Document:

FORM
      OF GUARANTY
      

     

    1. Identification.

    

    This
      Guaranty (the "Guaranty"), dated as of June 15, 2007, is entered into by
Beihai
      Hi-Tech Wealth Technology Development Co., Ltd., a company organized under
      the
      laws of the People’s Republic of China
      (the
“Guarantor”), for the benefit of the parties identified on Schedule A hereto
      (each a “Lender” and collectively, the "Lenders").

    

    2. Recitals.

    

    2.1 Guarantor
      is a direct or indirect subsidiary of Hi-Tech Wealth Inc., a Nevada corporation
      (“Parent”). The Lenders have made, are making and will be making loans to Parent
      (the "Loans"). Guarantor will obtain substantial benefit from the proceeds
      of
      the Loans.

    

    2.2 The
      Loans
      are and will be evidenced by certain promissory Notes (collectively, “Note” or
“Notes") issued by Parent on, about or after the date of this Guaranty pursuant
      to subscription agreements dated at or about the date hereof (“Subscription
      Agreements”). The Notes are further identified on Schedule A hereto and were and
      will be executed by Parent as “Borrower” or “Debtor” for the benefit of each
      Lender as the “Holder” or “Lender” thereof.

    

    2.3 In
      consideration of the Loans made and to be made by Lenders to Parent and for
      other good and valuable consideration, and as security for the performance
      by
      Parent of its obligations under the Notes and as security for the repayment
      of
      the Loans and all other sums due from Debtor to Lenders arising under the Notes,
      Subscription Agreements and any other agreement between or among them relating
      to the foregoing (collectively, the "Obligations"), Guarantor, for good and
      valuable consideration, receipt of which is acknowledged, has agreed to enter
      into this Guaranty. Obligations include all future advances by Lenders to Parent
      made by Lenders pursuant to the Subscription Agreement. 

    

    2.4 The
      Lenders have appointed Peter Benz as Collateral Agent pursuant to that certain
      Collateral Agent Agreement dated at or about the date of this Agreement
      (“Collateral Agent Agreement”), among the Lenders and Collateral
      Agent.

    

    3. Guaranty.

    

    3.1 Guaranty.
      Guarantor hereby unconditionally and irrevocably guarantees, the punctual
      payment, performance and observance when due, whether at stated maturity, by
      acceleration or otherwise, of all of the Obligations now or hereafter existing,
      whether for principal, interest (including, without limitation, all interest
      that accrues after the commencement of any insolvency, bankruptcy or
      reorganization of Parent, whether or not constituting an allowed claim in such
      proceeding), fees, commissions, expense reimbursements, liquidated damages,
      indemnifications or otherwise (such obligations, to the extent not paid by
      Parent being the “Guaranteed Obligations”), and agrees to pay any and all
      reasonable costs, fees and expenses (including reasonable counsel fees and
      expenses) incurred by Collateral Agent and the Lenders in enforcing any rights
      under the guaranty set forth herein. Without limiting the generality of the
      foregoing, Guarantor’s liability shall extend to all amounts that constitute
      part of the Guaranteed Obligations and would be owed by Parent to Collateral
      Agent and the Lenders, but for the fact that they are unenforceable or not
      allowable due to the existence of an insolvency, bankruptcy or reorganization
      involving Parent.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    3.2 Guaranty
      Absolute.
      Guarantor guarantees that the Guaranteed Obligations will be paid strictly
      in
      accordance with the terms of the Notes, regardless of any law, regulation or
      order now or hereafter in effect in any jurisdiction affecting any of such
      terms
      or the rights of Collateral Agent or the Lenders with respect thereto. The
      obligations of Guarantor under this Guaranty are independent of the Guaranteed
      Obligations, and a separate action or actions may be brought and prosecuted
      against Guarantor to enforce such obligations, irrespective of whether any
      action is brought against Parent or any other Guarantor or whether Parent or
      any
      other Guarantor is joined in any such action or actions. The liability of
      Guarantor under this Guaranty constitutes a primary obligation, and not a
      contract of surety, and to the extent permitted by law, shall be irrevocable,
      absolute and unconditional irrespective of, and Guarantor hereby irrevocably
      waives any defenses it may now or hereafter have in any way relating to, any
      or
      all of the following:

     

    (a)
      any
      lack of validity or enforceability of the Notes or any agreement or instrument
      relating thereto;

     

    (b)
      any
      change in the time, manner or place of payment of, or in any other term of,
      all
      or any of the Guaranteed Obligations, or any other amendment or waiver of or
      any
      consent to departure from the Notes, including, without limitation, any increase
      in the Guaranteed Obligations resulting from the extension of additional credit
      to Parent or otherwise;

     

    (c)
      any
      taking, exchange, release, subordination or non-perfection of any Collateral,
      or
      any taking, release or amendment or waiver of or consent to departure from
      any
      other guaranty, for all or any of the Guaranteed Obligations;

     

    (d)
      any
      change, restructuring or termination of the corporate, limited liability company
      or partnership structure or existence of Parent; or

     

    (e)
      any
      other circumstance (including, without limitation, any statute of limitations)
      or any existence of or reliance on any representation by Collateral Agent or
      the
      Lenders that might otherwise constitute a defense available to, or a discharge
      of, Parent or any other guarantor or surety.

     

    This
      Guaranty shall continue to be effective or be reinstated, as the case may be,
      if
      at any time any payment of any of the Guaranteed Obligations is rescinded or
      must otherwise be returned by Collateral Agent, the Lenders or any other entity
      upon the insolvency, bankruptcy or reorganization of the Parent or otherwise
      (and whether as a result of any demand, settlement, litigation or otherwise),
      all as though such payment had not been made.

     

    3.3 Waiver.
      Guarantor hereby waives promptness, diligence, notice of acceptance and any
      other notice with respect to any of the Guaranteed Obligations and this Guaranty
      and any requirement that Collateral Agent or the Lenders or exhaust any right
      or
      take any action against any Borrower or any other person or entity or any
      Collateral. Guarantor acknowledges that it will receive direct and indirect
      benefits from the financing arrangements contemplated herein and that the waiver
      set forth in this Section 3.3
      is
      knowingly made in contemplation of such benefits. Guarantor hereby waives any
      right to revoke this Guaranty, and acknowledges that this Guaranty is continuing
      in nature and applies to all Guaranteed Obligations, whether existing now or
      in
      the future.

     

    3.4
      Continuing
      Guaranty; Assignments.
      This
      Guaranty is a continuing guaranty and shall (a) remain in full force and effect
      until the later of the indefeasible cash payment in full of the Guaranteed
      Obligations and all other amounts payable under this Guaranty, the Subscription
      Agreements and Notes, (b) be binding upon Guarantor, its successors and assigns
      and (c) inure to the benefit of and be enforceable by the Lenders and their
      successors, pledgees, transferees and assigns. Without limiting the generality
      of the foregoing clause (c), any Lender may pledge, assign or otherwise
      transfer all or any portion of its rights and obligations under this Guaranty
      (including, without limitation, all or any portion of its Notes owing to it)
      to
      any other Person, and such other Person shall thereupon become vested with
      all
      the benefits in respect thereof granted such Collateral Agent or Lender herein
      or otherwise.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    3.5
      Subrogation.
      No
      Guarantor will exercise any rights that it may now or hereafter acquire against
      the Collateral Agent or any Lender or other Guarantor (if any) that arise from
      the existence, payment, performance or enforcement of such Guarantor’s
      obligations under this Guaranty, including, without limitation, any right of
      subrogation, reimbursement, exoneration, contribution or indemnification,
      whether or not such claim, remedy or right arises in equity or under contract,
      statute or common law, including, without limitation, the right to take or
      receive from the Collateral Agent or any Lender or other Guarantor (if any),
      directly or indirectly, in cash or other property or by set-off or in any other
      manner, payment or security solely on account of such claim, remedy or right,
      unless and until all of the Guaranteed Obligations and all other amounts payable
      under this Guaranty shall have been indefeasibly paid in full in cash.

     

    3.6
      Maximum
      Obligations.
      Notwithstanding any provision herein contained to the contrary, Guarantor’s
      liability with respect to the Obligations shall be limited to an amount not
      to
      exceed, as of any date of determination, the amount that could be claimed by
      Lenders from Guarantor without rendering such claim voidable or avoidable under
      Section 548 of the Bankruptcy Code or under any applicable state Uniform
      Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
      or
      common law.

     

    4. Miscellaneous.
      

     

    4.1 Expenses.
      Guarantor shall pay to the Lenders, on demand, the amount of any and all
      reasonable expenses, including, without limitation, attorneys' fees, legal
      expenses and brokers' fees, which the Lenders may incur in connection with
      exercise or enforcement of any the rights, remedies or powers of the Lenders
      hereunder or with respect to any or all of the Obligations.

    

    4.2 Waivers,
      Amendment and Remedies.
      No
      course of dealing by the Lenders and no failure by the Lenders to exercise,
      or
      delay by the Lender in exercising, any right, remedy or power hereunder shall
      operate as a waiver thereof, and no single or partial exercise thereof shall
      preclude any other or further exercise thereof or the exercise of any other
      right, remedy or power of the Lenders. No amendment, modification or waiver
      of
      any provision of this Guaranty and no consent to any departure by Guarantor
      therefrom, shall, in any event, be effective unless contained in a writing
      signed by the Majority in Interest (as such term is defined in the Collateral
      Agent Agreement) or the Lender or Lenders against whom such amendment,
      modification or waiver is sought, and then such waiver or consent shall be
      effective only in the specific instance and for the specific purpose for which
      given. The rights, remedies and powers of the Lenders, not only hereunder,
      but
      also under any instruments and agreements evidencing or securing the Obligations
      and under applicable law are cumulative, and may be exercised by the Lenders
      from time to time in such order as the Lenders may elect.

    

    4.3 Notices.
      All
      notices or other communications given or made hereunder shall be in writing
      and
      shall be personally delivered or deemed delivered the first business day after
      being faxed (provided that a copy is delivered by first class mail) to the
      party
      to receive the same at its address set forth below or to such other address
      as
      either party shall hereafter give to the other by notice duly made under this
      Section:

    
      

      
        	
                To
                  Parent and Guarantor, to:

              	 	
                Hi-Tech
                  Wealth Inc.Suite 1503, Sino Plaza

                255-257
                  Gloucester Road

                Causeway
                  Bay, Hong Kong

                Attn:
                  Ma Qing, Chief Financial Officer

                Fax:
                  +852 2975 9809

              

      

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      
        	
                With
                  an additional copy by telecopier only to:

              	 	
                Loeb
                  & Loeb LLP

                345
                  Park Avenue

                New
                  York, NY 10154

                Attn:
                  Mitchell S. Nussbaum, Esq.

                Fax:
                  (212) 202-7829

              

      

      

      
        	
                To
                  Lenders:

              	 	
                To
                  the addresses and telecopier numbers set forth
                  on Schedule A

              

      

       

      
        	
                To
                  the Collateral Agent:

              	 	
                Peter
                  Benz

                600
                  Montgomery Street, 44th
                  Floor

                San
                  Francisco, CA 94111

                Fax:
                  (415) 981-5301

              

      

      

      
        	
                If
                  to Parent, Guarantor, Lender orCollateral Agent, with a copy by
                  telecopier
                  only to:

              
	 
	
                 

              	 	
                Grushko
                  & Mittman, P.C.

                551
                  Fifth Avenue, Suite 1601

                New
                  York, New York 10176

                Fax:
                  (212) 697-3575

              

      

       

    

    Any
      party
      may change its address by written notice in accordance with this
      paragraph.

    

    4.4 Term;
      Binding Effect.
      This
      Guaranty shall (a) remain in full force and effect until payment and
      satisfaction in full of all of the Obligations; (b) be binding upon Guarantor
      and its successors and permitted assigns; and (c) inure to the benefit of the
      Lenders and their respective successors and assigns. All
      the
      rights and benefits granted by Guarantor to the Collateral Agent and Lenders
      hereunder and other agreements and documents delivered in connection therewith
      are deemed granted to both the Collateral Agent and Lenders. Upon the payment
      in
      full of the Obligations, (i) this Guaranty shall terminate and (ii) the Lenders
      will, upon Guarantor's request and at Guarantor's expense, execute and deliver
      to Guarantor such documents as Guarantor shall reasonably request to evidence
      such termination, all without any representation, warranty or recourse
      whatsoever.

    

    4.5 Captions.
      The
      captions of Paragraphs, Articles and Sections in this Guaranty have been
      included for convenience of reference only, and shall not define or limit the
      provisions hereof and have no legal or other significance
      whatsoever.

    

    4.6 Governing
      Law; Venue; Severability.
      This
      Guaranty shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to principles of conflicts or choice of law.
      Any legal action or proceeding against Guarantor with respect to this Guaranty
      may be brought in the courts of the State of New York or of the United States
      for the Southern District of New York, and, by execution and delivery of this
      Guaranty, Guarantor hereby irrevocably accepts for itself and in respect of
      its
      property, generally and unconditionally, the jurisdiction of the aforesaid
      courts. Guarantor hereby irrevocably waives any objection which they may now
      or
      hereafter have to the laying of venue of any of the aforesaid actions or
      proceedings arising out of or in connection with this Guaranty brought in the
      aforesaid courts and hereby further irrevocably waives and agrees not to plead
      or claim in any such court that any such action or proceeding brought in any
      such court has been brought in an inconvenient forum. If any provision of this
      Guaranty, or the application thereof to any person or circumstance, is held
      invalid, such invalidity shall not affect any other provisions which can be
      given effect without the invalid provision or application, and to this end
      the
      provisions hereof shall be severable and the remaining, valid provisions shall
      remain of full force and effect.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    4.7 Satisfaction
      of Obligations.
      For all
      purposes of this Guaranty, the payment in full of the Obligations shall be
      conclusively deemed to have occurred when either the Obligations have been
      indefeasibly paid in cash.

    

    4.8 Counterparts/Execution.
      This
      Agreement may be executed in any number of counterparts and by the different
      signatories hereto on separate counterparts, each of which, when so executed,
      shall be deemed an original, but all such counterparts shall constitute but
      one
      and the same instrument. This Agreement may be executed by facsimile signature
      and delivered by facsimile transmission.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the
      undersigned have executed and delivered this Guaranty, as of the date first
      written above.

    

    “GUARANTOR”

    BEIHAI
      HI-TECH WEALTH TECHNOLOGY

    DEVELOPMENT
      CO., LTD.

    A
      company organized under the laws of the

    People’s
      Republic of China

    

    

    

    By:
      _____________________________________ 

    

    Its:
      _____________________________________ 

    

    

    APPROVED
      BY “LENDERS”:

     

    

      
        	
                _______________________________________

              	 	
                _______________________________________

              
	
                LONGVIEW
                  FUND, LP

              	 	
                BASSO
                  MULTI-STRATEGY HOLDING FUND LTD.

              
	 	 	 
	 	 	 
	 	 	 
	
                _______________________________________

              	 	
                _______________________________________

              
	
                BASSO
                  FUND LTD.

              	 	
                IROQUOIS
                  MASTER FUND LTD.

              
	 	 	 
	 	 	 
	 	 	 
	
                _______________________________________

              	 	
                _______________________________________

              
	
                GRAHAM
                  PARTNERS, LP

              	 	
                INSIGNIA
                  PARTNERS LP

              
	 	 	 
	 	 	 
	 	 	 
	
                _______________________________________

              	 	
                _______________________________________

              
	
                NORTHWOOD
                  CAPITAL PARTNERS, LP

              	 	
                ALPHA
                  CAPITAL ANSTALT

              

      

    

     

    This
      Guaranty Agreement may be signed by facsimile signature
      and

    delivered
      by confirmed facsimile transmission.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    SCHEDULE
      A TO GUARANTY

    

    
      	
              LENDER

            	
              PRINCIPAL
                AMOUNT OF NOTE TO BE ISSUED ON CLOSING DATE

            	
              PRINCIPAL
                AMOUNT OF NOTE TO BE ISSUED ON SUBSEQUENT ISSUANCE CLOSING
                DATE

            
	
              LONGVIEW
                FUND, LP

              600
                Montgomery Street, 44th Floor

              San
                Francisco, CA 94111

              Fax:
                (415) 981-5301

            	
              $2,925,000.00

            	
              $2,925,000.00

            
	
              BASSO
                MULTI-STRATEGY HOLDING FUND LTD.

              A
                Cayman Islands Exempted Company

              c/o
                M&C Corporate Services

              Box
                309 GT, Ugland House

              South
                Church Street, George Town

              Grand
                Cayman, Cayman Islands

              Fax:
                (203) 352-6193

            	
              $850,000.00

            	
              $850,000.00

            
	
              BASSO
                FUND LTD.

              A
                Cayman Islands Exempted Company

              c/o
                M&C Corporate Services

              Box
                309 GT, Ugland House

              South
                Church Street, George Town

              Grand
                Cayman, Cayman Islands

              Fax:
                (203) 352-6193

            	
              $150,000.00

            	
              $150,000.00

            
	
              IROQUOIS
                MASTER FUND LTD.

              641
                Lexington Avenue, 26th
                Floor

              New
                York, NY 10022

              Fax:
                (212) 207-3452

            	
              $375,000.00

            	
              $375,000.00

            
	
              GRAHAM
                PARTNERS, LP

              666
                Fifth Avenue, 37th
                Floor

              New
                York, NY 10103

              Fax:
                (212) 808-7431

            	
              $200,000.00

            	
              $200,000.00

            
	
              INSIGNIA
                PARTNERS, LP

              1150
                First Avenue, Suite 600

              King
                of Prussia, PA 19406

              Fax:
                (610) 783-4788

            	
              $150,000.00

            	
              $150,000.00

            
	
              NORTHWOOD
                CAPITAL PARTNERS, LP

              1150
                First Avenue, Suite 600

              King
                of Prussia, PA 19406

              Fax:
                (610) 783-4788

            	
              $150,000.00

            	
              $150,000.00

            
	
              ALPHA
                CAPITAL ANSTALT

              Pradafant
                7

              9490
                Furstentums

              Vaduz,
                Lichtenstein

              Fax:
                011-42-32323196

            	
              $200,000.00

            	
              $200,000.00

            
	
              TOTAL

            	
              $5,000,000.00

            	
              $5,000,000.00

            

    

    

    
      
         

      

      
        7Unassociated Document

     

    SUBSCRIPTION
      AGREEMENT

     

     

    THIS
      SUBSCRIPTION AGREEMENT
      (this
“Agreement”),
      dated
      as of June 15, 2007, by and among Hi-Tech
      Wealth Inc.,
      a
      Nevada corporation (the “Company”),
      and
      the subscribers identified on the signature page hereto (each a “Subscriber”
and
      collectively “Subscribers”).

     

    WHEREAS,
      the
      Company and the Subscribers are executing and delivering this Agreement in
      reliance upon an exemption from securities registration afforded by the
      provisions of Section 4(2) and/or Regulation D (“Regulation
      D”)
      as
      promulgated by the United States Securities and Exchange Commission (the
“Commission”)
      under
      the Securities Act of 1933, as amended (the “1933
      Act”).

     

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Subscribers, and the
      Subscribers, in the aggregate, shall purchase Ten Million Dollars ($10,000,000)
      (the "Purchase
      Price")
      of
      principal amount of 10% promissory notes of the Company (“Note”
or
      “Notes”),
      a
      form of which is annexed hereto as Exhibit
      A;
      and
      share purchase warrants (collectively the “Warrants”),
      in
      the form attached hereto as Exhibit
      B,
      to
      purchase shares of the Company’s $.001 par value common stock (“Common
      Stock”)
      (the
“Warrant
      Shares”).
      The
      Notes, Warrants and the Warrant Shares are collectively referred to herein
      as
      the "Securities";
      and

     

    WHEREAS,
      the
      aggregate proceeds of the sale of the Notes and the Warrants contemplated hereby
      may be held in escrow pursuant to the terms of a Funds Escrow Agreement to
      be
      executed by the parties substantially in the form attached hereto as
Exhibit
      C
      (the
      "Escrow
      Agreement").

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and other agreements contained in this
      Agreement the Company and the Subscribers hereby agree as follows:

     

    1.    (a). Closing
      Date.
      The
“Closing Date” shall be the date that the Initial Purchase Price is transmitted
      by wire transfer or otherwise credited to or for the benefit of the Company.
      The
      consummation of the transactions contemplated herein shall take place at the
      offices of Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York,
      New York 10176, upon the satisfaction or waiver of all conditions to closing
      set
      forth in this Agreement. 

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) Conditions
      to Subsequent Issuance.
      The
      occurrence of the Subsequent Issuance is expressly contingent on (i) the
      accuracy on the Subsequent Issuance Date of the representations and warranties
      of the Company and Subscriber contained in this Agreement, except for any
      inaccuracies arising from facts that do not constitute a Material Adverse Effect
      (as defined in Section 5(a)), (ii) the non-occurrence of any Event of Default
      (as defined in the Note), and (iii) the perfection of Subscribers’ security
      interest in the Collateral consisting of intellectual property rights in the
      People’s Republic of China, evidenced by delivery from the Company to the
      Subscribers of an original or certified copy of a certificate issued by a
      Chinese government agency, evidencing the effectiveness of the granting to
      the
      Subscribers of a security interest in and to such Collateral, accompanied by
      a
      legal opinion from Beijing
      MingTai Lawyer LLC in
      the form attached hereto as Exhibit
      1(d)
      on or before the 150th
      day following the Closing Date (the condition described in this clause (iii),
      the “Subsequent
      Issuance Condition”).

     

    (e) Subsequent
      Issuance Deliveries.
      On the
      Subsequent Issuance Date, the Company will deliver a certificate (“Subsequent
      Issuance Certificate”)
      signed
      by its chief executive officer or chief financial officer (i) representing
      the
      accuracy of all the representations and warranties made by the Company contained
      in this Agreement as of Subsequent Issuance Date, as if such representations
      and
      warranties were made and given on the Subsequent Issuance Date, except for
      any
      inaccuracies arising from facts that do not constitute a Material Adverse Effect
      and (ii) representing compliance by the Company with the Subsequent Issuance
      Condition. A legal opinion nearly identical to the legal opinion referred to
      in
      Section 6 of this Agreement shall be delivered to each Subscriber at the
      Subsequent Issuance in relation to the Company, and Subsequent Issuance Notes
      (“Subsequent
      Issuance Legal Opinion”).

    

    2. Security
      Interest.
      The Subscribers will be granted a security interest in certain of the assets
      of
      the Company and Subsidiaries (as defined in Section 5(a) of this Agreement),
      including ownership of Magical Insight Investments Ltd (“Magical”),
      to be memorialized in “Security
      Agreements”,
      a form of which is annexed hereto as Exhibit
      D.
      The Company’s subsidiary, Beihai Hi-Tech Wealth Technology Developments Co., Ltd
      (“HTW”) will
      execute and deliver to the Subscribers a form of “Guaranty”
      annexed hereto as Exhibit
      E.
      The Company will execute such other agreements, documents and financing
      statements reasonably requested by Subscribers, which will be filed at the
      Company’s expense with such jurisdictions, states and counties designated by the
      Subscribers. The
      Company will also execute all such documents reasonably necessary in the opinion
      of Subscribers to memorialize and further protect the security interest
      described herein. The Subscribers will appoint a collateral agent (the
“Collateral
      Agent”)
      to represent them collectively in connection with the security interest to
      be
      granted to the Subscribers. The appointment will be pursuant to a “Collateral
      Agent Agreement”,
      a form of which is annexed hereto as Exhibit
      F.

     

    3. Warrants.
      On the
      Closing Date, the Company will issue and deliver an aggregate of 1,500,000
      Warrants to the Subscribers at the rate of one and one half Warrants for every
      ten dollars of Purchase Price to be invested by each such Subscriber. The
      exercise price to acquire a Warrant Share upon exercise of a Warrant shall
      be
      $2.50. The Warrants shall be exercisable until five (5) years after the issue
      date of the Warrants. The holder of the Warrants is granted the registration
      rights set forth in this Agreement. The Warrant exercise price and amount of
      Shares issuable upon exercise of the Warrants shall be equitably adjusted to
      offset the effect of stock splits, stock dividends, pro rata distributions
      of
      property or equity interests to the Company’s shareholders, and as otherwise
      described in the Warrant.

     

    4. Subscriber's
      Representations and Warranties.
      Each
      Subscriber as of each of the Closing Date and the Subsequent Issuance Date
      hereby represents and warrants to and agrees with the Company only as to such
      Subscriber that:

     

    (a) Organization
      and Standing of the Subscribers.
      If the
      Subscriber is an entity, such Subscriber is a corporation, partnership or other
      entity duly incorporated or organized, validly existing and in good standing
      under the laws of the jurisdiction of its incorporation or organization and
      has
      the requisite corporate power to own its assets and to carry on its
      business.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

    (c) No
      Conflicts.
      The
      execution, delivery and performance of this Agreement and the consummation
      by
      such Subscriber of the transactions contemplated hereby or relating hereto
      do
      not and will not (i) result in a violation of such Subscriber’s charter
      documents or bylaws or other organizational documents or (ii) conflict with,
      or
      constitute a default (or an event which with notice or lapse of time or both
      would become a default) under, or give to others any rights or termination,
      amendment, acceleration or cancellation of any agreement, indenture or
      instrument or obligation to which such Subscriber is a party or by which its
      properties or assets are bound, or result in a violation of any law, rule,
      or
      regulation, or any order, judgment or decree of any court or governmental agency
      applicable to such Subscriber or its properties (except for such conflicts,
      defaults and violations as would not, individually or in the aggregate, have
      a
      Material Adverse Effect, as defined in Section 5(a) herein, on such Subscriber).
      Such Subscriber is not required to obtain any consent, authorization or order
      of, or make any filing or registration with, any court or governmental agency
      in
      order for it to execute, deliver or perform any of its obligations under this
      Agreement or to purchase the Notes or acquire the Warrants in accordance with
      the terms hereof, provided that for purposes of the representation made in
      this
      sentence, such Subscriber is assuming and relying upon the accuracy of the
      relevant representations and agreements of the Company herein.

     

    (d) Information
      on Company.
      The
      Subscriber has been furnished with or has had access at the EDGAR Website of
      the
      Commission to the Company's Form 10-KSB for the year ended December 31, 2006
      as
      filed with the Commission, together with all subsequently filed Forms 10-QSB,
      8-K, and filings made with the Commission available at the EDGAR website
      (hereinafter referred to collectively as the "Reports").
      In
      addition, the Subscriber has received in writing from the Company such other
      information concerning its operations, financial condition and other matters
      as
      the Subscriber has requested in writing (such other information is collectively,
      the "Other
      Written Information"),
      and
      considered all factors the Subscriber deems material in deciding on the
      advisability of investing in the Securities. 

     

    (e) Information
      on Subscriber.
      The
      Subscriber is, and will be at the time of exercise of any of the Warrants,
      an
      institutional "accredited
      investor",
      as
      such term is defined in Rule 501(a)(1)(2)(3) or (7) of Regulation D promulgated
      by the Commission under the 1933 Act, owning at least $25 million in securities
      of issuers (other than issuers that are affiliated with such Subscriber), is
      experienced in investments and business matters, has made investments of a
      speculative nature and has purchased securities of United States publicly-owned
      companies in private placements in the past and, with its representatives,
      has
      such knowledge and experience in financial, tax and other business matters
      as to
      enable the Subscriber to utilize the information made available by the Company
      to evaluate the merits and risks of and to make an informed investment decision
      with respect to the proposed purchase, which represents a speculative
      investment. The Subscriber has the authority and is duly and legally qualified
      to purchase and own the Securities. The Subscriber is able to bear the risk
      of
      such investment for an indefinite period and to afford a complete loss thereof.
      The information set forth on the signature page hereto regarding the Subscriber
      is accurate.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (f) Purchase
      of Notes and Warrants.
      On the
      Closing Date, the Subscriber will purchase the Notes and Warrants as principal
      for its own account for investment only and not with a view toward, or for
      resale in connection with, the public sale or any distribution
      thereof.

     

    (g) Compliance
      with 1933 Act.
      The
      Subscriber understands and agrees that the Securities have not been registered
      under the 1933 Act or any applicable state securities laws, by reason of their
      issuance in a transaction that does not require registration under the 1933
      Act
      (based in part on the accuracy of the representations and warranties of
      Subscriber contained herein), and that such Securities must be held indefinitely
      unless a subsequent disposition is registered under the 1933 Act and any
      applicable state securities laws or is exempt from such
      registration.

     

    (h) Warrant
      Shares Legend.
      The
      Warrant Shares shall bear the following or similar legend:

     

    "THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
      SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW
      OR AN
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO HI-TECH WEALTH INC. THAT SUCH
      REGISTRATION IS NOT REQUIRED."

     

    (i) Warrants
      Legend.
      The
      Warrants shall bear the following 

     

    or
      similar legend:

     

    "THIS
      WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
      AND
      THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
      OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE
      STATE
      SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO HI-TECH
      WEALTH INC. THAT SUCH REGISTRATION IS NOT REQUIRED."

    

    (j) Note
      Legend.
      The
      Note shall bear the following legend:

     

    "THIS
      NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
      THIS
      NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
      OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO HI-TECH WEALTH INC. THAT SUCH
      REGISTRATION IS NOT REQUIRED."

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (k) Communication
      of Offer.
      The
      offer to sell the Securities was directly communicated to the Subscriber by
      the
      Company. At no time was the Subscriber presented with or solicited by any
      leaflet, newspaper or magazine article, radio or television advertisement,
      or
      any other form of general advertising or solicited or invited to attend a
      promotional meeting otherwise than in connection and concurrently with such
      communicated offer.

     

    (l) Authority;
      Enforceability.
      This
      Agreement and other agreements delivered together with this Agreement or in
      connection herewith have been duly authorized, executed and delivered by the
      Subscriber and are valid and binding agreements enforceable in accordance with
      their terms, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and similar laws of general applicability relating
      to
      or affecting creditors’ rights generally and to general principles of equity;
      and Subscriber (if an entity) has full corporate power and authority necessary
      to enter into this Agreement and such other agreements and to perform its
      obligations hereunder and under all other agreements entered into by the
      Subscriber relating hereto.

    

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

    

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

    

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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (p) Correctness
      of Representations.
      Each
      Subscriber represents as to such Subscriber that the foregoing representations
      and warranties are true and correct as of the date hereof and, unless a
      Subscriber otherwise notifies the Company prior to the Closing Date or the
      Subsequent Issuance Date, shall be true and correct as of the Closing Date
      or
      the Subsequent Issuance Date, as the case may be.

    

    (q) Survival.
      The
      foregoing representations and warranties shall survive the Subsequent Issuance
      Date for a period of three years.

     

    5. Company
      Representations and Warranties.
      Except
      as set forth in the Reports or the Other Written Information and as otherwise
      qualified in the Transaction Documents, the Company represents and warrants
      to
      and agrees with each Subscriber that:

     

    (a) Due
      Incorporation.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the respective jurisdictions of their incorporation and have
      the requisite corporate power to own their properties and to carry on their
      business as now being conducted. The Company is duly qualified as a foreign
      corporation to do business and is in good standing in each jurisdiction where
      the nature of the business conducted or property owned by it makes such
      qualification necessary, other than those jurisdictions in which the failure
      to
      so qualify would not have a Material Adverse Effect. For purpose of this
      Agreement, a “Material
      Adverse Effect”
shall
      mean a material adverse effect on the financial condition, results of
      operations, properties or business of the Company taken as a whole. For
      purposes of this Agreement, “Subsidiary”
      means, with respect to any entity at any date, any corporation, limited or
      general partnership, limited liability company, trust, estate, association,
      joint venture or other business entity of which more than 30% of
      (i) the outstanding capital stock having (in the absence of contingencies)
      ordinary voting power to elect a majority of the board of directors or other
      managing body of such entity, (ii) in the case of a partnership or limited
      liability company, the interest in the capital or profits of such partnership
      or
      limited liability company or (iii) in the case of a trust, estate,
      association, joint venture or other entity, the beneficial interest in such
      trust, estate, association or other entity business is, at the time of
      determination, owned or controlled directly or indirectly through one or more
      intermediaries, by such entity. As of the Closing Date, the Company’s only
      Subsidiaries are Magical Insight Investments Ltd., a British Virgin Islands
      corporation and Beihai Hi-Tech Wealth Technology Development Co., Ltd., a
a
      company
      organized under the laws of the People’s Republic of China,
      Euro
      Asia
      Arbitrage Investment Limited, a Hong Kong company, Beijing Hi-Tech Wealth
      Software Technology Ltd. a company organized under the laws of the People’s
      Republic of China.

     

    (b) Outstanding
      Stock.
      All
      issued and outstanding shares of capital stock of the Company and each of its
      subsidiaries have been duly authorized and validly issued and are fully paid
      and
      nonassessable.

     

    (c) Authority;
      Enforceability.
      This
      Agreement, the Notes, the Warrants, the Funds Escrow Agreement, Security
      Agreements, Guaranty, Collateral Agent Agreement and any other agreements
      delivered together with this Agreement or in connection herewith (collectively
      “Transaction
      Documents”)
      have
      been duly authorized, executed and delivered by the Company and are valid and
      binding agreements enforceable in accordance with their terms, subject to
      bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
      similar laws of general applicability relating to or affecting creditors' rights
      generally and to general principles of equity. The Company has full corporate
      power and authority necessary to enter into and deliver the Transaction
      Documents and to perform its obligations thereunder.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (d) Additional
      Issuances.
      There
      are no outstanding agreements or preemptive or similar rights affecting the
      Company's common stock or equity and no outstanding rights, warrants or options
      to acquire, or instruments convertible into or exchangeable for, or agreements
      or understandings with respect to the sale or issuance of any shares of common
      stock or equity of the Company or other equity interest in any of the
      subsidiaries of the Company except as described on Schedule
      5(d).

     

    (e) Consents.
      No
      consent, approval, authorization or order of any court, governmental agency
      or
      body or arbitrator having jurisdiction over the Company, or any of its
      Affiliates, the OTC Bulletin Board (the “Bulletin
      Board”)
      nor
      the Company's shareholders is required for the execution by the Company of
      the
      Transaction Documents and compliance and performance by the Company of its
      obligations under the Transaction Documents, including, without limitation,
      the
      issuance and sale of the Securities. The Transaction Documents and the Company’s
      performance of its obligations thereunder has been approved unanimously by
      the
      Company’s directors.

     

    (f) No
      Violation or Conflict.
      Assuming the representations and warranties of the Subscribers in Section 4
      are
      true and correct, neither the issuance and sale of the Securities nor the
      performance of the Company’s obligations under this Agreement and all other
      agreements entered into by the Company relating thereto by the Company
      will:

     

    (i) violate,
      conflict with, result in a breach of, or constitute a default (or an event
      which
      with the giving of notice or the lapse of time or both would be reasonably
      likely to constitute a default) under (A) the articles of incorporation, or
      bylaws of the Company, (B) to the Company's knowledge, any decree, judgment,
      order, law, treaty, rule, regulation or determination applicable to the Company
      of any court, governmental agency or body, or arbitrator having jurisdiction
      over the Company or any of its subsidiaries or over the properties or assets
      of
      the Company or any of its Affiliates, (C) the terms of any bond, debenture,
      note
      or any other evidence of indebtedness, or any agreement, stock option or other
      similar plan, indenture, lease, mortgage, deed of trust or other instrument
      to
      which the Company or any of its Affiliates or subsidiaries is a party, by which
      the Company or any of its Affiliates or subsidiaries is bound, or to which
      any
      of the properties of the Company or any of its Affiliates or subsidiaries is
      subject, or (D) the terms of any "lock-up" or similar provision of any
      underwriting or similar agreement to which the Company, or any of its Affiliates
      or subsidiaries is a party except the violation, conflict, breach, or default
      of
      which would not have a Material Adverse Effect on the Company; or

     

    (ii) result
      in
      the creation or imposition of any Lien (as defined herein), charge or
      encumbrance upon the Securities or any of the assets of the Company, its
      subsidiaries or any of its Affiliates other than Permitted Liens;
      or

     

    (iii) result
      in
      the activation of any anti-dilution rights or a reset or repricing of any debt
      or security instrument of any other creditor or equity holder of the Company,
      nor result in the acceleration of the due date of any obligation of the Company;
      or

     

    (iv) result
      in
      the activation of any piggy-back registration rights of any person or entity
      holding securities of the Company or having the right to receive securities
      of
      the Company.

     

    (g) The
      Securities.
      The
      Securities upon issuance:

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (i) are,
      or
      will be, free and clear of any security interests, liens, claims or other
      encumbrances, subject to restrictions upon transfer under the 1933 Act and
      any
      applicable state securities laws;

    

    (ii) have
      been, or will be, duly and validly authorized and on the date of exercise of
      the
      Warrants and issuance of the Warrant Shares will be duly and validly issued,
      fully paid and nonassessable and, if registered pursuant to the 1933 Act, and
      resold pursuant to an effective registration statement will be free trading
      and
      unrestricted except to the extent of any restrictions pursuant to the 1933
      Act
      or the Exchange Act that may be applicable to any Subscriber due to such
      Subscriber’s affiliate or insider status with respect to the Company or such
      Subscriber’s possession of material non-public information with respect to the
      Company;

     

    (iii) will
      not
      have been issued or sold in violation of any preemptive or other similar rights
      of the holders of any securities of the Company;

     

    (iv) will
      not
      subject the holders thereof to personal liability by reason of being such
      holders provided Subscriber’s representations herein are true and accurate and
      Subscribers take no actions or fail to take any actions required to be taken
      by
      the Subscribers pursuant to this Agreement for their purchase of the Securities
      to be in compliance with all applicable laws and regulations; and

     

    (v) assuming
      the representations warranties of the Subscribers as set forth in Section 4
      hereof are true and correct and Subscribers take no actions or fail to take
      any
      actions required to
      be
      taken by the Subscribers pursuant to this Agreement
      for their purchase of the Securities to be in compliance with all applicable
      laws and regulations, will not result in a violation of Section 5 under the
      1933
      Act.

     

    (h) Litigation.
      There
      is no pending or, to the best knowledge of the Company, threatened action,
      suit,
      proceeding or investigation before any court, governmental agency or body,
      or
      arbitrator having jurisdiction over the Company, or any of its Affiliates that
      would affect the execution by the Company or the performance by the Company
      of
      its obligations under the Transaction Documents. Except as disclosed in the
      Reports, there is no pending or, to the best knowledge of the Company, basis
      for
      or threatened action, suit, proceeding or investigation before any court,
      governmental agency or body, or arbitrator having jurisdiction over the Company,
      or any of its Affiliates which litigation if adversely determined would have
      a
      Material Adverse Effect on the Company.

     

    (i) Reporting
      Company.
      The
      Company is a publicly-held company subject to reporting obligations pursuant
      to
      Section 13 of the Securities Exchange Act of 1934, as amended (the "1934
      Act")
      and
      has a class of common equity registered pursuant to Section 12(g) of the 1934
      Act.

     

    (j) No
      Market Manipulation.
      The
      Company has not taken, and will not take, directly or indirectly, any action
      designed to, or that might reasonably be expected to, cause or result in
      stabilization or manipulation of the price of the Common Stock of the Company
      to
      facilitate the sale or resale of the Securities or affect the price at which
      the
      Securities may be issued or resold.

     

    (k) Information
      Concerning Company.
      The
      Reports contain all material information relating to the Company and its
      operations and financial condition as of their respective dates which
      information is required to be disclosed therein. Since the date of the financial
      statements included in the Reports, and except as modified in the Other Written
      Information or in the Schedules hereto, there has been no material adverse
      change in the Company's business, financial condition or affairs not disclosed
      in the Reports. The Reports do not contain any untrue statement of a material
      fact or omit to state a material fact required to be stated therein or necessary
      to make the statements therein not misleading in light of the circumstances
      when
      made.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (l) Stop
      Transfer.
      The
      Securities, when issued, will be restricted securities. The Company will not
      issue any stop transfer order or other order impeding the sale, resale or
      delivery of any of the Securities, except as may be required by any applicable
      federal or state securities laws and unless contemporaneous notice of such
      instruction is given to the Subscriber.

     

    (m) Defaults.
      The
      Company is not in violation of its articles of incorporation or bylaws. The
      Company is (i) not in default under or in violation of any other material
      agreement or instrument to which it is a party or by which it or any of its
      properties are bound or affected, which default or violation would have a
      Material Adverse Effect on the Company, (ii) not in default with respect to
      any
      order of any court, arbitrator or governmental body or subject to or party
      to
      any order of any court or governmental authority arising out of any action,
      suit
      or proceeding under any statute or other law respecting antitrust, monopoly,
      restraint of trade, unfair competition or similar matters, or (iii) to its
      knowledge, not in violation of any statute, rule or regulation of any
      governmental authority which violation would have a Material Adverse Effect
      on
      the Company.

     

    (n) Not
      an
      Integrated Offering.
      Neither
      the Company, nor any of its Affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offer of the Securities pursuant to this Agreement to be integrated with
      prior offerings by the Company for purposes of the 1933 Act or any applicable
      stockholder approval provisions, including, without limitation, under the rules
      and regulations of the Bulletin Board. Nor will the Company or any of its
      Affiliates or subsidiaries take any action or steps that would cause the offer
      or issuance of the Securities to be integrated with other offerings. The Company
      will not conduct any offering other than the transactions contemplated hereby
      that will be integrated with the offer or issuance of the
      Securities.

     

    (o) No
      General Solicitation.
      Neither
      the Company, nor any of its Affiliates, nor to its knowledge, any person acting
      on its or their behalf, has engaged in any form of general solicitation or
      general advertising (within the meaning of Regulation D under the 1933 Act)
      in
      connection with the offer or sale of the Securities.

     

    (p) Listing.
      The
      Company's common stock is quoted on the Bulletin Board under the symbol:
      GCPN.OB. The Company has not received any oral or written notice that its common
      stock is not eligible nor will become ineligible for quotation on the Bulletin
      Board nor that its common stock does not meet all requirements for the
      continuation of such quotation. The Company satisfies all the requirements
      for
      the continued quotation of its common stock on the Bulletin Board.

     

    (q) No
      Undisclosed Liabilities.
      The
      Company has no liabilities or obligations which are material, individually
      or in
      the aggregate, which are not disclosed in the Reports and Other Written
      Information, other than those incurred in the ordinary course of the Company’s
      businesses since December 31, 2006 and which, individually or in the aggregate,
      would reasonably be expected to have a Material Adverse Effect except as set
      forth in Schedule
      5(q).
      On the
      Closing Date, the Company will have liabilities of not more than $25,627,676
      (excluding permitted liens).

     

    (r) No
      Undisclosed Events or Circumstances.
      Since
      December 31, 2005, no event or circumstance has occurred or exists with respect
      to the Company or its businesses, properties, operations or financial condition,
      that, under applicable law, rule or regulation, requires public disclosure
      or
      announcement prior to the date hereof by the Company but which has not been
      so
      publicly announced or disclosed in the Reports.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (s) Capitalization.
      The
      authorized and outstanding capital stock of the Company as of the date of this
      Agreement and the Closing Date are set forth on Schedule
      5(d).
      Except
      as set forth on Schedule
      5(d),
      there
      are no options, warrants, or rights to subscribe to, securities, rights or
      obligations convertible into or exchangeable for or giving any right to
      subscribe for any shares of capital stock of the Company. All of the outstanding
      shares of Common Stock of the Company have been duly and validly authorized
      and
      issued and are fully paid and nonassessable.

     

    (t) Dilution.
      The
      Company's executive officers and directors understand the nature of the
      Securities being sold hereby and recognize that the issuance of the Securities
      will have a potential dilutive effect on the equity holdings of other holders
      of
      the Company’s equity or rights to receive equity of the Company. The board of
      directors of the Company has unanimously concluded, in its good faith business
      judgment, that the issuance of the Securities is in the best interests of the
      Company. The Company specifically acknowledges that its obligation to issue
      the
      Warrant Shares upon exercise of the Warrants is binding upon the Company and
      enforceable regardless of the dilution such issuance may have on the ownership
      interests of other shareholders of the Company or parties entitled to receive
      equity of the Company.

     

    (u) No
      Disagreements with Accountants and Lawyers.
      There
      are no material disagreements of any kind presently existing, or reasonably
      anticipated by the Company to arise, between the Company and the accountants
      and
      lawyers formerly or presently employed by the Company, including but not limited
      to disputes or conflicts over payment owed to such accountants and
      lawyers.

    

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

    

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

    

    (x) Subsidiary
      Representations.
      The Company makes each of the representations contained in Sections 5(a), (b),
      (d), (f), (h), (k), (m), (q), (r) and (u) of this Agreement, as same relate
      to
      each Subsidiary of the Company.

     

    (y) Foreign
      Corrupt Practices.
      Neither
      the Company nor, to the knowledge of the Company, any director, officer, agent,
      employee, or stockholder acting on behalf of the Company has taken any action,
      directly or indirectly, that would result in a violation by such persons of
      the
      Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
      thereunder (the “FCPA”)
      or of
      comparable PRC law, including, without limitation, making use of the mails
      or
      any means or instrumentality of interstate commerce corruptly in furtherance
      of
      an offer, payment, promise to pay or authorization of the payment of any money,
      or other property, gift, promise to give, or authorization of the giving of
      anything of value to any “foreign official” (as such term is defined in the
      FCPA) or any foreign political party or official thereof or any candidate for
      foreign political office, in contravention of the FCPA or of comparable PRC
      law
      and the Company has conducted its business in compliance with the FCPA and
      comparable PRC law.

     

    (z) Solvency.
      Based
      on the financial condition of the Company as of the Closing Date after giving
      effect to the receipt by the Company of the proceeds from the sale of the
      Securities hereunder, (i) the Company’s fair saleable value of its assets
      exceeds the amount that will be required to be paid on or in respect of the
      Company’s existing debts and other liabilities (including known contingent
      liabilities) as they mature; (ii) the Company’s assets do not constitute
      unreasonably small capital to carry on its business for the current fiscal
      year
      as now conducted and as proposed to be conducted including its capital needs
      taking into account the particular capital requirements of the business
      conducted by the Company, and projected capital requirements and capital
      availability thereof; and (iii) the current cash flow of the Company, together
      with the proceeds the Company would receive, were it to liquidate all of its
      assets, after taking into account all anticipated uses of the cash, would be
      sufficient to pay all amounts on or in respect of its debt when such amounts
      are
      required to be paid. The Company does not intend to incur debts beyond its
      ability to pay such debts as they mature (taking into account the timing and
      amounts of cash to be payable on or in respect of its debt).

     

    
      
        
        

      

      
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    (AA) Correctness
      of Representations.
      The
      Company represents that the foregoing representations and warranties are true
      and correct as of the date hereof in all material respects, and, unless the
      Company otherwise notifies the Subscribers prior to the Closing Date, shall
      be
      true and correct in all material respects as of the Closing Date.

     

    (BB) Survival.
      The
      foregoing representations and warranties shall survive the Subsequent Issuance
      Date for a period of three years.

     

    6. Regulation
      D Offering.
      The
      offer and issuance of the Securities to the Subscribers is being made pursuant
      to the exemption from the registration provisions of the 1933 Act afforded
      by
      Section 4(2) of the 1933 Act and/or Rule 506 of Regulation D promulgated
      thereunder. On each Closing Date, the Company will provide an opinion reasonably
      acceptable to Subscriber from the Company's legal counsel opining on the
      availability of an exemption from registration under the 1933 Act as it relates
      to the offer and issuance of the Securities and other matters reasonably
      requested by Subscribers. A form of the legal opinion is annexed hereto as
      Exhibit
      G.
      The
      Company will provide, at the Company's expense, such other legal opinions in
      the
      future as are reasonably necessary for the issuance and resale of the Warrant
      Shares.

     

    7.1. Covenants
      of the Company.
      The
      Company covenants and agrees with the Subscribers as follows:

     

    (a) Stop
      Orders.
      The
      Company will advise the Subscribers, promptly after it receives notice of
      issuance by the Commission, any state securities commission or any other
      regulatory authority of any stop order or of any order preventing or suspending
      any offering of the Securities of the Company, or of the suspension of the
      qualification of the Common Stock of the Company for offering or sale in any
      jurisdiction, or the initiation of any proceeding for any such
      purpose.

     

    (b) Listing/Quotation.
      The
      Company shall promptly secure the quotation or listing of the Warrant Shares
      upon each national securities exchange, or automated quotation system upon
      which
      they are or become eligible for quotation or listing (subject to official notice
      of issuance) and shall maintain same so long as any Warrants are outstanding.
      The Company will maintain the quotation or listing of its Common Stock on the
      American Stock Exchange, Nasdaq SmallCap Market, Nasdaq National Market System,
      Bulletin Board, or New York Stock Exchange (whichever of the foregoing is at
      the
      time the principal trading exchange or market for the Common Stock (the
“Principal
      Market”)),
      and
      will comply in all respects with the Company's reporting, filing and other
      obligations under the bylaws or rules of the Principal Market, as applicable.
      The Company will provide the Subscribers copies of all notices it receives
      notifying the Company of the threatened and actual delisting of the Common
      Stock
      from any Principal Market. As of the date of this Agreement and the Closing
      Date, the Bulletin Board is the Principal Market.

     

    (c) Market
      Regulations.
      The
      Company shall notify the Commission, the Principal Market and applicable state
      authorities, in accordance with their requirements, of the transactions
      contemplated by this Agreement, and shall take all other necessary action and
      proceedings as may be required and permitted by applicable law, rule and
      regulation, for the legal and valid issuance of the Securities to the
      Subscribers and promptly provide copies thereof to Subscriber.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (d) Reporting
      Requirements.
      From
      the date of this Agreement and until the last to occur of (i) two (2) years
      after the Subsequent Issuance Date, or (ii) until all the Warrant Shares have
      been resold or transferred by all the Subscribers pursuant to a registration
      statement or pursuant to Rule 144, without regard to volume limitation, or
      (iii)
      the Notes are no longer outstanding (the date of occurrence of the first such
      event being the “End
      Date”),
      the
      Company will (v) cause the Common Stock to continue to be registered under
      Section 12(b) or 12(g) of the 1934 Act, (x) comply in all respects with its
      reporting and filing obligations under the 1934 Act, (y) comply with all
      reporting requirements that are applicable to an issuer with a class of shares
      registered pursuant to Section 12(b) or 12(g) of the 1934 Act, as applicable,
      and (z) comply with all requirements related to any registration statement
      filed
      pursuant to this Agreement. The Company will use its best efforts not to take
      any action or file any document (whether or not permitted by the 1933 Act or
      the
      1934 Act or the rules thereunder) to terminate or suspend such registration
      or
      to terminate or suspend its reporting and filing obligations under said acts
      until the End Date. Until the End Date, the Company will use its best efforts
      to
      continue the listing or quotation of the Common Stock on the Principal Market
      or
      other market with the reasonable consent of Subscribers holding a majority
      of
      each of the Warrants and Warrant Shares, and will comply in all respects with
      the Company's reporting, filing and other obligations under the bylaws or rules
      of the Principal Market. The Company agrees to timely file a Form D with respect
      to the Securities if required under Regulation D and to provide a copy thereof
      to each Subscriber promptly after such filing.

     

    (e) Use
      of
      Proceeds.
      Except
      as described on Schedule
      7(e),
      the
      Purchase Price may not and will not be used for accrued and unpaid officer
      and
      director salaries, payment of financing related debt, redemption of outstanding
      notes or equity instruments of the Company nor non-trade obligations outstanding
      on the Closing Date.

     

    (f) Reservation.
      Prior
      to the Closing Date, the Company undertakes to reserve, pro rata,
      on
      behalf of each Subscriber, from its authorized but unissued common stock, a
      number of common shares equal to the amount of Warrant Shares issuable upon
      exercise of the Warrants. Failure to have sufficient shares reserved pursuant
      to
      this Section 7.1(f) for three (3) consecutive business days or ten (10) days
      in
      the aggregate shall be a material default of the Company’s obligations under
      this Agreement.

     

    (g) Taxes.
      From
      the date of this Agreement and until the End Date, the Company will promptly
      pay
      and discharge, or cause to be paid and discharged, when due and payable, all
      lawful taxes, assessments and governmental charges or levies imposed upon the
      income, profits, property or business of the Company; provided, however, that
      any such tax, assessment, charge or levy need not be paid if the validity
      thereof shall currently be contested in good faith by appropriate proceedings
      and if the Company shall have set aside on its books adequate reserves with
      respect thereto, and provided, further, that the Company will pay all such
      taxes, assessments, charges or levies forthwith upon the commencement of
      proceedings to foreclose any lien which may have attached as security
      therefor.

     

    (h) Insurance.
      From
      the date of this Agreement and until the End Date, the Company will keep its
      assets which are of an insurable character insured by financially sound and
      reputable insurers against loss or damage by fire, explosion and other risks
      customarily insured against by companies in the Company’s line of business, in
      amounts sufficient to prevent the Company from becoming a co-insurer and not
      in
      any event less than one hundred percent (100%) of the insurable value of the
      property insured; and the Company will maintain, with financially sound and
      reputable insurers, insurance against other hazards and risks and liability
      to
      persons and property to the extent and in the manner customary for companies
      in
      similar businesses similarly situated and to the extent available on
      commercially reasonable terms.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (i) Books
      and Records.
      From the
      date of this Agreement and until the End Date, the Company will keep true
      records and books of account in which full, true and correct entries will be
      made of all dealings or transactions in relation to its business and affairs
      in
      accordance with generally accepted accounting principles applied on a consistent
      basis.

     

    (j) Governmental
      Authorities.
      From the
      date of this Agreement and until the End Date, the Company shall duly observe
      and conform in all material respects to all valid requirements of governmental
      authorities relating to the conduct of its business or to its properties or
      assets.

     

    (k) Intellectual
      Property.
      From
      the date of this Agreement and until the End Date, the Company shall maintain
      in
      full force and effect its corporate existence, rights and franchises and all
      licenses and other rights to use intellectual property owned or possessed by
      it
      and reasonably deemed to be necessary to the conduct of its
      business.

     

    (l) Properties.
      From the
      date of this Agreement and until the End Date, the Company will keep its
      properties in good repair, working order and condition, reasonable wear and
      tear
      excepted, and from time to time make all necessary and proper repairs, renewals,
      replacements, additions and improvements thereto; and the Company will at all
      times comply with each provision of all leases to which it is a party or under
      which it occupies property if the breach of such provision could reasonably
      be
      expected to have a Material Adverse Effect.

     

    (m) Confidentiality/Public
      Announcement.
      From the
      date of this Agreement and until the End Date, the Company agrees that except
      in
      connection with a Form 8-K or pursuant to a Registration Statement, it will
      not
      disclose publicly or privately the identity of the Subscribers unless expressly
      agreed to in writing by a Subscriber or only to the extent required by law
      and
      then only upon five days prior notice to Subscriber. In
      the event that the Company believes that a
      notice or communication contains material, nonpublic information, relating
      to the Company or Subsidiaries, the Company shall so indicate to the Subscriber
      contemporaneously with delivery of such notice or information. In the absence
      of
      any such indication, the Subscriber shall be allowed to presume that all
      matters relating to such notice and information do not constitute material,
      nonpublic information relating to the Company or Subsidiaries.
In
      any
      event and subject to the foregoing, the Company undertakes to file a Form 8-K
      or
      make a public announcement describing the Offering not later than the first
      business day after the Closing Date. In the Form 8-K or public announcement,
      the
      Company will specifically disclose the amount of common stock outstanding
      immediately after the Closing.

     

    (n) Non-Public
      Information.
      The
      Company covenants and agrees that neither it nor any other Person acting on
      its
      behalf will provide any Subscriber or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Subscriber shall have agreed in writing to receive such
      information. The Company understands and confirms that each Subscriber shall
      be
      relying on the foregoing representations in effecting transactions in securities
      of the Company.

    

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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (p) Negative
      Covenants.
      So long
      as a Note is outstanding, without the consent of the Subscriber, the Company
      will not and will not permit any of Magical Insight or HTW to directly or
      indirectly:

    

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

    

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

    

    (iii) repay,
      repurchase or offer to repay, repurchase or otherwise acquire or make any
      dividend or distribution in respect of any of its Common Stock, preferred stock,
      or other equity securities other than to the extent permitted or required under
      the Transaction Documents; or

     

    (iv) prepay
      or
      redeem any financing related debt or past due obligations outstanding as of
      the
      Closing Date.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    7.2. Injunction
      - Posting of Bond.
      In the
      event a Subscriber shall elect to exercise the Warrant in whole or in part,
      the
      Company may not refuse exercise based on any claim that such Subscriber or
      any
      one associated or affiliated with such Subscriber has been engaged in any
      violation of law, or for any other reason, unless, an injunction from a court,
      on notice, restraining and or enjoining exercise of all or part of said Warrant
      shall have been sought and obtained by the Company and the Company has posted
      a
      surety bond for the benefit of such Subscriber in the amount of 120% of the
      aggregate purchase price of the Warrant Shares which are subject to the
      injunction, which bond shall remain in effect until the completion of
      arbitration/litigation of the dispute and the proceeds of which shall be payable
      to such Subscriber to the extent Subscriber obtains judgment.

     

    7.3. Buy-In.
      In
      addition to any other rights available to the Subscriber, if the Company fails
      to deliver to the Subscriber such shares issuable upon exercise of a Warrant
      on
      or before the Delivery Date (as defined in the Warrant) and if seven (7)
      business days after the Delivery Date the Subscriber purchases (in an open
      market transaction or otherwise) shares of Common Stock to deliver in
      satisfaction of a sale by such Subscriber of the Common Stock which the
      Subscriber was entitled to receive upon such exercise (a "Buy-In"),
      then
      the Company shall pay in cash to the Subscriber (in addition to any remedies
      available to or elected by the Subscriber) the amount by which (A) the
      Subscriber's total purchase price (including brokerage commissions, if any)
      for
      the shares of Common Stock so purchased exceeds (B) the aggregate exercise
      price
      for which such exercise was not timely honored, together with interest thereon
      at a rate of 15% per annum, accruing until such amount and any accrued interest
      thereon is paid in full (which amount shall be paid as liquidated damages and
      not as a penalty). For example, if the Subscriber purchases shares of Common
      Stock having a total purchase price of $11,000 to cover a Buy-In with respect
      to
      an attempted exercise of $10,000 of Warrant exercise price, the Company shall
      be
      required to pay the Subscriber $1,000, plus interest. The Subscriber shall
      provide the Company written notice indicating the amounts payable to the
      Subscriber in respect of the Buy-In.

    

    8.    (a)  Due
      Diligence Fee.
      The
      Company will pay a due diligence fee (“Due
      Diligence Fee”)
      of
      $15,000 as more fully described on Schedule
      8(a)
      hereto.
      The Due Diligence Fee will be paid on the Closing Date out of funds held
      pursuant to the Escrow Agreement. 

     

    (b) Broker’s
      Fee.
      The
      Company represents that there are no other parties entitled to receive fees,
      commissions, or similar payments in connection with the Offering except
      Broadband Capital Management, LLC (“Broker”)
      which
      is entitled to a fee payable in cash or common stock determined by reference
      to
      5% of the aggregate Purchase Price.

     

    9. Legal
      Fees.
      On the
      Closing Date, the Company shall pay to Grushko & Mittman, P.C., a fee of
      $60,000 (“Legal
      Fees”)
      (of
      which $10,000 has been paid prior to the Closing Date) as reimbursement for
      services rendered to the Subscribers in connection with this Agreement and
      the
      purchase and sale of the Notes and Warrants (the “Offering”)
      and
      acting as Escrow Agent. The Legal Fees will be payable out of funds held
      pursuant to the Escrow Agreement.

     

    10. Covenants
      of the Company and Subscriber Regarding Indemnification.

     

    (a) The
      Company agrees to indemnify, hold harmless, reimburse and defend the
      Subscribers, the Subscribers' officers, directors, agents, Affiliates, control
      persons, and principal shareholders, against any claim, cost, expense,
      liability, obligation, loss or damage (including reasonable legal fees) of
      any
      nature, incurred by or imposed upon the Subscriber or any such person which
      results, arises out of or is based upon (i) any material misrepresentation
      by
      Company or breach of any warranty by Company in this Agreement or in any
      Exhibits or Schedules attached hereto, or other agreement delivered pursuant
      hereto; or (ii) after any applicable notice and/or cure periods, any material
      breach or default in performance by the Company of any covenant or undertaking
      to be performed by the Company hereunder, or any other agreement entered into
      by
      the Company and Subscriber relating hereto.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (b) Each
      Subscriber agrees to indemnify, hold harmless, reimburse and defend the Company
      and each of the Company’s officers, directors, agents, Affiliates, control
      persons against any claim, cost, expense, liability, obligation, loss or damage
      (including reasonable legal fees) of any nature, incurred by or imposed upon
      the
      Company or any such person which results, arises out of or is based upon (i)
      any
      material misrepresentation by such Subscriber in this Agreement or in any
      Exhibits or Schedules attached hereto, or other agreement delivered pursuant
      hereto; or (ii) after any applicable notice and/or cure periods, any material
      breach or default in performance by such Subscriber of any covenant or
      undertaking to be performed by such Subscriber hereunder, or any other agreement
      entered into by the Company and Subscribers, relating hereto.

     

    (c) In
      no
      event shall the liability of any Subscriber or permitted successor hereunder
      or
      under any other agreement delivered in connection herewith be greater in amount
      than the dollar amount of the net proceeds actually received by such Subscriber
      upon the sale of Registrable Securities (as defined herein).

     

    (d) The
      procedures set forth in Section 11.6 shall apply to the indemnification set
      forth in Sections 10(a) and 10(b) above.

     

    10A. Covenants
      of Subscribers

     

    (a) Short
      Sales After the Date Hereof.
      Each
      Subscriber severally and not jointly with the other Subscribers covenants that
      neither it nor any affiliates acting on its behalf or pursuant to any
      understanding with it will execute any Short Sales during the period after
      the
      Discussion Time and ending at the time that the transactions contemplated by
      this Agreement are first publicly announced. Each Subscriber, severally and
      not
      jointly with the other Subscribers, covenants that until such time as the
      transactions contemplated by this Agreement are publicly disclosed by the
      Company, such Subscriber will maintain, the confidentiality of all disclosures
      made to it in connection with this transaction (including the existence and
      terms of this transaction). Each Subscriber understands and acknowledges,
      severally and not jointly with any other Subscriber, that the SEC currently
      takes the position that coverage of short sales of shares of the Common Stock
      “against the box” prior to the Effective Date of the Registration Statement with
      respect to the Securities is a violation of Section 5 of the 1933 Act, as set
      forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available
      Telephone Interpretations, dated July 1997, compiled by the Office of Chief
      Counsel, Division of Corporation Finance. Notwithstanding the foregoing, in
      the
      case of a Subscriber that is a multi-managed investment vehicle whereby separate
      portfolio managers manage separate portions of such Subscriber’s assets and the
      portfolio manager have no direct knowledge of the investment decisions made
      by
      the portfolio managers managing other portions of such Subscriber’s assets, the
      covenant set forth above shall only apply with respect to the portion of assets
      managed by the portfolio manager that made the investment decision to purchase
      the Securities covered by the Agreement. Upon  delivery by the Company
      to Subscriber after the Closing Date of any notice or information, in writing,
      electronically or otherwise, and while a Note, Warrants, or Warrant Shares
      are
      held by Subscriber, unless the  Company has in good faith determined
      that the matters relating to such notice do not
      constitute material, nonpublic information relating to
      the Company or Subsidiaries, the Company  shall within one
      business day after any such delivery publicly disclose such 
material,  nonpublic  information on a
      Report on Form 8-K or otherwise.  In
      the event that the Company believes that a
      notice or communication contains material, nonpublic information, relating
      to the Company or Subsidiaries, the Company shall so indicate to the Subscriber
      contemporaneously with delivery of such notice or information. In the absence
      of
      any such indication, the Subscriber shall be allowed to presume that all
      matters relating to such notice and information do not constitute material,
      nonpublic information relating to the Company or
      Subsidiaries.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    11.1. Registration
      Rights.
      The
      Company hereby grants the following registration rights to holders of the
      Securities.

     

    (i) If
      the
      Company at any time proposes to register any of its securities under the 1933
      Act for sale to the public, whether for its own account or for the account
      of
      other security holders or both, except with respect to registration statements
      on Forms S-4, S-8 or another form not available for registering the Warrant
      Shares (collectively, the “Registrable
      Securities”)
      for
      sale to the public, provided the Registrable Securities are not otherwise
      registered for resale by the Subscribers or Holder pursuant to an effective
      registration statement and provided the inclusion of the Registrable Securities
      in the registration statement is permitted pursuant to the then current
      interpretation of the staff of the Securities and Exchange Commission regarding
      the availability of Rule 415 for continuous or delayed offerings of securities
      for the account of selling security-holders (the “415
      Position”),
      each
      such time it will give at least fifteen (15) days' prior written notice to
      the
      record holder of the Registrable Securities of its intention so to do. Upon
      the
      written request of the holder, received by the Company within ten (10) days
      after the giving of any such notice by the Company, to register any of the
      Registrable Securities not previously registered which may be included pursuant
      to the 415 Position, the Company will cause such Registrable Securities with
      the
      securities to be covered by the registration statement proposed to be filed
      by
      the Company, all to the extent required to permit the sale or other disposition
      of the Registrable Securities so registered by the holder of such Registrable
      Securities (the “Seller”
or
      “Sellers”).
      Notwithstanding anything else contained herein, the registration rights granted
      herein are subordinate in all respects to the registration rights granted to
      the
      holders of the Company’s Series B preferred stock, including with respect to the
      timing of inclusion and priority in any reduction of the amount of Securities
      so
      registered. In the event any Registrable Securities are not included in any
      such
      registration statement due to the 415 Position, the Company agrees to file,
      at
      the earliest possible time in view of the 415 Position, a further registration
      statement to register the resale of the Registrable Securities, subject to
      the
      priority of the Series B preferred stock described in the immediately preceding
      sentence. In the event that any registration pursuant to this Section 11.1
      shall
      be, in whole or in part, an underwritten public offering of common stock of
      the
      Company, the number of shares of Registrable Securities to be included in such
      an underwriting may be reduced by the managing underwriter if and to the extent
      that the Company and the underwriter shall reasonably be of the opinion that
      such inclusion would adversely affect the marketing of the securities to be
      sold
      by the Company therein; provided, however, that the Company shall notify the
      Seller in writing of any such reduction. Notwithstanding the foregoing
      provisions, or Section 11.4 hereof, the Company may withdraw or delay or suffer
      a delay of any registration statement referred to in this Section 11.1 without
      thereby incurring any liability to the Seller due to such withdrawal or
      delay.

     

    11.2. Registration
      Procedures.
      If and
      whenever the Company is required by the provisions of Section 11.1 to effect
      the
      registration of any Registrable Securities under the 1933 Act, the Company
      will,
      as expeditiously as possible: 

     

    (a) subject
      to the timelines provided in this Agreement, prepare and file with the
      Commission a registration statement required by Section 11, with respect to
      the
      Registrable Securities and use its best efforts to cause such registration
      statement to become and remain effective for the period of the distribution
      contemplated thereby (determined as herein provided), and promptly provide
      to
      the holders of the Registrable Securities copies of all filings and Commission
      letters of comment and notify Subscribers and Grushko & Mittman, P.C. (by
      telecopier and by email to Counslers@aol.com)
      within
      one (1) business day of (i) notice that the Commission has no comments or no
      further comments on the Registration Statement, and (ii) the declaration of
      effectiveness of the registration statement;

     

    
      
        
        

      

      
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    (b) furnish
      to the Sellers, at the Company’s expense, such number of copies of the
      registration statement and the prospectus included therein (including each
      preliminary prospectus) as such persons reasonably may request in order to
      facilitate the public sale or their disposition of the securities covered by
      such registration statement; 

     

    (c) use
      its
      best efforts to register or qualify the Registrable Securities covered by such
      registration statement under the securities or “blue sky” laws of such
      jurisdictions as the Sellers shall request in writing, provided, however, that
      the Company shall not for any such purpose be required to qualify generally
      to
      transact business as a foreign corporation in any jurisdiction where it is
      not
      so qualified or to consent to general service of process in any such
      jurisdiction or to subject itself to taxation in respect of doing business
      in
      any jurisdiction in which it is not otherwise so subject; 

     

    (d) if
      applicable, list the Registrable Securities covered by such registration
      statement with any securities exchange on which the Common Stock of the Company
      is then listed; 

     

    (e) promptly
      notify the Sellers when a prospectus relating thereto is required to be
      delivered under the 1933 Act, of the happening of any event of which the Company
      has knowledge as a result of which the prospectus contained in such registration
      statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading in light of the circumstances then
      existing; and

     

    (f) provided
      same would not be in violation of the provision of Regulation FD under the
      1934
      Act, make available for inspection by the Sellers, and any attorney, accountant
      or other agent retained by the Seller or underwriter, all publicly available,
      non-confidential financial and other records, pertinent corporate documents
      and
      properties of the Company, and cause the Company's officers, directors and
      employees to supply all publicly available, non-confidential information
      reasonably requested by the seller, attorney, accountant or agent in connection
      with such registration statement. 

     

    11.3. Provision
      of Documents.
      In
      connection with each registration described in this Section 11, each Seller
      will
      furnish to the Company in writing such information and representation letters
      with respect to itself and the proposed distribution by it as reasonably shall
      be necessary in order to assure compliance with federal and applicable state
      securities laws. 

     

    11.4. Expenses.
      All
      expenses incurred by the Company in complying with Section 11, including,
      without limitation, all registration and filing fees, printing expenses, fees
      and disbursements of counsel and independent public accountants for the Company,
      fees and expenses (including reasonable counsel fees) incurred in connection
      with complying with state securities or “blue sky” laws, fees of the National
      Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
      and registrars, costs of insurance and fee of one counsel for all Sellers are
      called “Registration
      Expenses.”
All
      underwriting discounts and selling commissions applicable to the sale of
      Registrable Securities, including any fees and disbursements of any additional
      counsel to the Seller, are called "Selling
      Expenses."
      The
      Company will pay all Registration Expenses in connection with the registration
      statement under Section 11. Selling Expenses in connection with each
      registration statement under Section 11 shall be borne by the Seller and may
      be
      apportioned among the Sellers in proportion to the number of shares sold by
      the
      Seller relative to the number of shares sold under such registration statement
      or as all Sellers thereunder may agree.

     

    
      
        
        

      

      
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    11.5. Indemnification
      and Contribution.

     

    (a) In
      the
      event of a registration of any Registrable Securities under the 1933 Act
      pursuant to Section 11, the Company will, to the extent permitted by law,
      indemnify and hold harmless the Seller, each officer of the Seller, each
      director of the Seller, each underwriter of such Registrable Securities
      thereunder and each other person, if any, who controls such Seller or
      underwriter within the meaning of the 1933 Act, against any losses, claims,
      damages or liabilities, joint or several, to which the Seller, or such
      underwriter or controlling person may become subject under the 1933 Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in any registration statement
      under which such Registrable Securities were registered under the 1933 Act
      pursuant to Section 11, any preliminary prospectus or final prospectus contained
      therein, or any amendment or supplement thereof, or arise out of or are based
      upon the omission or alleged omission to state therein a material fact required
      to be stated therein or necessary to make the statements therein not misleading
      in light of the circumstances when made, and will subject to the provisions
      of
      Section 11.5(c) reimburse the Seller, each such underwriter and each such
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action; provided, however, that the Company shall not be liable
      to
      the Seller to the extent that any such damages arise out of or are based upon
      an
      untrue statement or omission made in any preliminary prospectus if (i) the
      Seller failed to send or deliver a copy of the final prospectus delivered by
      the
      Company to the Seller with or prior to the delivery of written confirmation
      of
      the sale by the Seller to the person asserting the claim from which such damages
      arise, (ii) the final prospectus would have corrected such untrue statement
      or
      alleged untrue statement or such omission or alleged omission, or (iii) to
      the
      extent that any such loss, claim, damage or liability arises out of or is based
      upon an untrue statement or alleged untrue statement or omission or alleged
      omission so made in conformity with information furnished by any such Seller,
      or
      any such controlling person in writing specifically for use in such registration
      statement or prospectus. 

     

    (b) In
      the
      event of a registration of any of the Registrable Securities under the 1933
      Act
      pursuant to Section 11, each Seller severally but not jointly will, to the
      extent permitted by law, indemnify and hold harmless the Company, and each
      person, if any, who controls the Company within the meaning of the 1933 Act,
      each officer of the Company who signs the registration statement, each director
      of the Company, each underwriter and each person who controls any underwriter
      within the meaning of the 1933 Act, against all losses, claims, damages or
      liabilities, joint or several, to which the Company or such officer, director,
      underwriter or controlling person may become subject under the 1933 Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in the registration statement
      under which such Registrable Securities were registered under the 1933 Act
      pursuant to Section 11, any preliminary prospectus or final prospectus contained
      therein, or any amendment or supplement thereof, or arise out of or are based
      upon the omission or alleged omission to state therein a material fact required
      to be stated therein or necessary to make the statements therein not misleading,
      and will reimburse the Company and each such officer, director, underwriter
      and
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action, provided, however, that the Seller will be liable hereunder
      in any such case if and only to the extent that any such loss, claim, damage
      or
      liability arises out of or is based upon an untrue statement or alleged untrue
      statement or omission or alleged omission made in reliance upon and in
      conformity with information pertaining to such Seller, as such, furnished in
      writing to the Company by such Seller specifically for use in such registration
      statement or prospectus, and provided, further, however, that the liability
      of
      the Seller hereunder shall be limited to the net proceeds actually received
      by
      the Seller from the sale of Registrable Securities covered by such registration
      statement.

     

    
      
        
        

      

      
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    (c) Promptly
      after receipt by an indemnified party hereunder of notice of the commencement
      of
      any action, such indemnified party shall, if a claim in respect thereof is
      to be
      made against the indemnifying party hereunder, notify the indemnifying party
      in
      writing thereof, but the omission so to notify the indemnifying party shall
      not
      relieve it from any liability which it may have to such indemnified party other
      than under this Section 11.5(c) and shall only relieve it from any liability
      which it may have to such indemnified party under this Section 11.5(c), except
      and only if and to the extent the indemnifying party is prejudiced by such
      omission. In case any such action shall be brought against any indemnified
      party
      and it shall notify the indemnifying party of the commencement thereof, the
      indemnifying party shall be entitled to participate in and, to the extent it
      shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such indemnified party, and, after notice from the indemnifying
      party to such indemnified party of its election so to assume and undertake
      the
      defense thereof, the indemnifying party shall not be liable to such indemnified
      party under this Section 11.5(c) for any legal expenses subsequently incurred
      by
      such indemnified party in connection with the defense thereof other than
      reasonable costs of investigation and of liaison with counsel so selected,
      provided, however, that, if the defendants in any such action include both
      the
      indemnified party and the indemnifying party and the indemnified party shall
      have reasonably concluded that there may be reasonable defenses available to
      it
      which are different from or additional to those available to the indemnifying
      party or if the interests of the indemnified party reasonably may be deemed
      to
      conflict with the interests of the indemnifying party, the indemnified parties,
      as a group, shall have the right to select one separate counsel and to assume
      such legal defenses and otherwise to participate in the defense of such action,
      with the reasonable expenses and fees of such separate counsel and other
      expenses related to such participation to be reimbursed by the indemnifying
      party as incurred.

     

    (d) In
      order
      to provide for just and equitable contribution in the event of joint liability
      under the 1933 Act in any case in which either (i) a Seller, or any controlling
      person of a Seller, makes a claim for indemnification pursuant to this Section
      11.5 but it is judicially determined (by the entry of a final judgment or decree
      by a court of competent jurisdiction and the expiration of time to appeal or
      the
      denial of the last right of appeal) that such indemnification may not be
      enforced in such case notwithstanding the fact that this Section 11.5 provides
      for indemnification in such case, or (ii) contribution under the 1933 Act may
      be
      required on the part of the Seller or controlling person of the Seller in
      circumstances for which indemnification is not provided under this Section
      11.5;
      then, and in each such case, the Company and the Seller will contribute to
      the
      aggregate losses, claims, damages or liabilities to which they may be subject
      (after contribution from others) in such proportion so that the Seller is
      responsible only for the portion represented by the percentage that the public
      offering price of its securities offered by the registration statement bears
      to
      the public offering price of all securities offered by such registration
      statement, provided, however, that, in any such case, (y) the Seller will not
      be
      required to contribute any amount in excess of the public offering price of
      all
      such securities sold by it pursuant to such registration statement; and (z)
      no
      person or entity guilty of fraudulent misrepresentation (within the meaning
      of
      Section 11(f) of the 1933 Act) will be entitled to contribution from any person
      or entity who was not guilty of such fraudulent misrepresentation.

     

    11.6. Delivery
      of Unlegended Shares.

     

    (a) Within
      three (3) business days (such third business day being the “Unlegended
      Shares Delivery Date”)
      after the business day on which the Company has received (i) a notice that
      Warrant Shares have been sold pursuant to a registration statement or Rule
      144
      under the 1933 Act, (ii) a representation that the prospectus delivery
      requirements, or the requirements of Rule 144, as applicable and if required,
      have been satisfied, and (iii) the original share certificates representing
      the
      shares of Common Stock that have been sold, and (iv) in the case of sales under
      Rule 144, customary representation letters of the Subscriber and/or Subscriber’s
      broker regarding compliance with the requirements of Rule 144, the Company
      at
      its expense, (y) shall deliver, and shall cause legal counsel selected by the
      Company to deliver to its transfer agent (with copies to Subscriber) an
      appropriate instruction and opinion of such counsel, directing the delivery
      of
      shares of Common Stock without any legends including the legend set forth in
      Section 4
      above, reissuable pursuant to any effective and current Registration Statement
      described in Section 11 of this Agreement or pursuant to Rule 144 under the
      1933
      Act (the “Unlegended
      Shares”);
      and (z) cause the transmission of the certificates representing the Unlegended
      Shares together with a legended certificate representing the balance of the
      submitted Warrant Shares certificate, if any, to the Subscriber at the address
      specified in the notice of sale, via express courier, by electronic transfer
      or
      otherwise on or before the Unlegended Shares Delivery Date. 

     

    
      
        
        

      

      
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    (b) In
      lieu of delivering physical certificates representing the Unlegended Shares,
      if
      the Company’s transfer agent is participating in the Depository Trust Company
      (“DTC”)
      Fast Automated Securities Transfer program, upon request of a Subscriber, so
      long as the certificates therefor do not bear a legend and the Subscriber is
      not
      obligated to return such certificate for the placement of a legend thereon,
      the
      Company must cause its transfer agent to electronically transmit the Unlegended
      Shares by crediting the account of Subscriber’s prime Broker with DTC through
      its Deposit Withdrawal Agent Commission system. Such delivery must be made
      on or
      before the Unlegended Shares Delivery Date.

    

    (c) The
      Company understands that a delay in the delivery of the Unlegended Shares
      pursuant to Section 11 hereof after the Unlegended Shares Delivery Date could
      result in economic loss to Subscriber. As compensation to Subscriber for such
      loss, the Company agrees to pay late payment fees (as liquidated damages and
      not
      as a penalty) to the Subscriber for late delivery of Unlegended Shares in the
      amount of $100 per business day after the Delivery Date for each $10,000 of
      Purchase Price of the Unlegended Shares subject to the delivery default. If
      during any 360 day period, the Company fails to deliver Unlegended Shares as
      required by this Section 11.6 for an aggregate of thirty (30) days, then each
      Subscriber or assignee holding Securities subject to such default may, at its
      option, require the Company to redeem all or any portion of the Warrant Shares
      subject to such default at a price per share equal to 120% of the Purchase
      Price
      of such Warrant Shares (“Unlegended
      Redemption Amount”).

     

    (d) In
      addition to any other rights available to a Subscriber, if the Company fails
      to
      deliver to a Subscriber Unlegended Shares as required pursuant to this
      Agreement, within seven (7) business days after the Unlegended Shares Delivery
      Date and the Subscriber or a broker on the Subscriber’s behalf, purchases (in an
      open market transaction or otherwise) shares of common stock to deliver in
      satisfaction of a sale by such Subscriber of the shares of Common Stock which
      the Subscriber was entitled to receive from the Company (a "Buy-In"), then
      the
      Company shall pay in cash to the Subscriber (in addition to any remedies
      available to or elected by the Subscriber) the amount by which (A) the
      Subscriber's total purchase price (including brokerage commissions, if any)
      for
      the shares of common stock so purchased exceeds (B) the aggregate purchase
      price
      of the shares of Common Stock delivered to the Company for reissuance as
      Unlegended Shares
      together
      with interest thereon at a rate of 15% per annum, accruing until such amount
      and
      any accrued interest thereon is paid in full (which amount shall be paid as
      liquidated damages and not as a penalty). For example, if a Subscriber purchases
      shares of Common Stock having a total purchase price of $11,000 to cover a
      Buy-In with respect to $10,000 of Purchase Price of shares of Common Stock
      delivered to the Company for reissuance as Unlegended Shares, the Company shall
      be required to pay the Subscriber $1,000,
      plus interest. The
      Subscriber shall provide the Company written notice indicating the amounts
      payable to the Subscriber in respect of the Buy-In.

    

    (e) In
      the
      event a Subscriber shall request delivery of Unlegended Shares as described
      in
      Section 11.6 and the Company is required to deliver such Unlegended Shares
      pursuant to Section 11.6, the Company may not refuse to deliver Unlegended
      Shares based on any claim that such Subscriber or any one associated or
      affiliated with such Subscriber has been engaged in any violation of law, or
      for
      any other reason, unless, an injunction or temporary restraining order from
      a
      court, on notice, restraining and or enjoining delivery of such Unlegended
      Shares or exercise of all or part of said Warrant shall have been sought and
      obtained by the Company or at the Company’s request or with the Company’s
      assistance, and the Company has posted a surety bond for the benefit of such
      Subscriber in the amount of 120% of the amount of the Purchase Price of the
      Warrant Shares which are subject to the injunction or temporary restraining
      order, which bond shall remain in effect until the completion of
      arbitration/litigation of the dispute and the proceeds of which shall be payable
      to such Subscriber to the extent Subscriber obtains judgment in Subscriber’s
      favor.

     

    
      
        
        

      

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

    

    (b) Offering
      Restrictions.
      For so long as the Notes are outstanding, except for the Excepted Issuances,
      the
      Company will not enter into any equity line of credit or similar agreement,
      nor
      issue nor agree to issue any floating or variable priced equity linked
      instruments nor any of the foregoing or equity with price reset rights.
The
      only
      officer, director, employee and consultant stock option or stock incentive
      plan
      currently in effect or contemplated by the Company has been filed with the
      Reports prior to five days before the Closing Date. Other than Excepted
      Issuances, no other plan will be adopted nor may any options or equity not
      included in such plan be issued to such persons for so long as any sum is
      outstanding under the Note.

     

    
      
        
        

      

      
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    (c) Right
      of Participation.
      Until
      one year after the Subsequent Issuance Date, the Subscribers shall be given
      not
      less than ten (10) business days prior written notice of any proposed sale
      by
      the Company of its common stock or other securities or debt obligations. The
      Subscribers who exercise their rights pursuant to this Section 12(b) shall
      have
      the right during the ten (10) business days following receipt of the notice
      to
      participate in the offering to purchase up to Ten Million Dollars ($10,000,000)
      of such offered common stock, debt or other securities in accordance with the
      terms and conditions set forth in the notice of sale of such offer. In the
      event
      such terms and conditions are modified during the notice period, the Subscribers
      shall be given prompt notice of such modification and shall have the right
      during the original notice period or for a period of ten (10) business days
      following the notice of modification, whichever is longer, to exercise such
      right. Payment for such purchase by the Subscribers may be made by cash and/or
      tender of the Note and all sums due under the Note. In such event, the
      Subscriber will receive a credit against such other subscription purchase price
      or payment equal to the amount of Note Principal applied to such payment and
      a
      credit equal to the accrued interest and any other amount accrued or payable
      to
      Subscriber pursuant to the Transaction Documents.

     

    13. Miscellaneous.

     

    (a) Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) if to the Company, to: Hi-Tech Wealth Inc., Suite
      1503, Sino Plaza, 255-257 Gloucester Road, Causeway Bay, Hong Kong, Attn: Ma
      Qing, CFO, telecopier: +852 2975 9809, with an additional copy by telecopier
      only to: Loeb & Loeb, LLP, 345 Park Avenue, New York, NY 10154, Attn:
      Mitchell S. Nussbaum, Esq., telecopier: (212) 202-7829, and (ii) if to the
      Subscribers, to: the one or more addresses and telecopier numbers indicated
      on
      the signature pages hereto, with an additional copy by telecopier only to:
      Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
      10176, telecopier: (212) 697-3575.

     

    (b) Entire
      Agreement; Assignment.
      This
      Agreement and other documents delivered in connection herewith represent the
      entire agreement between the parties hereto with respect to the subject matter
      hereof and may be amended only by a writing executed by both parties. Neither
      the Company nor the Subscribers have relied on any representations not contained
      or referred to in this Agreement and the documents delivered herewith. No right
      or obligation of the Company shall be assigned without prior notice to and
      the
      written consent of the Subscribers. 

     

    (c) 
      Counterparts/Execution.
      This
      Agreement may be executed in any number of counterparts and by the different
      signatories hereto on separate counterparts, each of which, when so executed,
      shall be deemed an original, but all such counterparts shall constitute but
      one
      and the same instrument. This Agreement may be executed by facsimile signature
      and delivered by facsimile transmission.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (d) Law
      Governing this Agreement.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to conflicts of laws principles that would
      result in the application of the substantive laws of another jurisdiction.
      Any
      action brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the state courts of
      New
      York or in the federal courts located in the state of New York. The
      parties and the individuals executing this Agreement and other agreements
      referred to herein or delivered in connection herewith on behalf of the Company
      agree to submit to the jurisdiction of such courts and waive trial by
      jury.
      The
      prevailing party shall be entitled to recover from the other party its
      reasonable attorney's fees and costs. In the event that any provision of this
      Agreement or any other agreement delivered in connection herewith is invalid
      or
      unenforceable under any applicable statute or rule of law, then such provision
      shall be deemed inoperative to the extent that it may conflict therewith and
      shall be deemed modified to conform with such statute or rule of law. Any such
      provision which may prove invalid or unenforceable under any law shall not
      affect the validity or enforceability of any other provision of any
      agreement.

     

    (e) Specific
      Enforcement, Consent to Jurisdiction.
      The
      Company and Subscriber acknowledge and agree that irreparable damage would
      occur
      in the event that any of the provisions of this Agreement were not performed
      in
      accordance with their specific terms or were otherwise breached. It is
      accordingly agreed that the parties shall be entitled to an injunction or
      injunctions to prevent or cure breaches of the provisions of this Agreement
      and
      to enforce specifically the terms and provisions hereof, this being in addition
      to any other remedy to which any of them may be entitled by law or equity.
      Subject to Section 13(d) hereof, each of the Company, Subscriber and any
      signator hereto in his personal capacity hereby waives, and agrees not to assert
      in any such suit, action or proceeding, any claim that it is not personally
      subject to the jurisdiction in New York of such court, that the suit, action
      or
      proceeding is brought in an inconvenient forum or that the venue of the suit,
      action or proceeding is improper. Nothing in this Section shall affect or limit
      any right to serve process in any other manner permitted by law.

     

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

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (g) Consent.
      As used
      in the Agreement, “consent of the Subscribers” or similar language means the
      consent of holders of not less than 75% of the total of the Shares issued and
      issuable upon conversion of outstanding Notes owned by Subscribers on the date
      consent is requested.

     

    (h) Equal
      Treatment.
      No
      consideration shall be offered or paid to any person to amend or consent to
      a
      waiver or modification of any provision of the Transaction Documents unless
      the
      same consideration is also offered and paid to all the Subscribers and their
      permitted successors and assigns. Payments to the Subscribers for sums due
      under
      the Notes must be made by the Company in proportion to the Subscribers’ initial
      Note principal amounts.

     

    (i) Maximum
      Payments.
      Nothing
      contained herein or in any document referred to herein or delivered in
      connection herewith shall be deemed to establish or require the payment of
      a
      rate of interest or other charges in excess of the maximum permitted by
      applicable law. In the event that the rate of interest or dividends required
      to
      be paid or other charges hereunder exceed the maximum permitted by such law,
      any
      payments in excess of such maximum shall be credited against amounts owed by
      the
      Company to the Subscriber and thus refunded to the Company.

    

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

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT

     

    

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

     

     

    
      	 	 	 
	 	
              HI-TECH
                WEALTH INC.

              a
                Nevada corporation

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:
                

              Title:
                

            
	 	Dated:    	June
              ____, 2007

    

     

    

    
      	
              SUBSCRIBER

            	
              CLOSING
                PURCHASE PRICE

            	
              SUBSEQUENT
                ISSUANCE PURCHASE PRICE

            
	
               

              Name
                of Subscriber: ____________________________________

               

              _____________________________________________________

               

              Address:
                _____________________________________________

               

              ____________________________________________________

               

              Fax
                No.: ____________________________________________

               

              Taxpayer
                ID# (if applicable): ____________________________

               

               

               

              ____________________________________________________

              (Signature)

              By:
                

            	 	 

    

    

    
      
        
        

      

      
        26

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