SECURITIES PURCHASE AGREEMENT
 
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of August 28, 2008, by
and among Universal Travel Group, a Nevada corporation, with headquarters
located at Shenzhen, the People’s Republic of China (the “Company”), and the
investors listed on the Schedule of Buyers attached hereto (individually, a
“Buyer” and collectively, the “Buyers”). The Company and the Buyers shall
collectively be referred to as the “Parties” and individually, a “Party”.
 
BACKGROUND
 
A.  The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of
Regulation D (“Regulation D”) as promulgated by the United States Securities and
Exchange Commission (the “SEC”) under the 1933 Act.
 
B.  Each Buyer wishes to purchase, and the Company wishes to sell, upon the
terms and conditions stated in this Agreement, (i) that aggregate number of
shares of the Common Stock, par value $0.001 per share, of the Company (the
“Common Stock”), set forth opposite such Buyer's name in column (3) on the
Schedule of Buyers (which aggregate amount for all Buyers together shall be
4,588,708 shares of Common Stock and shall collectively be referred to herein as
the “Common Shares”) and (ii) warrants, in substantially the form attached
hereto as Exhibit A (the “Warrants”), to acquire up to that number of additional
shares of Common Stock set forth opposite such Buyer's name in column (4) of the
Schedule of Buyers (which aggregate amount shall be Warrants covering 2,294,356
shares of Common Stock and, as exercised, shall collectively be referred to
herein as the “Warrant Shares”).
 
C.  Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit B (the “Registration Rights
Agreement”) pursuant to which the Company has agreed to provide certain
registration rights with respect to the Common Shares, and the Warrant Shares
under the 1933 Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.
 
D.  Contemporaneously with the execution and delivery of this Agreement, the
parties hereto, together with Sichenzia Ross Friedman Ference LLP (“Escrow
Agent”), are executing and delivering a Closing Escrow Agreement, substantially
in the form attached hereto as Exhibit C (the “Closing Escrow Agreement”)
pursuant to which the Buyers shall deposit their Purchase Price (as defined
below) with the Escrow Agent to be applied to the transactions contemplated
hereunder.
 

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E.  Contemporaneously with the execution and delivery of this Agreement, the
Company, the Buyers and the Company’s CEO, Ms. Jiangping Jiang, and Sichenzia
Ross Friedman Ference LLP (“Make Good Escrow Agent”), are executing and
delivering a Make Good Escrow Agreement, substantially in the form attached
hereto as Exhibit D (the “Make Good Escrow Agreement”); and the Company and its
CEO, Ms. Jiangping Jiang, are executing and delivering a Lock-Up Agreement,
substantially in the form attached hereto as Exhibit E.
 
F.  The Common Shares, the Warrants and the Warrant Shares collectively are
referred to herein as the “Securities”.
 
NOW, THEREFORE, the Company and each Buyer hereby agree as follows:
 
1. PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.
 
(a)  Purchase of Common Shares and Warrants. Subject to the satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall
issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees
to purchase from the Company on the Closing Date (as defined below), the number
of Common Shares as is set forth opposite such Buyer's name in column (3) on the
Schedule of Buyers, along with Warrants to acquire up to that number of Warrant
Shares as is set forth opposite such Buyer's name in column (4) on the Schedule
of Buyers (the “Closing”). The Closing shall occur on the Closing Date at the
offices of Sichenzia Ross Friedman Ference LLP, located at 61 Broadway, 32nd
Floor, New York, NY 10006 or such other venue as the Parties may so designate.
 
(b) Purchase Price. The purchase price for the Common Shares and related
Warrants to be purchased by each Buyer at the Closing shall be the amount set
forth opposite such Buyer’s name in column (5) of the Schedule of Buyers (the
“Purchase Price”) which shall be equal to the amount of $1.55 per Common Share
and a related Warrant for the purchase of one-half a Common Share, times the
number of Common Shares purchased.
 
(c) Closing Date. The date and time of the Closing (the “Closing Date”) shall be
10:00 a.m., New York City Time, on August 28, 2008 (or such other date and time
as is mutually agreed to by the Company and each Buyer).
 
(d) Form of Payment. On the Closing Date, (i) each Buyer shall pay its
respective Purchase Price to the Company for the Common Shares and Warrants to
be issued and sold to such Buyer at the Closing, either (A) by wire transfer of
immediately available funds in accordance with the Company's written wire
instructions, or (B) by bank certified checks made payable to the Company and
(ii) the Company shall deliver to each Buyer (A) one or more stock certificates,
evidencing the number of Common Shares such Buyer is purchasing as is set forth
opposite such Buyer’s name in column (3) of the Schedule of Buyers, and (B) a
Warrant pursuant to which such Buyer shall have the right to acquire such number
of Warrant Shares as is set forth opposite such Buyer’s name in column (4) of
the Schedule of Buyers, in all cases duly executed on behalf of the Company and
registered in the name of such Buyer.
 
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2. BUYER'S REPRESENTATIONS AND WARRANTIES.
 
Each Buyer represents and warrants with respect to only itself that:
 
(a) Organization and Good Standing of Buyers. If the Buyer is an entity, such
Buyer is a corporation, partnership or limited liability company duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization.
 
(b) Authorization and Power. Each Buyer has the requisite power and authority to
enter into and perform the Transaction Documents (as defined below) to which
such Buyer is a party and to purchase the Shares and Warrants being sold to it
hereunder. The execution, delivery and performance of the Transaction Documents
to which such Buyer is a party by such Buyer and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate or partnership action, and no further consent or
authorization of such Buyer or its Board of Directors, stockholders, or
partners, as the case may be, is required. The Transaction Documents to which
such Buyer is a party have been duly authorized, executed and delivered by such
Buyer and constitutes, or shall constitute when executed and delivered, a valid
and binding obligation of such Buyer enforceable against such Buyer in
accordance with the terms thereof.
 
(c) No Public Sale or Distribution. Such Buyer is (i) acquiring the Common
Shares and the Warrants and (ii) upon exercise of the Warrants will acquire the
Warrant Shares issuable upon exercise thereof, in the ordinary course of
business for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the 1933 Act and such Buyer does not have a
present arrangement to effect any distribution of the Securities to or through
any Person or entity; provided, however, that by making the representations
herein, such Buyer does not agree to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at
any time in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.
 
(d) Accredited Investor Status. Such Buyer is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D. Such Buyer is not required to be
registered as a broker-dealer under Section 15 of the Exchange Act and such
Buyer is not a broker-dealer, nor an affiliate of a broker-dealer.
 
(e) Reliance on Exemptions. Such Buyer understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Buyer's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of such Buyer to acquire the
Securities.
 
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(f) Information. Such Buyer and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been
requested by such Buyer as it has deemed necessary or appropriate to conduct its
due diligence investigation and has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company’s stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company. Such Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by such Buyer or its advisors, if
any, or its representatives shall modify, amend or affect such Buyer's right to
rely on the Company's representations and warranties contained herein. Each
Buyer further acknowledges that such Buyer understands the high risks of
investing in companies domiciled and/or which operate primarily in the People’s
Republic of China and that the purchase of the Securities involves substantial
risks and is able to afford a complete loss of such investment. Such Buyer has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of the
Securities.
 
(g) No Governmental Review. Such Buyer understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.
 
(h) Transfer or Resale. Such Buyer understands that except as provided in the
Registration Rights Agreement: (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company an
opinion of counsel, in a generally acceptable form, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) such Buyer
provides the Company with reasonable assurance that such Securities can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the
1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule 144”);
(ii) any sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the seller
(or the Person (as defined in Section 3(s)) through whom the sale is made) may
be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
Person is under any obligation to register the Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder. Notwithstanding the foregoing, the Securities may be
pledged in connection with a bona fide margin account or other loan secured by
the Securities and such pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Buyer effecting
a pledge of Securities shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement
or any other Transaction Document (as defined below), including, without
limitation, this Section 2(h); provided, that in order to make any sale,
transfer or assignment of Securities, such Buyer and its pledgee makes such
disposition in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.
 
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(i) Legends. Such Buyer understands that the certificates or other instruments
representing the Common Shares and the Warrant Shares and, until such time as
the resale of the Common Shares and the Warrant Shares have been registered
under the 1933 Act as contemplated by the Registration Rights Agreement, the
stock certificates representing the Warrant Shares, except as set forth below,
shall bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
 
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at The Depository Trust Company (“DTC”), if, unless otherwise required
by state securities laws, (i) such Securities are registered for resale under
the 1933 Act, (ii) in connection with a sale, assignment or other transfer, such
holder provides the Company with an opinion of counsel reasonably satisfactory
to the Company, in a generally acceptable form, to the effect that such sale,
assignment or transfer of the Securities may be made without registration under
the applicable requirements of the 1933 Act and that such legend is no longer
required, or (iii) such holder provides the Company with reasonable assurance
that the Securities can be sold, assigned or transferred pursuant to Rule 144 or
Rule 144A. The Company shall be responsible for the fees of its transfer agent
and all DTC fees associated with such issuance. If the Company shall fail for
any reason or for no reason to issue to the holder of the Securities within
three (3) Trading Days after the occurrence of any of (i) through (iii) above, a
certificate without such legend or to issue such Securities to such holder by
electronic delivery at the applicable balance account at DTC, and if on or after
such Trading Day the holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
holder of such Securities that the holder anticipated receiving without legend
from the Company (a “Buy-In”), then the Company shall, within three (3) Business
Days after the holder's request and in the holder's discretion, either (i) pay
cash to the holder in an amount equal to the holder's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company's obligation to
deliver such unlegended Securities shall terminate, or (ii) promptly honor its
obligation to deliver to the holder such unlegended Securities as provided above
and pay cash to the holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price (as defined in the Warrants) on the date of
exercise. “Trading Day” is defined as a day on which securities are generally
traded in real-time (and not under any delayed or pre-market or post-market
trading) in any of the following markets: the Nasdaq Capital Market, the
American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market
or the OTC Bulletin Board.
 
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(j) Validity; Enforcement. This Agreement and other Transaction Documents as
they apply to each Buyer have been duly and validly authorized, executed and
delivered on behalf of such Buyer and shall constitute the legal, valid and
binding obligations of such Buyer enforceable against such Buyer in accordance
with their respective terms, except as such enforceability may be limited by
general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
 
(k) No Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the Transaction Documents as they apply to each Buyer and the
consummation by such Buyer of the transactions contemplated hereby and thereby
will not (i) result in a violation of the organizational documents of such Buyer
or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which such Buyer is a party or by which
its properties or assets are bound, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations
hereunder. Such Buyer is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under this Agreement or the other Transaction Documents to which such Buyer is a
party or to purchase the Shares and the Warrants or acquire the Warrant Shares
in accordance with the terms hereof.
 
(l) Residency. Such Buyer is a resident of that jurisdiction specified below its
address on the Schedule of Buyers.
 
(m) Prohibited Transactions. Since the Buyer was approached by the Company with
respect to the transactions contemplated hereby, neither such Buyer nor any
Person acting on behalf of or pursuant to any understanding with such Buyer has,
directly or indirectly, effected or agreed to effect any transaction in the
Common Stock, including any short sale, whether or not against the box,
established any “put equivalent position” (as defined in Rule 16a-1(h) under the
Exchange Act) with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock or otherwise
sought to hedge its position in the Securities (but not including any actions to
secure available shares to borrow in order to effect short sales or similar
transactions in the future) (each, a “Prohibited Transaction”). Prior to the
earliest to occur of (i) the termination of this Agreement or (ii) the date of
the 8-K Filing as described in Section 4(i), such Buyer shall not, and shall
cause any Person acting on behalf of or pursuant to any understanding with such
Buyer not to, engage, directly or indirectly, in a Prohibited Transaction.
 
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(n) No General Solicitation. Each Buyer acknowledges that the Shares and
Warrants were not offered to such Buyer by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, website, or
similar media, or broadcast over television or radio, or (ii) any seminar or
meeting to which such Buyer was invited by any of the foregoing means of
communications.
 
(o) Independent Investment. Except as may be disclosed in any filings with the
Securities and Exchange Commission by the Buyers under Section 13 and/or Section
16 of the Exchange Act, no Buyer has agreed to act with any other Buyer for the
purpose of acquiring, holding, voting or disposing of the Shares and Warrants
purchased hereunder for purposes of Section 13(d) under the Exchange Act, and
each Buyer is acting independently with respect to its investment in the Shares.
 
(p) Brokers. Each Buyer has no knowledge of any brokerage or finder’s fees or
commissions that are or will be payable by the Company or any of its
Subsidiaries to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person or entity with respect to the
transactions contemplated by this Agreement
 
(q) Listing of Common Shares. Immediately upon the effectiveness of a
registration statement with the SEC covering the Common Shares and the Warrant
Shares, the Buyers shall use reasonable efforts to assist the Company in making
an immediate application to a United States stock exchange, such as the Nasdaq
Capital Market or the American Stock Exchange, for the listing of the Common
Shares.
 
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 
The Company represents and warrants to each of the Buyers that:
 
(a) Organization and Qualification. Each of the Company and its “Subsidiaries”
(which for purposes of this Agreement means any entity in which the Company,
directly or indirectly, owns capital stock or holds an equity or similar
interest) are corporations duly organized and validly existing in good standing
under the laws of the jurisdiction in which they are incorporated, and have the
requisite corporate power and authorization to own their properties and to carry
on their business as now being conducted. Each of the Company and its
Subsidiaries is duly qualified to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a Material
Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any
material adverse effect on the business, properties, assets, operations, results
of operations, condition (financial or otherwise) or prospects of the Company
and its Subsidiaries, taken as a whole, or on the transactions contemplated
hereby and the other Transaction Documents or by the agreements and instruments
to be entered into in connection herewith or therewith, or on the authority or
ability of the Company to perform its obligations under the Transaction
Documents (as defined below). The Company has no Subsidiaries except as set
forth on Schedule 3(a).
 
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(b) Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Registration Rights Agreement, the Irrevocable Transfer
Agent Instructions (as defined in Section 5), the Warrants, the Closing Escrow
Agreement, the Make Good Escrow Agreement, the Lock-Up Agreement and each of the
other agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the “Transaction
Documents”) and to issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby, including, without limitation, the issuance of the Common Shares and
the Warrants and the reservation for issuance and the issuance of the Warrant
Shares issuable upon exercise of any Warrant have been duly authorized by the
Company's Board of Directors and no further consent or authorization is required
by the Company, its Board of Directors or its stockholders. This Agreement and
the other Transaction Documents have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
 
(c) Issuance of Securities. The Common Shares and the Warrants are duly
authorized and, upon issuance in accordance with the terms hereof, shall be
validly issued and free from all taxes, liens and charges with respect to the
issue thereof and the Common Shares shall be fully paid and nonassessable with
the holders being entitled to all rights accorded to a holder of Common Stock.
As of the Closing Date, the Company shall have duly authorized and reserved for
issuance a number of shares of Common Stock which equals the number of Warrant
Shares. The Company shall, so long as any of the Warrants are outstanding, take
all action necessary to reserve and keep available out of its authorized and
unissued capital stock, solely for the purpose of effecting the exercise of the
Warrants, 100% of the number of shares of Common Stock issuable upon exercise of
the Warrants. Upon exercise in accordance with the Warrants, the Warrant Shares
will be validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock. The offer and
issuance by the Company of the Securities is exempt from registration under the
1933 Act.
 
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(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Common Shares and the Warrants and the reservation for issuance and issuance
of the Warrant Shares) will not (i) result in a violation of the Articles of
Incorporation (as defined below) or Bylaws (as defined below) of the Company or
any of its Subsidiaries or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) result in a violation of any U.S. law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations and the rules and
regulations of the Over-The-Counter Bulletin Board (“OTCBB”)), or by which any
property or asset of the Company or a Subsidiary is bound or affected, except in
the case of clause (ii) such as could not, individually or in the aggregate,
have or reasonably be expected to have a Material Adverse Effect.
 
(e) Consents. The Company is not required to obtain any consent, authorization
or order of, or make any filing or registration with, any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its obligations under or
contemplated by the Transaction Documents, in each case in accordance with the
terms hereof or thereof (other than (x) any consent, authorization or order that
has been obtained as of the date hereof, (y) any filing or registration that has
been made as of the date hereof or (z) any filings which may be required to be
made by the Company with the Commission or state securities administrators
subsequent to the Closing; provided, that, for purposes of the representation
made in this sentence, the Company is assuming and relying upon the accuracy of
the relevant representations and agreements of the Buyers herein). All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the Closing Date. The Company and its Subsidiaries are unaware of
any facts or circumstances that might prevent the Company from obtaining or
effecting any of the registration, application or filings pursuant to the
preceding sentence. The Company is not in violation of any requirements of the
OTCBB and has no knowledge of any facts that would reasonably lead to the
cessation of quotations for the Common Stock on the OTCBB in the foreseeable
future
 
(f) Acknowledgment Regarding Buyer's Purchase of Securities. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of
arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or director of the Company, (ii) an “affiliate” of the Company (as defined in
Rule 144) or (iii) to the knowledge of the Company, a “beneficial owner” of more
than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended (the “1934 Act”)). The Company
further acknowledges that no Buyer is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to such Buyer's purchase of the Securities. The Company
further represents to each Buyer that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.
 
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(g) No General Solicitation; Placement Agent's Fees. Neither the Company, nor
any of its affiliates, nor any Person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Securities. The
Company shall be responsible for the payment of any placement agent's fees,
financial advisory fees, or brokers' commissions (other than for persons engaged
by any Buyer or its investment advisor) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation,
attorney's fees and out-of-pocket expenses) arising in connection with any such
claim. For the purposes of this Agreement and the other Transaction Documents
and the transactions contemplated hereby and thereby, the Parties agree and
acknowledge, jointly and severally, that no agent’s fees, financial advisory
fees or brokers’ commission whatsoever is/are due to any third party by the
Company.
 
(h) No Integrated Offering. None of the Company, its Subsidiaries, any of their
affiliates, and any Person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of any of the
Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated. None of the
Company, its Subsidiaries, their affiliates and any Person acting on their
behalf will take any action or steps referred to in the preceding sentence that
would require registration of any of the Securities under the 1933 Act or cause
the offering of the Securities to be integrated with other offerings.
 
(i) Dilutive Effect. The Company understands and acknowledges that the number of
Warrant Shares issuable upon exercise of the Warrants will increase in certain
circumstances. The Company further acknowledges that its obligation to issue the
Warrant Shares upon exercise of the Warrants in accordance with this Agreement
and the Warrants, in each case, is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company.
 
(j) Application of Takeover Protections; Rights Agreement. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Articles of Incorporation or the laws of the
State of Nevada which is or could become applicable to any Buyer as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company's issuance of the Securities and any Buyer's ownership of the
Securities. The Company has not adopted a stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of Common Stock or
a change in control of the Company.
 
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(k) SEC Documents; Financial Statements. During the two (2) years prior to the
date hereof, the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the 1934 Act (all of the foregoing filed prior
to the date hereof or prior to the date of the Closing, along with the Current
Report of the Company being filed in connection with the transactions
contemplated hereby, and all exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”). The Company has delivered to
the Buyers or their respective representatives true, correct and complete copies
of the SEC Documents not available on the EDGAR system. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. As of their respective dates, the
financial statements of the Company included in the SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the Company to
the Buyers which is not included in the SEC Documents, including, without
limitation, information referred to in Section 2(f) of this Agreement, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.
 
(l) Absence of Certain Changes. Except as disclosed in Schedule 3(l), since
December 31, 2007, there has been no material adverse change and no material
adverse development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company or
its Subsidiaries. Except as disclosed in Schedule 3(l), since December 31, 2007,
the Company has not (i) declared or paid any dividends, (ii) sold any assets,
individually or in the aggregate, in excess of $25,000 outside of the ordinary
course of business or (iii) had capital expenditures, individually or in the
aggregate, in excess of $25,000. The Company has not taken any steps to seek
protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would
reasonably lead a creditor to do so. The Company is not as of the date hereof,
and after giving effect to the transactions contemplated hereby to occur at the
Closing, will not be Insolvent (as defined below). For purposes of this Section
3(l), “Insolvent” means, with respect to any Person (i) the present fair
saleable value of such Person's assets is less than the amount required to pay
such Person's total Indebtedness (as defined in Section 3(s)), (ii) such Person
is unable to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured, (iii) such
Person intends to incur or believes that it will incur debts that would be
beyond its ability to pay as such debts mature or (iv) such Person has
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted.
 
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(m) No Undisclosed Events, Liabilities, Developments or Circumstances. No event,
liability, development or circumstance has occurred or exists, or is
contemplated to occur, with respect to the Company or its Subsidiaries or their
respective business, properties, prospects, operations or financial condition,
that would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly announced.
 
(n) Conduct of Business; Regulatory Permits. Neither the Company nor its
Subsidiaries is in material violation of any term of or in default under the
Articles of Incorporation or Bylaws or their organizational charter or articles
of incorporation or bylaws, respectively. Neither the Company nor any of its
Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or its Subsidiaries, and
neither the Company nor any of its Subsidiaries will conduct its business in
violation of any of the foregoing, except for possible violations which would
not, individually or in the aggregate, have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company is not in violation of any
of the rules, regulations or requirements of the OTCBB and has no knowledge of
any facts or circumstances that would reasonably lead to delisting or suspension
of the Common Stock by the OTCBB in the foreseeable future except for possible
violations which would not, individually or in the aggregate, have a Material
Adverse Effect and would not, individually or in the aggregate, reasonably lead
to delisting or suspension from trading of the Common Stock by the OTCBB, FINRA
or the SEC. During the two (2) years prior to the date hereof, (i) the Common
Stock has been quoted on the OTCBB, (ii) trading in the Common Stock has not
been suspended by the SEC or FINRA and (iii) the Company has received no
communication, written or oral, from the SEC or the OTCBB regarding the
suspension or cessation of quotation of the Common Stock on the OTCBB. The
Company and its Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit
 
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(o) Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries,
nor any director, officer, agent, employee or other Person acting on behalf of
the Company or any of its Subsidiaries has, in the course of its actions for, or
on behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
 
(p) Sarbanes-Oxley Act. The Company is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and any and all applicable rules and regulations promulgated by the SEC
thereunder that are effective as of the date hereof , except for possible
violations which would not, individually or in the aggregate, have a Material
Adverse Effect.
 
(q) Transactions With Affiliates. Except as otherwise provided in the SEC
Documents, none of the officers, directors or employees of the Company is
presently a party to any transaction with the Company or any of its Subsidiaries
(other than for ordinary course services as employees, officers or directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee or partner.
 
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(r) Equity Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of 70,000,000 shares of Common Stock, of which as of the
date hereof, 37,031,258 shares are issued and outstanding, no shares are
reserved for issuance pursuant to options and warrants outstanding and no shares
are reserved for issuance pursuant to securities (other than the Warrants)
exercisable or exchangeable for, or convertible into, shares of Common Stock.
All of such outstanding shares have been, or upon issuance will be, validly
issued and are fully paid and nonassessable. Except as set forth on Schedule
3(r) and in the SEC Documents: (i) no shares of the Company's capital stock are
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company or
any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company or any of its Subsidiaries; (iii) there are no outstanding
debt securities, notes, credit agreements, credit facilities or other
agreements, documents or instruments evidencing Indebtedness (as defined in
Section 3(s)) of the Company or any of its Subsidiaries or by which the Company
or any of its Subsidiaries is or may become bound; (iv) there are no financing
statements securing obligations in any material amounts, either singly or in the
aggregate, filed in connection with the Company or any of its Subsidiaries; (v)
there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the 1933 Act (except the Registration Rights Agreement); (vi) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries; (vii) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities; (viii) the Company does not have any stock appreciation rights
or “phantom stock” plans or agreements or any similar plan or agreement; and
(ix) the Company and its Subsidiaries have no liabilities or obligations
required to be disclosed in the SEC Documents but not so disclosed in the SEC
Documents, other than those incurred in the ordinary course of the Company's or
any Subsidiary's respective businesses and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect. The Company has
furnished or made available to the Buyer upon such Buyer's request, true,
correct and complete copies of the Company's Articles of Incorporation, as
amended and as in effect on the date hereof (the “Articles of Incorporation”),
and the Company's Bylaws, as amended and as in effect on the date hereof (the
“Bylaws”), and the terms of all securities convertible into, or exercisable or
exchangeable for, shares of Common Stock and the material rights of the holders
thereof in respect thereto.
 
(s) Indebtedness and Other Contracts. Except as disclosed in Schedule 3(s) and
the SEC Documents, neither the Company nor any of its Subsidiaries (i) has any
outstanding Indebtedness (as defined below), (ii) is a party to any contract,
agreement or instrument, the violation of which, or default under which, by the
other party(ies) to such contract, agreement or instrument, in the judgment of
the Company’s officers, would result in a Material Adverse Effect, (iii) is in
violation of any term of or in default under any contract, agreement or
instrument relating to any Indebtedness, except where such violations and
defaults would not result, in the judgment of the Company’s officers,
individually or in the aggregate, in a Material Adverse Effect, or (iv) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company's officers, has or is
expected to have a Material Adverse Effect. For purposes of this Agreement: (x)
“Indebtedness” of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business), (C) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of other kinds referred to in clauses (A) through (G) above; (y)
“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; and (z)
“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
 
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(t) Absence of Litigation. Except as set forth on Schedule 3(t) and the SEC
Documents, there is no action, suit, proceeding, inquiry or investigation before
the SEC, FINRA, any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company, the Common Stock or any of its Subsidiaries or
any of the Company's or the Company's Subsidiaries' officers or directors,
whether of a civil or criminal nature or otherwise.
 
(u) Insurance. The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged. Except as set
forth on Schedule 3(u), neither the Company nor any Subsidiary has been refused
any insurance coverage sought or applied for. Neither the Company nor any
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
 
(v) Employee Relations. (i) Neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement or employs any member of a union.
The Company and its Subsidiaries believe that their relations with their
employees are good. No executive officer of the Company or any of its
Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the
Company or any such Subsidiary that such officer intends to leave the Company or
any such Subsidiary or otherwise terminate such officer's employment with the
Company or any such Subsidiary. No executive officer of the Company, to the
knowledge of the Company or any of its Subsidiaries, is, or is now expected to
be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters.
 
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(ii) The Company and its Subsidiaries are in compliance with all federal, state,
local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages
and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
 
(w) Title. The Company and its Subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and any of its Subsidiaries. Any real property and facilities held under
lease by the Company and any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.
 
(x) Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and other intellectual property rights (“Intellectual Property Rights”)
necessary to conduct their respective businesses as now conducted. None of the
Company's Intellectual Property Rights have expired or terminated, or are
expected to expire or terminate within three years from the date of this
Agreement. The Company does not have any knowledge of any infringement by the
Company or its Subsidiaries of Intellectual Property Rights of others. There is
no claim, action or proceeding being made or brought, or to the knowledge of the
Company, being threatened, against the Company or any of its Subsidiaries
regarding its Intellectual Property Rights. The Company is unaware of any facts
or circumstances which might give rise to any of the foregoing infringements or
claims, actions or proceedings. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their Intellectual Property Rights.
 
(y) Environmental Laws. The Company and its Subsidiaries (i) are in compliance
with any and all Environmental Laws (as hereinafter defined), (ii) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval
where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so
comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The term “Environmental Laws” means all federal, state,
local or foreign laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.
 
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(z) Subsidiary Rights. The Company, or one of its Subsidiaries, has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary.
 
(aa) Tax Status. The Company and each of its Subsidiaries (i) has made or filed
all federal, foreign and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (iii) has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.
 
(bb) Internal Accounting and Disclosure Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient, in
its reasonable belief, to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15 under the 1934 Act) that are effective in
ensuring that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is recorded, processed, summarized
and reported, within the time periods specified in the rules and forms of the
SEC, including, without limitation, controls and procedures designed in to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is accumulated and communicated to
the Company’s management, including its principal executive officer or officers
and its principal financial officer or officers, as appropriate, to allow timely
decisions regarding required disclosure. During the twelve months prior to the
date hereof neither the Company nor any of its Subsidiaries have received any
notice or correspondence from any accountant relating to any potential material
weakness in any part of the system of internal accounting controls of the
Company or any of its Subsidiaries.
 
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(cc) Off Balance Sheet Arrangements. Save as otherwise provided in the SEC
Documents, there is no transaction, arrangement, or other relationship between
the Company and an unconsolidated or other off balance sheet entity that is
required to be disclosed by the Company in its Exchange Act filings and is not
so disclosed or that otherwise would be reasonably likely to have a Material
Adverse Effect.
 
(dd) Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities.
 
(ee) Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income or similar taxes) which are required to be paid in connection
with the sale and transfer of the Securities to be sold to each Buyer hereunder
will be, or will have been, fully paid or provided for by the Company, and all
laws imposing such taxes will be or will have been complied with.
 
(ff) Investment Company Status. The Company is not, and upon consummation of the
sale of the Securities will not be, an “investment company,” a company
controlled by an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company” as such terms
are defined in the Investment Company Act of 1940, as amended.
 
(gg) Acknowledgement Regarding Buyers' Trading Activity. Except as is set forth
in Section 2(m), it is understood and acknowledged by the Company (i) that
neither the Company nor any of its Subsidiaries has asked any Buyer nor has any
Buyer agreed with the Company or its Subsidiaries, to desist from purchasing or
selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities
for any specified term; (ii) to the Company's knowledge, that any Buyer, and
counterparties in “derivative” transactions to which any such Buyer is a party,
directly or indirectly, presently do not have a “short” position in the Common
Stock, and (iii) that each Buyer shall not be deemed to have any affiliation
with or control over any arm's length counterparty in any “derivative”
transaction. The Company further understands and acknowledges that (a) one or
more Buyers may engage in hedging and/or trading activities at various times
during the period that the Securities are outstanding and (b) such hedging
and/or trading activities, if any, can reduce the value of the existing
stockholders' equity interest in the Company both at and after the time the
hedging and/or trading activities are being conducted. The Company acknowledges
that such aforementioned hedging and/or trading activities do not constitute a
breach of this Agreement or any of the documents executed in connection
herewith. The Company is not aware of any of the aforementioned hedging and/or
trading activities of any of the Buyers. The Company may not be informed of, and
will not monitor, any such aforementioned hedging and/or trading activities by
one or more Buyers in the future.
 
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(hh) U.S. Real Property Holding Corporation. The Company is not, has never been,
and so long as any Securities remain outstanding, shall not become, a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon Buyer's
request.
 
(ii) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries
is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and
to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries owns or
controls, directly or indirectly, five percent (5%) or more of the outstanding
shares of any class of voting securities or twenty-five percent or more of the
total equity of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve. Neither the Company nor any of its
Subsidiaries or Affiliates exercises a controlling influence over the management
or policies of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve.
 
(jj) No Additional Agreements. The Company does not have any agreement or
understanding with any Buyer with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction Documents.
 
(kk) Disclosure. The Company understands and confirms that each of the Buyers
will rely on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided to the Buyers regarding the
Company, its business and the transactions contemplated hereby, including the
Schedules to this Agreement, furnished by or on behalf of the Company are
materially true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading except any non-disclosure would not, individually or in the
aggregate, have a Material Adverse Effect . Each press release issued by the
Company during the twelve (12) months preceding the date of this Agreement did
not at the time of release contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading. No event or circumstance has occurred or
information exists with respect to the Company or any Subsidiary or either of
its or their respective business, properties, prospects, operations or financial
conditions, which, under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so publicly
announced or disclosed (assuming for this purpose that the Company's reports
filed under the Exchange Act of 1934, as amended, are being incorporated into an
effective registration statement filed by the Company under the 1933 Act) except
any non-disclosure would not, individually or in the aggregate, have a Material
Adverse Effect. The Company acknowledges and agrees that no Buyer makes or has
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 2.
 
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4. COVENANTS.
 
(a) Best Efforts. Each Party shall use its commercially reasonable efforts
timely to satisfy each of the covenants and the conditions to be satisfied by it
as provided in Sections 5, 6 and 7 of this Agreement.
 
(b) Form D and Blue Sky. The Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy thereof to each
Buyer promptly after such filing. The Company, on or before the Closing Date,
shall take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for or to qualify the Securities for sale to the
Buyers at the Closing pursuant to this Agreement under applicable securities or
“Blue Sky” laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to the Buyers on or prior to the Closing Date. The Company shall make all
filings and reports relating to the offer and sale of the Securities required
under applicable securities or “Blue Sky” laws of the states of the United
States following the Closing Date.
 
(c) Reporting Status. Until the date on which the Investors (as defined in the
Registration Rights Agreement) shall have sold all the Common Shares and Warrant
Shares and none of the Warrants are outstanding (the “Reporting Period”), the
Company shall timely file all reports required to be filed with the SEC pursuant
to the 1934 Act, and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would otherwise permit such termination.
 
(d) Use of Proceeds. The Company will use the proceeds from the sale of the
Securities for general corporate purposes, including general and administrative
expenses, and in connection with acquisitions and not for (i) the repayment of
any outstanding Indebtedness of the Company or any of its Subsidiaries, or (ii)
the redemption or repurchase of any of its or its Subsidiaries' equity
securities. The Company agrees that it will deposit $500,000 of the proceeds in
escrow under the Escrow Agreement to pay the fees and expenses in connection
with a public relations and investor relations campaign of a design and type
satisfactory to a representative of the Buyers designated in the Escrow
Agreement. Such amount shall be released only upon the dual signatures of the
CEO of the Company and such representative of the Buyers designated in the
Escrow Agreement. The Company agrees that the public relations and investor
relations campaign shall include a "retail component" involving the use of
direct mail to assist in the repositioning of the Company in the minds of the
general public. The Company agrees that it will use its commercially reasonable
efforts to identify and engage a Chief Financial Officer who shall be fluent in
English and Mandarin, who understands and has a working knowledge of United
States generally accepted accounting principles, who has had significant
responsibility for the preparation and filing of quarterly, annual and current
reports with the SEC and who has experience working with or in United States
capital market participants. The Company agrees that it will deposit $600,000 of
the proceeds in escrow under the Escrow Agreement, to be released only upon the
dual signatures of the CEO of the Company and the representative of the Buyers
designated in the Escrow Agreement following the engagement of a Chief Financial
Officer as described herein.
 
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(e) Financial Information. The Company agrees to send the following to each
Investor during the Reporting Period (i) unless the following are filed with the
SEC through EDGAR and are available to the public through the EDGAR system,
within one (1) Business Day after the filing thereof with the SEC, a copy of its
Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current
Reports on Form 8-K and any registration statements (other than on Form S-8) or
amendments filed pursuant to the 1933 Act, (ii) on the same day as the release
thereof, facsimile copies or email copies of all press releases issued by the
Company or any of its Subsidiaries, and (iii) copies of any notices and other
information made available or given to the stockholders of the Company
generally, contemporaneously with the making available or giving thereof to the
stockholders. As used herein, “Business Day” means any day other than Saturday,
Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.
 
(f) Listing. Neither the Company nor any of its Subsidiaries shall take any
action which would be reasonably expected to result in the delisting or
suspension of the Common Stock on the national securities exchange, automated
quotation system or OTCBB upon which the Common Stock is then listed or quoted.
 
(g) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by an Investor (as defined in the Registration Rights
Agreement) in connection with a bona fide margin agreement or other loan or
financing arrangement that is secured by the Securities. The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(h) of this Agreement;
provided that an Investor and its pledgee shall be required to comply with the
provisions of Section 2(h) of this Agreement in order to effect a sale, transfer
or assignment of Securities to such pledgee. The Company hereby agrees to
execute and deliver such documentation as a pledgee of the Securities may
reasonably request in connection with a pledge of the Securities to such pledgee
by an Investor provided that any and all costs to effect the pledge of the
Securities are borne by pledgor and/or pledgee and not Company.
 
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(h) Disclosure of Transactions and Other Material Information. The Company
shall, on or before 8:30 a.m., New York City time, within the fourth Business
Day after the date of this Agreement, (A) issue a press release (the “Press
Release”) reasonably acceptable to the Buyers disclosing all material terms of
the transactions contemplated hereby and (B) file a Current Report on Form 8-K
describing the terms of the transactions contemplated by the Transaction
Documents in the form required by the 1934 Act, and attaching the material
Transaction Documents (including, without limitation, this Agreement (and all
schedules to this Agreement), the form of Warrant and the Registration Rights
Agreement) as exhibits to such filing (including all attachments, the “8-K
Filing”). From and after the issuance of the Press Release, no Buyer shall be in
possession of any material, nonpublic information received from the Company, any
of its Subsidiaries or any of its respective officers, directors, employees or
agents, that is not disclosed in the Press Release. The Company shall not, and
shall cause each of its Subsidiaries and each of their respective officers,
directors, employees and agents, not to, provide any Buyer with any material,
nonpublic information regarding the Company or any of its Subsidiaries from and
after the filing of the Press Release without the express written consent of
such Buyer. If a Buyer has, or believes it has, received any such material,
nonpublic information regarding the Company or any of its Subsidiaries from the
Company, any of its Subsidiaries or any of the respective officers, directors,
or agents, other than as required in writing by such Buyer, it may provide the
Company with written notice thereof. The Company shall, within five (5) Trading
Days of receipt of such notice, make public disclosure of such material,
nonpublic information. In the event of a breach of the foregoing covenant by the
Company, any of its Subsidiaries, or any of its or their respective officers,
directors, employees and agents, in addition to any other remedy provided herein
or in the Transaction Documents, a Buyer shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise,
of such material, nonpublic information without the prior approval by the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. No Buyer shall have any liability to the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, stockholders or agents for any such disclosure. Subject to
the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue
any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of any Buyer, to make any press release or
other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations, including the applicable rules and
regulations of the OTCBB (provided that in the case of clause (i) each Buyer
shall be consulted by the Company in connection with any such press release or
other public disclosure prior to its release). Without the prior written consent
of any applicable Buyer, neither the Company nor any of its Subsidiaries or
affiliates shall disclose the name of such Buyer in any filing, announcement,
release or otherwise, unless such disclosure is required by law or regulation.
 
(i) Registration Statements. The Company shall file a registration statement
with the SEC to register the Common Shares and the shares underlying the
Warrants (“Registrable Securities”) pursuant to the terms set forth in the
Registration Rights Agreement within forty-five (45) days after the Closing
Date. No other securities shall be included in the registration statement. The
Company shall use its commercially reasonable efforts to cause the registration
statement to become effective within 180 days after filing. In the event that
the number of Common Shares and the shares underlying the Warrants to be
registered on the initial registration statement as permitted by the Commission
is less than the full amount of the Registrable Securities as a result of Rule
415 of the Securities Act or its interpretation, the Company shall file one or
more subsequent registration statements to register the rest of the Registrable
Securities until all Registrable Securities are registered, pursuant to the
provisions of the Registration Rights Agreement; provided that the Company's
obligation to file subsequent registration statements shall cease on the second
yearly anniversary of the Closing Date. Each Buyer’s shares shall be registered
in the subsequent registrations on a pro rata basis. Until the date that is
forty-five days after the effective date of the initial registration statement,
the Company will not file a registration statement (other than on Form S-8 or
solely to register shares of Common Stock issued pursuant to an acquisition with
non-affiliated third parties on an arm's length basis, the primary purpose of
which is not to raise additional capital (the“Acquisition Shares”)) under the
1933 Act relating to securities that are not the Securities or any shares of
Common Stock underlying the Warrants. Until the effective date of the initial
registration statement, the Company will not file a registration statement under
the 1933 Act relating to Acquisition Shares.
 
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(j) Corporate Existence. So long as any Buyer beneficially owns any Warrants,
the Company shall maintain its corporate existence and shall not sell all or
substantially all of the Company's assets, except in the event of a merger or
consolidation or sale of all or substantially all of the Company's assets, where
the surviving or successor entity in such transaction (i) assumes the Company's
obligations hereunder and under the agreements and instruments entered into in
connection herewith and (ii) is a publicly traded corporation whose common stock
is quoted on or listed for trading on the OTCBB, The NASDAQ Capital Market, The
NASDAQ Global Market, The NASDAQ Global Select Market, the American Stock
Exchange or The New York Stock Exchange, Inc (each referred to herein as a
“Trading Market”).
 
(k) Reservation of Shares. So long as any Buyer owns any Warrants, the Company
shall take all action necessary to at all times have authorized, and reserved
for the purpose of issuance no less than 100% of the number of shares of Common
Stock issuable upon exercise of the Warrants then outstanding (without taking
into account any limitations on the exercise of the Warrants set forth in the
Warrants).
 
(l) Additional Issuances of Securities.
 
(i) For purposes of this Section 4(m), the following definitions shall apply.
 
(1)  “Common Stock Equivalents” means, collectively, Options and Convertible
Securities.

(2)  “Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for Common Stock.

(3)  “Options” means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.
 
(4)  “Exempt Issuance” means the issuance of (a) shares of Common Stock or
options to employees, officers or directors of the Company pursuant to any stock
or option plan duly adopted by the Board of Directors of the Company or a
majority of the members of a committee of directors established for such
purpose, (b) securities upon the exercise or exchange of or conversion of any
Securities issued hereunder and/or securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that such securities have not been amended since the
date of this Agreement to increase the number of such securities or to decrease
the exercise, exchange or conversion price of any such securities, and (c)
securities issued pursuant to acquisitions or strategic transactions, provided
any such issuance shall only be to a Person which is, itself or through its
subsidiaries, an operating company in a business synergistic with the business
of the Company and in which the Company receives benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities.
 
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(ii) From the date hereof until the one year anniversary of the Closing Date
(the "Trigger Date"), the Company will not, directly or indirectly, offer, sell,
grant any option to purchase, or otherwise dispose of (or announce any offer,
sale, grant or any option to purchase or other disposition of) any of its or its
Subsidiaries' equity or equity equivalent securities, including, without
limitation, any debt, preferred stock or other instrument or security that is,
at any time during its life and under any circumstances, convertible into or
exchangeable or exercisable for shares of Common Stock or Common Stock
Equivalents (any such offer, sale, grant, disposition or announcement being
referred to as a "Subsequent Placement") unless the Company shall have first
complied with this Section 4(l).

(iii) The Company shall deliver to each Buyer hereunder a written notice (the
"Offer Notice") of any proposed or intended issuance or sale or exchange (the
"Offer") of the securities being offered (the "Offered Securities") in a
Subsequent Placement, which Offer Notice shall (w) identify and describe the
Offered Securities, (x) describe the price and other terms upon which they are
to be issued, sold or exchanged, and the number or amount of the Offered
Securities to be issued, sold or exchanged, (y) identify the persons or entities
(if known) to which or with which the Offered Securities are to be offered,
issued, sold or exchanged and (z) offer to issue and sell to or exchange with
such Buyers all of the Offered Securities, allocated among such Buyers (a) based
on such Buyer's pro rata portion of the total Purchase Price hereunder (the
"Basic Amount"), and (b) with respect to each Buyer that elects to purchase its
Basic Amount, any additional portion of the Offered Securities attributable to
the Basic Amounts of other Buyers as such Buyer shall indicate it will purchase
or acquire should the other Buyers subscribe for less than their Basic Amounts
(the "Undersubscription Amount"), which process shall be repeated until the
Buyers shall have an opportunity to subscribe for any remaining
Undersubscription Amount.

(iv) To accept an Offer, in whole or in part, such Buyer must deliver a written
notice to the Company prior to the end of the fifth Business Day after such
Buyer's receipt of the Offer Notice (the "Offer Period"), setting forth the
portion of such Buyer's Basic Amount that such Buyer elects to purchase and, if
such Buyer shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that such Buyer elects to purchase (in either
case, the "Notice of Acceptance"). If the Basic Amounts subscribed for by all
Buyers are less than the total of all of the Basic Amounts, then each Buyer who
has set forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, that if the
Undersubscription Amounts subscribed for exceed the difference between the total
of all the Basic Amounts and the Basic Amounts subscribed for (the "Available
Undersubscription Amount"), each Buyer who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
available Undersubscription Amount as the Basic Amount of such Buyer bears to
the total Basic Amounts of all Buyers that have subscribed for Undersubscription
Amounts, subject to rounding by the Company to the extent its deems reasonably
necessary.

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(v) The Company shall have twenty Business Days from the expiration of the Offer
Period above to (i) offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Buyers (the "Refused Securities"), but only to the offerees described in the
Offer Notice (if so described therein) and only upon terms and conditions
(including, without limitation, unit prices and interest rates) that are not
more favorable to the acquiring Person or Persons or less favorable to the
Company than those set forth in the Offer Notice and (ii) to publicly announce
(a) the execution of such Subsequent Placement Agreement (as defined below), and
(b) either (x) the consummation of the transactions contemplated by such
Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which shall be filed with the Commission on a Current
Report on Form 8-K with such Subsequent Placement Agreement and any documents
contemplated therein filed as exhibits thereto. If no disclosure has been made
by the Company by the end of the twenty Business Day period referred to in this
subsection (d), the Subsequent Placement shall be deemed to have been abandoned
and the Buyers shall no longer be deemed to be in possession of any non-public
information with respect to the Company.

(vi) In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in this
Section 4(l)), then each Buyer may, at its sole option and in its sole
discretion, reduce the number or amount of the Offered Securities specified in
its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that such Buyer elected to purchase pursuant to
Section 4(l)(iv) above multiplied by a fraction, (i) the numerator of which
shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued
or sold to Buyers pursuant to Section 4(l)(iv) above prior to such reduction)
and (ii) the denominator of which shall be the original amount of the Offered
Securities. In the event that any Buyer so elects to reduce the number or amount
of Offered Securities specified in its Notice of Acceptance, the Company may not
issue, sell or exchange more than the reduced number or amount of the Offered
Securities unless and until such securities have again been offered to the
Buyers in accordance with this Section 4(l).

(vii) Upon the closing of the issuance, sale or exchange of all or less than all
of the Refused Securities, the Buyers shall acquire from the Company, and the
Company shall issue to the Buyers, the number or amount of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to Section 4(l)(vi)
above if the Buyers have so elected, upon the terms and conditions specified in
the Offer. The purchase by the Buyers of any Offered Securities is subject in
all cases to the preparation, execution and delivery by the Company and the
Buyers of a purchase agreement relating to such Offered Securities reasonably
satisfactory in form and substance to the Buyers and their respective counsel
(such agreement, the “Subsequent Placement Agreement”).

(viii) Any Offered Securities not acquired by the Buyers or other persons in
accordance with Section 4(m)(vii) above may not be issued, sold or exchanged
until they are again offered to the Buyers under the procedures specified in
this Agreement.

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(ix) In exchange for the Company’s willingness to agree to these procedures,
each Buyer hereby irrevocably agrees that it will hold in strict confidence any
and all Offer Notices, the information contained therein, and the fact that the
Company is contemplating a Subsequent Placement, until such time as the Company
is obligated to make the disclosures required by Section 4(l)(v), or unless it
notifies the Company in writing that it no longer desires to receive Offer
Notices.

(x) Notwithstanding the foregoing, this Section 4(l) shall not apply in respect
of an Exempt Issuance.
 
(m) Conduct of Business. The business of the Company and its Subsidiaries shall
not be conducted in violation of any law, ordinance or regulation of any
governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.
 
(n) Closing Documents. On or prior to fourteen (14) calendar days after the
Closing Date, the Company agrees to deliver, or cause to be delivered, to each
Buyer and Secore & Waller  a complete closing set of the Transaction Documents,
Securities and any other document required to be delivered to any party pursuant
to Section 7 hereof or otherwise.
 
(o) Employee Stock Option Plan. On or prior to the expiration of sixty (60) days
after the Closing Date, the Company shall enact an employee stock option plan,
subject to the approval of the Buyers, for certain key members of management
covering options to purchase a total of 6,600,000 shares of Common Stock of the
Company (“Plan”). The Parties agree that such number of options shall be granted
to the following key members of the Company as set forth opposite their
respective names in Exhibit J hereto. The options to collectively purchase
1,100,000 shares of Common Stock under the said Plan shall vest on each
anniversary of the grant until the end of six years, whereby all the options to
purchase the 6,600,000 shares of Common Stock shall vest and be immediately
exerciseable. However, in the event (i) the Company reports an after tax Net
Income of $14,000,000 in its Annual Report on Form 10-K filed with the SEC for
its fiscal year 2008, then options to purchase 2,200,000 shares of Common Stock
in the aggregate under the Plan shall vest and become immediately exercisable
and each grantee of such options shall be entitled to exercise his/her options
rateably, (ii) the Company reports an after tax Net Income of $18,000,000 in its
Annual Report on Form 10-K filed with the SEC for its fiscal year 2009, then
options to purchase another 2,200,000 shares of Common Stock in the aggregate
under the Plan shall vest and become immediately exercisable and each grantee of
such options shall be entitled to exercise his/her options rateably and (iii)
the Company reports an after tax Net Income of $22,000,000 in its Annual Report
on Form 10-K filed with the SEC for its fiscal year 2010, then options to
purchase another 2,200,000 shares of Common Stock in the aggregate under the
Plan shall vest and become immediately exercisable and each grantee of such
options shall be entitled to exercise his/her options rateably. The number of
shares of Common Stock covered by the Plan shall be subject to adjustment for
subsequent events, including but not limited to the Reverse Split described in
section 4 (p) of this Agreement.”Net Income” shall be defined in accordance with
the United States generally accounting principles and shall not, for the
purposes of this Agreement and the transactions contemplated hereby include:

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(i) the offering and transactional costs associated with this $7,500,000 private
placement financing transaction, including without limitation, legal and audit
costs, registration and filing fees;

(ii) losses the Company has suffered or reasonably calculated to have suffered
as a result of a force majeure event, which shall mean (i) acts of God such as
earthquakes with an intensity of more than 7.0 on the Richter scale in
geographic areas where the Company derives more than 50% of its revenue, or (ii)
snow storms, rainstorms, floods and other natural catastrophes of such intensity
and/or duration that exceed the average monthly amount for that geographic area
by more than 100% in geographic areas in which the Company derives more than 50%
of its revenue;

(iii) the costs and expense incurred by the Company in 2008 and incurred in 2009
in establishing an employee stock option plan pursuant to Section 4(o) of this
Securities Purchase Agreement and granting stock options to Ms. Jiangping Jiang
thereunder; and

(iv) any compensation expense incurred by the Company in connection with the
release of any escrow shares under the Make Good Securities Escrow Agreement
between the Company, the Buyers, Ms. Jiangping Jiang and Sichenzia Ross Friedman
Ference LLP, as escrow agent dated August 28, 2008 to Ms. Jiangping Jiang.
 
(p)  Reverse Split. On or prior to the expiration of one hundred and eight (180)
days from the Closing Date, the Company shall use its commercially reasonable
efforts to effect a two-for-one (2:1) reverse split of its Common Stock
(“Reverse Split”). Further, the Company undertakes to the Buyers that it will
not effect any other reverse splits of the Company’s Common Stock other than the
said Reverse Split for a period of thirty-six (36) months from the Closing Date.
 
(q)  No Change in Control. For a period of twelve (12) months from the Closing
Date, the Company will not enter into a transaction that would result in a
Change in Control of the Company without the unanimous approval of the Company’s
independent directors and the written approval of the Buyers, such approval not
to be unreasonably withheld. For the purposes of this Section 4(q), “Change in
Control” shall be deemed to have occurred (a) on the date that any one Person,
or more than one Person acting in concert, acquires beneficial ownership of
voting securities the Company that, together with the voting securities
previously held or beneficially owned by such Person or Persons acting in
concert, constitutes more than fifty percent (50%) of the voting rights of any
class of securities issued by the Company; or (b) on the date that any one
Person or Persons acting in concert acquires (or has acquired during the twelve
month period ending on the date of the most recent acquisition of such Person or
Persons) assets from the Company that have a total gross fair market value equal
to or more than fifty percent (50%) of the total gross fair market value of all
of the assets of the Company immediately prior to such acquisition or
acquisitions; for this purpose, the term “gross fair market value” means the
value of the assets of the Company, or the value of the assets being disposed
of, determined without regard to any liabilities associated with such assets.
The determination of whether persons are acting in concert, and of beneficial
ownership, shall be made in accordance with Regulation 13D under the Exchange
Act.

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(r) Sale and Further Encumbrance. For a period of eighteen (18) months from the
Closing Date, the Company shall not sell more than 10% of its Net Equity or
encumber itself with a debt amounting to more than 50% of its Net Equity. For
the purposes of Section 4(r), “Net Equity” means that amount reflected as
Stockholder's Equity of the Company on the most recent financial statements
filed with the SEC.
 
(s) Expenses. The Company shall bear all of its own legal, accounting and other
expenses, including those relating to the preparation of this Agreement and the
other Transaction Documents, and the preparation and filing of any current
report, quarterly or annual report or registration statement with the SEC.
 
(t) Audit Committee Chairman.  The Company has appointed an Audit Committee
Chairman.  The Buyers shall have fourteen (14) days following Closing to satisfy
themselves as to his credentials.  If the Buyers shall inform the Company within
such fourteen (14) days that the credentials are not acceptable to the Buyers,
the Company will use its commercially reasonable efforts to identify and
nominate as director another person who is qualified to serve as Chairman of the
Audit Committee, and who is acceptable to the representative of the Buyers
designated in the Escrow Agreement.  Such proposed Audit Committee Chairman
shall be qualified to act as an independent director under Section 10A(m) of the
Exchange Act, shall understand and have a working knowledge of United States
generally accepted accounting principles, and shall have had experience as an
officer or committee member with significant responsibility for the preparation
and filing of quarterly, annual and current reports with the SEC.
 
5. REGISTER; TRANSFER AGENT INSTRUCTIONS.
 
(a) Register. The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to each
holder of Securities), a register for the Common Shares and the Warrants, in
which the Company shall record the name and address of the Person in whose name
the Common Shares and the Warrants have been issued (including the name and
address of each transferee), the number of Common Shares held by such Person,
the number of Warrant Shares issuable upon exercise of the Warrants held by such
Person and the number of Common Shares held by such Person. The Company shall
keep the register open and available at all times during business hours for
inspection of any Buyer or its legal representatives.
 
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(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at DTC,
registered in the name of each Buyer or its respective nominee(s), for the
Common Shares, and the Warrant Shares issued at the Closing or upon exercise of
the Warrants in such amounts as specified from time to time by each Buyer to the
Company upon exercise of the Warrants in the form of Exhibit F attached hereto
(the “Irrevocable Transfer Agent Instructions”). The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 5(b), and stop transfer instructions to give effect to Section
2(h) hereof, will be given by the Company to its transfer agent, and that the
Securities shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the other
Transaction Documents. If a Buyer effects a sale, assignment or transfer of the
Securities in accordance with Section 2(h), the Company shall permit the
transfer and shall promptly instruct its transfer agent to issue one or more
certificates or credit shares to the applicable balance accounts at DTC in such
name and in such denominations as specified by such Buyer to effect such sale,
transfer or assignment. In the event that such sale, assignment or transfer
involves Common Shares or Warrant Shares sold, assigned or transferred pursuant
to an effective registration statement or pursuant to Rule 144, the transfer
agent shall issue such Securities to the Buyer, assignee or transferee, as the
case may be, without any restrictive legend. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to a
Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Section 5(b) will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this
Section 5(b), that a Buyer shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss
and without any bond or other security being required.
 
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
 
The obligation of the Company hereunder to issue and sell the Common Shares and
the related Warrants to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof:
 
(i) Such Buyer shall have executed each of the Transaction Documents to which it
is a party and delivered the same to the Company.
 
(ii) Such Buyer shall have delivered to the Escrow Agent, in accordance with the
terms of the Escrow Agreement, the Purchase Price for the Common Shares and the
related Warrants being purchased by such Buyer and each other Buyer at the
Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company or by means of a check made payable to the
Escrow Agent which has been cleared and made freely available prior to the
Closing
 
(iii) The representations and warranties of such Buyer shall be true and correct
in all material respects as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date which shall be true and correct as of such specified
date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Closing Date.

29

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(iv) No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction that prohibits the consummation
of any of the transactions contemplated by the Transaction Documents.
 
(v) Each Buyer has completed an Accredited Investor Questionnaire to the
satisfaction of the Company and has delivered the same to the Company.
 
7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.
 
The obligation of each Buyer hereunder to purchase the Common Shares and the
related Warrants at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer's sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:
 
(i) The Company shall have executed and delivered to such Buyer (i) each of the
Transaction Documents and (ii) the Common Shares (in such amounts as such Buyer
shall request) and the related Warrants (in such amounts as such Buyer shall
request) being purchased by such Buyer at the Closing pursuant to this
Agreement.
 
(ii) The Company shall have executed the Make Good Escrow Agreement together
with the Buyers and Ms. Jiangping Jiang, the Company’s CEO and have delivered
the shares thereunder to the Escrow Agent.
 
(iii) The Company shall have executed the Lock-Up Agreement with Ms. Jiangping
Jiang.
 
(iv) Such Buyer shall have received the opinion of Sichenzia Ross Friedman
Ference LLP, the Company's outside counsel (“Company Counsel”), dated as of the
Closing Date, in substantially the form of Exhibit G attached hereto.
 
(v) The Company shall have delivered to such Buyer a copy of the Irrevocable
Transfer Agent Instructions, in the form of Exhibit F attached hereto, which
instructions shall have been delivered to and acknowledged in writing by the
Company's transfer agent.
 
(vi) The Company shall have delivered to such Buyer a certificate evidencing the
incorporation and good standing of the Company and each of its operating
Subsidiaries in such corporation's state of incorporation issued by the
Secretary of State of such state of incorporation as of a date within 10 days of
the Closing Date.
 
(vii) The Company shall have delivered to such Buyer a certificate evidencing
the Company's qualification as a foreign corporation and good standing issued by
the Secretary of State (or comparable office) of each jurisdiction in which the
Company conducts business and is required to so qualify, as of a date within 10
days of the Closing Date.

30

--------------------------------------------------------------------------------

(viii) The Common Stock (I) shall be quoted on the OTCBB and (II) shall not have
been suspended, as of the Closing Date, by the SEC or FINRA from trading on the
OTCBB nor shall suspension by the SEC or FINRA have been threatened.
 
(ix) The Company shall have delivered to such Buyer a certified copy of the
Articles of Incorporation as certified by the Secretary of State of the State of
Nevada within 10 days of the Closing Date.
 
(x) The Company shall have delivered to such Buyer a certificate, executed by
the Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Company's Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Articles of
Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
form attached hereto as Exhibit H.
 
(xi) The representations and warranties of the Company shall be true and correct
as of the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date
which shall be true and correct as of such specified date) and the Company shall
have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such
Buyer shall have received a certificate, executed by the Chief Executive Officer
of the Company, dated as of the Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by such Buyer in the form
attached hereto as Exhibit I.
 
(xii) The Company shall have delivered to such Buyer a letter from the Company's
transfer agent certifying the number of shares of Common Stock outstanding as of
a date within five days of the Closing Date.
 
(xiii) The Company shall have obtained all governmental, regulatory or third
party consents and approvals, if any, necessary for the sale of the Common
Shares and the Warrants.
 
(xiv) The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.
 
(xv) No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction that prohibits the consummation
of any of the transactions contemplated by the Transaction Documents.
 
8. TERMINATION . In the event that the Closing shall not have occurred with
respect to a Buyer on or before ten (10) Business Days from the date hereof due
to the Company's or such Buyer's failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party's failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated pursuant to this Section
8, the Company shall remain obligated to reimburse the non-breaching Buyers for
the expenses described in Section 4(g) above.

31

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9. MISCELLANEOUS.
 
(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. The Company hereby appoints Sichenzia Ross Friedman Ference LLP with
offices at 61 Broadway, 32nd Floor, New York, NY 10006 as its agent for service
of process in New York. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 
 
(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.
 
(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.
 
(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

32

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(e) Entire Agreement; Amendments. This Agreement supersedes all other prior oral
or written agreements between the Buyers, the Company, their affiliates and
Persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
holders of Common Shares representing at least a majority of the amount of the
Common Shares, or, if prior to the Closing Date, the Buyers listed on the
Schedule of Buyers as being obligated to purchase at least a majority of the
amount of the Common Shares. No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought. No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Common Shares then outstanding. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of any of the Transaction Documents unless the same consideration
also is offered to all of the parties to the Transaction Documents, holders of
Common Shares or holders of the Warrants, as the case may be. The Company has
not, directly or indirectly, made any agreements with any Buyers relating to the
terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents. Without limiting the
foregoing, the Company confirms that, except as set forth in this Agreement, no
Buyer has made any commitment or promise or has any other obligation to provide
any financing to the Company or otherwise.
 
(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) five Business Day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:
 
If to the Company:
 
Universal Travel Group
Attention:
Ms. Jiangping Jiang
Address:
3/F Hualian Building, No. 2008 Shennan Road,
 
Central Futian District,
City & State:
Shenzhen, The People’s Republic of China
Telephone:
86-755-83668559
Fax:
86-755-83668556
Email:
01@cnutg.cn

 
33

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

Sichenzia Ross Friedman Ference LLP
Attention:
Benjamin Tan, Esq.
Telephone:
(212) 930 9700
Fax:
(212) 930 9725
Email:
btan@srff.com

 
If to the Transfer Agent:
 
American Stock Transfer and Trust Co.
Address; 6201 15th Avenue, Brooklyn, NY 11219
Telephone: 
Facsimile:  
Attention: Mr. Wilbert Myles  
Email:

If to a Buyer, to its address, facsimile number and email address set forth on
the Schedule of Buyers, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers,
 
with a copy (for informational purposes only, and which shall not constitute
notice) to:

Secore & Waller, L.L.P.
Attention:
Joan Conway Waller
Address:
12222 Merit Drive, Suite 1350, Dallas, Texas 75254
Telephone:
(972) 776-0200
Fax:
(972) 776-0200
Email:
jo@secorewaller.com

or to such other address, facsimile number and/or email address and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
 
(g) Currency. Unless otherwise indicated, all dollar amounts referred to in this
Agreement are in United States Dollars. All amounts owing under this Agreement
or any Transaction Document shall be paid in US dollars. All amounts denominated
in other currencies shall be converted in the US dollar equivalent amount in
accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into US dollars
pursuant to this Agreement, the US dollar exchange rate as published in the Wall
Street Journal on the relevant date of calculation.

34

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(h) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including any purchasers of the Common Shares or the Warrants. The Company shall
not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the holders of Common Shares representing at least a
majority of the number of the Common Shares, including by merger or
consolidation. A Buyer may assign some or all of its rights hereunder without
the consent of the Company, in which event such assignee shall be deemed to be a
Buyer hereunder with respect to such assigned rights.
 
(i) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.
 
(j) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and 9
shall survive the Closing and the delivery and exercise of Securities, as
applicable. Each Buyer shall be responsible only for its own representations,
warranties, agreements and covenants hereunder.
 
(k) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
 
(l) Indemnification. In consideration of each Buyer's execution and delivery of
the Transaction Documents and acquiring the Securities thereunder and in
addition to all of the Company's other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each other holder of the Securities and all of their stockholders,
partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons' agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, or (iii) the
status of such Buyer or holder of the Securities as an investor in the Company.
To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 9(k)
shall be the same as those set forth in Section 6 of the Registration Rights
Agreement.

35

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(m) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
 
(n) Remedies. Each Buyer and each holder of the Securities shall have all rights
and remedies set forth in the Transaction Documents and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law. Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of
its obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages and without posting a bond
or other security.
 
(o) Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights
 
(p) Payment Set Aside. To the extent that the Company makes a payment or
payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

36

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(q) Independent Nature of Buyers' Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way for
the performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents and the Company
acknowledges that the Buyers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Buyer confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Buyer to be joined as an additional party in any
proceeding for such purpose.
 
(r) Judgment Currency.
 
If for the purpose of obtaining or enforcing judgment against the Company in any
court in any jurisdiction it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 9(r) referred to
as the “Judgment Currency”) an amount due in US dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Business Day
immediately preceding:
 
(1) the date of actual payment of the amount due, in the case of any proceeding
in the courts of New York or in the courts of any other jurisdiction that will
give effect to such conversion being made on such date: or
 
(2) the date on which the foreign court determines, in the case of any
proceeding in the courts of any other jurisdiction (the date as of which such
conversion is made pursuant to this Section being hereinafter referred to as the
“Judgment Conversion Date”).
 
If in the case of any proceeding in the court of any jurisdiction referred to in
Section 9(r)(i)(2) above, there is a change in the Exchange Rate prevailing
between the Judgment Conversion Date and the date of actual payment of the
amount due, the applicable party shall pay such adjusted amount as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the Exchange Rate prevailing on the date of payment, will produce
the amount of US dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial order at the Exchange
Rate prevailing on the Judgment Conversion Date.
 
Any amount due from the Company under this provision shall be due as a separate
debt and shall not be affected by judgment being obtained for any other amounts
due under or in respect of this Agreement.

37

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[Signature Pages Follow]
 
38

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IN WITNESS WHEREOF, each Buyer and the Company have caused its respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.
 
COMPANY:
 
UNIVERSAL TRAVEL GROUP
   
By:
   
Name: Jiangping Jiang
 
Title: Chief Executive Officer

39

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

BUYER:
 
ACCESS AMERICA FUND, LP
   
By:
 
 
Name:
 
Title:
   
BUYER:
 
CHINAMERICA FUND LP
   
By:
 
 
Name:
 
Title:
   
BUYER:
 
POPE INVESTMENT II LLC
   
By:
 
 
Name:
 
Title:

 
40

--------------------------------------------------------------------------------

 
BUYER:
 
HELLER CAPITAL INVESTMENTS, LLC
   
By:
 
 
Name:
 
Title:
   
BUYER:
 
CGM as C/F RONALD I. HELLER IRA
   
By:
 
 
Name:
 
Title:
   
BUYER:
 
INVESTMENT HUNTER, LLC
   
By:
 
 
Name:
 
Title:

 
41

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BUYER:
 
MARED INVESTMENTS
   
By:
 
 
Name:
 
Title:
   
BUYER:
 
HIGH CAPITAL FUNDING, LLC
   
By:
 
 
Name:
 
Title:
   
BUYER:
 
MERRILL LYNCH, PIERCE, FENNER &
SMITH, FBO BEAU L. JOHNSON
   
By:
 
 
Name:
 
Title:

 
42

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SCHEDULE OF BUYERS

Buyer
 
Address and Facsimile
Number
 
Number of Common Shares
 
Number of Warrant Shares
 
Purchase Price
 
Legal Representative’s
Address and Facsimile
Number
 
Access America Fund, LP
 
   

1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
   

645,161
   

322,581
 

$

1,000,000
   
Access America Fund, LP
1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
 
Chinamerica Fund LP
   

2909 At. Andrews Drive, Richardson, TX 75082
Fax:
   

645,161
   

322,581
 

$

1,000,000
   
Access America Fund, LP
1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
 
Pope Investments II LLC
   

5100 Poplar Avenue, Suite 805, Memphis, TN 38137
Fax:
     

1,935,484
      

967,742
   

$

3,000,000
   
Access America Fund, LP
1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
 
Heller Capital Investments, LLC
   

700 E. Palisade Avenue, Englewood Cliffs, NJ 07632
Fax:
   

350,000
   

175,000
 

$

542,500
   
Access America Fund, LP
1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
 
CGM as C/F Ronald I. Heller IRA
   

700 E. Palisade Avenue, Englewood Cliffs, NJ 07632
Fax:
   

150,000
   

75,000
 

$

232,500
   
Access America Fund, LP
1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
 
Investment Hunter, LLC
   

1048 Texan Trail, Grapevine, TX 76051
Fax:
   

645,161
   

322,581
 

$

1,000,000
   
Access America Fund, LP
1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
 

 
43

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MARed Investments
   

29719 High Eschelon, Fair Oaks Ranch, TX 78015
Fax:
   

129,032
   

64,516
   

$

200,000
     
Access America Fund, LP
1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
 
High Capital Funding. LLC
   

333 Sandy Springs Circle, Suite 230, Atlanta, GA 30328
Fax:
   

75,806
   

37,903
 

$

117,500
   
Access America Fund, LP
1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
 
Merrill Lynch, Pierce, Fenner & Smith, FBO Beau L. Johnson
   

150 Fauyetteville St., Suite 2000, Raleigh, NC 27601-2919
Fax:
   

12,903
   

6,452
 

$

20,000
   
Access America Fund, LP
1800 West Loop South, Suite 485, Houston, TX 77027
Fax:
 
TOTAL
          

4,588,708
   

2,294,356
 

$

7,112,500
    
 
                                   

44

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EXHIBITS

Exhibit A
Form of Warrant
Exhibit B
Form of Registration Rights Agreement
Exhibit C
Form of Closing Escrow Agreement
Exhibit D
Form of Make Good Escrow Agreement
Exhibit E
Form of Lock-Up Agreement
Exhibit F
Form of Irrevocable Transfer Agent Instructions
Exhibit G
Form of Company Counsel Opinion
Exhibit H
Form of Secretary's Certificate
Exhibit I
Form of Officer's Certificate
Exhibit J
List of Stock Option Grantees

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SCHEDULES
 
Schedule 3(a) - List of Subsidiaries
Schedule 3(l) - Absence of Certain Changes
Schedule 3(r) - Equity Capitalization
Schedule 3(s) - Indebtedness and Other Contracts
Schedule 3(t) - Absence of Litigation
Schedule 3(u) - Insurance

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