SUBSCRIPTION AGREEMENT
 
 
THIS SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of June 15, 2007, by
and among Hi-Tech Wealth Inc., a Nevada corporation (the “Company”), and the
subscribers identified on the signature page hereto (each a “Subscriber” and
collectively “Subscribers”).
 
WHEREAS, the Company and the Subscribers are executing and delivering this
Agreement in reliance upon an exemption from securities registration afforded by
the provisions of Section 4(2) and/or 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 “1933 Act”).
 
WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to the Subscribers, and the
Subscribers, in the aggregate, shall purchase Ten Million Dollars ($10,000,000)
(the "Purchase Price") of principal amount of 10% promissory notes of the
Company (“Note” or “Notes”), a form of which is annexed hereto as Exhibit A; and
share purchase warrants (collectively the “Warrants”), in the form attached
hereto as Exhibit B, to purchase shares of the Company’s $.001 par value common
stock (“Common Stock”) (the “Warrant Shares”). The Notes, Warrants and the
Warrant Shares are collectively referred to herein as the "Securities"; and
 
WHEREAS, the aggregate proceeds of the sale of the Notes and the Warrants
contemplated hereby may be held in escrow pursuant to the terms of a Funds
Escrow Agreement to be executed by the parties substantially in the form
attached hereto as Exhibit C (the "Escrow Agreement").
 
NOW, THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Agreement the Company and the Subscribers hereby agree as
follows:
 
1.    (a). Closing Date. The “Closing Date” shall be the date that the Initial
Purchase Price is transmitted by wire transfer or otherwise credited to or for
the benefit of the Company. The consummation of the transactions contemplated
herein shall take place at the offices of Grushko & Mittman, P.C., 551 Fifth
Avenue, Suite 1601, New York, New York 10176, upon the satisfaction or waiver of
all conditions to closing set forth in this Agreement.

   (b) Closing. Subject to the satisfaction or waiver of the terms and
conditions of this Agreement, on the Closing Date, each Subscriber shall
purchase and the Company shall sell to each Subscriber a Note in the principal
amount designated on the signature page hereto (“Closing Notes”), and Warrants
as described in Section 3 of this Agreement (“Warrants”). The Principal Amount
of the Notes to be purchased by the Subscribers on the Closing Date shall equal
Five Million Dollars ($5,000,000) (the “Closing Purchase Price”).

(c) Subsequent Issuance. The issuance of one or more Notes aggregating an
additional Five Million Dollars ($5,000,000) (the “Subsequent Issuance Purchase
Price” and, together with the Closing Purchase Price, the “Purchase Price”)
shall be on or before the fifth business day after the compliance with the
Subsequent Issuance Condition as defined in Section 1(d) (the “Subsequent
Issuance Date”). Subject to the satisfaction or waiver of the conditions to
Closing, on the Subsequent Issuance Date, each Subscriber shall purchase and the
Company shall sell to each Subscriber a Note in the Principal Amount designated
on the signature page hereto (“Subsequent Issuance Notes”). The Subsequent
Issuance Notes shall have the same maturity date as the Closing Notes.

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(d) Conditions to Subsequent Issuance. The occurrence of the Subsequent Issuance
is expressly contingent on (i) the accuracy on the Subsequent Issuance Date of
the representations and warranties of the Company and Subscriber contained in
this Agreement, except for any inaccuracies arising from facts that do not
constitute a Material Adverse Effect (as defined in Section 5(a)), (ii) the
non-occurrence of any Event of Default (as defined in the Note), and (iii) the
perfection of Subscribers’ security interest in the Collateral consisting of
intellectual property rights in the People’s Republic of China, evidenced by
delivery from the Company to the Subscribers of an original or certified copy of
a certificate issued by a Chinese government agency, evidencing the
effectiveness of the granting to the Subscribers of a security interest in and
to such Collateral, accompanied by a legal opinion from Beijing MingTai Lawyer
LLC in the form attached hereto as Exhibit 1(d) on or before the 150th day
following the Closing Date (the condition described in this clause (iii), the
“Subsequent Issuance Condition”).
 
(e) Subsequent Issuance Deliveries. On the Subsequent Issuance Date, the Company
will deliver a certificate (“Subsequent Issuance Certificate”) signed by its
chief executive officer or chief financial officer (i) representing the accuracy
of all the representations and warranties made by the Company contained in this
Agreement as of Subsequent Issuance Date, as if such representations and
warranties were made and given on the Subsequent Issuance Date, except for any
inaccuracies arising from facts that do not constitute a Material Adverse Effect
and (ii) representing compliance by the Company with the Subsequent Issuance
Condition. A legal opinion nearly identical to the legal opinion referred to in
Section 6 of this Agreement shall be delivered to each Subscriber at the
Subsequent Issuance in relation to the Company, and Subsequent Issuance Notes
(“Subsequent Issuance Legal Opinion”).

2. Security Interest. The Subscribers will be granted a security interest in
certain of the assets of the Company and Subsidiaries (as defined in Section
5(a) of this Agreement), including ownership of Magical Insight Investments Ltd
(“Magical”), to be memorialized in “Security Agreements”, a form of which is
annexed hereto as Exhibit D. The Company’s subsidiary, Beihai Hi-Tech Wealth
Technology Developments Co., Ltd (“HTW”) will execute and deliver to the
Subscribers a form of “Guaranty” annexed hereto as Exhibit E. The Company will
execute such other agreements, documents and financing statements reasonably
requested by Subscribers, which will be filed at the Company’s expense with such
jurisdictions, states and counties designated by the Subscribers. The Company
will also execute all such documents reasonably necessary in the opinion of
Subscribers to memorialize and further protect the security interest described
herein. The Subscribers will appoint a collateral agent (the “Collateral Agent”)
to represent them collectively in connection with the security interest to be
granted to the Subscribers. The appointment will be pursuant to a “Collateral
Agent Agreement”, a form of which is annexed hereto as Exhibit F.
 
3. Warrants. On the Closing Date, the Company will issue and deliver an
aggregate of 1,500,000 Warrants to the Subscribers at the rate of one and one
half Warrants for every ten dollars of Purchase Price to be invested by each
such Subscriber. The exercise price to acquire a Warrant Share upon exercise of
a Warrant shall be $2.50. The Warrants shall be exercisable until five (5) years
after the issue date of the Warrants. The holder of the Warrants is granted the
registration rights set forth in this Agreement. The Warrant exercise price and
amount of Shares issuable upon exercise of the Warrants shall be equitably
adjusted to offset the effect of stock splits, stock dividends, pro rata
distributions of property or equity interests to the Company’s shareholders, and
as otherwise described in the Warrant.
 
4. Subscriber's Representations and Warranties. Each Subscriber as of each of
the Closing Date and the Subsequent Issuance Date hereby represents and warrants
to and agrees with the Company only as to such Subscriber that:
 
(a) Organization and Standing of the Subscribers. If the Subscriber is an
entity, such Subscriber is a corporation, partnership or other entity duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization and has the requisite
corporate power to own its assets and to carry on its business.
 
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(b) Authorization and Power. Each Subscriber has the requisite power and
authority to enter into and perform this Agreement and to purchase the Notes and
Warrants being sold to it hereunder. The execution, delivery and performance of
this Agreement by such Subscriber and the consummation of 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
Subscriber or its Board of Directors, stockholders, partners, members, as the
case may be, is required. This Agreement has been duly authorized, executed and
delivered by such Subscriber and constitutes, or shall constitute when executed
and delivered, a valid and binding obligation of the Subscriber enforceable
against the Subscriber in accordance with the terms hereof.
 
(c) No Conflicts. The execution, delivery and performance of this Agreement and
the consummation by such Subscriber of the transactions contemplated hereby or
relating hereto do not and will not (i) result in a violation of such
Subscriber’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 or termination, amendment, acceleration or cancellation of any agreement,
indenture or instrument or obligation to which such Subscriber 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 Subscriber or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a Material Adverse Effect, as defined in Section 5(a) herein, on
such Subscriber). Such Subscriber 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 to purchase the Notes or acquire the
Warrants in accordance with the terms hereof, provided that for purposes of the
representation made in this sentence, such Subscriber is assuming and relying
upon the accuracy of the relevant representations and agreements of the Company
herein.
 
(d) Information on Company. The Subscriber has been furnished with or has had
access at the EDGAR Website of the Commission to the Company's Form 10-KSB for
the year ended December 31, 2006 as filed with the Commission, together with all
subsequently filed Forms 10-QSB, 8-K, and filings made with the Commission
available at the EDGAR website (hereinafter referred to collectively as the
"Reports"). In addition, the Subscriber has received in writing from the Company
such other information concerning its operations, financial condition and other
matters as the Subscriber has requested in writing (such other information is
collectively, the "Other Written Information"), and considered all factors the
Subscriber deems material in deciding on the advisability of investing in the
Securities.
 
(e) Information on Subscriber. The Subscriber is, and will be at the time of
exercise of any of the Warrants, an institutional "accredited investor", as such
term is defined in Rule 501(a)(1)(2)(3) or (7) of Regulation D promulgated by
the Commission under the 1933 Act, owning at least $25 million in securities of
issuers (other than issuers that are affiliated with such Subscriber), is
experienced in investments and business matters, has made investments of a
speculative nature and has purchased securities of United States publicly-owned
companies in private placements in the past and, with its representatives, has
such knowledge and experience in financial, tax and other business matters as to
enable the Subscriber to utilize the information made available by the Company
to evaluate the merits and risks of and to make an informed investment decision
with respect to the proposed purchase, which represents a speculative
investment. The Subscriber has the authority and is duly and legally qualified
to purchase and own the Securities. The Subscriber is able to bear the risk of
such investment for an indefinite period and to afford a complete loss thereof.
The information set forth on the signature page hereto regarding the Subscriber
is accurate.
 
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(f) Purchase of Notes and Warrants. On the Closing Date, the Subscriber will
purchase the Notes and Warrants as principal for its own account for investment
only and not with a view toward, or for resale in connection with, the public
sale or any distribution thereof.
 
(g) Compliance with 1933 Act. The Subscriber understands and agrees that the
Securities have not been registered under the 1933 Act or any applicable state
securities laws, by reason of their issuance in a transaction that does not
require registration under the 1933 Act (based in part on the accuracy of the
representations and warranties of Subscriber contained herein), and that such
Securities must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act and any applicable state securities laws or is
exempt from such registration.
 
(h) Warrant Shares Legend. The Warrant Shares shall bear the following or
similar legend:
 
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO HI-TECH WEALTH INC. THAT SUCH
REGISTRATION IS NOT REQUIRED."
 
(i) Warrants Legend. The Warrants shall bear the following
 
or similar legend:
 
"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO HI-TECH
WEALTH INC. THAT SUCH REGISTRATION IS NOT REQUIRED."

(j) Note Legend. The Note shall bear the following legend:
 
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO HI-TECH WEALTH INC. THAT SUCH
REGISTRATION IS NOT REQUIRED."
 
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(k) Communication of Offer. The offer to sell the Securities was directly
communicated to the Subscriber by the Company. At no time was the Subscriber
presented with or solicited by any leaflet, newspaper or magazine article, radio
or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.
 
(l) Authority; Enforceability. This Agreement and other agreements delivered
together with this Agreement or in connection herewith have been duly
authorized, executed and delivered by the Subscriber and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights generally and
to general principles of equity; and Subscriber (if an entity) has full
corporate power and authority necessary to enter into this Agreement and such
other agreements and to perform its obligations hereunder and under all other
agreements entered into by the Subscriber relating hereto.

(m) Restricted Securities. Subscriber understands that the Securities have not
been registered under the 1933 Act and such Subscriber will not sell, offer to
sell, assign, pledge, hypothecate or otherwise transfer any of the Securities
unless (i) pursuant to an effective registration statement under the 1933 Act or
(ii) such Subscriber provides the Company with an opinion of counsel, in a form
reasonably acceptable to the Company, to the effect that a sale, assignment or
transfer of the Securities may be made without registration under the 1933 Act,
or (iii) Subscriber provides the Company with reasonable assurances (in the form
of seller and broker representation letters) that the Warrant Shares may be sold
pursuant to (A) Rule 144 promulgated under the 1933 Act, or (B) Rule 144(k)
promulgated under the 1933 Act, in each case following the applicable holding
period set forth therein. Notwithstanding anything to the contrary contained in
this Agreement, such Subscriber may transfer (without restriction and without
the need for an opinion of counsel) the Securities to its Affiliates (as defined
below) provided that such Affiliate is an “accredited investor” under Regulation
D and such Affiliate agrees to be bound by the terms and conditions of this
Agreement. For the purposes of this Agreement, an “Affiliate” of any person or
entity means any other person or entity directly or indirectly controlling,
controlled by or under direct or indirect common control with such person or
entity. For purposes of this definition, “control” means the power to direct the
management and policies of such person or firm, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.

(n) No Governmental Review. Each Subscriber understands that no United States
federal or state agency or any other governmental or state agency has passed on
or made recommendations or endorsement of the Securities or the suitability of
the investment in the Securities nor have such authorities passed upon or
endorsed the merits of the offering of the Securities.

(o) Short Sales Prior to the Date Hereof. Subscriber has not directly or
indirectly, nor has any person acting on behalf of or pursuant to any
understanding with such Subscriber, executed any disposition, including Short
Sales (but not including the location and/or reservation of borrowable shares of
Common Stock), in the securities of the Company during the period commencing
from the time that such Subscriber first received a term sheet from the Company
or any other person setting forth the material terms of the transactions
contemplated hereunder until the date hereof (“Discussion Time”).
Notwithstanding the foregoing, in the case of a Subscriber that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Subscriber’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Subscriber’s assets, the representation set
forth above shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement. For purposes of this Agreement, the term
“Short Sales” shall include all “short sales” as defined in Rule 200 of
Regulation SHO under the Exchange Act.
 
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(p) Correctness of Representations. Each Subscriber represents as to such
Subscriber that the foregoing representations and warranties are true and
correct as of the date hereof and, unless a Subscriber otherwise notifies the
Company prior to the Closing Date or the Subsequent Issuance Date, shall be true
and correct as of the Closing Date or the Subsequent Issuance Date, as the case
may be.

(q) Survival. The foregoing representations and warranties shall survive the
Subsequent Issuance Date for a period of three years.
 
5. Company Representations and Warranties. Except as set forth in the Reports or
the Other Written Information and as otherwise qualified in the Transaction
Documents, the Company represents and warrants to and agrees with each
Subscriber that:
 
(a) Due Incorporation. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the respective jurisdictions of
their incorporation and have the requisite corporate power to own their
properties and to carry on their business as now being conducted. The Company is
duly qualified as a foreign corporation to do business and is in good standing
in each jurisdiction where the nature of the business conducted or property
owned by it makes such qualification necessary, other than those jurisdictions
in which the failure to so qualify would not have a Material Adverse Effect. For
purpose of this Agreement, a “Material Adverse Effect” shall mean a material
adverse effect on the financial condition, results of operations, properties or
business of the Company taken as a whole. For purposes of this Agreement,
“Subsidiary” means, with respect to any entity at any date, any corporation,
limited or general partnership, limited liability company, trust, estate,
association, joint venture or other business entity of which more than 30% of
(i) the outstanding capital stock having (in the absence of contingencies)
ordinary voting power to elect a majority of the board of directors or other
managing body of such entity, (ii) in the case of a partnership or limited
liability company, the interest in the capital or profits of such partnership or
limited liability company or (iii) in the case of a trust, estate, association,
joint venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such
entity. As of the Closing Date, the Company’s only Subsidiaries are Magical
Insight Investments Ltd., a British Virgin Islands corporation and Beihai
Hi-Tech Wealth Technology Development Co., Ltd., a a company organized under the
laws of the People’s Republic of China, Euro Asia Arbitrage Investment Limited,
a Hong Kong company, Beijing Hi-Tech Wealth Software Technology Ltd. a company
organized under the laws of the People’s Republic of China.
 
(b) Outstanding Stock. All issued and outstanding shares of capital stock of the
Company and each of its subsidiaries have been duly authorized and validly
issued and are fully paid and nonassessable.
 
(c) Authority; Enforceability. This Agreement, the Notes, the Warrants, the
Funds Escrow Agreement, Security Agreements, Guaranty, Collateral Agent
Agreement and any other agreements delivered together with this Agreement or in
connection herewith (collectively “Transaction Documents”) have been duly
authorized, executed and delivered by the Company and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights generally and
to general principles of equity. The Company has full corporate power and
authority necessary to enter into and deliver the Transaction Documents and to
perform its obligations thereunder.
 
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(d) Additional Issuances. There are no outstanding agreements or preemptive or
similar rights affecting the Company's common stock or equity and no outstanding
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, or agreements or understandings with respect to the sale or
issuance of any shares of common stock or equity of the Company or other equity
interest in any of the subsidiaries of the Company except as described on
Schedule 5(d).
 
(e) Consents. No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Company,
or any of its Affiliates, the OTC Bulletin Board (the “Bulletin Board”) nor the
Company's shareholders is required for the execution by the Company of the
Transaction Documents and compliance and performance by the Company of its
obligations under the Transaction Documents, including, without limitation, the
issuance and sale of the Securities. The Transaction Documents and the Company’s
performance of its obligations thereunder has been approved unanimously by the
Company’s directors.
 
(f) No Violation or Conflict. Assuming the representations and warranties of the
Subscribers in Section 4 are true and correct, neither the issuance and sale of
the Securities nor the performance of the Company’s obligations under this
Agreement and all other agreements entered into by the Company relating thereto
by the Company will:
 
(i) violate, conflict with, result in a breach of, or constitute a default (or
an event which with the giving of notice or the lapse of time or both would be
reasonably likely to constitute a default) under (A) the articles of
incorporation, or bylaws of the Company, (B) to the Company's knowledge, any
decree, judgment, order, law, treaty, rule, regulation or determination
applicable to the Company of any court, governmental agency or body, or
arbitrator having jurisdiction over the Company or any of its subsidiaries or
over the properties or assets of the Company or any of its Affiliates, (C) the
terms of any bond, debenture, note or any other evidence of indebtedness, or any
agreement, stock option or other similar plan, indenture, lease, mortgage, deed
of trust or other instrument to which the Company or any of its Affiliates or
subsidiaries is a party, by which the Company or any of its Affiliates or
subsidiaries is bound, or to which any of the properties of the Company or any
of its Affiliates or subsidiaries is subject, or (D) the terms of any "lock-up"
or similar provision of any underwriting or similar agreement to which the
Company, or any of its Affiliates or subsidiaries is a party except the
violation, conflict, breach, or default of which would not have a Material
Adverse Effect on the Company; or
 
(ii) result in the creation or imposition of any Lien (as defined herein),
charge or encumbrance upon the Securities or any of the assets of the Company,
its subsidiaries or any of its Affiliates other than Permitted Liens; or
 
(iii) result in the activation of any anti-dilution rights or a reset or
repricing of any debt or security instrument of any other creditor or equity
holder of the Company, nor result in the acceleration of the due date of any
obligation of the Company; or
 
(iv) result in the activation of any piggy-back registration rights of any
person or entity holding securities of the Company or having the right to
receive securities of the Company.
 
(g) The Securities. The Securities upon issuance:
 
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(i) are, or will be, free and clear of any security interests, liens, claims or
other encumbrances, subject to restrictions upon transfer under the 1933 Act and
any applicable state securities laws;

(ii) have been, or will be, duly and validly authorized and on the date of
exercise of the Warrants and issuance of the Warrant Shares will be duly and
validly issued, fully paid and nonassessable and, if registered pursuant to the
1933 Act, and resold pursuant to an effective registration statement will be
free trading and unrestricted except to the extent of any restrictions pursuant
to the 1933 Act or the Exchange Act that may be applicable to any Subscriber due
to such Subscriber’s affiliate or insider status with respect to the Company or
such Subscriber’s possession of material non-public information with respect to
the Company;
 
(iii) will not have been issued or sold in violation of any preemptive or other
similar rights of the holders of any securities of the Company;
 
(iv) will not subject the holders thereof to personal liability by reason of
being such holders provided Subscriber’s representations herein are true and
accurate and Subscribers take no actions or fail to take any actions required to
be taken by the Subscribers pursuant to this Agreement for their purchase of the
Securities to be in compliance with all applicable laws and regulations; and
 
(v) assuming the representations warranties of the Subscribers as set forth in
Section 4 hereof are true and correct and Subscribers take no actions or fail to
take any actions required to be taken by the Subscribers pursuant to this
Agreement for their purchase of the Securities to be in compliance with all
applicable laws and regulations, will not result in a violation of Section 5
under the 1933 Act.
 
(h) Litigation. There is no pending or, to the best knowledge of the Company,
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or any of its Affiliates that would affect the execution by the Company or the
performance by the Company of its obligations under the Transaction Documents.
Except as disclosed in the Reports, there is no pending or, to the best
knowledge of the Company, basis for or threatened action, suit, proceeding or
investigation before any court, governmental agency or body, or arbitrator
having jurisdiction over the Company, or any of its Affiliates which litigation
if adversely determined would have a Material Adverse Effect on the Company.
 
(i) Reporting Company. The Company is a publicly-held company subject to
reporting obligations pursuant to Section 13 of the Securities Exchange Act of
1934, as amended (the "1934 Act") and has a class of common equity registered
pursuant to Section 12(g) of the 1934 Act.
 
(j) No Market Manipulation. The Company has not taken, and will not take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
the Common Stock of the Company to facilitate the sale or resale of the
Securities or affect the price at which the Securities may be issued or resold.
 
(k) Information Concerning Company. The Reports contain all material information
relating to the Company and its operations and financial condition as of their
respective dates which information is required to be disclosed therein. Since
the date of the financial statements included in the Reports, and except as
modified in the Other Written Information or in the Schedules hereto, there has
been no material adverse change in the Company's business, financial condition
or affairs not disclosed in the Reports. The Reports do not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances when made.
 
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(l) Stop Transfer. The Securities, when issued, will be restricted securities.
The Company will not issue any stop transfer order or other order impeding the
sale, resale or delivery of any of the Securities, except as may be required by
any applicable federal or state securities laws and unless contemporaneous
notice of such instruction is given to the Subscriber.
 
(m) Defaults. The Company is not in violation of its articles of incorporation
or bylaws. The Company is (i) not in default under or in violation of any other
material agreement or instrument to which it is a party or by which it or any of
its properties are bound or affected, which default or violation would have a
Material Adverse Effect on the Company, (ii) not in default with respect to any
order of any court, arbitrator or governmental body or subject to or party to
any order of any court or governmental authority arising out of any action, suit
or proceeding under any statute or other law respecting antitrust, monopoly,
restraint of trade, unfair competition or similar matters, or (iii) to its
knowledge, not in violation of any statute, rule or regulation of any
governmental authority which violation would have a Material Adverse Effect on
the Company.
 
(n) Not an 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 offer of the Securities pursuant to
this Agreement to be integrated with prior offerings by the Company for purposes
of the 1933 Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of the Bulletin Board. Nor
will the Company or any of its Affiliates or subsidiaries take any action or
steps that would cause the offer or issuance of the Securities to be integrated
with other offerings. The Company will not conduct any offering other than the
transactions contemplated hereby that will be integrated with the offer or
issuance of the Securities.
 
(o) No General Solicitation. Neither the Company, nor any of its Affiliates, nor
to its knowledge, 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 1933 Act) in connection with the offer or sale of the
Securities.
 
(p) Listing. The Company's common stock is quoted on the Bulletin Board under
the symbol: GCPN.OB. The Company has not received any oral or written notice
that its common stock is not eligible nor will become ineligible for quotation
on the Bulletin Board nor that its common stock does not meet all requirements
for the continuation of such quotation. The Company satisfies all the
requirements for the continued quotation of its common stock on the Bulletin
Board.
 
(q) No Undisclosed Liabilities. The Company has no liabilities or obligations
which are material, individually or in the aggregate, which are not disclosed in
the Reports and Other Written Information, other than those incurred in the
ordinary course of the Company’s businesses since December 31, 2006 and which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect except as set forth in Schedule 5(q). On the Closing
Date, the Company will have liabilities of not more than $25,627,676 (excluding
permitted liens).
 
(r) No Undisclosed Events or Circumstances. Since December 31, 2005, no event or
circumstance has occurred or exists with respect to the Company or its
businesses, properties, operations or financial condition, that, under
applicable law, rule or regulation, requires public disclosure or announcement
prior to the date hereof by the Company but which has not been so publicly
announced or disclosed in the Reports.
 
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(s) Capitalization. The authorized and outstanding capital stock of the Company
as of the date of this Agreement and the Closing Date are set forth on Schedule
5(d). Except as set forth on Schedule 5(d), there are no options, warrants, or
rights to subscribe to, securities, rights or obligations convertible into or
exchangeable for or giving any right to subscribe for any shares of capital
stock of the Company. All of the outstanding shares of Common Stock of the
Company have been duly and validly authorized and issued and are fully paid and
nonassessable.
 
(t) Dilution. The Company's executive officers and directors understand the
nature of the Securities being sold hereby and recognize that the issuance of
the Securities will have a potential dilutive effect on the equity holdings of
other holders of the Company’s equity or rights to receive equity of the
Company. The board of directors of the Company has unanimously concluded, in its
good faith business judgment, that the issuance of the Securities is in the best
interests of the Company. The Company specifically acknowledges that its
obligation to issue the Warrant Shares upon exercise of the Warrants is binding
upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership interests of other shareholders of the Company or parties
entitled to receive equity of the Company.
 
(u) No Disagreements with Accountants and Lawyers. There are no material
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly
or presently employed by the Company, including but not limited to disputes or
conflicts over payment owed to such accountants and lawyers.

(v) DTC Status. The Company’s transfer agent is not a participant in and the
Common Stock is not eligible for transfer pursuant to the Depository Trust
Company Automated Securities Transfer Program. The name, address, telephone
number, fax number, contact person and email address of the Company transfer
agent is set forth on Schedule 5(v) hereto.

(w) Investment Company. The Company is not an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

(x) Subsidiary Representations. The Company makes each of the representations
contained in Sections 5(a), (b), (d), (f), (h), (k), (m), (q), (r) and (u) of
this Agreement, as same relate to each Subsidiary of the Company.
 
(y) Foreign Corrupt Practices. Neither the Company nor, to the knowledge of the
Company, any director, officer, agent, employee, or stockholder acting on behalf
of the Company has taken any action, directly or indirectly, that would result
in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (the “FCPA”) or of comparable
PRC law, including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA or of comparable PRC law and the
Company has conducted its business in compliance with the FCPA and comparable
PRC law.
 
(z) Solvency. Based on the financial condition of the Company as of the Closing
Date after giving effect to the receipt by the Company of the proceeds from the
sale of the Securities hereunder, (i) the Company’s fair saleable value of its
assets exceeds the amount that will be required to be paid on or in respect of
the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business for the current fiscal year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts are
required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt).
 
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(AA) Correctness of Representations. The Company represents that the foregoing
representations and warranties are true and correct as of the date hereof in all
material respects, and, unless the Company otherwise notifies the Subscribers
prior to the Closing Date, shall be true and correct in all material respects as
of the Closing Date.
 
(BB) Survival. The foregoing representations and warranties shall survive the
Subsequent Issuance Date for a period of three years.
 
6. Regulation D Offering. The offer and issuance of the Securities to the
Subscribers is being made pursuant to the exemption from the registration
provisions of the 1933 Act afforded by Section 4(2) of the 1933 Act and/or Rule
506 of Regulation D promulgated thereunder. On each Closing Date, the Company
will provide an opinion reasonably acceptable to Subscriber from the Company's
legal counsel opining on the availability of an exemption from registration
under the 1933 Act as it relates to the offer and issuance of the Securities and
other matters reasonably requested by Subscribers. A form of the legal opinion
is annexed hereto as Exhibit G. The Company will provide, at the Company's
expense, such other legal opinions in the future as are reasonably necessary for
the issuance and resale of the Warrant Shares.
 
7.1. Covenants of the Company. The Company covenants and agrees with the
Subscribers as follows:
 
(a) Stop Orders. The Company will advise the Subscribers, promptly after it
receives notice of issuance by the Commission, any state securities commission
or any other regulatory authority of any stop order or of any order preventing
or suspending any offering of the Securities of the Company, or of the
suspension of the qualification of the Common Stock of the Company for offering
or sale in any jurisdiction, or the initiation of any proceeding for any such
purpose.
 
(b) Listing/Quotation. The Company shall promptly secure the quotation or
listing of the Warrant Shares upon each national securities exchange, or
automated quotation system upon which they are or become eligible for quotation
or listing (subject to official notice of issuance) and shall maintain same so
long as any Warrants are outstanding. The Company will maintain the quotation or
listing of its Common Stock on the American Stock Exchange, Nasdaq SmallCap
Market, Nasdaq National Market System, Bulletin Board, or New York Stock
Exchange (whichever of the foregoing is at the time the principal trading
exchange or market for the Common Stock (the “Principal Market”)), and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the Principal Market, as applicable.
The Company will provide the Subscribers copies of all notices it receives
notifying the Company of the threatened and actual delisting of the Common Stock
from any Principal Market. As of the date of this Agreement and the Closing
Date, the Bulletin Board is the Principal Market.
 
(c) Market Regulations. The Company shall notify the Commission, the Principal
Market and applicable state authorities, in accordance with their requirements,
of the transactions contemplated by this Agreement, 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 Securities to
the Subscribers and promptly provide copies thereof to Subscriber.
 
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(d) Reporting Requirements. From the date of this Agreement and until the last
to occur of (i) two (2) years after the Subsequent Issuance Date, or (ii) until
all the Warrant Shares have been resold or transferred by all the Subscribers
pursuant to a registration statement or pursuant to Rule 144, without regard to
volume limitation, or (iii) the Notes are no longer outstanding (the date of
occurrence of the first such event being the “End Date”), the Company will (v)
cause the Common Stock to continue to be registered under Section 12(b) or 12(g)
of the 1934 Act, (x) comply in all respects with its reporting and filing
obligations under the 1934 Act, (y) comply with all reporting requirements that
are applicable to an issuer with a class of shares registered pursuant to
Section 12(b) or 12(g) of the 1934 Act, as applicable, and (z) comply with all
requirements related to any registration statement filed pursuant to this
Agreement. The Company will use its best efforts not to take any action or file
any document (whether or not permitted by the 1933 Act or the 1934 Act or the
rules thereunder) to terminate or suspend such registration or to terminate or
suspend its reporting and filing obligations under said acts until the End Date.
Until the End Date, the Company will use its best efforts to continue the
listing or quotation of the Common Stock on the Principal Market or other market
with the reasonable consent of Subscribers holding a majority of each of the
Warrants and Warrant Shares, and will comply in all respects with the Company's
reporting, filing and other obligations under the bylaws or rules of the
Principal Market. The Company agrees to timely file a Form D with respect to the
Securities if required under Regulation D and to provide a copy thereof to each
Subscriber promptly after such filing.
 
(e) Use of Proceeds. Except as described on Schedule 7(e), the Purchase Price
may not and will not be used for accrued and unpaid officer and director
salaries, payment of financing related debt, redemption of outstanding notes or
equity instruments of the Company nor non-trade obligations outstanding on the
Closing Date.
 
(f) Reservation. Prior to the Closing Date, the Company undertakes to reserve,
pro rata, on behalf of each Subscriber, from its authorized but unissued common
stock, a number of common shares equal to the amount of Warrant Shares issuable
upon exercise of the Warrants. Failure to have sufficient shares reserved
pursuant to this Section 7.1(f) for three (3) consecutive business days or ten
(10) days in the aggregate shall be a material default of the Company’s
obligations under this Agreement.
 
(g) Taxes. From the date of this Agreement and until the End Date, the Company
will promptly pay and discharge, or cause to be paid and discharged, when due
and payable, all lawful taxes, assessments and governmental charges or levies
imposed upon the income, profits, property or business of the Company; provided,
however, that any such tax, assessment, charge or levy need not be paid if the
validity thereof shall currently be contested in good faith by appropriate
proceedings and if the Company shall have set aside on its books adequate
reserves with respect thereto, and provided, further, that the Company will pay
all such taxes, assessments, charges or levies forthwith upon the commencement
of proceedings to foreclose any lien which may have attached as security
therefor.
 
(h) Insurance. From the date of this Agreement and until the End Date, the
Company will keep its assets which are of an insurable character insured by
financially sound and reputable insurers against loss or damage by fire,
explosion and other risks customarily insured against by companies in the
Company’s line of business, in amounts sufficient to prevent the Company from
becoming a co-insurer and not in any event less than one hundred percent (100%)
of the insurable value of the property insured; and the Company will maintain,
with financially sound and reputable insurers, insurance against other hazards
and risks and liability to persons and property to the extent and in the manner
customary for companies in similar businesses similarly situated and to the
extent available on commercially reasonable terms.
 
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(i) Books and Records. From the date of this Agreement and until the End Date,
the Company will keep true records and books of account in which full, true and
correct entries will be made of all dealings or transactions in relation to its
business and affairs in accordance with generally accepted accounting principles
applied on a consistent basis.
 
(j) Governmental Authorities. From the date of this Agreement and until the End
Date, the Company shall duly observe and conform in all material respects to all
valid requirements of governmental authorities relating to the conduct of its
business or to its properties or assets.
 
(k) Intellectual Property. From the date of this Agreement and until the End
Date, the Company shall maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use
intellectual property owned or possessed by it and reasonably deemed to be
necessary to the conduct of its business.
 
(l) Properties. From the date of this Agreement and until the End Date, the
Company will keep its properties in good repair, working order and condition,
reasonable wear and tear excepted, and from time to time make all necessary and
proper repairs, renewals, replacements, additions and improvements thereto; and
the Company will at all times comply with each provision of all leases to which
it is a party or under which it occupies property if the breach of such
provision could reasonably be expected to have a Material Adverse Effect.
 
(m) Confidentiality/Public Announcement. From the date of this Agreement and
until the End Date, the Company agrees that except in connection with a Form 8-K
or pursuant to a Registration Statement, it will not disclose publicly or
privately the identity of the Subscribers unless expressly agreed to in writing
by a Subscriber or only to the extent required by law and then only upon five
days prior notice to Subscriber. In the event that the Company believes that a
notice or communication contains material, nonpublic information, relating to
the Company or Subsidiaries, the Company shall so indicate to the Subscriber
contemporaneously with delivery of such notice or information. In the absence of
any such indication, the Subscriber shall be allowed to presume that all matters
relating to such notice and information do not constitute material, nonpublic
information relating to the Company or Subsidiaries. In any event and subject to
the foregoing, the Company undertakes to file a Form 8-K or make a public
announcement describing the Offering not later than the first business day after
the Closing Date. In the Form 8-K or public announcement, the Company will
specifically disclose the amount of common stock outstanding immediately after
the Closing.
 
(n) Non-Public Information. The Company covenants and agrees that neither it nor
any other Person acting on its behalf will provide any Subscriber or its agents
or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Subscriber shall have agreed
in writing to receive such information. The Company understands and confirms
that each Subscriber shall be relying on the foregoing representations in
effecting transactions in securities of the Company.

(o)  Seniority. Except for Permitted Liens and as otherwise provided for herein,
until the Notes are fully satisfied, the Company shall not grant nor allow any
security interest to be taken in the assets of the Company or any Subsidiary,
nor issue any debt, equity or other instrument which would give the holder
thereof directly or indirectly, a right in any assets of the Company or any
Subsidiary, superior to any right of the Note holder in or to such assets
without the prior written consent of holders of seventy-five percent (75%) of
the aggregate principal amount of the Notes.
 
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(p) Negative Covenants. So long as a Note is outstanding, without the consent of
the Subscriber, the Company will not and will not permit any of Magical Insight
or HTW to directly or indirectly:

(i) create, incur, assume any pledge, hypothecation, assignment, deposit
arrangement, lien, charge, claim, security interest, security title, mortgage,
security deed or deed of trust, easement or encumbrance, or preference, priority
or other security agreement or preferential arrangement of any kind or nature
whatsoever (including any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing, and
the filing of, or agreement to give, any financing statement perfecting a
security interest under the Uniform Commercial Code or comparable law of any
jurisdiction) (each, a “Lien”) upon any of its property, whether now owned or
hereafter acquired except for: (i) the Excepted Issuances (as defined in Section
12(a) hereof), (ii) (a) Liens existing on the Closing Date as set forth on
Schedule 7(p), (b) Liens on property of a person existing at the time such
person is merged into or consolidated with the Company or any Subsidiary of the
Company or becomes a Subsidiary, provided that such Liens were not created in
contemplation of such merger, consolidation or acquisition and do not extend to
any assets other than those of the person so merged into or consolidated with
the Company or such Subsidiary or acquired by the Company or such Subsidiary,
(c) the replacement, extension or renewal of any Lien permitted by clauses (a)
or (b) above upon or in the same property theretofore subject thereto or the
replacement, extension or renewal of the indebtedness secured thereby; (d) Liens
imposed by law for taxes that are not yet due or are being contested in good
faith and for which adequate reserves have been established in accordance with
generally accepted accounting principles; (e) carriers’, warehousemen’s,
mechanics’, material men’s, repairmen’s and other like Liens imposed by law,
arising in the ordinary course of business and securing obligations that are not
overdue by more than 30 days or that are being contested in good faith and by
appropriate proceedings; (f) pledges and deposits made in the ordinary course of
business in compliance with workers’ compensation, unemployment insurance and
other social security laws or regulations; (g) deposits to secure the
performance of bids, trade contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business; (h) Liens created with respect to the
financing of the purchase of new property in the ordinary course of the
Company’s business up to the amount of the purchase price of such property; (i)
easements, zoning restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of business that do
not secure any monetary obligations and do not materially detract from the value
of the affected property, (j) up to not more than an additional one million
dollars of indebtedness above that outstanding on the Closing Date, or (h) as
described on Schedule 7.1(p) (each of (a) through (j), a “Permitted Lien”) and
(iii) indebtedness for borrowed money which is not senior or pari passu in right
of payment to the payment of the Notes;

     (ii) amend its certificate of incorporation, bylaws or its charter
documents so as to materially adversely affect any rights of the Subscriber;

(iii) repay, repurchase or offer to repay, repurchase or otherwise acquire or
make any dividend or distribution in respect of any of its Common Stock,
preferred stock, or other equity securities other than to the extent permitted
or required under the Transaction Documents; or
 
(iv) prepay or redeem any financing related debt or past due obligations
outstanding as of the Closing Date.
 
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7.2. Injunction - Posting of Bond. In the event a Subscriber shall elect to
exercise the Warrant in whole or in part, the Company may not refuse exercise
based on any claim that such Subscriber or any one associated or affiliated with
such Subscriber has been engaged in any violation of law, or for any other
reason, unless, an injunction from a court, on notice, restraining and or
enjoining exercise of all or part of said Warrant shall have been sought and
obtained by the Company and the Company has posted a surety bond for the benefit
of such Subscriber in the amount of 120% of the aggregate purchase price of the
Warrant Shares which are subject to the injunction, which bond shall remain in
effect until the completion of arbitration/litigation of the dispute and the
proceeds of which shall be payable to such Subscriber to the extent Subscriber
obtains judgment.
 
7.3. Buy-In. In addition to any other rights available to the Subscriber, if the
Company fails to deliver to the Subscriber such shares issuable upon exercise of
a Warrant on or before the Delivery Date (as defined in the Warrant) and if
seven (7) business days after the Delivery Date the Subscriber purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Subscriber of the Common Stock which the
Subscriber was entitled to receive upon such exercise (a "Buy-In"), then the
Company shall pay in cash to the Subscriber (in addition to any remedies
available to or elected by the Subscriber) the amount by which (A) the
Subscriber's total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased exceeds (B) the aggregate exercise price
for which such exercise was not timely honored, together with interest thereon
at a rate of 15% per annum, accruing until such amount and any accrued interest
thereon is paid in full (which amount shall be paid as liquidated damages and
not as a penalty). For example, if the Subscriber purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of $10,000 of Warrant exercise price, the Company shall be
required to pay the Subscriber $1,000, plus interest. The Subscriber shall
provide the Company written notice indicating the amounts payable to the
Subscriber in respect of the Buy-In.

8.    (a)  Due Diligence Fee. The Company will pay a due diligence fee (“Due
Diligence Fee”) of $15,000 as more fully described on Schedule 8(a) hereto. The
Due Diligence Fee will be paid on the Closing Date out of funds held pursuant to
the Escrow Agreement. 
 
(b) Broker’s Fee. The Company represents that there are no other parties
entitled to receive fees, commissions, or similar payments in connection with
the Offering except Broadband Capital Management, LLC (“Broker”) which is
entitled to a fee payable in cash or common stock determined by reference to 5%
of the aggregate Purchase Price.
 
9. Legal Fees. On the Closing Date, the Company shall pay to Grushko & Mittman,
P.C., a fee of $60,000 (“Legal Fees”) (of which $10,000 has been paid prior to
the Closing Date) as reimbursement for services rendered to the Subscribers in
connection with this Agreement and the purchase and sale of the Notes and
Warrants (the “Offering”) and acting as Escrow Agent. The Legal Fees will be
payable out of funds held pursuant to the Escrow Agreement.
 
10. Covenants of the Company and Subscriber Regarding Indemnification.
 
(a) The Company agrees to indemnify, hold harmless, reimburse and defend the
Subscribers, the Subscribers' officers, directors, agents, Affiliates, control
persons, and principal shareholders, against any claim, cost, expense,
liability, obligation, loss or damage (including reasonable legal fees) of any
nature, incurred by or imposed upon the Subscriber or any such person which
results, arises out of or is based upon (i) any material misrepresentation by
Company or breach of any warranty by Company in this Agreement or in any
Exhibits or Schedules attached hereto, or other agreement delivered pursuant
hereto; or (ii) after any applicable notice and/or cure periods, any material
breach or default in performance by the Company of any covenant or undertaking
to be performed by the Company hereunder, or any other agreement entered into by
the Company and Subscriber relating hereto.
 
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(b) Each Subscriber agrees to indemnify, hold harmless, reimburse and defend the
Company and each of the Company’s officers, directors, agents, Affiliates,
control persons against any claim, cost, expense, liability, obligation, loss or
damage (including reasonable legal fees) of any nature, incurred by or imposed
upon the Company or any such person which results, arises out of or is based
upon (i) any material misrepresentation by such Subscriber in this Agreement or
in any Exhibits or Schedules attached hereto, or other agreement delivered
pursuant hereto; or (ii) after any applicable notice and/or cure periods, any
material breach or default in performance by such Subscriber of any covenant or
undertaking to be performed by such Subscriber hereunder, or any other agreement
entered into by the Company and Subscribers, relating hereto.
 
(c) In no event shall the liability of any Subscriber or permitted successor
hereunder or under any other agreement delivered in connection herewith be
greater in amount than the dollar amount of the net proceeds actually received
by such Subscriber upon the sale of Registrable Securities (as defined herein).
 
(d) The procedures set forth in Section 11.6 shall apply to the indemnification
set forth in Sections 10(a) and 10(b) above.
 
10A. Covenants of Subscribers
 
(a) Short Sales After the Date Hereof. Each Subscriber severally and not jointly
with the other Subscribers covenants that neither it nor any affiliates acting
on its behalf or pursuant to any understanding with it will execute any Short
Sales during the period after the Discussion Time and ending at the time that
the transactions contemplated by this Agreement are first publicly announced.
Each Subscriber, severally and not jointly with the other Subscribers, covenants
that until such time as the transactions contemplated by this Agreement are
publicly disclosed by the Company, such Subscriber will maintain, the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction). Each
Subscriber understands and acknowledges, severally and not jointly with any
other Subscriber, that the SEC currently takes the position that coverage of
short sales of shares of the Common Stock “against the box” prior to the
Effective Date of the Registration Statement with respect to the Securities is a
violation of Section 5 of the 1933 Act, as set forth in Item 65, Section 5 under
Section A, of the Manual of Publicly Available Telephone Interpretations, dated
July 1997, compiled by the Office of Chief Counsel, Division of Corporation
Finance. Notwithstanding the foregoing, in the case of a Subscriber that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Subscriber’s assets and the portfolio manager have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Subscriber’s assets, the covenant set forth
above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Securities
covered by the Agreement. Upon  delivery by the Company to Subscriber after the
Closing Date of any notice or information, in writing, electronically or
otherwise, and while a Note, Warrants, or Warrant Shares are held by Subscriber,
unless the  Company has in good faith determined that the matters relating to
such notice do not constitute material, nonpublic information relating to
the Company or Subsidiaries, the Company  shall within one business day after
any such delivery publicly disclose such  material,  nonpublic  information on a
Report on Form 8-K or otherwise.  In the event that the Company believes that a
notice or communication contains material, nonpublic information, relating to
the Company or Subsidiaries, the Company shall so indicate to the Subscriber
contemporaneously with delivery of such notice or information. In the absence of
any such indication, the Subscriber shall be allowed to presume that all matters
relating to such notice and information do not constitute material, nonpublic
information relating to the Company or Subsidiaries.
 
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11.1. Registration Rights. The Company hereby grants the following registration
rights to holders of the Securities.
 
(i) If the Company at any time proposes to register any of its securities under
the 1933 Act for sale to the public, whether for its own account or for the
account of other security holders or both, except with respect to registration
statements on Forms S-4, S-8 or another form not available for registering the
Warrant Shares (collectively, the “Registrable Securities”) for sale to the
public, provided the Registrable Securities are not otherwise registered for
resale by the Subscribers or Holder pursuant to an effective registration
statement and provided the inclusion of the Registrable Securities in the
registration statement is permitted pursuant to the then current interpretation
of the staff of the Securities and Exchange Commission regarding the
availability of Rule 415 for continuous or delayed offerings of securities for
the account of selling security-holders (the “415 Position”), each such time it
will give at least fifteen (15) days' prior written notice to the record holder
of the Registrable Securities of its intention so to do. Upon the written
request of the holder, received by the Company within ten (10) days after the
giving of any such notice by the Company, to register any of the Registrable
Securities not previously registered which may be included pursuant to the 415
Position, the Company will cause such Registrable Securities with the securities
to be covered by the registration statement proposed to be filed by the Company,
all to the extent required to permit the sale or other disposition of the
Registrable Securities so registered by the holder of such Registrable
Securities (the “Seller” or “Sellers”). Notwithstanding anything else contained
herein, the registration rights granted herein are subordinate in all respects
to the registration rights granted to the holders of the Company’s Series B
preferred stock, including with respect to the timing of inclusion and priority
in any reduction of the amount of Securities so registered. In the event any
Registrable Securities are not included in any such registration statement due
to the 415 Position, the Company agrees to file, at the earliest possible time
in view of the 415 Position, a further registration statement to register the
resale of the Registrable Securities, subject to the priority of the Series B
preferred stock described in the immediately preceding sentence. In the event
that any registration pursuant to this Section 11.1 shall be, in whole or in
part, an underwritten public offering of common stock of the Company, the number
of shares of Registrable Securities to be included in such an underwriting may
be reduced by the managing underwriter if and to the extent that the Company and
the underwriter shall reasonably be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Company
therein; provided, however, that the Company shall notify the Seller in writing
of any such reduction. Notwithstanding the foregoing provisions, or Section 11.4
hereof, the Company may withdraw or delay or suffer a delay of any registration
statement referred to in this Section 11.1 without thereby incurring any
liability to the Seller due to such withdrawal or delay.
 
11.2. Registration Procedures. If and whenever the Company is required by the
provisions of Section 11.1 to effect the registration of any Registrable
Securities under the 1933 Act, the Company will, as expeditiously as possible:
 
(a) subject to the timelines provided in this Agreement, prepare and file with
the Commission a registration statement required by Section 11, with respect to
the Registrable Securities and use its best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby (determined as herein provided), and promptly provide to
the holders of the Registrable Securities copies of all filings and Commission
letters of comment and notify Subscribers and Grushko & Mittman, P.C. (by
telecopier and by email to Counslers@aol.com) within one (1) business day of (i)
notice that the Commission has no comments or no further comments on the
Registration Statement, and (ii) the declaration of effectiveness of the
registration statement;
 
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(b) furnish to the Sellers, at the Company’s expense, such number of copies of
the registration statement and the prospectus included therein (including each
preliminary prospectus) as such persons reasonably may request in order to
facilitate the public sale or their disposition of the securities covered by
such registration statement;
 
(c) use its best efforts to register or qualify the Registrable Securities
covered by such registration statement under the securities or “blue sky” laws
of such jurisdictions as the Sellers shall request in writing, provided,
however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction or to subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject;
 
(d) if applicable, list the Registrable Securities covered by such registration
statement with any securities exchange on which the Common Stock of the Company
is then listed;
 
(e) promptly notify the Sellers when a prospectus relating thereto is required
to be delivered under the 1933 Act, of the happening of any event of which the
Company has knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and
 
(f) provided same would not be in violation of the provision of Regulation FD
under the 1934 Act, make available for inspection by the Sellers, and any
attorney, accountant or other agent retained by the Seller or underwriter, all
publicly available, non-confidential financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all publicly available,
non-confidential information reasonably requested by the seller, attorney,
accountant or agent in connection with such registration statement.
 
11.3. Provision of Documents. In connection with each registration described in
this Section 11, each Seller will furnish to the Company in writing such
information and representation letters with respect to itself and the proposed
distribution by it as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws.
 
11.4. Expenses. All expenses incurred by the Company in complying with Section
11, including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses (including reasonable counsel fees) incurred
in connection with complying with state securities or “blue sky” laws, fees of
the National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars, costs of insurance and fee of one counsel for
all Sellers are called “Registration Expenses.” All underwriting discounts and
selling commissions applicable to the sale of Registrable Securities, including
any fees and disbursements of any additional counsel to the Seller, are called
"Selling Expenses." The Company will pay all Registration Expenses in connection
with the registration statement under Section 11. Selling Expenses in connection
with each registration statement under Section 11 shall be borne by the Seller
and may be apportioned among the Sellers in proportion to the number of shares
sold by the Seller relative to the number of shares sold under such registration
statement or as all Sellers thereunder may agree.
 
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11.5. Indemnification and Contribution.
 
(a) In the event of a registration of any Registrable Securities under the 1933
Act pursuant to Section 11, the Company will, to the extent permitted by law,
indemnify and hold harmless the Seller, each officer of the Seller, each
director of the Seller, each underwriter of such Registrable Securities
thereunder and each other person, if any, who controls such Seller or
underwriter within the meaning of the 1933 Act, against any losses, claims,
damages or liabilities, joint or several, to which the Seller, or such
underwriter or controlling person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registrable Securities were registered under the 1933 Act
pursuant to Section 11, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances when made, and will subject to the provisions of
Section 11.5(c) reimburse the Seller, each such underwriter and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable to
the Seller to the extent that any such damages arise out of or are based upon an
untrue statement or omission made in any preliminary prospectus if (i) the
Seller failed to send or deliver a copy of the final prospectus delivered by the
Company to the Seller with or prior to the delivery of written confirmation of
the sale by the Seller to the person asserting the claim from which such damages
arise, (ii) the final prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged omission, or (iii) to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such Seller, or
any such controlling person in writing specifically for use in such registration
statement or prospectus.
 
(b) In the event of a registration of any of the Registrable Securities under
the 1933 Act pursuant to Section 11, each Seller severally but not jointly will,
to the extent permitted by law, indemnify and hold harmless the Company, and
each person, if any, who controls the Company within the meaning of the 1933
Act, each officer of the Company who signs the registration statement, each
director of the Company, each underwriter and each person who controls any
underwriter within the meaning of the 1933 Act, against all losses, claims,
damages or liabilities, joint or several, to which the Company or such officer,
director, underwriter or controlling person may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the registration
statement under which such Registrable Securities were registered under the 1933
Act pursuant to Section 11, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that the Seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such Seller, as such, furnished
in writing to the Company by such Seller specifically for use in such
registration statement or prospectus, and provided, further, however, that the
liability of the Seller hereunder shall be limited to the net proceeds actually
received by the Seller from the sale of Registrable Securities covered by such
registration statement.
 
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(c) Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 11.5(c) and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 11.5(c), except and only if and to the extent the indemnifying
party is prejudiced by such omission. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 11.5(c) for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so selected, provided, however, that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified parties, as a group, shall have the right to select one
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the reasonable expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
 
(d) In order to provide for just and equitable contribution in the event of
joint liability under the 1933 Act in any case in which either (i) a Seller, or
any controlling person of a Seller, makes a claim for indemnification pursuant
to this Section 11.5 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 11.5 provides for indemnification in such case, or (ii)
contribution under the 1933 Act may be required on the part of the Seller or
controlling person of the Seller in circumstances for which indemnification is
not provided under this Section 11.5; then, and in each such case, the Company
and the Seller will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that the Seller is responsible only for the portion
represented by the percentage that the public offering price of its securities
offered by the registration statement bears to the public offering price of all
securities offered by such registration statement, provided, however, that, in
any such case, (y) the Seller will not be required to contribute any amount in
excess of the public offering price of all such securities sold by it pursuant
to such registration statement; and (z) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
 
11.6. Delivery of Unlegended Shares.
 
(a) Within three (3) business days (such third business day being the
“Unlegended Shares Delivery Date”) after the business day on which the Company
has received (i) a notice that Warrant Shares have been sold pursuant to a
registration statement or Rule 144 under the 1933 Act, (ii) a representation
that the prospectus delivery requirements, or the requirements of Rule 144, as
applicable and if required, have been satisfied, and (iii) the original share
certificates representing the shares of Common Stock that have been sold, and
(iv) in the case of sales under Rule 144, customary representation letters of
the Subscriber and/or Subscriber’s broker regarding compliance with the
requirements of Rule 144, the Company at its expense, (y) shall deliver, and
shall cause legal counsel selected by the Company to deliver to its transfer
agent (with copies to Subscriber) an appropriate instruction and opinion of such
counsel, directing the delivery of shares of Common Stock without any legends
including the legend set forth in Section 4 above, reissuable pursuant to any
effective and current Registration Statement described in Section 11 of this
Agreement or pursuant to Rule 144 under the 1933 Act (the “Unlegended Shares”);
and (z) cause the transmission of the certificates representing the Unlegended
Shares together with a legended certificate representing the balance of the
submitted Warrant Shares certificate, if any, to the Subscriber at the address
specified in the notice of sale, via express courier, by electronic transfer or
otherwise on or before the Unlegended Shares Delivery Date.
 
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(b) In lieu of delivering physical certificates representing the Unlegended
Shares, if the Company’s transfer agent is participating in the Depository Trust
Company (“DTC”) Fast Automated Securities Transfer program, upon request of a
Subscriber, so long as the certificates therefor do not bear a legend and the
Subscriber is not obligated to return such certificate for the placement of a
legend thereon, the Company must cause its transfer agent to electronically
transmit the Unlegended Shares by crediting the account of Subscriber’s prime
Broker with DTC through its Deposit Withdrawal Agent Commission system. Such
delivery must be made on or before the Unlegended Shares Delivery Date.

(c) The Company understands that a delay in the delivery of the Unlegended
Shares pursuant to Section 11 hereof after the Unlegended Shares Delivery Date
could result in economic loss to Subscriber. As compensation to Subscriber for
such loss, the Company agrees to pay late payment fees (as liquidated damages
and not as a penalty) to the Subscriber for late delivery of Unlegended Shares
in the amount of $100 per business day after the Delivery Date for each $10,000
of Purchase Price of the Unlegended Shares subject to the delivery default. If
during any 360 day period, the Company fails to deliver Unlegended Shares as
required by this Section 11.6 for an aggregate of thirty (30) days, then each
Subscriber or assignee holding Securities subject to such default may, at its
option, require the Company to redeem all or any portion of the Warrant Shares
subject to such default at a price per share equal to 120% of the Purchase Price
of such Warrant Shares (“Unlegended Redemption Amount”).
 
(d) In addition to any other rights available to a Subscriber, if the Company
fails to deliver to a Subscriber Unlegended Shares as required pursuant to this
Agreement, within seven (7) business days after the Unlegended Shares Delivery
Date and the Subscriber or a broker on the Subscriber’s behalf, purchases (in an
open market transaction or otherwise) shares of common stock to deliver in
satisfaction of a sale by such Subscriber of the shares of Common Stock which
the Subscriber was entitled to receive from the Company (a "Buy-In"), then the
Company shall pay in cash to the Subscriber (in addition to any remedies
available to or elected by the Subscriber) the amount by which (A) the
Subscriber's total purchase price (including brokerage commissions, if any) for
the shares of common stock so purchased exceeds (B) the aggregate purchase price
of the shares of Common Stock delivered to the Company for reissuance as
Unlegended Shares together with interest thereon at a rate of 15% per annum,
accruing until such amount and any accrued interest thereon is paid in full
(which amount shall be paid as liquidated damages and not as a penalty). For
example, if a Subscriber purchases shares of Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to $10,000 of Purchase
Price of shares of Common Stock delivered to the Company for reissuance as
Unlegended Shares, the Company shall be required to pay the Subscriber $1,000,
plus interest. The Subscriber shall provide the Company written notice
indicating the amounts payable to the Subscriber in respect of the Buy-In.

(e) In the event a Subscriber shall request delivery of Unlegended Shares as
described in Section 11.6 and the Company is required to deliver such Unlegended
Shares pursuant to Section 11.6, the Company may not refuse to deliver
Unlegended Shares based on any claim that such Subscriber or any one associated
or affiliated with such Subscriber has been engaged in any violation of law, or
for any other reason, unless, an injunction or temporary restraining order from
a court, on notice, restraining and or enjoining delivery of such Unlegended
Shares or exercise of all or part of said Warrant shall have been sought and
obtained by the Company or at the Company’s request or with the Company’s
assistance, and the Company has posted a surety bond for the benefit of such
Subscriber in the amount of 120% of the amount of the Purchase Price of the
Warrant Shares which are subject to the injunction or temporary restraining
order, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to such Subscriber to the extent Subscriber obtains judgment in Subscriber’s
favor.
 
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12.    (a) Favored Nations Provision. Until the sale of all of the Warrant
Shares, the Subscribers shall be given not less than seven (7) business days
prior written notice of any proposed sale by the Company of its Common Stock or
other securities or debt obligations, except in connection with (i) full or
partial consideration in connection with a strategic merger, acquisition,
consolidation or purchase of substantially all of the securities or assets of
corporation or other entity provided such issuances are not for the purpose of
raising capital which holders of such securities or debt are not at any time
granted registration rights, (ii) the Company’s issuance of securities in
connection with strategic license agreements and other partnering arrangements
so long as such issuances are not for the purpose of raising capital which
holders of such securities or debt are not at any time granted registration
rights, (iii) the Company’s issuance of Common Stock or the issuances or grants
of options to purchase Common Stock pursuant to stock option plans and employee
stock purchase plans described on Schedule 5(d) hereto at prices equal to or
higher than the closing price of the Common Stock on the issue date of any of
the foregoing if applicable, otherwise at the fair market value, (iv)
underwritten public offerings and (v) purchase of up to $10,000,000 of the
Company’s Securities pursuant to the terms as described on Schedule 12(a) hereto
(collectively the foregoing are “Excepted Issuances”), if at any time Warrants
are outstanding, the Company shall offer, issue or agree to issue any Common
Stock or securities convertible into or exercisable for shares of Common Stock
(or modify any of the foregoing which may be outstanding) to any person or
entity at a price per share or conversion or exercise price per share which
shall be less than the Warrant exercise price, without the consent of each
Subscriber holding Warrants, or Warrant Shares, then the Company shall issue,
for each such occasion, additional shares of Common Stock to each Subscriber
holding Warrant Shares that are not then the subject of an effective
Registration Statement (provided such holder shall not have failed to comply
with its obligations under Section 11 hereof with respect to such Warrant Shares
or otherwise elected not to so include such Warrant Shares in a Registration
Statement) so that the average per share purchase price of the Warrant Shares
previously issued to the Subscriber (of only the Warrant Shares still owned by
the Subscriber) is equal to such other lower price per share. The delivery to
the Subscriber of the additional shares of Common Stock shall be not later than
the closing date of the transaction giving rise to the requirement to issue
additional shares of Common Stock. The Subscriber is granted the piggyback
registration rights described in Section 11 hereof in relation to such
additional shares of Common Stock or at the election of the Subscriber,
registration rights, if any, granted in connection with the dilutive issuance.
For purposes of the issuance and adjustment described in this paragraph, the
issuance of any security of the Company carrying the right to convert such
security into shares of Common Stock or of any warrant, right or option to
purchase Common Stock shall result in the issuance of the additional shares of
Common Stock upon the sooner of the agreement to or actual issuance of such
convertible security, warrant, right or option and again at any time upon any
subsequent issuances of shares of Common Stock upon exercise of such conversion
or purchase rights if such issuance is at a price lower than the Warrant
exercise price in effect upon such issuance. The rights of the Subscriber set
forth in this Section 12 are in addition to any other rights the Subscriber has
pursuant to this Agreement, any Transaction Document, and any other agreement
referred to or entered into in connection herewith.

(b) Offering Restrictions. For so long as the Notes are outstanding, except for
the Excepted Issuances, the Company will not enter into any equity line of
credit or similar agreement, nor issue nor agree to issue any floating or
variable priced equity linked instruments nor any of the foregoing or equity
with price reset rights. The only officer, director, employee and consultant
stock option or stock incentive plan currently in effect or contemplated by the
Company has been filed with the Reports prior to five days before the Closing
Date. Other than Excepted Issuances, no other plan will be adopted nor may any
options or equity not included in such plan be issued to such persons for so
long as any sum is outstanding under the Note.
 
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(c) Right of Participation. Until one year after the Subsequent Issuance Date,
the Subscribers shall be given not less than ten (10) business days prior
written notice of any proposed sale by the Company of its common stock or other
securities or debt obligations. The Subscribers who exercise their rights
pursuant to this Section 12(b) shall have the right during the ten (10) business
days following receipt of the notice to participate in the offering to purchase
up to Ten Million Dollars ($10,000,000) of such offered common stock, debt or
other securities in accordance with the terms and conditions set forth in the
notice of sale of such offer. In the event such terms and conditions are
modified during the notice period, the Subscribers shall be given prompt notice
of such modification and shall have the right during the original notice period
or for a period of ten (10) business days following the notice of modification,
whichever is longer, to exercise such right. Payment for such purchase by the
Subscribers may be made by cash and/or tender of the Note and all sums due under
the Note. In such event, the Subscriber will receive a credit against such other
subscription purchase price or payment equal to the amount of Note Principal
applied to such payment and a credit equal to the accrued interest and any other
amount accrued or payable to Subscriber pursuant to the Transaction Documents.
 
13. Miscellaneous.
 
(a) Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, 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: (i) if to the Company, to: Hi-Tech Wealth Inc., Suite
1503, Sino Plaza, 255-257 Gloucester Road, Causeway Bay, Hong Kong, Attn: Ma
Qing, CFO, telecopier: +852 2975 9809, with an additional copy by telecopier
only to: Loeb & Loeb, LLP, 345 Park Avenue, New York, NY 10154, Attn: Mitchell
S. Nussbaum, Esq., telecopier: (212) 202-7829, and (ii) if to the Subscribers,
to: the one or more addresses and telecopier numbers indicated on the signature
pages hereto, with an additional copy by telecopier only to: Grushko & Mittman,
P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, telecopier: (212)
697-3575.
 
(b) Entire Agreement; Assignment. This Agreement and other documents delivered
in connection herewith represent the entire agreement between the parties hereto
with respect to the subject matter hereof and may be amended only by a writing
executed by both parties. Neither the Company nor the Subscribers have relied on
any representations not contained or referred to in this Agreement and the
documents delivered herewith. No right or obligation of the Company shall be
assigned without prior notice to and the written consent of the Subscribers.
 
(c)  Counterparts/Execution. This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This Agreement
may be executed by facsimile signature and delivered by facsimile transmission.
 
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(d) Law Governing this Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of laws principles that would result in the application of the
substantive laws of another jurisdiction. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of New York or in the federal courts
located in the state of New York. The parties and the individuals executing this
Agreement and other agreements referred to herein or delivered in connection
herewith on behalf of the Company agree to submit to the jurisdiction of such
courts and waive trial by jury. The prevailing party shall be entitled to
recover from the other party its reasonable attorney's fees and costs. In the
event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.
 
(e) Specific Enforcement, Consent to Jurisdiction. The Company and Subscriber
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity. Subject to Section 13(d) hereof,
each of the Company, Subscriber and any signator hereto in his personal capacity
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 in New York 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. Nothing
in this Section shall affect or limit any right to serve process in any other
manner permitted by law.
 
(f) Independent Nature of Subscribers.   The Company acknowledges that the
obligations of each Subscriber under the Transaction Documents are several and
not joint with the obligations of any other Subscriber, and no Subscriber shall
be responsible in any way for the performance of the obligations of any other
Subscriber under the Transaction Documents.  The Company acknowledges that the
decision of each Subscriber to purchase Securities has been made by such
Subscriber independently of any other Subscriber 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 which may have been made or
given by any other Subscriber or by any agent or employee of any other
Subscriber, and no Subscriber or any of its agents or employees shall have any
liability to any Subscriber (or any other person) relating to or arising from
any such information, materials, statements or opinions.  The Company
acknowledges that nothing contained in any Transaction Document, and no action
taken by any Subscriber pursuant hereto or thereto (including, but not limited
to, the (i) inclusion of a Subscriber in the Registration Statement and (ii)
review by, and consent to, such Registration Statement by a Subscriber) shall be
deemed to constitute the Subscribers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the
Subscribers 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 Subscriber shall be entitled to independently
protect and enforce its rights, including without limitation, the rights arising
out of the Transaction Documents, and it shall not be necessary for any other
Subscriber to be joined as an additional party in any proceeding for such
purpose.  The Company acknowledges that it has elected to provide all
Subscribers with the same terms and Transaction Documents for the convenience of
the Company and not because Company was required or requested to do so by the
Subscribers.  The Company acknowledges that such procedure with respect to the
Transaction Documents in no way creates a presumption that the Subscribers are
in any way acting in concert or as a group with respect to the Transaction
Documents or the transactions contemplated thereby.
 
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(g) Consent. As used in the Agreement, “consent of the Subscribers” or similar
language means the consent of holders of not less than 75% of the total of the
Shares issued and issuable upon conversion of outstanding Notes owned by
Subscribers on the date consent is requested.
 
(h) Equal Treatment. No consideration shall be offered or paid to any person to
amend or consent to a waiver or modification of any provision of the Transaction
Documents unless the same consideration is also offered and paid to all the
Subscribers and their permitted successors and assigns. Payments to the
Subscribers for sums due under the Notes must be made by the Company in
proportion to the Subscribers’ initial Note principal amounts.
 
(i) Maximum Payments. Nothing contained herein or in any document referred to
herein or delivered in connection herewith shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest or
dividends required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Company to the Subscriber and thus refunded to the
Company.

(j) Calendar Days. All references to “days” in the Transaction Documents shall
mean calendar days unless otherwise stated. The terms “business days” and
“trading days” shall mean days that the New York Stock Exchange is open for
trading for three or more hours. Time periods shall be determined as if the
relevant action, calculation or time period were occurring in New York City.

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SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT
 

Please acknowledge your acceptance of the foregoing Subscription Agreement by
signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us.
 
 

       
HI-TECH WEALTH INC.
a Nevada corporation
 
   
   
    By:      

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Name:
Title:
  Dated:    June ____, 2007

 

SUBSCRIBER
CLOSING PURCHASE PRICE
SUBSEQUENT ISSUANCE PURCHASE PRICE
 
Name of Subscriber: ____________________________________
 
_____________________________________________________
 
Address: _____________________________________________
 
____________________________________________________
 
Fax No.: ____________________________________________
 
Taxpayer ID# (if applicable): ____________________________
 
 
 
____________________________________________________
(Signature)
By:
   

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