
      similar authorizations of all governmental authorities, or from any other
      person, that are required under any Environmental Laws. Except as set forth
      on
Schedule
      2.1(s),
      the
      Form 10-KSB or Form 10-QSB describes all material permits, licenses and other
      authorizations issued under any Environmental Laws to the Company or its
      subsidiaries. “Environmental
      Laws”
shall
      mean all applicable laws relating to the protection of the environment
      including, without limitation, all requirements pertaining to reporting,
      licensing, permitting, controlling, investigating or remediating emissions,
      discharges, releases or threatened releases of hazardous substances, chemical
      substances, pollutants, contaminants or toxic substances, materials or wastes,
      whether solid, liquid or gaseous in nature, into the air, surface water,
      groundwater or land, or relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of hazardous
      substances, chemical substances, pollutants, contaminants or toxic substances,
      material or wastes, whether solid, liquid or gaseous in nature. The Company
      has
      all necessary governmental approvals required under all Environmental Laws
      and
      used in its business or in the business of any of its subsidiaries. The Company
      and each of its subsidiaries are also in compliance with all other limitations,
      restrictions, conditions, standards, requirements, schedules and timetables
      required or imposed under all Environmental Laws. Except for such instances
      as
      would not individually or in the aggregate have a Material Adverse Effect,
      there
      are no past or present events, conditions, circumstances, incidents, actions
      or
      omissions relating to or in any way affecting the Company or its subsidiaries
      that violate or may violate any Environmental Law after the Closing Date or
      that
      may give rise to any environmental liability, or otherwise form the basis of
      any
      claim, action, demand, suit, proceeding, hearing, study or investigation (i)
      under any Environmental Law, or (ii) based on or related to the manufacture,
      processing, distribution, use, treatment, storage (including without limitation
      underground storage tanks), disposal, transport or handling, or the emission,
      discharge, release or threatened release of any hazardous substance.

     

    
      
        
        

      

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

     

    (u)  Material
      Agreements.
      Except
      as set forth on Schedule
      2.1(u),
      neither
      the Company nor any subsidiary is a party to any written or oral contract,
      instrument, agreement, commitment, obligation, plan or arrangement, a copy
      of
      which would be required to be filed with the Commission as an exhibit to a
      registration statement on Form S-3 or applicable form (collectively,
“Material
      Agreements”)
      if the
      Company or any subsidiary were registering securities under the Securities
      Act.
      The Company and each of its subsidiaries has in all material respects performed
      all the obligations required to be performed by them to date under the foregoing
      agreements, have received no notice of default and are not in default under
      any
      Material Agreement now in effect, the result of which could cause a Material
      Adverse Effect. Except as set forth on Schedule
      2.1(u),
      no
      written or oral contract, instrument, agreement, commitment, obligation, plan
      or
      arrangement of the Company or of any subsidiary limits or shall limit the
      payment of dividends on the Company’s Preferred Shares, other preferred stock,
      if any, or its Common Stock.

     

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

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

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

     

    (x)  Governmental
      Approvals.
      Except
      for the filing of any notice prior or subsequent to the Closing Date that may
      be
      required under applicable state and/or Federal securities laws (which if
      required, shall be filed on a timely basis), including the filing of a Form
      D
      and a registration statement or statements pursuant to the Registration Rights
      Agreement, and the filing of the Certificate of Designation with the Secretary
      of State for the State of Nevada, no authorization, consent, approval, license,
      exemption of, filing or registration with any court or governmental department,
      commission, board, bureau, agency or instrumentality, domestic or foreign,
      is or
      will be necessary for, or in connection with, the execution or delivery of
      the
      Preferred Shares and the Warrants, or for the performance by the Company of
      its
      obligations under the Transaction Documents.

     

    (y)  Employees.
      Neither
      the Company nor any subsidiary has any collective bargaining arrangements or
      agreements covering any of its employees. Except as set forth on Schedule
      2.1(y),
      neither
      the Company nor any subsidiary has any employment contract, agreement regarding
      proprietary information, non-competition agreement, non-solicitation agreement,
      confidentiality agreement, or any other similar contract or restrictive
      covenant, relating to the right of any officer, employee or consultant to be
      employed or engaged by the Company or such subsidiary. No officer, consultant
      or
      key employee of the Company or any subsidiary whose termination, either
      individually or in the aggregate, could have a Material Adverse Effect, has
      terminated or, to the knowledge of the Company, has any present intention of
      terminating his or her employment or engagement with the Company or any
      subsidiary.

     

    (z)  Absence
      of Certain Developments.
      Except
      as set forth on Schedule
      2.1(z),
      since
      June 30, 2006, neither the Company nor any subsidiary has:

    
       

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

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
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      (ee) Intentionally
        Omitted.

       

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

       

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

       

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

       

      (a) Organization
        and Standing of the Purchasers.
        If the
        Purchaser is an entity, such Purchaser is a corporation, 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.

       

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

       

      
        
          
          

        

        
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      (c) No
        Conflicts.
        The
        execution, delivery and performance of this Agreement and the Registration
        Rights Agreement and the consummation by such Purchaser of the transactions
        contemplated hereby and thereby or relating hereto do not and will not (i)
        result in a violation of such Purchaser’s charter documents or bylaws or other
        organizational documents or (ii) conflict with, or constitute a default (or
        an
        event which with notice or lapse of time or both would become a default)
        under,
        or give to others any rights of termination, amendment, acceleration or
        cancellation of any agreement, indenture or instrument or obligation to which
        such Purchaser is a party or by which its properties or assets are bound,
        or
        result in a violation of any law, rule, or regulation, or any order, judgment
        or
        decree of any court or governmental agency applicable to such Purchaser or
        its
        properties (except for such conflicts, defaults and violations as would not,
        individually or in the aggregate, have a material adverse effect on such
        Purchaser). Such Purchaser is not required to obtain any consent, authorization
        or order of, or make any filing or registration with, any court or governmental
        agency in order for it to execute, deliver or perform any of its obligations
        under this Agreement or the Registration Rights Agreement or to purchase
        the
        Preferred Shares or acquire the Warrants in accordance with the terms hereof,
        provided that for purposes of the representation made in this sentence, such
        Purchaser is assuming and relying upon the accuracy of the relevant
        representations and agreements of the Company herein.

       

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

       

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

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

       

      (f) Opportunities
        for Additional Information.
        Each
        Purchaser acknowledges that such Purchaser has had the opportunity to ask
        questions of and receive answers from, or obtain additional information from,
        the executive officers of the Company concerning the financial and other
        affairs
        of the Company, and to the extent deemed necessary in light of such Purchaser’s
        personal knowledge of the Company’s affairs, such Purchaser has asked such
        questions and received answers to the full satisfaction of such Purchaser,
        and
        such Purchaser desires to invest in the Company.

       

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

       

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

       

      (i) General.
        Such
        Purchaser understands that the Shares are being offered and sold in reliance
        on
        a transactional exemption from the registration requirement of Federal and
        state
        securities laws and the Company is relying upon the truth and accuracy of
        the
        representations, warranties, agreements, acknowledgments and understandings
        of
        such Purchaser set forth herein in order to determine the applicability of
        such
        exemptions and the suitability of such Purchaser to acquire the
        Shares.

       

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

       

      (k) Trading
        Activities.
        Each
        Purchaser agrees that it shall not, directly or indirectly, engage in any
        short
        sales with respect to the Common Stock for a period of one (1) year following
        the Closing. 

       

      
        
          
          

        

        
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      ARTICLE
        III

       

      Covenants

       

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

       

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

       

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

       

      Section
        3.3 Inspection
        Rights.
        The
        Company shall permit, during normal business hours and upon reasonable request
        and reasonable notice, each Purchaser or any employees, agents or
        representatives thereof, so long as such Purchaser shall be obligated hereunder
        to purchase the Preferred Shares or shall beneficially own any Preferred
        Shares,
        or shall own Conversion Shares which, in the aggregate, represent more than
        2%
        of the total combined voting power of all voting securities then outstanding,
        for purposes reasonably related to such Purchaser’s interests as a stockholder
        to examine and make reasonable copies of and extracts from the records and
        books
        of account of, and visit and inspect the properties, assets, operations and
        business of the Company and any subsidiary, and to discuss the affairs, finances
        and accounts of the Company and any subsidiary with any of its officers,
        consultants, directors, and key employees. 

       

      
        
          
          

        

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      Section
        3.9 Distributions.
        So long
        as any Preferred Shares remain outstanding, the Company agrees that it shall
        not
        (i) declare
        or pay any dividends or make any distributions to any holder(s) of Common
        Stock
        or (ii) purchase or otherwise acquire for value, directly or indirectly,
        any
        Common Stock or other equity security of the Company.

       

      
        
          
          

        

        
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      Section
        3.10 Status
        of Dividends.
        The
        Company covenants and agrees that (i) no Federal income tax return or claim
        for
        refund of Federal income tax or other submission to the Internal Revenue
        Service
        (the “Service”)
        will
        adversely affect the Preferred Shares, any other series of its Preferred
        Stock,
        or the Common Stock, and no deduction shall operate to jeopardize the
        availability to Purchasers of the dividends received deduction provided by
        Section 243(a)(1) of the Code or any successor provision, (ii) in no report
        to
        shareholders or to any governmental body having jurisdiction over the Company
        or
        otherwise will it treat the Preferred Shares other than as equity capital
        or the
        dividends paid thereon other than as dividends paid on equity capital unless
        required to do so by a governmental body having jurisdiction over the accounts
        of the Company or by a change in generally accepted accounting principles
        required as a result of action by an authoritative accounting standards setting
        body, and (iii) it will take no action which would result in the dividends
        paid
        by the Company on the Preferred Shares out of the Company’s current or
        accumulated earnings and profits being ineligible for the dividends received
        deduction provided by Section 243(a)(1) of the Code. The preceding sentence
        shall not be deemed to prevent the Company from designating the Preferred
        Stock
        as “Convertible Preferred Stock” in its annual and quarterly financial
        statements in accordance with its prior practice concerning other series
        of
        preferred stock of the Company. In the event that the Purchasers have reasonable
        cause to believe that dividends paid by the Company on the Preferred Shares
        out
        of the Company’s current or accumulated earnings and profits will not be treated
        as eligible for the dividends received deduction provided by Section 243(a)(1)
        of the Code, or any successor provision, the Company will, at the reasonable
        request of the Purchasers of 51% of the outstanding Preferred Shares, join
        with
        the Purchasers in the submission to the Service of a request for a ruling
        that
        dividends paid on the Shares will be so eligible for Federal income tax
        purposes, at the Purchasers expense. In addition, the Company will reasonably
        cooperate with the Purchasers (at Purchasers’ expense) in any litigation, appeal
        or other proceeding challenging or contesting any ruling, technical advice,
        finding or determination that earnings and profits are not eligible for the
        dividends received deduction provided by Section 243(a)(1)
        of the Code, or any successor provision to the extent that the position to
        be
        taken in any such litigation, appeal, or other proceeding is not contrary
        to any
        provision of the Code. Notwithstanding the foregoing, nothing herein contained
        shall be deemed to preclude the Company from claiming a deduction with respect
        to such dividends if (i) the Code shall hereafter be amended, or final Treasury
        regulations thereunder are issued or modified, to provide that dividends
        on the
        Preferred Shares or Conversion Shares should not be treated as dividends
        for
        Federal income tax purposes or that a deduction with respect to all or a
        portion
        of the dividends on the Shares is allowable for Federal income tax purposes,
        or
        (ii) in the absence of such an amendment, issuance or modification and after
        a
        submission of a request for ruling or technical advice, the Service shall
        issue
        a published ruling or advise that dividends on the Shares should not be treated
        as dividends for Federal income tax purposes. If the Service specifically
        determines that the Preferred Shares or Conversion Shares constitute debt,
        the
        Company may file protective claims for refund.

       

      Section
        3.11 Use
        of
        Proceeds.
        The
        net
        proceeds from the sale of the Shares hereunder shall be used by the Company
        for
        working capital and general corporate purposes and not to redeem any Common
        Stock or securities convertible, exercisable or exchangeable into Common
        Stock
        or to settle any outstanding litigation. 

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

       

      Section
        3.12 Reservation
        of Shares.
        So long
        as any of the Preferred Shares or Warrants remain outstanding, the Company
        shall
        take all action necessary to at all times have authorized, and reserved for
        the
        purpose of issuance, no less than one
        hundred fifty
        percent (150%) of the aggregate number of shares of Common Stock needed to
        provide for the issuance of the Conversion Shares and the Warrant
        Shares.

       

      Section
        3.13 Transfer
        Agent Instructions.
        The
        Company shall issue irrevocable instructions to its transfer agent, and any
        subsequent transfer agent, to issue certificates, registered in the name
        of each
        Purchaser or its respective nominee(s), for the Conversion Shares and the
        Warrant Shares in such amounts as specified from time to time by each Purchaser
        to the Company upon conversion of the Preferred Shares or exercise of the
        Warrants in the form of Exhibit
        G
        attached
        hereto (the “Irrevocable
        Transfer Agent Instructions”).
        Prior
        to registration of the Conversion Shares and the Warrant Shares under the
        Securities Act, all such certificates shall bear the restrictive legend
        specified in Section 5.1 of this Agreement. The Company warrants that no
        instruction other than the Irrevocable Transfer Agent Instructions referred
        to
        in this Section 3.13 will be given by the Company to its transfer agent and
        that
        the Shares shall otherwise be freely transferable on the books and records
        of
        the Company as and to the extent provided in this Agreement and the Registration
        Rights Agreement. If a Purchaser provides the Company with an opinion of
        counsel, in a generally acceptable form, to the effect that a public sale,
        assignment or transfer of the Shares may be made without registration
        under the Securities Act or the Purchaser provides the Company with reasonable
        assurances that such Shares can be sold pursuant to Rule 144 without any
        restriction as to the number of securities acquired as of a particular date
        that
        can then be immediately sold, the Company shall permit the transfer, and,
        in the
        case of the Conversion Shares and the Warrant Shares, promptly instruct its
        transfer agent to issue one or more certificates in such name and in such
        denominations as specified by such Purchaser and without any restrictive
        legend.
        The Company acknowledges that a breach by it of its obligations under this
        Section 3.13 will cause irreparable harm to the Purchasers by vitiating the
        intent and purpose of the transaction contemplated hereby. Accordingly, the
        Company acknowledges that the remedy at law for a breach of its obligations
        under this Section 3.13 will be inadequate and agrees, in the event of a
        breach or threatened breach by the Company of the provisions of this Section
        3.13, that the Purchasers shall be entitled, in addition to all other available
        remedies, to an order and/or injunction restraining any breach and requiring
        immediate issuance and transfer, without the necessity of showing economic
        loss
        and without any bond or other security being required.

       

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

       

      Section
        3.15 Reporting
        Status. So
        long
        as a Purchaser beneficially owns any of the Shares, the Company shall timely
        file all reports required to be filed with the Commission pursuant to the
        Exchange Act as if the Common stock were registered pursuant to Section 12(b)
        or
        12(g) of the Exchange Act, and the Company shall not cease filing reports
        under
        the Exchange Act even if the Exchange Act or the rules and regulations
        thereunder would permit such termination. 

       

      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

       

      Section
        3.21 Investor
        and Public Relations.
        The
        Company shall deposit or cause to be deposited Seven Hundred Fifty Thousand
        Dollars ($750,000) of the Purchase Price funded on the Closing Date in a
        separate escrow account with a separate escrow agent to be used by the Company
        in connection with investor and public relations and securities law compliance,
        including related legal fees and legal fees relating to minor post-closing
        corporate matters in the British Virgin Islands.

       

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

       

      Section
        3.23 Subsequent
        Financings.
        

       

      (a) For
        a
        period of two (2) years following the effective date of the Registration
        Statement (as defined in the Registration Rights Agreement), the Company
        covenants and agrees to promptly notify (in no event later than five (5)
        days
        after making or receiving an applicable offer) in writing (a “Rights
        Notice”)
        each
        holder of Preferred Shares (each, a “Preferred
        Stockholder”
and
        collectively the “Preferred
        Stockholders”)
        of the
        terms and conditions of any proposed offer or sale to, or exchange with (or
        other type of distribution to) any third party (a “Subsequent
        Financing”),
        of
        Common Stock or any debt or equity securities convertible, exercisable or
        exchangeable into Common Stock; provided,
        however,
        prior
        to delivering to each Preferred
        Stockholder
        a Rights
        Notice, the Company shall first deliver to each Preferred Stockholder a written
        notice of its intention to effect a Subsequent Financing (“Pre-Notice”)
        within
        three (3) Trading Days of receiving an applicable offer, which Pre-Notice
        shall
        ask such Preferred Stockholder if it wants to review the details of such
        financing. Upon the request of a Preferred Stockholder, and only upon a request
        by such Preferred Stockholder within three (3) Trading Days of receipt of
        a
        Pre-Notice, the Company shall promptly, but no later than two (2) Trading
        Days
        after such request, deliver a Rights Notice to such Preferred Stockholder.
        The
        Rights Notice shall describe, in reasonable detail, the proposed Subsequent
        Financing, the names and investment amounts of all investors participating
        in
        the Subsequent Financing (if known), the proposed closing date of the Subsequent
        Financing, which shall be no earlier than ten (10) Trading Days from the
        date of
        the Rights Notice, and all of the terms and conditions thereof and proposed
        definitive documentation to be entered into in connection therewith. The
        Rights
        Notice shall provide each Preferred Stockholder an option (the “Rights
        Option”)
        during
        the ten (10) Trading Days following delivery of the Rights Notice (the
“Option
        Period”)
        to
        inform the Company whether such Preferred Stockholder will purchase up to
        its
        pro rata portion of all or a portion of the securities being offered in such
        Subsequent Financing on the same, absolute terms and conditions as contemplated
        by such Subsequent Financing, provided the amount of such purchase shall
        not
        exceed the Purchase Price hereunder of the Preferred Shares held by such
        Preferred Stockholder except as allowed by the following sentence. If any
        Preferred Stockholder elects not to participate in such Subsequent Financing,
        the other Preferred Stockholders may participate on a pro-rata basis so long
        as
        such participation in the aggregate does not exceed the total Purchase Price
        hereunder. For purposes of this Section, all references to “pro
        rata”
means,
        for any Preferred Stockholder electing to participate in such Subsequent
        Financing, the percentage obtained by dividing (x) the number of Preferred
        Shares held by such Preferred Stockholder at the Closing by (y) the total
        number
        of all of the Preferred Shares outstanding. Delivery of any Rights Notice
        constitutes a representation and warranty by the Company that there are no
        other
        material terms and conditions, arrangements, agreements or otherwise except
        for
        those disclosed in the Rights Notice, to provide additional compensation
        to any
        party participating in any proposed Subsequent Financing, including, but
        not
        limited to, additional compensation based on changes in the Purchase Price
        or
        any type of reset or adjustment of a purchase or conversion price or to issue
        additional securities at any time after the closing date of a Subsequent
        Financing. If the Company does not receive notice of exercise of the Rights
        Option from the Preferred Stockholder within the Option Period, the Company
        shall have the right to close the Subsequent Financing on the scheduled closing
        date with a third party; provided
        that all
        of the material terms and conditions of the closing are the same as those
        provided to the Preferred Stockholder in the Rights Notice. If the closing
        of
        the proposed Subsequent Financing does not occur that date, any closing of
        the
        contemplated Subsequent Financing or any other Subsequent Financing shall
        be
        subject to all of the provisions of this Section 3.21(a), including, without
        limitation, the delivery of a new Rights Notice. The provisions of this Section
        3.21(a) shall not apply to issuances of securities in a Permitted
        Financing.

       

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

       

      (b) For
        purposes of this Agreement, a Permitted Financing (as defined hereinafter)
        shall
        not be considered a Subsequent Financing. A “Permitted
        Financing”
shall
        mean (i) securities issued (other than for cash) in connection with a merger,
        acquisition, or consolidation, (ii) securities issued pursuant to the conversion
        or exercise of convertible or exercisable securities issued or outstanding
        on or
        prior to the date of this Agreement or issued pursuant to this Agreement
        (so
        long as the conversion or exercise price in such securities are not amended
        to
        lower such price and/or adversely affect the Purchasers), (iii) securities
        issued in connection with bona fide strategic license agreements or other
        partnering arrangements so long as such issuances are not for the purpose
        of
        raising capital, (iv) Common Stock issued or the issuance or grants of options
        to purchase Common Stock pursuant to the Company’s stock option plans and
        employee stock purchase plans outstanding as they exist on the date of this
        Agreement, and (v) any warrants issued to the placement agent and its designees
        for the transactions contemplated by the Purchase Agreement.

      

      (c) Nothing
        herein shall prohibit the Company from establishing an employee stock option,
        restricted stock or other form of equity incentive plan for employees, officers
        or directors of the Company, and any awards made under such plan or exercises
        of
        such awards by the recipients thereof shall be deemed to be a Permitted
        Financing.

       

      Section
        3.24 Sarbanes-Oxley
        Act.
        The
        Company shall use its best efforts to be in compliance with the applicable
        provisions of the Sarbanes-Oxley Act of 2002, and the rules and regulations
        promulgated thereunder, as required under such Act.

       

      Section
        3.25 Nasdaq.
        The
        Company shall list and trade its shares of Common Stock on the Nasdaq Capital
        Market or the Nasdaq Global Market (collectively, “Nasdaq”) or any successor
        market thereto no later than December 31, 2007. In the event the shares of
        Common Stock are not listed and trading on Nasdaq by December 31, 2007, Fame
        Good International Limited (the “Principal
        Stockholder”)
        shall
        distribute, on a pro rata basis, to each of the Purchasers, shares of Common
        Stock owned by it as follows: (x) 1,500,000 shares of Common Stock if the
        shares
        are not listed by December 31, 2007, (y) an additional 3,000,000 shares of
        Common Stock if the shares are not listed by March 31, 2008 and (z) an
        additional 1,500,000 shares of Common Stock for each calendar month thereafter
        that the shares of Common Stock are not listed on the last day of such month.
        In
        connection with the foregoing, each Purchaser may elect, at each Purchaser’s
        sole discretion, to receive (i) shares of Common Stock owned by the Principal
        Stockholder; (ii) upon notice to the Company, Escrow Agent, Purchaser
        Representative and Principal Stockholder (each as defined in the Securities
        Escrow Agreement), the Escrow Shares (as defined in the Securities Escrow
        Agreement) in such amount as set forth in the preceding sentence; or (iii)
        newly
        issued shares of Common Stock of the Company. In the event a Purchaser elects
        to
        receive shares of Common Stock from the Escrow Shares, the Principal Stockholder
        shall deliver to the Escrow Agent additional shares of Common Stock owned
        by it
        in the amounts released to such Purchaser within thirty (30) days of the
        release
        of such shares from escrow.

       

      
        
          
          

        

        
          -22-

          
            

          

        

        
          
          

        

      

       

      Section
        3.26 No
        Commissions in connection with Conversion of Preferred Shares.
        In
        connection with the conversion of the Preferred Shares into Conversion Shares,
        neither the Company nor any Person acting on its behalf will take any action
        that would result in the Conversion Shares being exchanged by the Company
        other
        than with the then existing holders of the Preferred Shares exclusively where
        no
        commission or other remuneration is paid or given directly or indirectly
        for
        soliciting the exchange in compliance with Section 3(a)(9) of the Securities
        Act.

       

      ARTICLE
        IV

      

      CONDITIONS

       

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

       

      (a) Accuracy
        of Each Purchaser’s Representations and Warranties.
        The
        representations and warranties of each Purchaser shall be true and correct
        in
        all material respects as of the date when made and as of the Closing Date
        as
        though made at that time, except for representations and warranties that
        are
        expressly made as of a particular date, which shall be true and correct in
        all
        material respects as of such date.

       

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

       

      
        
          
          

        

        
          -23-

          
            

          

        

        
          
          

        

      

       

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

       

      (d) Delivery
        of Purchase Price.
        The
        Purchase Price for the Preferred Shares and Warrants has been delivered to
        the
        escrow agent pursuant to the Escrow Agreement.

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          -24-

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

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

       

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

       

      (k) Reservation
        of Shares.
        As of
        the Closing Date, the Company shall have reserved out of its authorized and
        unissued Common Stock, solely for the purpose of effecting the conversion
        of the
        Preferred Shares and the exercise of the Warrants, a number of shares of
        Common
        Stock equal to one hundred fifty percent (150%) of the aggregate number of
        Conversion Shares issuable upon conversion of the Preferred Shares issued
        or to
        be issued pursuant to this Agreement and the number of Warrant Shares issuable
        upon exercise of the number of Warrants issued or to be issued pursuant to
        this
        Agreement.

       

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

       

      (m) Lock-Up
        Agreement.
        As of
        the Closing Date, the persons listed on Schedule
        3.20
        hereto
        shall have delivered to the Purchasers a fully executed Lock-Up Agreement
        in the
        form of Exhibit E
        attached
        hereto. 

       

      
        
          
          

        

        
          -25-

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      (p) Escrow
        Deposit Agreement.
        At the
        Closing, the Company and the escrow agent shall have executed and delivered
        the
        Escrow Deposit Agreement in the form of Exhibit
        F-1
        attached
        hereto to each Purchaser.

       

      (q) Securities
        Escrow Agreement.
        The
        Securities Escrow Agreement shall have been executed by the parties thereto
        and
        the Escrow Shares (as defined in the Securities Escrow Agreement) shall have
        been deposited into the escrow account pursuant to the terms of the Securities
        Escrow Agreement in the form of Exhibit
        F-2
        attached
        hereto.

       

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

       

      (s) Share
        Exchange Transaction.
        Prior
        to the Closing, the Share Exchange Transaction shall have been
        consummated.

       

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

       

      ARTICLE
        V

       

      Stock
        Certificate Legend

       

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

       

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

       

      
        
          
          

        

        
          -26-

          
            

          

        

        
          
          

        

      

       

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

       

      
        
          
          

        

        
          -27-

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        VI

       

      Indemnification

       

      Section
        6.1 General
        Indemnity.
        The
        Company agrees to indemnify and hold harmless the Purchasers (and their
        respective directors, officers, managers, partners, members, shareholders,
        affiliates, agents, successors and assigns) from and against any and all
        losses,
        liabilities, deficiencies, costs, damages and expenses (including, without
        limitation, reasonable attorneys’ fees, charges and disbursements) incurred by
        the Purchasers as a result of any inaccuracy in or breach of the
        representations, warranties or covenants made by the Company herein.

       

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

       

      
        
          
          

        

        
          -28-

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        VII

       

      Miscellaneous

       

      Section
        7.1 Fees
        and Expenses.
        Except
        as otherwise set forth in this Agreement and the other Transaction Documents,
        each party shall pay the fees and expenses of its advisors, counsel, accountants
        and other experts, if any, and all other expenses, incurred by such party
        incident to the negotiation, preparation, execution, delivery and performance
        of
        this Agreement, provided
        that the
        Company shall pay all reasonable attorneys' fees and expenses (including
        disbursements and out-of-pocket expenses) incurred by the Purchasers in
        connection with (i) the preparation, negotiation, execution and delivery
        of this
        Agreement and the other Transaction Documents and the transactions contemplated
        thereunder, which payment shall be made at the Closing, (ii) the filing and
        declaration of effectiveness by the Commission of the Registration Statement
        and
        (iii) any amendments, modifications or waivers of this Agreement or any of
        the
        other Transaction Documents. The Company shall also pay to Vision
        Opportunity Master Fund, Ltd.
        at the
        Closing in connection with due diligence expenses incurred by Vision Opportunity
        Master Fund, Ltd. an amount of $100,000. The Company shall pay all reasonable
        fees and expenses incurred by the Purchasers in connection with the enforcement
        of this Agreement or any of the other Transaction Documents, including, without
        limitation, all reasonable attorneys' fees and expenses but only if the
        Purchasers are successful in any litigation or arbitration relating to such
        enforcement. 

       

      Section
        7.2 Specific
        Enforcement, Consent to Jurisdiction. 

       

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

       

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

       

      
        
          
          

        

        
          -29-

          
            

          

        

        
          
          

        

      

       

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

       

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

      

      
        	
                If
                  to the Company:

              	
                Wuhan
                  Blower Co.

                Canglongdao
                  Science Park of Wuhan 

                East
                  Lake Hi-Tech Development Zone

                Wuhan,
                  Hubei 430200

                People’s
                  Republic of China

                Attention:
                  Xu Jie 

                Tel.
                  No.: (86) 138 7113 6999

                Fax
                  No.: (86) 027 5970 0010

              
	 	 
	
                with
                  copies to:

              	
                Troutman
                  Sanders LLP

                The
                  Chrysler Building

                405
                  Lexington Avenue

                New
                  York, New York 10174

                Attention:
                  Henry I. Rothman, Esq.

                Tel.
                  No.: (212) 704-6179 

                Fax
                  No.: (212) 704-5950

              

      

       

      
        
          
          

        

        
          -30-

          
            

          

        

        
          
          

        

      

       

      
        	
                If
                  to any Purchaser:

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

              
	 	 
	 	
                Kramer
                  Levin Naftalis & Frankel LLP

                1177
                  Avenue of the Americas

                New
                  York, New York 10036

                Attention:
                  Christopher S. Auguste, Esq.

                Tel
                  No.: (212) 715-9100

                Fax
                  No.: (212) 715-8000

              

      

       

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

       

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

       

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

       

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

       

      Section
        7.8 No
        Third Party Beneficiaries.
        This
        Agreement is intended for the benefit
        of the parties hereto and their respective permitted successors and assigns
        and
        is not for the benefit of, nor may any provision hereof be enforced by, any
        other person.

       

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

       

      
        
          
          

        

        
          -31-

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

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

      

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

       

      
        
          
          

        

        
          -32-

          
            

          

        

        
          
          

        

      

       

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

       

      
        	 	 	 
	 	
                UNITED
                  NATIONAL FILM CORPORATION

              
	 
 	 
 	 
 
	
              	By:  	
                /s/
                  Xu Jie

              
	 	
                

                Name:
                  Xu Jie

              
	 	
                Title:
                  President and Chief Executive
                  Officer

              

      

       

      
        	 	 	 
	 	
                PURCHASER

              
	 
 	 
 	 
 
	
              	By:  	
                /s/
                  Adam Benowitz

              
	 	
                

                Name: 
                  Adam Benowitz

              
	 	Title: 
                Portfolio Manager

      

       

      
        
          	 	 	 
	 	
                  PURCHASER

                
	 
 	 
 	 
 
	
                	By:  	
                  /s/
                    Daven Patel

                
	 	
                  

                  Name: 
                    Daven Patel

                
	 	Title: 
Vice
                  President

        

         

      

      
        
          	 	 	 
	 	
                  PURCHASER

                
	 
 	 
 	 
 
	
                	By:  	
                  /s/
                    Jonathan Barton

                
	 	
                  

                  Name: 
                    Jonathan Barton

                
	 	Title: 
Chief
                  Financial Officer
	 	 
	 	Old Lane, LP
	 	
                  Old Lane, L.p. representing as advisors for
                    

                  - Old Lane Cayman Master Fund, LP

                  - Old Lane US Master Fund, LP

                  - Old Lane HMA Master Fund,
                    LP

                

        

         

        
          
            	 	 	 
	 	
                    PURCHASER

                  
	 	 
	 	
                    QVT
                      FUND LP, by its general partner, QVT Associates GP LLC

                  
	 
 	 
 	 
 
	
                  	By:  	
                    /s/
                      Yi Cen

                  
	 	 	
                    
                      

                      Name:  Yi Cen

                  
	 	 	Title:  Authorized Signatory
	 	 	 
	 	By:  	
                    /s/
                      Tracy Fu

                  
	 	
                    

                    Name: 
                      Tracy Fu

                  
	 	Title: 
                    Managing Member

          

           

          
            
              
                	 	 	 
	 	
                        PURCHASER

                      
	 	 
	 	
                        TCW
                          AMERICAS DEVELOPMENT ASSOCIATION, L.P.

                      
	 
 	 
 	 
 
	
                      	By:  	
                        /s/
                          Penelope Foley

                      
	 	
                        

                        Name: 
                          Penelope Foley

                      
	 	Title: 
                        Managing Director

              

               

            

          

        

      

       

       

      
        
          
          

        

        
          -33-

          
            

          

        

        
          
          

        

         

        
          
            
              	 	 	 
	 	
                      PURCHASER

                    
	 	 
	 
 	 
 	 
 
	
                    	By:  	
                      /s/
                        Stephen L. Parr

                    
	 	 	
                      
                        

                      

                      Name: 
                        Stephen L. Parr

                    
	 	 	Title:  President - Halter/Pope USX China
                      Fund

            

             

            
              
                
                  
                    	 	 	 
	 	
                            PURCHASER

                          
	 	 
	 	
                            MidSouth
                              Investor Fund LP

                          
	 
 	 
 	 
 
	
                          	By:  	
                            /s/
                              L.O. Heidtke

                          
	 	 	
                            
                              

                            

                            Name: 
                              L.O. Heidtke

                          
	 	 	Title:  General
                            Partner

                  

                   

                

              

            

            
              
                
                  	 	 	 
	 	
                          PURCHASER

                        
	 	 
	 	
                          Whitebox
                            Intermarket Partners, L.P.

                        
	 
 	 
 	 
 
	
                        	By:	
                          Whitebox
                            Intermarket Advisors, LLC, its G.P. 

                        
	 	 	
                        
	 	By: 	Whitebox Advisors LLC, its Managing
                          Members
	 	 	 
	 	By: 	
                          /s/
                            Jonathan Wood

                        
	 	
                          

                          Name: 
                            Jonathan Wood

                        
	 	Title: 
                          CFO/Director

                

                 

              

            

            
              
                
                  	 	 	 
	 	
                          PURCHASER

                        
	 	 
	 	
                          Lighthouse
                            Consulting Limited

                        
	 
 	 
 	 
 
	
                        	By:  	
                          /s/
                            Bai Ye Feng

                        
	 	
                          

                          Name: 
                            Bai Ye Feng

                        
	 	Title: 
                          Director

                

                 

              

            

          

          
            	
                    ACKNOWLEDGED
                      AND AGREED AS TO SECTION 3.25:

                  	 	 	 
	 	 	 	 
	
                    FAME
                      GOOD INTERNATIONAL LIMITED

                  	 	 	 
	 	 	 	 
	By: 
                    /s/ Xu Jie	 	 	
                  
	
                    
                      

                    

                    Name: 
Xu
                      Jie

                  	 	 	
                  
	Title: 
                    Director	 	 	
                  

          

           

          
            
              
              

            

            
              -34-

              
                

              

            

            
              
              

            

          

        

         

         

      

      EXHIBIT
        A to the

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      
        

          
            	
                    Investor

                  	 	
                    Investment

                  	 	
                    Shares

                    Purchased

                  	 	
                    Series
                      A

                    Warrants

                  	 	
                    Series
                      B

                    Warrants

                  	 	
                    Series
                      J

                    Warrants

                  	 
	
                    Vision
                      OpportunityMaster Fund Ltd.

                  	 	
                    $

                  	
                    7,000,000.36

                  	 	 	
                    3,004,292

                  	 	 	
                    1,802,575

                  	 	 	
                    1,802,575

                  	 	 	
                    3,004,292

                  	 
	
                    20
                      West 55th Street

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    New
                      York, New York 10019

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Attn
                      Yiting Liu

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Blue
                      Ridge Investments, L.L.C.

                  	 	 	
                    5,000,000.59

                  	 	 	
                    2,145,923

                  	 	 	
                    1,287,554

                  	 	 	
                    1,287,554

                  	 	 	
                    2,145,923

                  	 
	
                    c/o
                      Bank of America

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    9
                      West 57th Street

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    New
                      York, New York 10019

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Attn:
                      Stephen P. Ewald

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Old
                      Lane LP [IN THE NAME OF THREE SEPARATE FUNDS]

                  	 	 	
                  	 	 	
                  	 	 	
                  	 	 	
                  	 	 	
                  	 
	
                    Old
                      Lane Cayman Master Fund, LP 

                  	 	 	
                    2,863,779.70

                  	 	 	
                    1,229,090

                  	 	 	
                    737,454

                  	 	 	
                    737,454

                  	 	 	
                    1,229,090

                  	 
	
                    Old
                      Lane US Master Fund, LP

                  	 	 	
                    1,129,175

                  	 	 	
                    484,625

                  	 	 	
                    290,775

                  	 	 	
                    290,775

                  	 	 	
                    484,625

                  	 
	
                    Old
                      Lane HMA Master Fund, LP

                  	 	 	
                    812,044.61

                  	 	 	
                    348,517

                  	 	 	
                    209,110

                  	 	 	
                    209,110

                  	 	 	
                    348,517

                  	 
	
                    500
                      Park Avenue

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    New
                      York, New York 10036

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Attn:
                      Wasif T. Khan

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    QVT
                      Financial, LP

                  	 	 	
                    3,000,000.82

                  	 	 	
                    1,287,554

                  	 	 	
                    772,532

                  	 	 	
                    772,532

                  	 	 	
                    1,287,554

                  	 
	
                    1171
                      Avenue of the Americas

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    New
                      York, New York 10036

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Attn:
                      Yi Cen

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    TCW
                      Americas Development Association LP

                  	 	 	
                    1,999,999.77

                  	 	 	
                    858,369

                  	 	 	
                    515,021

                  	 	 	
                    515,021

                  	 	 	
                    858,369

                  	 
	
                    200
                      Park Avenue

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    New
                      York, New York 10166

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Attn:
                      Penny Foley

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Halter/Pope
                      USX China Fund

                  	 	 	
                    699,000.00

                  	 	 	
                    300,000

                  	 	 	
                    180,000

                  	 	 	 	 	 	 	 
	
                    5100
                      Poplar Avenue

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Suite
                      805

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Memphis,
                      Tennessee 38137

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Attn:
                      Stephen L. Parr

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    MidSouth
                      Investors Fund LP

                  	 	 	
                    499,999.36

                  	 	 	
                    214,592

                  	 	 	
                    128,755

                  	 	 	 	 	 	 	 
	
                    201
                      4th Avenue North

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Suite
                      1950

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Nashville,
                      Tennessee 37219

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Attn:
                      Lyman O. Heidtke

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    White
                      Box Advisors, LLC

                  	 	 	
                    499,999.36

                  	 	 	
                    214,592

                  	 	 	
                    128,755

                  	 	 	 	 	 	 	 
	
                    3033
                      Excelsior Blvd.

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Suite
                      300

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Minneapolis,
                      Minn 55416

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Attn:
                      Wei Li

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Lighthouse
                      Consulting Limited

                  	 	 	
                    466,000.00

                  	 	 	
                    200,000

                  	 	 	
                    120,000

                  	 	 	 	 	 	 	 
	
                    Tung
                      Chai Building

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    86
                      Wellington Street

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Central,
                      Hong Kong

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Attn:
                      Bai Feng

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Total

                  	 	
                    $

                  	
                    23,970,000.82

                  	 	 	
                    10,287,554

                  	 	 	
                    6,172,531

                  	 	 	
                    5,615,021

                  	 	 	
                    9,358,370

                  	 

          

        

      

       

      
        
          
          

        

        
          -35-

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        B to the 

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      

      FORM
        OF CERTIFICATE OF DESIGNATION

       

      
        
          
          

        

        
          -36-

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        C-1 to the 

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      

      FORM
        OF SERIES A WARRANT

       

      
        
          
          

        

        
          -37-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        C-2 to the 

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      

      FORM
        OF SERIES J WARRANT

       

      
        
          
          

        

        
          -38-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        C-3 to the 

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      

      FORM
        OF SERIES B WARRANT

       

      
        
          
          

        

        
          -39-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        D to the 

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      

      FORM
        OF REGISTRATION RIGHTS AGREEMENT

       

      
        
          
          

        

        
          -40-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        E to the 

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      

      FORM
        OF LOCK-UP AGREEMENT

       

      
        
          
          

        

        
          -41-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        F-1 to the 

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      

      FORM
        OF ESCROW DEPOSIT AGREEMENT

       

      
        
          
          

        

        
          -42-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        F-2 to the 

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      

      FORM
        OF SECURITIES ESCROW AGREEMENT

       

      
        
          
          

        

        
          -43-

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        G to the 

      SERIES
        A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

      UNITED
        NATIONAL FILM CORPORATION

      

      FORM
        OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

      

      UNITED
        NATIONAL FILM CORPORATION

      

      as
        of
        February 7, 2007

       

      [Name
        and address of Transfer Agent]

      Attn:
        _____________

       

      Ladies
        and Gentlemen:

       

      Reference
        is made to that certain Series A Convertible Preferred Stock Purchase Agreement
        (the “Purchase
        Agreement”),
        dated
        as of February 7, 2007, by and among United National Film Corporation, a
        Nevada
        corporation (the “Company”),
        and
        the purchasers named therein (collectively, the “Purchasers”)
        pursuant to which the Company is issuing to the Purchasers shares of its
        Series
        A Convertible Preferred Stock, par value $0.0001
        per share, (the “Preferred
        Shares”)
        and
        warrants (the “Warrants”)
        to
        purchase shares of the Company’s common stock, par value $0.0001 per share (the
“Common
        Stock”).
        This
        letter shall serve as our irrevocable authorization and direction to you
        provided that you are the transfer agent of the Company at such time) to
        issue
        shares of Common Stock upon conversion of the Preferred Shares (the
“Conversion
        Shares”)
        and
        exercise of the Warrants (the “Warrant
        Shares”)
        to or
        upon the order of a Purchaser from time to time upon (i) surrender to you
        of a
        properly completed and duly executed Conversion Notice or Exercise Notice,
        as
        the case may be, in the form attached hereto as Exhibit I and Exhibit II,
        respectively, (ii) in the case of the conversion of Preferred Shares, a copy
        of
        the certificates (with the original certificates delivered to the Company)
        representing Preferred Shares being converted or, in the case of Warrants
        being
        exercised, a copy of the Warrants (with the original Warrants delivered to
        the
        Company) being exercised (or, in each case, an indemnification undertaking
        with
        respect to such share certificates or the warrants in the case of their loss,
        theft or destruction), and (iii) delivery of a treasury order or other
        appropriate order duly executed by a duly authorized officer of the Company.
        So
        long as you have previously received (x) written confirmation from counsel
        to
        the Company that a registration statement covering resales of the Conversion
        Shares or Warrant Shares, as applicable, has been declared effective by the
        Securities and Exchange Commission (the “SEC”)
        under
        the Securities Act of 1933, as amended (the “1933
        Act”),
        and
        no subsequent notice by the Company or its counsel of the suspension or
        termination of its effectiveness and (y) a copy of such registration statement,
        and if the Purchaser represents in writing that the Conversion Shares or
        the
        Warrant Shares, as the case may be, were sold pursuant to the Registration
        Statement, then certificates representing the Conversion Shares and the Warrant
        Shares, as the case may be, shall not bear any legend restricting transfer
        of
        the Conversion Shares and the Warrant Shares, as the case may be, thereby
        and
        should not be subject to any stop-transfer restriction. Provided, however,
        that
        if you have not previously received those items and representations listed
        above, then the certificates for the Conversion Shares and the Warrant Shares
        shall bear the following legend:

       

      “THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT”), OR ANY STATE
        SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
        UNLESS
        REGISTERED UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS,
        OR
        UNITED NATIONAL FILM CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL
        THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
        PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.”

       

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

       

      
        
          
          

        

        
          -44-

          
            

          

        

        
          
          

        

      

       

      A
        form of
        written confirmation from counsel to the Company that a registration statement
        covering resales of the Conversion Shares and the Warrant Shares has been
        declared effective by the SEC under the 1933 Act is attached hereto as Exhibit
        III.

       

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

       

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

       

      
        	 	 	 
	 	
                Very
                  truly yours,

              
	 	 
	 	
                UNITED
                  NATIONAL FILM CORPORATION 

              
	 	 
	 	
                By:

              
	 	
                
                  

                

                Name:

              
	 	
                
                  

                

                Title:

              
	 	
                
                  

                

              

      

       

      
        	
                ACKNOWLEDGED
                  AND AGREED:

              	 	 	 
	 	 	 	 
	
                [TRANSFER
                  AGENT]

              	 	 	 
	 	 	 	 
	
                By:
                         

              	 	 	 
	
                
                  

                

                
                  Name:

                

              	 	 	
              
	
                
                  

                

                Title:       

              	 	 	
              
	
                
                  

                

                Date:

              	 	 	 
	
                
                  
 

              	 	 	 

      

       

      
        
          
          

        

        
          -45-

          
            

          

        

        
          
          

        

      

       

      

        EXHIBIT
          I

         

        UNITED
          NATIONAL FILM CORPORATION

        CONVERSION
          NOTICE

         

        Reference
          is made to the Certificate of Designation of the Relative Rights and Preferences
          of the Series A Preferred Stock of United National Film Corporation (the
          “Certificate of Designation”). In accordance with and pursuant to the
          Certificate of Designation, the undersigned hereby elects to convert the
          number
          of shares of Series A Preferred Stock, par value $0.0001
          per share (the “Preferred Shares”), of United National Film Corporation a Nevada
          corporation (the “Company”), indicated below into shares of Common Stock, par
          value $0.0001 per share (the “Common Stock”), of the Company, by tendering the
          stock certificate(s) representing the share(s) of Preferred Shares specified
          below as of the date specified below.

        

        Date
          of
          Conversion:                         ______________________________________

        

        Number
          of
          Preferred Shares to be converted:            _________

        

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

        

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

        

        Please
          confirm the following information:

        

        Conversion
          Price:                           _______________________________________

        

        Number
          of
          shares of Common Stock

        to
          be
          issued:                              _______________________________________

        

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

        

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

         

        
          	
                  Issue
                    to:

                	 	 	
                   

                  
                    

                  

                  
                    

                  

                
	
                  Facsimile
                    Number:

                  
                     

                    Authorization:

                  

                	 	 	
                   

                  
                    

                  

                   

                  

                  By:

                
	 	 	 	
                  
                    

                  

                  Title:

                
	
                   

                  Dated:

                	 	 	
                  
                    

                  

                   

                

        

         

        
          
            
            

          

          
            -46-

            
              

            

          

          
            
            

          

        

        

        EXHIBIT
          II

         

        FORM
          OF EXERCISE NOTICE

         

        EXERCISE
          FORM

         

        UNITED
          NATIONAL FILM CORPORATION

        

        The
          undersigned____________, pursuant to the provisions of the within Warrant,
          hereby elects to purchase ______ shares of Common Stock of United National
          Film
          Corporation covered by the within Warrant.

         

        
          	 	 	 
	Dated:	Signature
	
                  
                    
 

                	
                  
                    

                  

                  Address 

                
	 	
                  
                    

                    

                  

                

        

        

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

        

        ASSIGNMENT

        

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

         

        
          	
                	 	 
	Dated:	Signature
	
                  
                    
 

                	
                  
                    

                  

                  Address 

                
	 	
                  
                    

                    

                  

                

        

         

        PARTIAL
          ASSIGNMENT

        

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

         

        
          	
                	 	 
	Dated:	Signature
	
                  
                    
 

                	
                  
                    

                  

                  Address 

                
	 	
                  
                    

                    

                  

                

        

        

        FOR
          USE
          BY THE ISSUER ONLY:

        

        This
          Warrant No. W-_________ canceled (or transferred or exchanged) this _______
          day
          of __________, _______, shares of Common Stock issued therefor in the name
          of
          _______________, Warrant No. W-______ issued for _______ shares of Common
          Stock
          in the name of ________________.

        
          
            
            

          

          
            -47-

            
              

            

          

           

        

        EXHIBIT
          III

         

        FORM
          OF NOTICE OF EFFECTIVENESS

        OF
          REGISTRATION STATEMENT

         

        [Name
          and address of Transfer Agent]

        Attn:
          _________

        

        Re: United
          National Film Corporation 

         

        Ladies
          and Gentlemen:

         

        We
          are
          counsel to United National Film Corporation, a Nevada corporation (the
          “Company”),
          and
          have represented the Company in connection with that certain Series A
          Convertible Preferred Stock Purchase Agreement (the “Purchase
          Agreement”),
          dated
          as of February 7, 2007, by and among the Company and the purchasers named
          therein (collectively, the “Purchasers”)
          pursuant to which the Company issued to the Purchasers shares of its Series
          A
          Convertible Preferred Stock, par value $0.0001 per share, (the “Preferred
          Shares”)
          and
          warrants (the “Warrants”)
          to
          purchase shares of the Company’s common stock, par value $0.0001 per share (the
“Common
          Stock”).
          Pursuant to the Purchase Agreement, the Company has also entered into a
          Registration Rights Agreement with the Purchasers (the “Registration
          Rights Agreement”),
          dated
          as of February 7, 2007, pursuant to which the Company agreed, among other
          things, to register the Registrable Securities (as defined in the Registration
          Rights Agreement), including the shares of Common Stock issuable upon conversion
          of the Preferred Shares and exercise of the Warrants, under the Securities
          Act
          of 1933, as amended (the “1933
          Act”).
          In
          connection with the Company’s obligations under the Registration Rights
          Agreement, on ________________, 2007, the Company filed a Registration
          Statement
          on Form SB-2 (File No. 333-________) (the “Registration
          Statement”)
          with
          the Securities and Exchange Commission (the “SEC”)
          relating to the resale of the Registrable Securities which names each of
          the
          present Purchasers as a selling stockholder thereunder.

         

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

         

        
          	 	 	 
	 	
                  Very
                    truly yours,

                
	 	 
	 	
                  [COMPANY
                    COUNSEL]

                
	 
 	 
 	 
 
	
                	By:  	
                
	 	
                  

                
	 	 
	
                  cc: [LIST
                    NAMES OF PURCHASERS]

                	
                

        

         

        
          
            
            

          

          
            -48-

            
              

            

          

           

        

        

        EXHIBIT
          H to the 

        SERIES
          A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR 

        UNITED
          NATIONAL FILM CORPORATION

        

        FORM
          OF OPINION OF COUNSEL

        

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

        

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

        

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

        

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

        

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

         

        
          
            
            

          

          
            -49-

            
              

            

          

          
            
            

          

        

        

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

        

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

        

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

         

        
          	 	 	 
	 	
                  Very
                    truly yours,

                
	 
 	 
 	 
 
	
                	
                	
                
	 	
                
	 	
                

 

        
          
            
            

          

          
            -50-

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