Document:

Unassociated Document

    MOBILE
      PREPAID EXCLUSIVE MASTER SERVICE AGREEMENT

     

    This
      Exclusive Master Service Agreement (the “Agreement”)
      is
      made and entered into as of this 23rd day of April, 2007 (the “Effective
      Date”),
      by
      and between Europhone USA, LLC., a New York Limited Liability Company
      (“EUROPHONE”
or
      the
“Company”)
      and,
      PARALLEL NO LIMIT, INC, a Delaware Corporation (“Client”).
      All
      capitalized terms not otherwise defined herein shall have the meanings ascribed
      to them in the “Definitions” section set forth on Schedule
      D.

    

    WHEREAS,
      Client has agreed to engage EUROPHONE, and EUROPHONE has agreed to be engaged,
      to provide certain carrier network and carrier network connected services,
      sale
      of Eugro Mobile, information technology, back office support services and
      consulting services to Client in accordance with the terms of this Agreement;
      and 

    

    WHEREAS,
      EUROPHONE acquired cell time and related services from independent third
      parties.

    

    NOW,
      THEREFORE, in consideration of the mutual promises contained herein, and of
      other good and valuable consideration, the receipt and sufficiency of which
      is
      hereby acknowledged, EUROPHONE and Client (individually each a “Party”
and
      collectively the “Parties”)
      agree
      as follows:

    

    

    ARTICLE
      II

    TERM/DEPOSIT

    

    2.1 Term.
      The
      term of this Agreement shall begin on the Effective Date and shall continue
      in
      effect for a period of five (5) years from the date of this agreement, unless
      terminated earlier in accordance with the terms hereof (the “Initial
      Term”).
      Following expiration of the Initial Term, this Agreement shall automatically
      renew for successive two (2) year terms (the “Renewal
      Term”
and,
      collectively with the Initial Term, the “Term”)
      unless
      either: (i) Client
      notifies EUROPHONE in writing at least seventy (70) days prior to the expiration
      of any Term that Client does not wish to renew the Agreement;
      (ii)
      EUROPHONE notifies Client in writing at least seventy (70) days prior to the
      expiration of any Term or that EUROPHONE does not wish to renew the Agreement;
      (iii) EUROPHONE notifies Client in writing at the that is six months after
      the
      date hereof or fifty days prior to the expiration of any Term, in the event
      that
      EUROPHONE does not have at least the requisite Minimum Activations and
      Active
      Subscriber Base (as hereinafter defined) as of such date, or (iv) Client
      and EUROPHONE are unable to agree upon the pricing for the Renewal Term as
      provided in this Section and as a result EUROPHONE or Client elects to terminate
      this Agreement as provided in this Section. The price to be paid for the
      Services during any automatic renewal period shall be as mutually agreed between
      EUROPHONE and Client. EUROPHONE shall notify Client in writing of any proposed
      changes in pricing under direct control of EUROPHONE or other terms during
      a
      renewal period at least fifty (50) days prior to the expiration of the then
      current term. The parties shall negotiate in good faith for the pricing and
      other terms that will apply in the renewal period. In the event that Client
      and
      EUROPHONE cannot mutually agree upon the prices and other terms for the Services
      within fifty (50) days following such notice, then either Client or EUROPHONE
      may terminate this Agreement upon written notice to the other party.
      Notwithstanding the foregoing, EUROPHONE, in its sole discretion, may terminate
      this Agreement at the end of the six month anniversary of this Agreement and
      at
      the end of any year in accordance with subparagraph (iii) above, if Minimum
      Activations for such fiscal year have not been met by Client, and either party
      may terminate in accordance with their rights in ARTICLE
      VIII.
      

     

    2.2
      Buy
      Out.
      Should
      the contract terminate due to any of the provisions of 2.1 above the Client
      shall be due a continuing commission of only 4% of the gross sales generated
      by
      the then current subscriber base attributable to Client for a period of three
      (3) years from the termination date of the contract. Said commission to be
      paid
      if and as earned, on a monthly basis within 5 business days of the end of each
      calendar month. EUROPHONE shall not be required to pay any other commissions
      or
      payments scheduled herein or otherwise agreed to by the parties whether to
      the
      Client or any of its affiliates, sub distributors, tier groups, or otherwise.
      

    
      
         

      

      
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    2.3 Deposit.
      Client
      shall pay and maintain a deposit of $100,000 (the “Deposit”)
      to
      EUROPHONE, which may be used in the event of any non-payment or default of
      Client. The $100,000 Deposit shall be held in a segregated, interest bearing
      account of EUROPHONE, with interest accruing on said Deposit. EUROPHONE shall
      have the right to increase the foregoing deposit to a reasonable amount to
      be
      agreed upon by the parties, if the dollar amount of purchases increase
      substantially above the Minimum Activations and Active Subscriber Base.

    

    

    ARTICLE
      III

    EUROPHONE
      SERVICES

    

    3.1 Services.
      During
      the Term, EUROPHONE will provide to Client the services described in
Schedule A
      attached
      hereto (the “Services”)
      in
      accordance with the terms set forth in this Agreement and the Schedules attached
      hereto. The Services may be performed by EUROPHONE directly, or, as described
      herein or otherwise agreed to by the Parties, through one or more
      sub-contractors selected by EUROPHONE. In the event that EUROPHONE sub-contracts
      any services hereunder, EUROPHONE shall be responsible for the performance
      of
      the Services by EUROPHONE’s subcontractors and will permit Client, to the extent
      allowable under EUROPHONE’s agreements, to pursue warranty remedies against such
      EUROPHONE subcontractors directly after notice to EUROPHONE if Client feels
      best
      served by doing so. In addition, EUROPHONE will provide Client with the Carrier
      Network and carrier network connected services described in Schedule
      D,
      in
      accordance with the terms set forth therein. Client expressly acknowledges
      that,
      except as expressly provided in Schedule
      D,
      EUROPHONE makes no warranty and shall have no liability to Client or its
      subscribers, for the carrier network and carrier network connected services.
      Except as expressly provided herein with respect to the Services (or any
      additional services to be performed as described in Section 3.2), EUROPHONE
      does
      not assume any obligations of Client with respect to Client’s business or data
      processing requirements. 

    

    3.2 Additional
      Services.
      During
      the Term, Client may request that EUROPHONE provide certain services not
      included within the scope of the Services such as long distance and one way
      systems. Any such additional services will be provided, subject to the parties’
mutual agreement, including an agreement on the rates and other fees to be
      paid
      by Client to EUROPHONE. 

    

    3.3 Service
      Levels.
      EUROPHONE shall use commercially reasonable efforts to perform the Services
      in a
      manner which meets its clients reasonable expectations and will deliver on
      the
      goals mutually agreed to and set forth in this Agreement. EUROPHONE provides
      no
      service on carrier network and carrier network connected services. 

    

    3.4 Control
      of Resources.
      EUROPHONE shall have the exclusive right to manage all EUROPHONE resources
      used
      in providing the Services as EUROPHONE deems appropriate, including the right
      to
      relocate and substitute computer equipment, personnel and other resources,
      and
      to change computer configurations and procedures. EUROPHONE will use
      commercially reasonable efforts to comply with industry best practices with
      regards to security, system redundancy, and all hosting standards with respect
      to the Services. EUROPHONE agrees to notify Client, in writing, of all
      technology changes, conversions, and or relocation affecting Client 30 days
      prior to cut-over, or as commercially reasonable.

    

    3.5
       Carrier
      Operating/MVNO Agreement.
      EUROPHONE shall provide Client access to carrier network and carrier network
      connected services through EUROPHONE’s resale arrangements upon approval by the
      selected carrier, and subject to the terms of Schedule
      D.
      EUROPHONE will use commercially reasonable efforts to make any necessary system
      modifications to support future changes from the carriers to carrier network
      and
      carrier network connected services that occur from time to time.

    
      
         

      

      
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    3.6 Exclusivity.
      (a)
      Client agrees that EUROPHONE shall be the exclusive provider to Client, whether
      directly or through EUROPHONE subcontractors, of the Services and carrier
      network and carrier network connected services. Client agrees that during the
      Term, Client shall not solicit, contract for, or obtain any services that
      substitute for or compete with the Services and carrier network and carrier
      network connected services from any person or entity other than EUROPHONE,
      without the prior express written approval of EUROPHONE, which approval may
      be
      withheld in EUROPHONE’s sole discretion. The parties also agree that Client
      shall be the exclusive distributor of EUROPHONE for the Services (but not for
      any “One World One Sim” card or similar related products or services) within the
      United States. Additionally, Client may distribute, on a non exclusive basis,
      the Services within Canada and Mexico only. Client will make best efforts to
      ensure that Services sold by it or its distributors, agents or affiliates,
      are
      not sold or distributed outside of the United States, Canada or Mexico. Client
      further acknowledges that should Client breach the provisions of this Section
      3.6, EUROPHONE would be irreparably harmed and that damages would be an
      inadequate remedy and therefore, EUROPHONE shall be entitled to injunctive
      or
      other equitable relief without obligation to post bond or other security (and
      Client hereby expressly waives and disclaims any such requirement). EUROPHONE
      hereby acknowledges that Client currently has several thousand customers using
      CDMA services provided by Locus Communications. Client shall be allowed to
      continue to service such customers until their termination but shall not solicit
      new customers under the existing agreement. Client shall make every effort
      to
      convert such subscribers to the GSM or CDMA services provided under this
      agreement. 

     

    (b)
       Nothing
      herein shall be deemed to limit, in any way, the scope or extent of EUROPHONE’s
      business or EUROPHONE’s ability to: 

     

    (i)
      enter
      into contracts with third parties wherever located or, to sell directly to
      such
      parties the “One World One Sim” card or related products or Services (or any
      other products or services that do not constitute part of the Services, as
      defined herein), anywhere in the world on an exclusive or non exclusive basis
      (provided that any right granted to Client to sell such cards may only be made
      pursuant to a separate agreement agreed to by the parties, which agreement
      shall
      provide, among other things, that the sale of the One World One Sim or similar
      cards or services to or by Client, shall be non-exclusive and limited to sales
      in the United States only), 

     

    (ii)
      sell
      any and all products and Services of any kind, anywhere outside of the United
      States, and grant exclusive or non exclusive licenses for the foregoing anywhere
      outside of the United States, 

     

    (iii)
      make direct sales of any and all products and Services to end purchasers
      wherever in the world located, whether through internet, Company owned stores
      (which may be located anywhere), call in centers or otherwise, 

     

    (iv)
      open
      one or more stores in whole or in part owned by EUROPHONE or its affiliated
      group of companies anywhere in the world, for the purposes of selling any and
      all products and Services whatsoever, 

     

    (v)
      sell
      any and all products and Services directly to corporations, entities, government
      bodies or organizations subject to the paragraph of Section 3.6 (c).

     

    In
      addition, EUROPHONE may market, sell, license and advertise its products and
      services for any of the permitted purposes set forth in subparagraphs (i)
      through (v) of Section 3.6. 

     

    (c) The
      parties agree that either party may solicit and sell the products to
      corporations or similar entities, entities, banks, government bodies, or other
      organizations for use by such entities by their employees or for promotional
      and
      gift related purposes. Notwithstanding the foregoing, prior to either the Client
      or EUROPHONE’s approaching any such entity to solicit said sales, such party
      shall advise the other party herein (the “Receiving
      Party”)
      of
      their intent to so solicit to such company and entity and, if , the Receiving
      Party already has a bonafide connection with active plans and intentions of
      soliciting such entity or is otherwise in the process of actively marketing
      to
      such entity then, upon receipt of a written statement therefore from the
      Receiving Party, the non-Receiving Party shall not approach said entity for
      sales at such time until the termination of a period of four months after the
      termination of the Receiving Party’s relationship with the said entity.

    
      
         

      

      
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    ARTICLE
      IV

    CLIENT
      RESPONSIBILITIES

    

    4.1 Client
      Responsibilities.
      During
      the Term, it shall be solely Client’s responsibility to provide EUROPHONE with
      the data related to Client’s business, and perform the activities, which
      EUROPHONE deems necessary to carry out the Services described hereunder and
      the
      carrier network and carrier network connected services described in Schedule
      D,
      including without limitation the data and activities set forth in this
Article
      IV.
      

    

    4.2 Operating
      Instructions.
      Client
      will cooperate with any written operating instructions provided by EUROPHONE
      to
      Client from time to time for purposes of assuring proper performance of the
      Services. EUROPHONE will provide appropriate personnel to explain such
      instructions as reasonably necessary for Client’s compliance with them. In the
      event that Client fails to comply with any such operating instructions,
      EUROPHONE shall be excused from any breach arising from, or service level
      credits associated with, errors in accuracy, timeliness and/or other
      obligations, as the situation may determine, in its performance of the Services
      to the extent any failure in EUROPHONE’s performance results from Client’s
      failure to comply with such operating instructions. 

    

    4.3 Cooperation.
      Client
      shall cooperate with EUROPHONE by making promptly available, as requested by
      EUROPHONE, such management decisions, personnel, information, data, approvals
      and acceptances as may be required to enable EUROPHONE to properly perform
      its
      obligations under this Agreement.

    

    4.4 Production
      Manager.
      Client
      shall designate one of its suitably qualified employees to serve as the
      Production Manager for Client with respect to the Services, and carrier network
      and carrier network connected services provided hereunder. The Production
      Manager shall be EUROPHONE’s primary contact with Client, and EUROPHONE shall be
      entitled to rely upon the instructions, decisions and/or approvals provided
      by
      Client’s Production Manager. Client may replace the Production Manager from time
      to time by providing EUROPHONE with written notice designating a new Production
      Manager. In the event that the Production Manager is replaced, the client will
      promptly provide EUROPHONE with the name and contact information for the new
      Production Manager. 

    

    4.5 Applicable
      Approvals and Compliance with Law.
      It
      shall be Client’s sole responsibility to obtain, pay, comply with and maintain
      any and all applicable federal, state and agency regulations, laws, rules,
      titles and tariffs which apply to the business of Client. Client shall be solely
      responsible for all of its federal, state and local sales, income payroll or
      other taxes. Client agrees that EUROPHONE shall have no responsibility for
      such
      compliance whatsoever.

    

    4.6 Minimum
      Activations Per Year.
      Client
      shall procure 150,000 activations during each year that this Agreement is in
      effect, with the first year ending on April 1, 2007 (said minimum required
      sales
      amount will be increased from year to year pursuant to this Section
      4.6,
      is
      referred to herein as the “Minimum
      Activations”).
      Notwithstanding the foregoing, before the end of the six month period
      immediately following the date of this Agreement (the “Trial
      Period”),
      Client shall have procured at least 75,000 Minimum Activations during such
      six
      month period (not pro-rated). Each year thereafter during the term, the Minimum
      Activations from sales generated by Client shall increase by 10% cumulatively
      from the year before (i.e. the prior year’s Minimum Activations multiplied by
      110%). In the event that the foregoing Minimum Activations are not satisfied,
      EUROPHONE may terminate this Agreement, without penalty (other than payments
      under Section
      2.2),
      at the
      end of any year in accordance with Section
      2.1.
      By way
      of example only, if Minimum Activations for the year ended December 31, 2008
      is
      below 165,000 during such calendar year, then EUROPHONE may terminate this
      Agreement. 

    

    4.7 Minimum
      Subscriber Base.
      At the
      date that is fifty (50) days prior to the end of the Initial Term or any
      subsequent Renewal Term, the minimum subscriber base of existing active account
      users (as increases from year to year, the “Active
      Subscriber Base”)
      shall
      be on track to be equivalent to the Minimum Activations fur such year and said
      Active Subscriber Base shall be no less then 75,000 as of the date that is
      six
      months after the date of this Agreement. If the Active Subscriber Base is not
      equivalent to the Minimum Activation (or is not equal to 75,000 on the six
      month
      anniversary of this Agreement) then this Agreement may be terminated pursuant
      to
Section
      2.1.
      By way
      of example, if the Active Subscriber Base on December 31, 2008 is below 165,000
      during such calendar year, then EUROPHONE may terminate this Agreement.

    
      
         

      

      
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    ARTICLE
      V

    RECORD
      RETENTION AND RETRIEVAL

    

    EUROPHONE
      shall maintain customer data files to the extent that the same is readily
      available to EUROPHONE, specifically the bill images and the rated call detail,
      on-line for access and retrieval by Client for the current billing month and
      the
      11 (11) preceding months. Records shall be retained on behalf of EUROPHONE
      at a
      secure facility for a period of two (2) years following the billing year and,
      thereafter, shall be delivered to Client for any further required retention.
      EUROPHONE shall retrieve records for Client, at Client’s request and expense,
      within fifteen (15) Business Days of such request.

    

    

    ARTICLE
      VI

    INVOICING
      AND PAYMENT FOR SERVICES

    

    6.1 Charges
      and Payment; Sim Chips, Hardware.
      Client
      and the Company agree that the settlement process will be on a weekly basis
      via
      ACH for the prior week’s shipments. EUROPHONE will ACH the Client (as applicable
      based upon how client establishes genealogy) (i) within one business day of
      the
      shipment of cellular phones and other hardware and , (ii) simultaneously upon
      activation of any sim chips, cards or other services. The activity is based
      upon
      the agreed upon contractual rates agreed to at the time of sale thereof.

    

    In
      the
      event of a payment default, using ACH, that is not cured within one (1) business
      day, and in addition to other remedies at law or in equity, any one or more
      of
      the following may occur at EUROPHONE’s sole discretion and option:

    

    (a)
       All
      channel / dealer portals may be suspended.

    

    (b)
       All
      channel / dealer portals shall be reactivated after the following conditions
      have been met:

    

    i.
       A
      full
      accounting of all open invoices shall be performed and all open invoices must
      be
      paid current;

    

    ii.
       A
      five
      day equivalent deposit shall be provided by Client upon request based on the
      daily average of the previous five business days as shall be determined by
      Company. 

    

    iii.
       The
      cure
      payments shall be received via wire transfer by Company.

    

    (c)
       Failure
      to cure within five business days will result in the Company’s right to take any
      or both of the following actions:

    

    i.
       Possible
      deactivation of all Subscribers; or

    

    ii.
       Sale
      of
      current Subscribers to Company or another MVNO. 

    

    (d)
       The
      proceeds from any sale or transfer of Subscribers shall be used to offset any
      amounts due to the Company as a result of Client’s breach, with the balance to
      be paid to the Client to the extent of commissions owed to the Client, as set
      forth in Section
      2.2.
      

    
      
         

      

      
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    6.2
      Residuals
      :Any
      residuals payable to Client shall be paid as provided in Schedule
      C
      based
      upon the difference between the Client’s commission rate and any commission
      already held at point of sale by Client or dealer.
      Payment
      Cycles will be bi-monthly 1st
      -
      15th
      and
      16th
      through
      the end of the month. Payment will be due 5 days after the end of each payment
      cycle. Except as otherwise provided herein, amounts Client owes to EUROPHONE
      or
      third-parties under this Agreement for related service fees in Schedule
      C
      shall be
      due and payable by Client within thirty (30) calendar days of the invoice date.
      Any amounts remaining unpaid for more than thirty (30) calendar days after
      the
      applicable invoice date shall bear interest at the rate of 1.5% per month (but
      in no event to exceed the highest applicable lawful rate of interest).

     

    6.3 Charges
      and Payments for Activations, Airtime, and Reactivations.
      Client
      and the Company agree that the settlement process will be on a daily basis
      via
      ACH for daily activity, billed directly from Client’s or Client’s dealer’s
      accounts. EUROPHONE will ACH the Client or Client dealers, as applicable, (based
      upon how Client establishes genealogy) on the Monday of the subsequent week
      or
      the following business day should Monday a holiday for all activity on the
      Client of Client dealer’s payment reports. The activity is based upon the
      transaction contract rates as defined in Schedule
      C.
      Payments shall post in accordance with Section 6.1. 

    

    6.4 Default.
      In the
      event of non-payment under Section 6.1 or 6.2, EUROPHONE may debit the amount
      from the initial Deposit, in addition to any other remedies available to
      it.

    

    ARTICLE
      VII

    MODIFICATION
      OF THE CUSTOMER ACQUISITION, BILLING, AND CARE SYSTEM

    

    7.1 General.
      EUROPHONE services shall be provided through the back office support generally
      provided to EUROPHONE (“Back
      Office Systems”).
      EUROPHONE shall have responsibility for preparing any modifications to its
      Back
      Office Systems and providing product support services with respect to them
      as is
      deemed necessary at EUROPHONE’s sales division.

    

    7.2 Installation
      of Patches and Maintenance Fixes.
      Client
      acknowledges and agrees that it will be necessary for EUROPHONE or its
      supplier(s)/service providers to periodically install patches and maintenance
      fixes to its Back Office Systems to perform the Services. EUROPHONE shall be
      entitled to determine when and how to install such patches and maintenance
      fixes. Client acknowledges and agrees that the application of patches and
      maintenance fixes shall be in accordance with EUROPHONE’s (or its
      supplier(s)/service providers’) internal process. EUROPHONE shall notify Client
      in writing in advance of a planned installation of a patch or maintenance fix
      that may affect Client. 

    

    7.3 Installation
      of Operating System Hardware, Storage, Software and Network.
      Client
      acknowledges and agrees that periodically it will be necessary for EUROPHONE
      to
      install current maintenance and/or new versions of Operating System Hardware,
      Storage, Software and Network components to perform the Services. EUROPHONE
      shall be entitled to determine when to install these components in its sole
      discretion.

    

    7.4 Subscriber
      Base Ownership.
      With
      the exception of the contractual rights as provided herein or the rights of
      end-users as granted by law, EUROPHONE is and shall be the sole and exclusive
      owner of the subscribers and user base of the Services and of the phone numbers
      issued thereby. EUROPHONE may transfer such user base to different carriers
      or
      service providers from time to time. Client acknowledges that it shall not
      have
      any such ownership rights and that it may not cause or facilitate the transfer
      or migration of any numbers or Services to other carriers or service providers
      other then as directed by EUROPHONE from time to time and further agrees to
      provide migration assistance as necessary in order to assist with the foregoing.
      

    
      
         

      

      
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    ARTICLE
      VIII

    DISPUTES
      AND REMEDIES

    

    8.1 Notice
      of Breach and Opportunity To Cure.
      No
      breach of this Agreement, including without limitation a breach of warranty
      hereunder, shall be actionable by either Party unless such Party has, as an
      express condition precedent to commencing such an action or proceeding, provided
      written notice to the Party in breach specifying the breach in reasonable detail
      and providing the Party in breach an amount of time to cure such breach (if
      reasonably capable of cure) as provided below, and the Party in breach fails
      to
      cure the breach within such notice period.

    

    8.2 Termination
      For Cause.
      In the
      event either Party to this Agreement shall be in material breach of this
      Agreement (other than for nonpayment which is governed by Section 8.3 and
ARTICLE
      VI)
      and (i)
      where EUROPHONE is the breaching Party, it fails to substantially cure such
      breach within seventy (70) days after its receipt of a written notice specifying
      the details of the breach, and (ii) where Client is the breaching Party, it
      fails to substantially cure such breach within thirty (30) days after its
      receipt of a written notice specifying the details of the breach or, (iii)
      with
      respect to any material breach capable of cure which cannot reasonably be cured
      within the
      cure
      periods specified in subsections (i) and (ii) above,
      should
      the breaching Party fail to proceed within the applicable cure period specified
      in subsections (i) and (ii) above to commence curing the breach and thereafter
      to proceed with all due diligence to cure the breach, the Party not in breach
      of
      this Agreement may terminate this Agreement by giving prompt written notice
      of
      termination. Notwithstanding the foregoing, Client understands that EUROPHONE
      obtains its hardware and time related services from third parties, and that
      breach or failure by such parties to provide services or hardware to EUROPHONE
      shall be an additional and valid defense to any claim asserted against EUROPHONE
      for damages caused by such breach or failure.

    

    8.3 Termination
      For Nonpayment.
      In the
      event Client fails to pay all amounts due EUROPHONE in accordance with the
      terms
      of this Agreement, then EUROPHONE may terminate this Agreement by providing
      Client with written notice of termination; provided, however, that in the event
      that the disputed amount is greater than 15%, then, undisputed amount shall
      be
      paid immediately, with the disputed amount placed in escrow with an escrow
      agent
      determined by the parties in good faith. All other invoices shall be invoiced
      and paid regularly in accordance with this Agreement on an ongoing basis,
      presuming that the provisions of the previous sentence is complied with. The
      principals of each party shall meet within five (5) business days with
      sufficient documentation to resolve the dispute. In the event that the dispute
      is not resolved within such time, EUROPHONE may treat such failure as a
      non-payment hereunder. Client waives its right to dispute any invoiced amounts
      if it does not provide written notice of such dispute within sixty (60) days
      of
      the date of or receipt of the invoice. In the event of a dispute, Client must
      pay the entire invoiced amount in full and, in such event, the Parties will
      exercise good faith to resolve the amounts due under the invoice within seventy
      (70) days after Client has disputed the invoiced amount. In the event that
      a
      disputed amount is not resolved within such seventy (70) day period, or
      EUROPHONE reasonably determines that such dispute will not be resolved within
      such seventy (70) day period, both parties shall submit such dispute to
      arbitration in accordance with 8.6 below. Notwithstanding the foregoing,
      EUROPHONE’s obligation to deliver additional services shall cease after one (1)
      day in the event of non-payment pursuant to ARTICLE
      VI.

    

    8.4 Termination
      Due To Insolvency.
      In the
      event either Party to this Agreement becomes or is declared insolvent, becomes
      subject to a voluntary or involuntary bankruptcy or similar proceeding, or
      makes
      an assignment for the benefit of all or substantially all of its creditors,
      then
      the other Party to this Agreement may terminate this Agreement by giving written
      notice thereof to such Party which notice shall specify the date of
      termination.

    

    8.5 Termination
      for Fraud.
      Client
      shall not assist or participate in any fraudulent usage by end-users and shall
      analyze and report any such known or suspected usage to the Company and take
      corrective action to resolve and prevent such fraudulent usage. The Company
      may
      also, in its sole discretion, take any corrective action or exercise other
      legal
      or equitable rights it has, as against end-users reasonably suspected by it
      of
      committing fraud, including without limitation, deactivating such user’s
      account(s)

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    

    8.6 Dispute
      Resolution.
      This
      Section 8.6 governs any dispute, disagreement, claim or controversy between
      Client and EUROPHONE arising from or related to this Agreement (a “Disputed
      Matter”).
      All
      Disputed Matters shall be referred jointly to senior executives of each of
      the
      Parties. If such executives do not agree upon a resolution within ten (10)
      days
      after referral of the matter to them, the parties shall proceed with binding
      arbitration as follows: 

    

    (a) Arbitration: Any
      and
      all disputes, controversies or claims arising out of or in connection with
      this
      letter or the breach, termination, validity thereof, or the work performed
      hereunder shall be settled by final and binding arbitration in accordance with
      the American Arbitration Association ("AAA")
      rules
      as presently in force. The appointing authority shall be the AAA. The
      arbitration shall be heard and determined by three arbitrators. Each party
      shall
      name one arbitrator. The third arbitrator shall be named by the appointing
      authority. If one of the arbitrators is unable to serve, due to death,
      disability or other reason, the party appointing said arbitrator shall appoint
      a
      replacement arbitrator. The place of arbitration shall be in New York; provided,
      however, that EUROPHONE shall have the right to consolidate any arbitration
      hereunder with any arbitration proceeding involving a EUROPHONE third party
      supplier (including a EUROPHONE subcontractor), and in such event, the place
      of
      arbitration shall be in such venue in the United States called for in the
      arbitration proceeding with which this instant proceeding has been consolidated.
      The award shall be made and payable in U.S. dollars, free of any tax or other
      deductions. The award may include interest from the date of any breach or other
      violation of this Agreement. The arbitrators shall fix the appropriate rate
      of
      interest from the date of the breach or other violation to the date that the
      award is paid in full. In no event, however, should the interest rate during
      such period be lower than the prime commercial lending rate for favored
      borrowers published from time to time by the Wall Street Journal. The parties
      may stipulate whether discovery will be limited or broad ranging. If the parties
      fail to so stipulate, the appointing authority will determine the method of
      discovery that will be used. Parties may introduce expert witnesses and take
      at
      least three depositions of one another. The arbitration panel possesses broad
      authority to issue interim measures of protection. All notices to be given
      in
      connection with the arbitration shall be in writing.

    

    

    ARTICLE
      X

    ERROR
      CORRECTION, LIMITATION OF LIABILITY AND INDEMNITY

    

    10.1 Error
      Correction.
      Client
      shall be responsible for the data, information and input supplied to EUROPHONE
      by Client or on behalf of Client. EUROPHONE shall have no liability of any
      kind
      with regard to errors that are attributable to incorrect data, information
      or
      input supplied to EUROPHONE by Client or on behalf of Client. With regard to
      errors which are caused solely by an error of EUROPHONE or its service
      provider(s), Client shall provide written notice to EUROPHONE of such error
      and
      (i) for reports run on a daily basis, EUROPHONE shall only be required to
      retroactively reprocess such reports if Client first reports such error to
      EUROPHONE within two (2) days of Client’s first receipt of output from EUROPHONE
      that evidences the error; (ii) for reports run on a weekly basis, EUROPHONE
      shall only be required to retroactively reprocess such reports if Client first
      reports such error to EUROPHONE within six (6) days of Client’s first receipt of
      output from EUROPHONE that evidences the error; and (iii) for reports run
      on a monthly basis, EUROPHONE shall only be required to retroactively reprocess
      such reports if Client first reports such error to EUROPHONE within twenty
      (20)
      days of Client’s first receipt of output from EUROPHONE that evidences the
      error. For purposes of the preceding sentence, a report shall be considered
      “daily,” “weekly,” or “monthly” based on the frequency with which the report is
      actually run for Client, and not on the basis of the report’s classification
      generally. In the event that EUROPHONE, through no fault of Client, has
      mistakenly calculated the rates applicable to Client’s Subscriber base, or has
      otherwise printed materially erroneous information on Client’s bills to its
      Subscribers, and the bill cycle processing for the following month has not
      already been completed by EUROPHONE, then EUROPHONE shall correct the
      miscalculation or the error and reprocess the relevant billing data within
      seven
      (7) days after such error is brought to the attention of EUROPHONE. Otherwise,
      EUROPHONE will alert Client to the problem and mutually agree on the remedial
      action that EUROPHONE will take without additional expense to Client provided
      that such report shall be completed within thirty (30) days after such error
      is
      brought to the attention of Client.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    

    10.2 Scope
      of Liability.
      IN NO
      EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY IN CONNECTION WITH THE
      PROVISION OR USE OF THE SERVICES OR ANY OTHER OBLIGATION OF SUCH PARTY UNDER
      THIS AGREEMENT FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, RELIANCE, EXEMPLARY,
      PUNITIVE OR SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOST
      PROFITS (EXCEPT WITH RESPECT TO THE FEES AND OTHER CHARGES AND AMOUNTS PAYABLE
      UNDER THIS AGREEMENT), REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT,
      INDEMNITY, NEGLIGENCE, OR WARRANTY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF
      THE
      POSSIBILITY OF SUCH DAMAGES.

    

    The
      Parties have agreed that the limitations specified in this Section 10.2 shall
      not apply to liabilities of one party to the other under Section 10.3 or in
      the
      event of Client’s breach of any of Sections 3.6(a), 3.6(c), 8.5, 13.1 or 13.2;
      and (b) will survive and apply even if any limited remedy specified in this
      Agreement is found to have failed of its essential purpose and (c) do not apply
      with respect to Client’s liability in connection with carrier network and
      carrier network connected services. These limitations represent an allocation
      of
      risk between the Parties and are an essential and material part of this
      Agreement.

    

    10.3 General
      Indemnification.

    

    (a) Indemnity
      by Client.
      Client
      shall indemnify, protect, defend and hold harmless EUROPHONE and its directors,
      shareholders, officers, agents, suppliers, service providers, assignors,
      attorneys and affiliates from and against, any Liabilities asserted against
      or
      as incurred by such persons or entities arising out of or relating to any
      third-party claims for: (i) bodily injury to or death of any person caused
      by Client or its agents, subcontractors or employees; (ii) damage to, or
      loss or destruction of, tangible real property or tangible personal property
      caused by Client or its agents, subcontractors or employees; (iii) alleged
      infringement of third-party rights to intellectual property Client provided
      to
      EUROPHONE for the purpose of carrying out this Agreement; and (iv) Client’s
      failure to comply with any applicable state or federal law or regulation,
      including without limitation any conduct by Client in violation of any
      regulations promulgated by the Federal Communications Commission, the Federal
      Trade Commission or the State Public Utility Commissions such as “slamming” and
“cramming” violations.

    

    (b) Indemnity
      by EUROPHONE.
      EUROPHONE shall indemnify, protect, defend and hold harmless Client and its
      directors, shareholders, officers, agents, attorneys and affiliates from and
      against, any liabilities asserted against or as incurred by such persons or
      entities arising out of or relating to any third-party claims for:
      (i) bodily injury to or death of any person caused by EUROPHONE or its
      agents, subcontractors or employees; (ii) damage to, or loss or destruction
      of, any tangible real property or tangible personal property caused by EUROPHONE
      or its agents, subcontractors or employees; and (iii) alleged infringement
      of third-party rights to intellectual property EUROPHONE provided Client for
      the
      purpose of carrying out this Agreement. 

    

    (c) Indemnity
      Procedure.
      The
      obligations to indemnify, protect, defend and hold harmless included in this
      Agreement shall not apply to the extent the indemnified Party was responsible
      for giving rise to the matter upon which the claim for indemnification is based
      and will not apply unless the indemnified Party (i) promptly notifies the
      indemnifying Party of any matters in respect of which the indemnity may apply
      and of which the indemnified Party has knowledge (provided that the failure
      to
      provide such prompt notice shall not relieve a Party of any obligation under
      this Section not materially affected by such failure); (ii) gives the
      indemnifying Party full opportunity to control the response thereto and the
      defense thereof, including any agreement relating to the settlement thereof,
      provided that the indemnifying Party shall not settle any such claim or action
      without the prior written consent of the indemnified Party (which shall not
      be
      unreasonably withheld or delayed); and (iii) cooperates with the
      indemnifying Party, at the indemnifying Party’s cost and expense in the defense
      or settlement thereof. The indemnified Party may participate, at its own
      expense, in such defense and in any settlement discussions directly or through
      counsel of its choice on a monitoring, non-controlling basis.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    

    

    ARTICLE
      XI

    WARRANTIES

    

    11.1 Services.
      EUROPHONE warrants to Client that all Services provided hereunder will be
      performed in a good and workmanlike manner in accordance with generally accepted
      industry standards. In the event of any failure by EUROPHONE to conform to
      the
      foregoing warranty in any material respect, EUROPHONE shall, upon notice by
      Client, use good faith efforts to cure or correct such failure at EUROPHONE’s
      expense, as soon as reasonably practical after Client’s written notice to
      EUROPHONE as provided herein. This Section 11 sets forth Client’s exclusive
      remedies and EUROPHONE’s only obligation for breach of warranty or other duty
      related to the quality of the Services. The foregoing warranty is expressly
      conditioned upon (i) Client providing EUROPHONE with prompt written notice
      of any claim during the Term, which notice must identify with particularity
      the
      non-conformity; and (ii) Client’s full cooperation with EUROPHONE in all
      reasonable respects relating thereto, including assisting EUROPHONE to locate
      and reproduce the non-conformity. The foregoing warranty will not apply to
      the
      extent that the alleged breach of warranty is due to carrier network or carrier
      network connected services, third-party hardware, software and any other
      services or goods supplied by Client and which do not conform to their
      respective technical, functional and performance specifications and criteria,
      as
      such criteria was specified by the third party (or Client), and EUROPHONE shall
      have no liability or obligation as a result thereof.

    

    THE
      EXPRESS WARRANTY PROVIDED HEREIN IS IN LIEU OF ALL LIABILITIES OR OBLIGATIONS
      OF
      EUROPHONE FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE DELIVERY, USE
      OR
      PERFORMANCE OF THE SERVICES, CARRIER NETWORK AND CARRIER NETWORK CONNECTED
      SERVICES, OR ANY FAILURE THEREOF.

    

    11.2 WARRANTY
      DISCLAIMER.
      THE
      EXPRESS WARRANTY MADE IN SECTION 11.1 IS EXCLUSIVE AND IN LIEU OF ALL OTHER
      WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE
      IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
      EUROPHONE EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
      FITNESS FOR PARTICULAR PURPOSE.

    

    

    ARTICLE
      XII

    INTELLECTUAL
      PROPERTY RIGHTS AND USE OF MARKS

    

    12.1 Intellectual
      Property Rights.
      Client
      acknowledges and agrees that the data provided by EUROPHONE (or its service
      provider(s) or supplier(s) to configure Client’s master dealer portal (including
      without limitation data entered as part of the plans, rules and tables
      configuration) and any other proprietary data provided to Client pursuant to
      this Agreement (or otherwise provided to Client by EUROPHONE or its affiliates
      that relate to its business, sources or intellectual property) is confidential
      and proprietary to Client, Client shall not use or copy, and shall ensure that
      its employees, agents, and affiliates do not use or copy, that data as
      configured by EUROPHONE for any person or entity other than
      EUROPHONE.

    

    12.2 Ownership
      of Media.
      Unless
      furnished by Client or its carriers, and with the exception of the media
      delivered by EUROPHONE to Client on which the reports and outputs provided
      hereunder are contained, as between Client and EUROPHONE, all media upon which
      Client data is stored is and shall remain the property of
      EUROPHONE.

    

    12.3 Use
      of
      Marks.

    

    (a) The
      Parties currently contemplate that Client branding may appear in some fashion
      on
      or in Subscriber bills, reports, correspondence and related materials
      (collectively referred to as “Billing
      Materials”).
      Each
      Party acknowledges the other Party’s rights in and to their respective
      copyrights, trademarks, service marks, logos, trade names and other proprietary
      marks or those of its third party licensors (collectively referred to as
“Marks”).
      Nothing in this Agreement shall be construed to grant either Party any license
      to or rights in or to the other Party’s Marks, except as set forth in Section
      12.3(b) below.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    (b) Client
      acknowledges that it does not have any rights to the “Eugro,” “Europhone,”
“Eugro,” or “One World One Sim” marks, or phrases or names similar to such
      marks, and that the same is owned by EUROPHONE or its affiliates.

    

    (c) EUROPHONE
      shall use the EUGRO specific trademark(s), trade name(s) and product name(s):
      (1) in conjunction with the Services and Billing Materials as contemplated
      herein, or (2) on or in connection with the reproduction of computer media
      and related materials and as contemplated herein. Client shall have no right
      to
      use any EUROPHONE Marks without the advance written consent of EUROPHONE, which
      shall not be unreasonably withheld if such Marks are used in accordance with
      this intended purpose under this Agreement, subject further to non-default
      by
      Client of this Agreement. Client may be required to execute a waiver of license
      agreement further limiting or delineating use of such Marks. Client shall use
      the trademarks and names only in such a way as to enhance the value and
      visibility of the brand through its advertising and marketing materials. For
      the
      avoidance of doubt, any license to use any trademarks, trade names as product
      names shall terminate simultaneously with this Agreement. 

    

    (d) The
      use
      of each Party’s Marks shall comply with any local laws. Neither Party nor its
      subsidiaries, nor its successors in interest, shall (or shall cause others
      to)
      challenge, file suit or initiate proceedings, or contest in any other manner
      the
      other Party’s ownership rights or rights to use, or allow its subsidiaries to
      use such Party’s Marks to identify any goods or services of such Party and its
      subsidiaries.

    

    (e) The
      owner
      or licensor of the Marks may discontinue the use of any or all of its Marks
      on
      any Billing Materials or the like at its sole option.

    

    (f) Except
      as
      otherwise permitted herein, neither Party will use, or permit their respective
      employees, agents and subcontractors to use, the Marks of the other Party,
      or
      the other Party’s affiliates, whether registered or unregistered, without such
      Party’s prior written consent.

    

    (g) Client
      hereby agrees to indemnify, defend and hold harmless EUROPHONE and all of its
      officers, directors, employees, shareholders, suppliers, consultants and
      third-party contractors from any Liabilities as incurred by them as a result
      of
      any claim, statutory or at common law, arising from or related to any alleged
      infringement by Client, including without limitation any alleged contributory
      infringement, as a result of any unlawful use of EUROPHONE’s marks.

    

    

    ARTICLE
      XIII

    CONFIDENTIAL
      INFORMATION/ NONCIRCUMVENT

    

    13.1 Confidential
      Information.
      EUROPHONE and Client agree that all information in whatever form exchanged
      between the Parties concerning the Services and carrier network and carrier
      network connected services shall be treated by the receiving Party as
      confidential (“Confidential
      Information”)
      and
      shall be held in strict confidence and used only for purposes of this Agreement.
      No such information shall be disclosed by the receiving Party, its agents or
      employees without the prior written consent of the disclosing Party, except:
      (i) to subcontractors or vendors of the receiving Party who have signed a
      confidentiality agreement no less restrictive than that set forth in this
      Section 13.1; and (ii) as may be necessary to enforce this Agreement or by
      reason of legal, accounting or regulatory requirements. Notwithstanding the
      foregoing, information shall not be considered Confidential Information where
      the receiving Party can demonstrate that such information:

    

    (i) was
      in
      the public domain on or prior to the date of this Agreement; or

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    

    (ii) was
      lawfully in the possession of the receiving Party on or prior to the date of
      this Agreement or the disclosure; or

    

    (iii) became
      part of the public domain, by publication or otherwise, not due to any
      unauthorized act or omission on the part of the receiving Party; or

    

    (iv) was
      independently created or derived by the receiving Party without the aid of
      any
      Confidential Information provided to the receiving Party by the disclosing
      Party; or

    

    
      	 	
              (v)

            	
              is
                supplied to the receiving Party by a third party as a matter of right
                and
                is not in violation of any confidentiality agreement between such
                third
                party and the disclosing Party.

            

    

    

    13.2 Non-Circumvention. Client
      shall not on its own, through its agents, subcontractors, employees, servants,
      executives, owners or affiliates (or any entity owned or controlled, or under
      common ownership with, directly or indirectly, any of the foregoing), or by
      disclosure to any other person or entity circumvent or otherwise contact,
      directly or indirectly any source for services or service providers utilized
      by
      EUROPHONE in connection with providing services under this Agreement, or other
      related contacts that are part of the Confidential Information, or any other
      potential source introduced by EUROPHONE, during the Term of this Agreement
      and
      for a period of twenty four (24) months after the cessation of any business
      between the Parties, without notifying the Company first and receiving actual
      consent thereto in writing from Company. Provided, however, that if the
      Agreement is terminated by EUROPHONE other than for cause or non-payment, then
      the foregoing twenty-four (24) months provided shall be reduced to twelve (12)
      months.

    

    ARTICLE
      XIV

    MISCELLANEOUS
      PROVISIONS

    

    14.1 Non
      solicitation of Employees.
      Each
      Party acknowledges that the other Party’s success in its industry is largely
      dependent on the performance of its personnel and that, therefore, each Party
      expends substantial resources in connection with employment and training.
      Accordingly, neither Party shall hire, either as an employee or contractor,
      any
      person who was a Restricted Employee of the other Party at any time during
      the
      twelve (12) months preceding such hiring or retention, without obtaining the
      advance written consent of the other Party. A Restricted Employee is any
      employee or third-party contractor (including employees thereof) of a Party,
      excluding members of the clerical staff.

    

     

    14.2 Binding
      Effect; Assignment.
      Neither
      party may assign or otherwise transfer or convey any of its rights, duties
      or
      obligations under this Agreement (except subcontracting as authorized herein)
      without the prior written consent of the other Party except either Party may,
      upon written notice to the other Party (but without any obligation to obtain
      the
      consent of such other party), assign this Agreement or any of its rights
      hereunder to any person or entity who succeeds (by purchase, merger, operation
      of law or otherwise) to all or substantially all of the capital stock, assets
      or
      business of such Party, if such person or entity agrees in writing to assume
      and
      be bound by all of the obligations of such party under this Agreement. Any
      attempted assignment, transfer or delegation in contravention of this paragraph
      will be void and of no force and effect. This Agreement shall be binding upon
      and inure to the benefit of the Parties hereto and their respective successors
      and permitted assignees.

    

    

    14.3 No
      Waiver.
      No
      failure of either Party to exercise any power or right given either Party
      hereunder or to insist upon strict compliance by either Party with its
      obligations hereunder, and no custom or practice of the Parties at variance
      with
      the terms hereof shall constitute a waiver of either Party’s right to demand
      exact compliance with the terms hereof.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    14.4 Excused
      Performance.
      Each
      Party shall be excused from performance, and shall have no liability beyond
      what
      is included in this Agreement, for any period and to the extent that such Party
      is prevented, hindered or delayed from performing any Services or other
      obligations under this Agreement, in whole or in part, as a result of acts,
      omissions or events beyond the reasonable control of such Party, including
      by
      way of illustration and not limitation, acts or omissions of the other Party,
      third-party nonperformance, failure or malfunction of computer or
      telecommunications hardware, equipment or software, breach or other
      nonperformance by such Party’s vendors and suppliers, due to strikes or labor
      disputes, riots, war or terrorism, fire, acts of God or governmental
      regulations; provided that such Party shall resume performance hereunder
      promptly upon resolution of such acts, omissions or events.

    

    14.5 Rights
      Cumulative.
      All
      rights, powers, and privileges conferred hereunder upon the Parties shall be
      cumulative and shall not restrict those given by law.

    

    14.6 Singular
      Includes Plural.
      The
      singular of any word in this Agreement includes the plural.

    

    14.7 Notices.
      Whenever under this Agreement one Party is required or permitted to give notice
      to the other, such notice shall be deemed given when delivered in hand or by
      overnight courier with tracking capability, or three (3) Business Days after
      the
      date mailed by United States mail, certified mail, return receipt requested,
      postage prepaid, and addressed as follows:

    

    In
      the
      case of EUROPHONE:

    

    EUROPHONE
      USA LLC

    181
      WESTCHESTER AVENUE, Suite 303c

    Port
      Chester, NY 10573

    Attention:
      Anna Aspras

    Fax :
      (914) 937-4100

    

    With
      a
      copy to :

    

    Hodgson
      Russ LLP

    1540
      Broadway, 24th Floor

    New
      York,
      New York 10036

    Attention :
      Joseph Goldberg, Esq.

    Fax :
      (212) 751-0928

    

    In
      the
      case of Client:

    

    PARALLEL
      NO LIMIT , INC.

    40
      Commerce Place, Suite 105

    Hicksville,
      NY 11801

    Attention:
      Dennis Gross

    

    Either
      Party may change its address for notification purposes by giving the other
      Party
      three (3) days prior written notice of the new address and the date upon which
      it will become effective.

    

    14.8 Relationship
      of Parties.
      In
      furnishing services to Client, EUROPHONE is acting as an independent contractor.
      This Agreement shall not be deemed to create a partnership, joint venture or
      fiduciary relationship between the Parties.

    

    14.9 Severability.
      In the
      event any provision of this Agreement is held to be unenforceable or invalid
      by
      any court of competent jurisdiction, the validity and enforceability of the
      remaining provisions of this Agreement shall not be affected and, in lieu of
      such invalid or unenforceable provision, there shall be added automatically
      as
      part of this Agreement one or more provisions as similar in terms as may be
      valid and enforceable under applicable law.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    14.10 Entire
      Agreement.
      This
      Agreement, including the Schedules attached hereto, constitutes the entire
      agreement between the Parties with respect to the subject matter hereof and
      supersedes all prior and contemporaneous representations, understandings or
      agreements, whether oral or written, relating to the subject matter hereof.
      All
      prior or contemporaneous representations, understandings or agreements, whether
      oral or written, that are not expressly set forth within the four corners of
      this Agreement are hereby deemed waived, superseded and abandoned.

    

    14.11 Amendments.
      No
      amendment or modification of this Agreement will be binding on either of the
      Parties to this Agreement unless such Amendment is contained in a written
      document which expresses an intention to amend this Agreement and is executed
      by
      both the Parties.

    

    14.12 Counterparts.
      This
      Agreement may be executed in several counterparts all of which taken together
      shall constitute one single agreement between the Parties.

    

    14.13 Headings.
      The
      article and section headings included in this Agreement are for reference and
      convenience only and shall not enter into the interpretation of this
      Agreement.

    

    14.14 Governing
      Law.
      This
      Agreement shall be governed and construed in accordance with the laws of the
      State of New York. 

    

    14.15 Currency.
      All
      monetary amounts stated in this Agreement are stated in United States Dollars,
      and all amounts due hereunder shall be paid by Client in United States
      Dollars.

    

    14.16 Terms
      Confidential.
      The
      terms and conditions of this Agreement are confidential and shall be treated
      as
      such by the Parties. The Parties will not disclose the pricing terms, and
      services offered to ANY third parties. Notwithstanding the foregoing, however,
      (i) Client or EUROPHONE may disclose to potential investors the Agreement
      in full provided Client obtains a non-disclosure agreement from its investor(s)
      that effectively limits the investor(s) from disclosing this Agreement to any
      party other than investor(s) (excluding bona-fide Venture Capital firms who
      have
      a policy not to sign non-disclosure agreements, but are held to professional
      standards of confidentiality; (ii) either party may disclose such portions
      of this Agreement (excluding the schedules hereto unless expressly required
      to
      do so by governmental authorities) as may be required for the filing of
      financial disclosure or other reports, filings and forms with the Securities
      and
      Exchange Commission, the FCC or other governmental agencies under applicable
      statutes and regulations; and (iii) Client will permit EUROPHONE to use
      Client as a reference with Client’s advance approval, which approval shall not
      be unreasonably withheld by Client

    

    14.17 No
      Third-Party Beneficiaries.
      The
      provisions of this Agreement are for the benefit of the Parties hereto and
      not
      for any other person.

    

    14.18 Survival.
      The
      provisions of Section 3.6, 4.6, 6.2, 8.6, 10.2, 10.3, 11.2, all of Sections
      12
      and 13 Section 14.1, and 14.14 shall survive any termination of this
      Agreement.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the Parties hereto have each executed this Agreement by a
      duly
      authorized representative as of the date indicated adjacent to their signatures
      hereon.

    

    
      	
              EUROPHONE
                USA, LLC

            	 	
              PARALLEL
                NO LIMIT, INC.

            
	 	 	 
	 	 	 
	
              By:_______________________________

            	 	
              By:_______________________________

            
	 	 	 
	 	 	 
	
              Name:Vasilios
                Koutsobinas         

            	 	
              Name:Dennis
                Gross                   
                

            
	 	 	 
	
              Title:President                    
                

            	 	
              Title: 
                President

            
	 	 	 
	
              Date:______________________________

            	 	
              Date:
                _____________________________

            

    

    

    

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    SCHEDULE
      A

    

    EUROPHONE
      SERVICES

    

    

    

    As
      further described below, the Services available under this Schedule
      A
      and the
      Master Service Agreement (“MSA”)
      shall
      consist of the following. EUROPHONE shall also provide such other services
      as
      may be mutually agreed upon as to description and price in accordance with
      Section 3.2 of the MSA.

    

     

    
      	 	
              1.

            	
              Implementation
                Services

            

    

    
      	 	
              2.

            	
              Customer
                Acquisition Services

            

    

    
      	 	
              3.

            	
              Equipment
                Fulfillment Services

            

    

    
      	 	
              4.

            	
              Carrier
                Provisioning Services

            

    

    
      	 	
              5.

            	
              Back
                Office System Operations

            

    

    
      	 	
              6.

            	
              Subscriber
                Care Services - 24 Hours a day, 7 Days a
                week

            

    

    
      	 	
              7.

            	
              Activity
                Reporting Services

            

    

    
      	 	
              8.

            	
              Management
                Consulting / Back Office Customization
                Services

            

    

    
      	 	
              9.

            	
              Service
                Bureau Interfaces

            

    

    

    In
      addition, and subject to the terms and conditions of Schedule D, EUROPHONE
      shall
      provide Client with the carrier network and carrier network services described
      therein.

    

    

    

    II. IMPLEMENTATION

    

    1. EUROPHONE
      shall assist Client in making decisions regarding Clients implementation data
      which is subsequently loaded into EUROPHONE’s Back Office Systems.

    

    2. EUROPHONE
      shall also provide system administrative functions including pricing
      modifications, table updates and configuration information, as necessary for
      Client’s implementation.

    

    

    

    

    III. CUSTOMER
      ACQUISITION

    Commencing
      on the Cutover Date, EUROPHONE shall provide Client access to EUROPHONE’s “POS”
system over the internet only. The POS web site shall provide the following
      information, functions and capabilities:

    

    
      	 	
              1.

            	
              Description
                of Eugro Mobil’s products and
                services.

            

    

    
      	 	
              2.

            	
              Rates
                and rate plans for Eugro Mobile’s selected products and
                services.

            

    

    
      	 	
              3.

            	
              Offer
                Subscribers the ability to order Eugro Mobile products and
                services.

            

    

    
      	 	
              4.

            	
              Enable
                Client to evaluate the credit worthiness of
                Subscribers.

            

    

    
      	 	
              5.

            	
              Enable
                Subscriber to review billing, balance, and payment
                information.

            

    

    
      	 	
              6.

            	
              Any
                other information as mutually agreed upon between EUROPHONE and
                Client.

            

    

    

    Client
      may acquire Subscribers through EUROPHONE’s POS system as follows:

    

    
      	 	
              1.

            	
              Client
                may utilize EUROPHONE’s website as a point of sale system at a manned
                retail location or in Client’s privately owned customer acquisition call
                center; or

            

    

    
      	 	
              2.

            	
              Client’s
                subscriber may directly access and utilize the website to activate
                all
                services with no assistance from client or EUROPHONE’s customer
                acquisition team.

            

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    

    IV. ACTIVITY
      / CLIENT PROFITABILITY REPORTING

    

    Client
      shall have access to standard reporting packages that permit the management
      of
      activations and deactivations by promo code, sales rep, location, date, and
      other key factors driving Client’s business. All such reports shall be available
      in real time via EUGROMOBILE web site. Client may request that EUROPHONE provide
      additional reports. EUROPHONE shall evaluate such request, and if approved,
      shall provide them, at no additional cost to Client, within forty (40) Business
      Days of such approval. If EUROPHONE determines that it will incur significant
      additional time and costs in producing Client’s requested reports, EUROPHONE
      shall provide Client with a written quote regarding the costs and timeframes
      associated with implementation of such additional reporting.

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    SCHEDULE
      B

    

    ACH
      Debit Agreement

    ACH
      Agreement

    

    This
      Agreement, dated as of March 7, 2007, is between EUROPHONE USA LLC,

    (“Originator”)
      and
      Parallel No Limit Inc.___________________________, (“Receiver”).

    

    RECITALS

    
      	
              A.
                

            	
              Receiver
                wishes to have Originator initiate Debit or Credit Entries to its
                account
                specified below (the “Account”)
                in payment of obligations owed by Receiver to Originator or Originator
                to
                Receiver pursuant to the terms of this Agreement, the laws of the
                state of
                New York and the Rules relating to Corporate entries (the “Rules”)
                of the National Automated Clearing House Association and Originator
                is
                willing to initiate such Entries on the terms set forth
                below.

            

    

    

    
      	
              B.

            	
              Unless
                otherwise defined herein, capitalized terms shall have the meanings
                provided in the Rules as set forth
                below:

            

    

    

    ACH:
      Automated Clearing House Network. A funds transfer system, governed by the
      NACHA
      Operating Rules, that provides for the interbank clearing of electronic entries
      for participating financial institutions.

    

    Originator:
      Any
      individual, corporation or other entity that initiates entries into the ACH
      Network.

    

    Receiver:
      An
      individual, corporation or other entity who has authorized an Originator to
      initiate a credit or debit entry to an account held at a Receiving Depository
      Financial Institution.

    

    Entry(ies):
      An
      electronic item representing the transfer of funds in the ACH.

    

    Credit:
      An entry
      to the record of an account to represent the transfer or placement of funds
      into
      the account.

    

    Debit:
      An entry
      to the record of an account to represent the transfer or removal of funds from
      the account.

    

    

    AGREEMENT

    In
      consideration of the mutual promises contained herein, Originator and Receiver
      agree as follows:

    

    1.
      Authorization:

    Subject
      to the terms set forth below, Receiver authorizes Originator to initiate Debit
      and/or Credit Entries to the Account in accordance with the Rules for
      obligations owing from time to time by Receiver to Originator or Originator
      to
      Receiver resulting from transactions or services provided under Schedule C.
      

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

    

    2.
      Authorization Limitations:

    No
      Entry
      shall be initiated under this Agreement except in conformity with
      the

    authorization
      provided above. The Originator will debit the invoice amount (Weekly Payment
      Report) on the due date as specified on each invoice. The number of Debit
      Entries made in a calendar month will be limited to the number of invoices
      due.
      The Originator will initiate Credit Entries to the Receiver as applicable from
      time to time. The Originator will provide notice of a debit or credit
      transaction on a daily basis via the Payment Report. No single Entry initiated
      under this Agreement shall be in excess of the invoice amount.

    

    3.
      Originator’s Failure to Originate:

    Receiver
      shall not be deemed to default on any obligation or suffer any loss of discount
      or other penalty by reason of the failure of Originator to initiate any Debit
      Entry in accordance with the terms of this Agreement, or by reason of any delay
      in receipt by Receiver’s financial institution, or the non-receipt by such
      institution of any Debit Entry initiated by Originator.

    

    4.
      Compliance with ACH Operating Rules:

    Receiver
      shall comply with and be bound by the ACH Rules as in effect from time
      to

    time.

    

    5.
      Acceptance and Return of Entries:

    Nothing
      contained herein shall be deemed to require Receiver or its financial
      institution to accept any Entry initiated under this Agreement, and any such
      Entry may be returned in accordance with the Rules. Receiver shall not be deemed
      to have accepted any Entry that is returned in accordance with the Rules.
      Originator shall not be deemed in default on any obligation or suffer any loss
      of discount or other penalty by reason of the return of any Entry, provided
      such
      Entry was initiated in accordance with the terms of this Agreement.
      Notwithstanding any statement contained in any Entry or any data transmitted
      with any Entry, and notwithstanding the failure to return any Entry in
      accordance with the Rules, Receiver shall not be deemed to have accepted any
      Entry as being in the correct amount if, within three days after receipt of
      the
      Entry by its financial institution, Receiver provides written notice to
      Originator of a discrepancy.

    

    6.
      Credit for Entries:

    Unless
      such Entry is returned in accordance with the Rules, Receiver shall, as of
      the
      date the amount of such Entry is credited to the Account, credit Originator
      with
      the Amount of each Entry received and interest or other charges payable with
      respect to the amount of such Entry shall cease of the time. Unless such Entry
      is returned in accordance with the Rules, Originator shall, as of the date
      of
      such Entry is credited to its Account with its financial institution, credit
      Receiver with the amount of each

    Entry
      received.

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    7.
      Information:

    Each
      Entry initiated under this Agreement shall be accompanied by the following
      information: The ach batch number and other applicable identifier
      information.

    

    8.
      Receiver’s Account: 

    The
      following is the deposit account maintained by Receiver:

    Financial
      Institution: Citibank

    Account
      No.: 74283859 ABA 021000089

    Location:
      Bethpage, NY

    Telephone
      No.: 

    If
      receiver is a natural person, Receiver acknowledges to Originator that the
      account is, and during the term of this Agreement, will be, maintained primarily
      for business, and not for personal, family, or household purposes. 

    

    9.
      Questions and Errors:

    In
      the
      event of any questions or error relating to Entries initiated pursuant to
      this

    Agreement,
      Receiver should contact Anna Aspras, (914) 937-3900 ext. 19, and Originator
      should contact Fred Kortmann_______________
      (_516__)939___-0001____.

    

    10.
      Liabilities of Parties: Neither
      Originator nor Receiver shall be liable for the act or omission of any Automated
      Clearing House, financial institution, or other person. The Receiver is
      responsible for ensuring that funds are available on the due date. If funds
      are
      not available on the specified due date, then the Receiver shall cure the amount
      due Originator via wire transfer within one business day. 

    

    11.
      Notice: Any
      written notice or other written communication required or permitted to be given
      under this Agreement shall be delivered, or sent by United States registered
      mail, postage prepaid, 

    

    And,
      if
      to Originator, addressed to:

    

    EUROPHONE
      USA, LLC

    181
      Westchester Avenue, Suite 303c

    Port
      Chester, NY 10573

    Attn:
      Anna Aspras

    

    And,
      if
      to Receiver, addressed to:

    

    PARALLEL
      NO LIMIT, INC.

    40
      Commerce Place, Suite 105

    Hicksville,
      NY 11801

    Attn:
      Fred Kortmann, CFO 

    

    unless
      another address is substituted by notice delivered or sent as provided
      herein.

    Any
      such
      notice shall be deemed given when so delivered.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    

    12.
      Termination: This
      Agreement may be terminated by Originator or Receiver at any time by giving
      30
      days prior written notice to the other party. Notwithstanding such termination,
      this Agreement shall remain in force and effect as to all transactions that
      have
      occurred prior to the date of the termination. 

    

    13.
      Headings: Headings
      are used for reference purposes only, and shall be deemed a part of this
      Agreement. 

    

    14.
      Law Governing: This
      Agreement shall be construed in accordance with and governed by the laws of
      the
      state of New York. 

    

    15.
      Entire Agreement: This
      Agreement embodies the entire agreement of the parties with respect to the
      subject matter hereof, and supersedes all previous negotiations,
      representations, and agreements with respect hereto, and shall be binding upon
      the parties hereto, and their respective successors and assigns. This Agreement
      may be amended only by a written statement, signed by both parties.

    

    
      	
              EUROPHONE
                USA, LLC 

            	 
	 	 
	
              _____________________________________
                

            	
              ___________________

            
	
              By:
                Vasilios Koutsobinas, President 

            	
              Date

            
	 	 
	 	 
	
              PARALLEL
                NO LIMIT , INC.

            	 
	 	 
	 	 
	
              _____________________________________
                

            	
              ___________________

            
	
              By:
                

            	
              Date

            

    

    

    

    

    I
      (we)
      hereby authorized EUROPHONE USA LLC, to initiate via Debit Entries, debit
      transactions and, if necessary, credit correction and adjustment transactions
      to
      my (our) account at _Citibank_________________________________.

    

    

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    AUTHORIZATION
      AGREEMENT FOR DIRECT DEPOSITS (ACH DEBITS)

    

    

    

    Originator                         Originator

    Name_____
      EUROPHONE USA, LLC ___________ID Number___ 

    

    

    EUROPHONE
      USA LLC hereinafter called ORIGINATOR, is authorized by ______________
      hereinafter called RECIEVER, to initiate debit entries to its XX Checking
      Account / ⑀⍺ Savings
      Account (select one) indicated below at the depository financial institution
      named below, hereafter called DEPOSITORY, and to credit the same to such
      account. RECEIVER acknowledges that the origination of ACH transactions to
      our
      account must comply with the provisions of U.S. law.

    

    Depository
      Name
      __Citibank___________________ Branch
      __Bethpage
      ______________________ 

     

    City
      __Bethpage____________________
      State__NY____________________ Zip_______________________

    

    Routing
      No ._021000089_________________________
      Account
      No. 74283859________________________________

    

    This
      authorization is to remain in full force and effect until ORIGINATOR has
      received written notification

    from
      RECEIVER of its termination in such time and in such manner as to afford
      ORIGINATOR and

    DEPOSITORY
      a reasonable opportunity to act on it.

    

    Receiver
          
      Receiver

    Name_Parallel
      No Limit Inc_________________________________ ID
      Number_________________________________

    

    Name__Fred
      Kortmann__________________________________
      Title__CFO____________________________________

    

    Dated:_3/7/2007_______________________
      Signature______________________________________________

    

    

    

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    SCHEDULE
      C

    

    EUROPHONE
      CHARGES

    

    

    See
      Schedule
      B
      for ACH
      agreement 

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    SCHEDULE
      D

    

    CARRIER
      (VERIZON / OTHER) IR AGREEMENT

    

     

    DEFINITIONS

     

    “Affiliate”
shall
      mean with respect to any Person, any other Person that, directly or indirectly,
      through one or more intermediaries, Controls, is Controlled by or is under
      common Control with such a Person.

     

    “Authentication”
or
      “Authenticatable”
refers
      to Equipment that meets published CIA guidelines for random A-key authentication
      as such guidelines may be amended from time to time.

     

    “Brownout”
shall
      mean the temporary blocking of automatic Roaming in a particular portion of
      the
      Territory or, with respect to a Roaming Carrier, in that Carrier’s MSA, RSA,
      BTA, or MTA.

     

    “BTA”
shall
      mean all or any portion of the Basic Trading Area in which the Carrier is
      authorized by the FCC to offer CMRS, GSM and/or Data Service.

     

    “Carrier”
shall
      mean the underlying carrier providing wholesale access to their network or
      a
      Person licensed by the FCC to offer CMRS, GSM and/or Data Service.

     

    “CDMA”
shall
      mean code-division multiple access.

     

    “Cloning
      Fraud”
shall
      mean an illegal or fraudulent activity wherein a legitimate number assignment
      module (NAM) or an electronic chip in a unit of Equipment is replaced to
      duplicate a legitimate End User’s Equipment Information, generally occurring by
      the unauthorized interception and programming of a valid End User’s Equipment ID
      and/or Number into another unit of Equipment.

     

    “Commercial
      Mobile Radio Service”
      (“CMRS”)
      shall
      mean each and every radio service that is defined by the Federal Communication
      Commission (“FCC”)
      as
      CMRS pursuant to 47 CFR 20.9 and other provisions of the FCC’s rules; including,
      but not limited to, cellular, PCS, paging, messaging, air-to-ground, specialized
      mobile radio services and enhanced specialized mobile radio services, satellite,
      and any other radio service that the FCC may in the future define as
      CMRS.

     

    “Company
      Service”
shall
      mean the Carrier CMRS, GSM and/or Data Service provided using the Carrier
      Facilities.

     

    “Control”
      (including the correlative meanings of the terms “Controlling”, “Controlled by”
and “under common Control with”) as used with respect to any Person, means the
      possession, directly or indirectly, of the power in fact or in law to direct
      or
      cause the direction of management policies of such Person, whether through
      ownership of voting securities, by contract or otherwise.

     

    “Customer”
shall
      mean a Person other than IR or an End User acquiring or using Company Service
      from Company.

     

    “Data
      Service”
shall
      mean the transmission of data packets using technology, including 1X Service,
      EVDO Service, or such other successor packet-switched, non-voice,
      systems/services.

     

    “Effective
      Date”
shall
      mean the date on which the authorized representative of Company and IR execute
      the Master Service Agreement.

     

    “End
      User”
shall
      mean the Person who purchases Company Service from IR.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    

     

    “Equipment”
shall
      refer to the End User’s radio telephone equipment that is technically and
      operationally compatible with the Company Service including mobile, portable
      or
      transportable telephones and data communications devices, facsimile machines,
      personal communications devices and any other wireless or similar devices used
      by End Users in conjunction with or in order to utilize Company Service, and
      accessories and enhancements associated therewith.

     

    “Equipment
      ID”
shall
      mean the unique electronic serial number, such as ESN, MEID (mobile equipment
      identifier) or similar term, assigned to a unit of equipment.

     

    “EVDO
      Footprint”
means
      those portions of the Territories where EVDO Service is available as of the
      Effective Date, as may be changed from time to time.

     

    “EVDO
      Service”
      (“EVDO”)
      means
      the 1xEVDO high-speed broadband packet data transport service provided over
      the
      Company Facilities, or such alternative high-speed broadband packet-switched
      service as may succeed EVDO.

     

    “Facilities”
means
      the telecommunications switching equipment, cell site transceiver equipment
      and
      other equipment maintained, expanded, modified or replaced by Carrier, as
      applicable, to provide CMRS, GSM and/or Data Service.

     

    “FCC”
shall
      mean the Federal Communications Commission.

     

    “Fraudulent
      Usage”
with
      respect to the use of CMRS, GSM and/or Data Service shall include, but not
      be
      limited to, the following:

     

    (i)
      accessing, altering or interfering, or attempting or assisting another to
      access, alter or interfere, with the Carrier Facilities and/or information
      of
      Carrier, any Customer or End user by rearranging, tampering or making any
      unauthorized connection with any Equipment, Facilities or Systems, or using
      any
      scheme, false representation or false credit devices, or by, or through, any
      other fraudulent means or devices whatsoever, whether within or outside of
      the
      Territories (including, without limitation, Cloning Fraud and the alteration,
      modification or other change to Equipment which would be viewed by the
      Facilities as the provision of CMRS, GSM and/or Data Service to two pieces
      of
      Equipment through one Number); (ii) using CMRS, GSM and/or Data Service in
      such
      a manner so as to interfere unreasonably with the use of CMRS, GSM and/or Data
      Service by Company or any Customers or End Users; (iii) using the CMRS, GSM
      and/or Data Service to convey information of a nature or in such a manner that
      renders such conveyance unlawful or to convey information found to be unlawful,
      including, but not limited to, a finding that such language was foul, profane,
      obscene, salacious or prurient, or to impersonate another person with fraudulent
      or malicious intent, or for any purpose in violation of the law, or in such
      manner as to interfere unreasonably with the use of CMRS, GSM and/or Data
      Service by any other Customer or End User; and/or (iv) any other unauthorized,
      wrongful or misappropriated use of CMRS, GSM and/or Data Service (including,
      without limitation, subscription fraud and Cloning Fraud) on a Number assigned
      to IR, whether or not such Number is currently active and whether such use
      is by
      IR or any End User.

     

    “GSM”
shall
      mean Global System for Mobile Communications.

     

    “Home
      SID”
refers
      to a SID associated with an MDN assigned to an End User.

     

    “Independent
      Representative”
      (“IR”)
      refers
      to the Person who is contracting under this Agreement and, to the extent that
      such term is used herein to describe required conduct or to obligate IR, the
      term shall also include any Affiliate, employee, principal, representative,
      officer, agent, subagent, other distributor, entity, or partnership if IR,
      and
      shall correspondingly create an obligation on the part of IR to bind such other
      Person accordingly.

     

    “Inventory
      Status”
means
      the condition or state of an MDN available to IR but not yet assigned to an
      End
      User, or the condition or state of an MDN assigned to an End User but
      subsequently disconnected and not re-assigned.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    

     

    “Invoice”
means
      an invoice of charges, fees, deposits, or other amounts owed to
      Company.

     

    “IS95A
      Data”
means
      a
      circuit-switched transport method.

     

    “KB”
shall
      mean kilobyte, and is a unit of measurement of usage of EVDO Service and/or
      1X
      Service.

     

    “MDN”
means
      the mobile directory number that is received from the North American Numbering
      Plan Administration (“NANPA”) for the purpose of receiving calls from the PSTN.
      It is a telephone number (“NPA-NXX-XXXX”)
      used
      to access CMRS, GSM and/or Data Service for use with Equipment.

     

    “MIN”
shall
      mean the mobile identification number, which is announced to Carriers by Company
      for the purpose of providing CMRS, GSM and/or Data Service and processing
      calls/transmissions on the Carrier Facilities.

     

    “MSA”
shall
      mean all or any portion of the Metropolitan Statistical Area in which Carrier
      is
      authorized by the FCC to offer CMRS, GSM and/or Data Service.

     

    “MTA”
shall
      mean all or any portion of the Major Trading Area in which Carrier is authorized
      by the FCC to offer CMRS, GSM and/or Data Service.

     

    “Number”
means
      the MIN and/or MDN used to provide access to CMRS, GSM and/or Data
      Service

     

    “OTAPA”
means
      Carrier’s over-the-air parameter administration application, or any other
      Carrier-initiated network over-the-air programming, providing the capability
      for
      Carrier-initiated programming of MDNs, including, but not limited to, remotely
      updating the Home SIDs, PRLs and MDNs in OTAPA-capable units of Equipment,
      which
      because such functionality is not currently deployed by Carrier may be subject
      to System availability/limitations such as, but not limited to, the requirement
      that the Equipment be physically in the Home SID for such update to be
      successful.

     

    “OTASP”
means
      Carrier’s over-the-air service provisioning providing the capability for OTASP
      capable Equipment to initiate the programming of Numbers, including, but not
      limited to, remotely updating the Home SIDs, PRLs and Numbers, in OTASP-capable
      Equipment on Carrier Facilities, where available, subject to Carrier’s billing
      system availability.

     

    “Person”
shall
      mean any individual, subsidiary, corporation, partnership, co-partnership,
      firm,
      joint venture, association, joint-stock company, trust, estate, unincorporated
      organization, governmental or regulatory body or other entity.

     

    “PRL”
means
      Carrier’s Preferred Roaming List. The PRL is a proprietary list of SIDs that
      identifies Carrier Facilities for system selection based on service arrangements
      between the Carrier and other Carriers or within the Carrier.

     

    “PSTN”
means
      the public switched telephone network.

     

    “Reseller”
shall
      mean the party who holds title to the Carrier wholesale contract.

     

    “Roaming”
shall
      mean the CMRS, GSM and/or Data Service, as and when available, provided to
      an
      End User outside of the Territories, or when an End User is in the Territories
      but using a Roaming Carrier’s Facilities.

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    

     

    “Roaming
      Carriers”
shall
      mean Carriers with whom the underlying Carrier or its Affiliates have agreements
      for the provision of CMRS, GSM and/or Data Service.

     

    “RSA”
shall
      mean all or any portion of the Rural Service Area in which Carrier is authorized
      by the FCC to offer CMRS, GSM and/or Data Service.

     

    “SID”
means
      the five-digit code assigned to each market by the FCC for each license issued
      to a Carrier.

     

    “Systems”
shall
      include, but not be limited to, Carrier’s billing system and Company’s billing
      system.

     

    “Territory”
or
      “Territories”
shall
      mean the areas in which Carrier is currently licensed and provides the
      Service.

     

    “1X
      Service”
means
      high-speed packet data transport service.

     

     ARTICLE
      I

     

    REPRESENTATIONS
      BY IR

     

    1.1 ACKNOWLEDGEMENT.
      IR has read and understands all terms and conditions set for in this Agreement
      and acknowledges and agrees:

     

    1.1.1 is
      a
      nonexclusive purchaser of Company Service;

     

    1.1.2 IR
      has
      had the opportunity to independently investigate the CDMA, CMRS, GSM and/or
      Data
      Service and/or Equipment sale/leasing business and the profitability (if any)
      and risks thereof and is not relying on any representation, guarantee, or
      statement of the Company other than that set forth in this
      Agreement;

     

    1.1.3 Company
      has not represented; (a) IR’s prospects or chances for success selling Company
      Service under this agreement; (b) the total investment that IR may need to
      make
      to operate under this Agreement (Company does not know the amount of the total
      investment that may be required for this purpose); or (c) that it will limit
      its
      efforts to sell Company Service or establish other IRs;

     

    1.1.4 IR
      will
      not obtain any exclusive rights under this Agreement either with respect to
      territory or otherwise, and understands that Company may appoint other agents,
      dealers or IRs in the territories. 

     

    

     

    ARTICLE
      II

     

    OBLIGATIONS
      OF IR

     

      2.1 IR
      SERVICES. Subject to the terms and conditions set forth herein, IR shall resell
      the Company Service in accordance with the eligibility requirements on which
      such Company Service is offered and only in the Territories with at least the
      Minimum Activations each year. IR acknowledges and agrees that this is a
      non-exclusive relationship; Company shall have other resellers, agents, and
      other representatives that sell the Company Service. IR shall be solely
      responsible for all risks, expenses and liabilities incurred in connection
      with
      its resale of Company Service, including, but not limited to, Fraudulent Usage
      associated with the MDNs provided to IR.

     

    2.2 FRAUD.
      IR
      shall not assist or participate in any Fraudulent Usage. If fraudulent usage
      occurs or is suspected by IR on an MDN assigned to IR, IR shall promptly
      analyze, investigate and take corrective action to resolve and prevent further
      fraudulent usage from occurring. If IR fails to take corrective action to
      resolve the fraudulent usage and Carrier, in its sole discretion determines
      that
      the ongoing fraudulent usage adversely affects Carrier’s ability to provide
      CMRS, GSM and/or data service, Carrier may take corrective action. 

     

    
      
         

      

      
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    IR
      shall
      be financially responsible for all fraudulent usage on MDN’s assigned to IR and
      acknowledges it is not eligible for any credits for fraudulent usage, including,
      but not limited to, cloning fraud.

     

    2.2.1 IR
      Participation.  IR
      shall
      actively participate and cooperate with Company in implementation of new and
      existing Company fraud prevention tools, including, but not limited to,
      Authentication, Roaming restrictions, use of personal identification numbers
      (“PIN”)
      codes
      and Brownouts.

     

    2.2.2 Authentication.
      Company has implemented Authentication in most of the Territories. For the
      Authentication feature to operate, the End User must have Authenticatable
      Equipment. IR shall install and/or make available to its End Users only
      Authenticatable Equipment in accordance with Section 2.4 of this Agreement.
      IR
      shall ensure that the Equipment complies with the Carrier’s policies for
      Authentication, which include, but are not limited to, i) delivery of Equipment
      ID/random A-key information directly to Carrier from the manufacturer of the
      Equipment prior to any request for activation of the associated Equipment,
      ii)
      complying with the Carrier provided EDI procedures, iii) perform a test call
      exceeding thirty (30) seconds in duration following the activation of CMRS,
      GSM
      and/or data service on a number, regardless of whether the Equipment is in
      its
      assigned home market or roaming

     

    2.2.3 CMRS,
      GSM
      and/or Data Service Restriction. The underlying Carrier reserves the right
      to
      impose any and all restrictions on CMRS, GSM and/or data service to prevent
      the
      occurrence of Fraudulent Usage. If the Carrier suspects a MDN assigned to IR
      is
      being used in a fraudulent manner by IR, an End User or any other person, the
      Carrier may, in its sole discretion and without prior notice, take such action
      as necessary for the protection of the Carrier facilities, systems, CMRS, GSM
      and/or data service, including interrupting or terminating the CMRS, GSM and/or
      data service provided to IR, an End User or any other person. The Carrier shall
      use reasonable commercial efforts to notify Reseller
      promptly
      following such interruption or termination of the CMRS, GSM and/or data
      service.

     

    2.2.4 Brownouts.
      IR acknowledges that the Carrier, in its sole discretion, may implement a
      Brownout in its Territories (or any portion thereof), and may permit a Roaming
      Carrier to implement a Brownout in such MSA, RSA, MTA, or BTA experiencing
      fraudulent usage.

     

      2.3 IR’S
      CONDUCT OF BUSINESS. IR shall act in all respects on its own account and shall
      be solely responsible for all aspects of its business including, but not limited
      to, establishing its retail rate plans, any credit verification, processes
      and
      standards, deposits, provisioning, billing, Equipment, collection,
      consolidation, rebilling, End User billing complaints, customer service to
      End
      Users, toll/long distance calls, bad debt and any other support services in
      connection with its provision of Company Service and Roaming to End Users.
      

     

      2.4
       EQUIPMENT
      COMPATIBILITY. IR shall ensure that any Equipment utilized by itself or End
      Users in connection with the Company Service and each End User’s use thereof
      shall at all times comply with the requirements outlined in this section.
      Company shall have no liability for IR’s Equipment or IR’s failure to maintain
      or meet such compatibility or requirements. Under no circumstances shall Company
      be responsible for or obligated to make any changes to its equipment,
      operations, facilities, or systems to accommodate any End User.

     

    2.4.1 All
      equipment activated on the Carrier’s facilities shall comply with the following
      requirements, which are subject to change by the Carrier, including, but not
      limited to:

     

    2.4.2 All
      Equipment shall be Authenticatable and certified by the Carrier.

     

    
      
         

      

      
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    2.4.3 All
      Equipment must be programmed with Carrier’s then current PRL. IR shall have
      responsibility for, including, but not limited to, any loss of service or higher
      rates than those set forth herein as a result of its or End User’s failure to
      update PRLs.

     

    2.4.4 All
      equipment must be OTAPA and OTASP-capable.

     

    COMPANY
      MAKES NO WARRANTY OR PRESENTATION, EITHER EXPRESS OR IMPLIED CONCERNING THE
      SUITABILITY, DURABILITY, FITNESS FOR USE, MERCHANTABILITY, CONDITION OR QUALITY
      OF THE EQUIPMENT THAT ARE CERTIFIED IN ACCORDANCE WITH THIS AGREEMENT, AND
      IT
      EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES
      OF
      MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.   

     

    2.5 FORECAST/MDN
      INVENTORY MANAGEMENT. IR
      shall
      submit activation forecasts so that MDN’s can be requested from the Carrier in
      the areas where IR is selling service. The Carrier will fulfill orders in a
      reasonably expedient manner consistent with its then current practices;
      provided; however, that Carrier’s obligation to provide MDNs is subject to the
      availability of the MDNs and the capacity of the Carrier facilities, and Carrier
      has no obligation to construct additional facilities or otherwise provide
      additional capacity. To the extent IR
      does not
      provide this forecast, or if the forecast provided is materially inaccurate,
      it
      may cause a delay in the provision of the MDNs to IR.
      Company
      shall have no liability for capacity limitations of facilities or MDN shortages.
      Information disclosed by IR
      in the
      forecast provided pursuant to this section shall be confidential information
      of
IR.
      It is
IR’s
      obligation to obtain information about MDN ‘jeopardy” markets. Such information
      may be obtained in the NANPA website (www.nanpa.com).

     

    2.5.1 In
      order
      to request new MDNs in a Rate Center (defined as a geographically specified
      point for determining mileage sensitive rates for PSTN calls), IR
      must
      meet a utilization threshold of 75% of End Users compared to the total MDNs
      issued (the “Utilization
      Threshold”).
      With
      regard to Rate Centers located in states that require different or higher
      Utilization Thresholds, the state-mandated Utilization Threshold will apply.
      The
      Carrier will not issue additional MDNs within a Rate Center until the applicable
      Utilization Threshold is met. In the event the Carrier is required to meet
      additional state or Federal MDN management requirements, the Carrier shall
      use
      commercially reasonable efforts to notify Company and IR
      of any
      such requirements; provided however, that Carrier’s failure to notify Company
      and IR
      shall
      not exempt IR
      from
      compliance with such requirements.

     

    2.5.2 All
      numbers used by IR
      will
      reside in the Carrier-owned Home Location Register (“HLR”)
      database(s) in the Carrier facilities. IR
      acknowledges and agrees that each Number represents a unit of access to the
      Carrier facilities in a particular portion of a designated Territory and that
      neither IR
      nor an
      End User shall acquire any proprietary interest in any specific Number assigned
      for their use. IR
      acknowledges and agrees that IR
      does not
      own the Numbers and that the Carrier reserves the right, upon reasonable
      advanced written notice to IR,
      to
      assign, designate, or change any such Number in its discretion, or as required
      by the applicable numbering authority or other authority, agency, or Person
      with
      jurisdiction over such numbering assignments. Pursuant to applicable law, End
      Users may acquire a proprietary interest in the MDN.

     

    2.6. INTERFERENCE.
      If IR
      or one
      or more End Users interferes, permits, or causes interference with the Carrier
      facilities or systems, or the use of an MDN assigned to an End User or
IR
      may
      cause interference, in Carriers sole discretion, upon discovery of any such
      abuse by an End User or from an MDN by either of the parties, the party having
      such knowledge shall promptly notify the other party. In the event the
      interference is caused by, or suspected to be caused by an End User,
IR
      shall
      immediately order the End User to cease from engaging in such act(s) of
      interference. To the extent such interference continues despite the above,
      Carrier shall have the right to discontinue IR
      service
      to that End User or the MDN assigned thereto and/or deny IR’s
      access, and Carrier shall provide Company, and Company will in turn provide
      to
      IR,
      with
      written notification of such discontinuance immediately thereafter. IR shall
      assist Company in taking all actions necessary to prevent further
      interference.

     

    
      
         

      

      
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    2.7. COMPLIANCE
      WITH LAWS. IR
      represents, warrants, and covenants: (a) that it shall comply in all material
      respects with all applicable local, state, and federal laws and any governmental
      rule, regulation or ordinance including, but not limited to, all FCC regulations
      and rules; and (b) that all functionality provided by IR
      does and
      will comply in all respects with the Communications Assistance for Law
      Enforcement Act (“CALEA”).

     

    2.7.1 The
      Carrier may modify this Agreement to comply with any final FCC opinion, order,
      directive, rule or regulation adopted by the FCC related to resale practices;
      provided that IR may terminate this Agreement if such modification materially
      and adversely affects IR’s
      ability to perform hereunder or if a material term or condition is changed
      in
      this Agreement, within thirty (30) days after receipt of notice of any such
      modification by giving Company thirty (30) days written notice.

     

    2.8 FINANCIAL
      PROTECTIONS. In order to protect Company and Carrier from consequences of IR’s
      failure to perform its obligations under this Agreement, including, but not
      limited to IR’s obligation to pay Company in accordance with this Agreement, IR
      may be requested to provide Company or Carrier with an irrevocable Letter of
      Credit and/or deposit, as more fully described in this Section. All Letters
      of
      Credit pursuant to this Agreement must remain valid until (a) six (6) months
      after this Agreement expires, or is terminated, provided, in either case, that
      all related charges are paid to Company in full, or (b) Company, in its sole
      discretion, notifies IR in writing that such Letter of Credit may expire. IR
      acknowledges that the provisions of this Section are reasonably required by
      Company and Carrier to secure the performance of IR’s obligations under this
      Agreement and to protect Company and Carrier in the event that IR breaches
      any
      such obligation. The provisions of this Section are independent of, and in
      addition to, such rights and remedies as Company may have at law or in equity
      or
      otherwise for any misrepresentation or breach of this Agreement by
      IR.

     

    2.8.1 The
      Letter of Credit shall be from a bank or other financial institution that is
      acceptable to Company.

     

    2.8.2 Company’s
      failure to request that IR
      provide
      a Letter of Credit upon implementation shall not operate as a waiver of the
      requirement, and IR
      shall
      provide such Letter of Credit within fifteen (15) days of Company notifying
      IR
      of such
      requirement.

     

    2.8.3 The
      amount of the Letter of Credit shall be determined by the Carrier. In the event
      that Carrier demands a Letter Of Credit, Company will provide written
      notification to IR
      of the
      required increase in the Letter of Credit and IR shall have thirty (30) days
      to
      comply.

     

    2.8.4 IR
      shall
      provide Company a deposit equal to five (5) days average subscriber usage as
      calculated from the previous months’ total billing. IR shall have thirty (30)
      days to comply with any request for an increase in the deposit
      amount.

     

    2.10 RADIO
      FREQUENCY (RF) ENHANCER. IR shall not install, deploy, or use any regeneration
      equipment or similar mechanism (for example, a repeater) to originate, amplify,
      enhance, retransmit or regenerate a transmitted RF signal.

    

     

    ARTICLE
      III

     

    OBLIGATIONS
      OF COMPANY

     

      3.1. CARRIER
      SERVICE. Subject
      to the terms, limitations and conditions set forth herein, the underlying
      Carrier shall provide service to the IR
      in the
      designated Territories. If the Carrier divests in any of the Territories or
      loses it FCC license to provide such service, the Carrier shall provide
IR
      notice
      of such divestiture or loss and Carrier‘s obligations hereunder shall cease with
      respect to such affected Territory.

     

    
      
         

      

      
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    3.2. ROAMING
      SERVICE. IR
      hereby
      acknowledges and agrees that the Company or Carrier is not responsible for
      the
      billing practices, service charges or ultimate availability of Roaming from
      Roaming Carriers, and Company and Carrier are not obligated to provide CMRS,
      GSM
      and/or Data Service in areas where Carrier does not have an FCC license, has
      not
      entered into a Roaming Agreement, or loses its Roaming Agreement. Carrier
      agrees, however, to make Roaming available to IR
      in any
      MSAs, MTAs, RSAs or BTAs in which Carrier has Roaming agreements, subject to
      Company’s current PRL. IR
      shall
      pay Company for roaming charges incurred on MDNs assigned to IR
      in
      accordance with this agreement.

     

    3.3. CARRIER
      SERVICE OUTAGES.
      Subject
      to the terms set forth herein, a credit allowance will be made, at the IR’s
      request, in the form of a prorate adjustment of the recurring charges billed
      by
      the Carrier for a period of total Carrier service outage in the Territory that
      exceeds twenty-four (24) consecutive hours. Such credit allowance shall be
      IR’s
      sole remedy and compensation for any such outage. For other than a total Carrier
      service outage, a credit allowance, at rates for monthly access outlined in
      the
      Master Service Agreement, will only be given to the IR for time actually
      credited to End Users by IR who are unable to use service due to a
      service-affecting interruption in excess of twenty-four (24) consecutive hours.
      Any credit granted by the Carrier will be passed on to Reseller when Company
      has
      received the credit from the Carrier.

     

    In
      the
      event the IR or an End User is affected by such interruption for a period of
      less than twenty-four (24) continuous hours, no such adjustment shall be made.
      No adjustments shall be allowed for accumulating periods of discontinuous
      interruption. IR’s request for credit must be received by the Company in writing
      within ten (10) days following the end of the period of interruption that
      qualifies for a credit. The credit allowance for a service outage will be
      computed by dividing the duration of the service affecting interruption
      (measured in days from the time the interruption is reported to and confirmed
      by
      Company) by thirty (30) and multiplying the result by Company’s monthly
      recurring charges for each interrupted MDN. In no case shall the credit exceed
      the recurring charges for that period. No other liability shall attach to
      Company as a result of such interruption to service. No credit allowance will
      be
      given for interruptions caused by the negligence or willful act of the IR or
      its
      End User, for failures or communication between Company and Reseller, power
      outages or other occurrences considered force majeure, or for interruptions
      caused by failure or equipment or service not provided by Company.

     

    

     

    ARTICLE
      IV

     

    RATES,
      CHARGES, FEES AND OTHER

     

      4.1 RATES,
      CHARGES, FEES AND OTHER AMOUNTS. In consideration for the Company Service and
      Roaming to be provided hereunder, IR
      shall
      pay Company the rates for CMRS, GSM and/or Data Service as set forth in the
      Master Service Agreement.

     

    4.2 COMPANY’S
      RIGHT TO MODIFY RATES, CHARGES, FEES AND OTHER AMOUNTS. IR
      hereby
      acknowledges and agrees that the underlying Carrier may change, terminate,
      adjust, and/or modify, any and all of its rates, charges, fees, tables, charts,
      discounts, and/or the qualification requirements (if any, for such items) upon
      thirty (30) days notice to Company and Company has the right to pass through
      those changes to the IR.
      IR
      acknowledges and agrees that any such change, termination, adjustment and/or
      modification shall apply to all MDNs to which IR
      has made
      available to the respective MDN the affected rate plan and that no such MDNs
      shall be permitted to remain on such changed, terminated, adjusted or modified
      plan, except as expressly provided by Company in the notice required under
      this
      Section 4.2. If the change in rates, charges or fees is materially adverse
      to
IR,
      IR
      may
      terminate this Agreement within thirty (30) days after receipt of such notice
      by
      providing thirty (30) days written notice of termination to Company. If Company
      does not receive such written notice within the thirty (30) day period,
IR
      shall be
      deemed to have accepted such changes.

     

    
      
         

      

      
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    4.3 CALCULATION
      FOR COMPANY SERVICE. Company shall charge IR
      for
      Company Service in accordance with the following practices. All data airtime
      is
      rounded up to the next full minute per transmission by an MDN with respect
      to
      IS95A Data, and all data usage with respect to EVDO Service and/or 1X Service
      will be rounded up to the nearest kilobyte on a monthly basis per MDN. All
      monetary charges will be rounded up to the nearest cent per month per MDN.
      Charges for each Data Service session typically begin when End User presses
      or
      clicks the “SEND” or “Connect” button for the Data Service session at the user
      interface. Charges typically end when the Equipment disconnects from the
      Facilities, which may be a few seconds after the End User presses or clicks
      the
“END” or “Disconnect” button or the session or call is otherwise disconnected.
      In the event (a) during an IS95A Data session, and End User travels outside
      the
      Territory or the connection to the Facilities of Company or a Roaming Carrier
      are otherwise temporarily unavailable, or (b) during an EVDO Service and/or
      1X
      Service session, an End User travels outside the EVDO Footprint and/or the
      Territory or the connection to the Company Facilities is otherwise temporarily
      unavailable; and such End User referenced in (a) or (b), as applicable,
      successfully continues with such Data Service session after returning within
      five (5) minutes, the End User will be billed for the entire length of such
      Data
      Service session and/or airtime from start/connect to
      end/disconnect.

     

    4.3.1 Chargeable
      time for a completed call received by an MDN begins when the call is answered
      and ends when the Equipment disconnects from the Facilities, which may be a
      few
      seconds after the “END” button is pressed or the call is otherwise disconnected.
      Notwithstanding the foregoing, in some Territories and unanswered call that
      rings for sixty (60) seconds or more will be billed. The charges for Company
      CMRS are based on per minute usage and any usage is rounded up to the next
      minute when fractional minutes are used by the IR
      or End
      User. The rates charged in the designated Territories are set for in the Master
      Service Agreement.

     

      
      4.4 BILLING
      SERVICES. Company shall make available access to the invoice via the System,
      within thirty (30) days of the end of each billing cycle. Company shall not
      be
      liable for any inaccuracies in the charges to IR
      or other
      inaccuracies over which the Company has no control. Company will reasonably
      cooperate with IR’s
      legitimate efforts to correct any such inaccuracies. IR
      expressly acknowledges that some charges incurred in a billing cycle may not
      appear on the Invoice for such billing cycle and that such charges will appear
      on the subsequent Invoices. IR
      is
      responsible for payment of any and all charges that all delayed or appear on
      subsequent Invoices. If any Invoice is not available to Company to access within
      five (5) business days after the customary availability date established by
      previous availability dates, Company shall notify the Carrier immediately.
      Company will notify the Carrier of any physical defects in the Invoice within
      ten (10) days of such download by Company.

     

      4.4.1 IR
      shall
      pay any amount due and payment for any amounts due contained in an Invoice
      or
      otherwise owed to Company hereunder shall be due in United States Dollars no
      later than the due date specified in such invoice. IR
      has no
      right to offset or withhold any amounts from Company, including, without
      limitation, any disputed item. Any amounts required to be paid hereunder will
      be
      deemed paid when received, subject to collection, at the location designated
      by
      Company on the Invoice being paid.

     

      4.4.2 If
      IR
      disputes
      any part of any invoice, IR
      must
      provide Company with written notice of the dispute containing a detailed
      description of the request for each specific item disputed within sixty (60)
      days of the Invoice date. If IR
      fails to
      provide Company with such written notice of the dispute within sixty (60) days
      of the Invoice date, then Company shall not be obligated to investigate or
      revise the Invoice and IR
      waives
      any rights to such disputed items. Upon receipt of any properly documented
      dispute, Company will forward such dispute to the Carrier, and the Carrier
      has
      sixty (60) days to provide Company with any response in connection with a
      disputed item. Any amount due Company by IR
      which is
      not paid in full by the due date shall be subject to a late payment charge
      equal
      to the maximum interest rate permitted by applicable law from the due date
      thereof until paid (the “Late
      Fees”).

     

      4.5 TARIFFS.
      In the event that the Company Service provided pursuant to this Agreement or
      the
      rates or other charges set forth in the Master Service Agreement become subject
      to any federal, state, or local regulation, then the parties shall work together
      to address any conflicting terms and conditions in effect under such
      regulation.

     

    
      
         

      

      
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    ARTICLE
      V

     

    COMPANY
      AND CARRIER MARKS

     

    5.1 IR
      hereby
      acknowledges that the Carrier names, logos, trademarks, and service marks are
      the sole property of the Carrier and/or their affiliates, and are good, valid,
      and enforceable in law and equity. IR
      shall
      not challenge or assist in challenging the validity of registrations thereof,
      or
      engage in any activities or commit any acts, directly or indirectly, which
      may
      consent, dispute or otherwise impair such right, title and interest of Carrier
      or its Affiliates therein. IR
      shall
      not acquire, nor claim any right, title or interest in or to Carrier Marks.
      IR
      acknowledges and agrees that it has no right, title or interest in any of
      Carrier Marks.

     

    5.2 IR
      shall
      not use any of the Carrier Marks as part of its corporate, trade or business
      names. Any use of the Carrier Marks by reseller shall be a violation of this
      Agreement and shall constitute an infringement of such Carrier
      Marks.

     

    5.3 IR
      shall
      not use the Carrier Marks in any advertising, sales promotion, press releases
      or
      other publicity matters. IR
      shall
      not use any language from which the Carrier Marks may be inferred or implied.
      The only permission granted to IR
      to use
      Carrier’s name is limited to circumstances where such use is necessary to
      respond to a specific End User’s or a prospective End User’s request for
      information regarding the Facilities on which the service is provided. The
      approved language is as follows: Service is provided on the Verizon Wireless
      network.

     

    5.4 Upon
      termination or expiration of this Agreement, IR
      shall
      have no right to continue any use of Carrier Marks to the extent it was
      expressly granted permission to do so hereunder.

     

    5.5 IR
      shall
      fully indemnify and hold harmless Carrier and Company from any and all claims,
      losses, damages or other expenses (including reasonable attorney’s fees) that
      arise or result from IR’s
      unauthorized use of a Mark.

     

    5.6 A
      breach
      by IR
      under
      this Section shall constitute immediate and irreparable injury to Carrier and
      Company not compensable in money damages and shall warrant preliminary and
      other
      injunctive and equitable relief upon a showing satisfactory to the court to
      which an application for relief may be made of the failure to carry out such
      obligation.

     

    5.7
       All
      marketing materials presented to the customer, including the website, must
      identify the Reseller as “powered by” or other form of designation, which makes
      it clear to the customer that service is provided by the Reseller rather than
      the Carrier.

     

    

     

    ARTICLE
      VI

     

    WARRANTY
      AND LIMITATION OF LIABILITY

     

    6.1 NO
      WARRANTY. COMPANY MAKES NO WARRANTIES, EITHER EXPRESSED OR IMPLIED, CONCERNING
      THE FACILITIES, SYSTEMS, OR THE CMRS AND/OR THE DATA SERVICE, INCLUDING, WITHOUT
      LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR
      PURPOSE. THIS SECTION SHALL APPLY TO IR
      AND ANY
      OF IR’S
      END
      USERS. 

     

    IR
      expressly acknowledges that Company shall have no liability for any failure,
      defects, malfunctions or errors in the Facilities, Systems, or for the provision
      of CMRS and/or Data Service hereunder to IR
      or its
      End Users.

     

    
      
         

      

      
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    6.2 INDEMNITY.
      Company shall not be liable for, and IR
      shall
      defend, indemnify and hold harmless Company from, any and all damages, claims,
      actions, losses, liabilities and other expenses (including reasonable attorney’s
      fees) (“Losses”)
      that
      may arise out of third party claims brought against Company to the extent such
      Losses result from: (i) any action brought by a service provider of IR
      or End
      User in connection with Reseller’s resale of Company Service, the Equipment or
IR’s
      End
      User contract (including personal injury), (ii) any libel, slander, or
      infringement of copyright arising from the material transmitted over the
      Facilities by IR
      or End
      Users, (iii) any infringement of copyrights, patents or intellectual property
      rights arising from or in connection with the Equipment when used with the
      Facilities by IR
      or by an
      End User, (iv) any breach or violation of this Agreement by IR,
      (v) any
      breach of any of the representations made by IR
      in this
      Agreement, or (vi) any act or omission of Reseller in connection with
IR’s
      use or
      resale of CMRS, GSM and/or Data Service pursuant to this Agreement. The rights
      of Company under this Section 9.2 are independent of, and in addition to, such
      rights and remedies Company may have at law or in equity or otherwise, including
      the right to seek specific performance, rescission, or restitution.

     

    6.3 NO
      LIABILITY. UNDER NO CIRCUMSTANCES WILL COMPANY HAVE ANY LIABILITY TO
IR
      OR ANY
      END USER FOR ANY CAUSES OF ACTION, LOSSES OR DAMAGES ARISING OUR OF (i)
      MISTAKES, OMMISSIONS, INTERRUPTIONS, ERRORS, OR DEFECTS IN FURNISHING CMRS
      AND/OR DATA SERVICE, OR (ii) FAILURES OR DEFECTS IN FACILITIES OR
      SYSTEMS.

     

    6.3.1 Company
      shall have no liability or obligation to IR
      with
      respect to any loss suffered by IR
      in
      connection with or arising from the acts or omissions of any Roaming Carrier
      for
      any reason, including the failure or, or defect in, any Facilities relating
      to
      the delivery of CMRS, GSM and/or Data Service.

     

    6.4 FACILITY
      MODIFICATIONS. IR
      acknowledges that CMRS, GSM or Data Service is a rapidly changing industry
      and
      technology and as such Company shall not be liable to IR
      or to
      the IR’s
      End
      Users if changes in any of the Facilities, Systems, operations, equipment,
      procedures, or service render obsolete any Equipment, service, software and/or
      applications provided by IR
      to End
      Users in conjunction with use of the Carrier service.

     

    6.5 PRIVACY
      AND SECURITY OF COMPANY SERVICE. IR
      acknowledges neither Company, Carrier nor its Affiliates can guarantee privacy
      or security of any transmission, including conversations and/or data
      transmission through the use of Carrier service.

     

    6.6 CAPACITY
      LIMITATION. The parties recognize that unusual concentrations of Carrier service
      usage may occur in certain locations. Carrier nor Company shall incur no
      liability for its inability to provide inadequate service hereunder if such
      liability is due to a lack of capacity on the Company or Carrier Facilities
      which results from the aforesaid usage concentration, and nothing herein shall
      require Carrier to expend any capital or resources to ensure capacity for
IR’s
      or its
      End Users’ use of Carrier service.

     

    6.7 POST
      TERMINATION/EXPIRATION OBLIGATIONS. Upon termination or expiration of this
      Agreement, IR
      shall
      remain solely responsible for its obligation to End Users existing immediately
      prior to termination and for all charges incurred by IR
      or its
      End Users for CMRS and/or Data Service and Roaming.

     

    6.7.1 Termination
      or expiration of this Agreement shall not release either party
      from:

     

    a.
      any
      liability which has already accrued to the other party hereto at the time of
      termination or expiration;

     

    b.
      any
      liability which thereafter may accrue with respect to any act or omission prior
      to termination or expiration;

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    

     

    c.
      any
      obligation which is expressly stated herein to survive termination or
      expiration.

     

    Notwithstanding
      the foregoing, upon notice of termination of this Agreement, or upon expiration
      of the Term, Company may, without liability, cancel any of IR’s
      pending orders for additional MDNs

     

    6.7.2 In
      the
      event of termination of this Agreement, Company is not obligated to ensure
      that
      any End User is able to continue to utilize Company Service or to transfer
      the
      End User’s MDN, except for termination by the IR
      in which
IR
      is still
      using Company billing system, in which case Company will work with Carrier
      to
      transfer the MDNs to the new agreement. As transfer of MDNs from one contract
      to
      another requires approval and participation of the Carrier, Company cannot
      guarantee Carrier’s willingness or timeliness to make such
      transfer.

     

    6.8
      DISCONNECTING END USERS. In the event of termination or expiration of this
      Agreement, Company may route IR’s
      End
      Users to a Company generated recording (or other message delivery system)
      advising that:

     

    6.8.1
      End
      Users’ MDNs are disconnected; and

     

    6.8.2
      That any requests regarding prior services and/or the disconnection should
      be
      directed to IR.

     

    In
      such
      event, IR
      hereby
      releases and holds harmless Company and Carrier from any and all claims and
      causes of action that may arise from such communications with End
      Users.

     

    

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

    Schedule
      E

    

    Retail
      Rates

    

    Verizon
      Pricing

    

    EUGRO
      MOBILE Verizon Pricing

    Pricing
      as of January 1, 2007

    

    
      	
              Rate
                Plan Name

            	
              Included
                

              Peak
                

              Minutes

            	
              Included

              Off-Peak
                Minutes

            	
              Retail
                Price

            	 	
              Client
                Commissions

            
	
              Flex
                100

            	
              100

            	
              0

            	
              $20.00

            	 	
              24%

            
	
              V175

            	
              175

            	
              3,000

            	
              $30.00

            	 	
              24%

            
	
              V400

            	
              400

            	
              3,000

            	
              $50.00

            	 	
              24%

            
	
              V750

            	
              750

            	
              3,000

            	
              $75.00

            	 	
              24%

            
	
              V1250

            	
              1,000

            	
              3,000

            	
              $100.00

            	 	
              24%

            
	
              V2000

            	
              2,000

            	
              3,000

            	
              $150.00

            	 	
              24%

            

    

    

     

    

     

     

    Cingular
      Pricing

     

    EUGRO
      MOBILE Cingular Pricing

    Pricing
      as of January 1, 2007

    

    
      	
              Rate
                Plan Name

            	
              Included
                

              Peak
                

              Minutes

            	
              Rate/Min

            	
              Retail
                Price

            	
              Client
                Commissions

            
	
              10

            	
              100*

            	
              $.10

            	
              $10.00

            	
              24%

            
	
              20

            	
              200*

            	
              $.10

            	
              $20.00

            	
              24%

            
	
              30

            	
              300*

            	
              $.10

            	
              $30.00

            	
              24%

            
	
              50

            	
              400*

            	
              $.10

            	
              $50.00

            	
              24%

            

    

    

    Eugro
      Mobile GSM will provide customers with 30 free minutes of airtime for each
      SIM
      purchased. 

    *.25
      cents daily fee applies. 

    

    SIM
      Cards

    

    Pricing
      -
      All SIM cards are $7.00 for the first three (3) months.

    

    All
      prices for SIM cards and service plans are subject to change. EUROPHONE will
      provide Client with at least 30 days notice of any changes in plan pricing
      and
      SIM card pricing.

    
       

       

       

      
        
           

        

        
          36Exhibit
      4.1

     

    

     

    

     

    

     

    NOTES
      PURCHASE AGREEMENT

    

    by
      and
      between

    

    CHINA
      SECURITY & SURVEILLANCE TECHNOLOGY, INC.

    as
      the
      Company

    

    CHAIN
      STAR INVESTMENTS LTD.

    CHINA
      SAFETECH HOLDINGS LIMITED

    CHINA
      SECURITY & SURVEILLANCE TECHNOLOGY (HK) LTD.

    GOLDEN
      GROUP CORPORATION (SHENZHEN) LIMITED

    GUANGZHOU
      SHIXING DIGITAL TECHNOLOGY CO., LTD.

    SHANGHAI
      CHENG FENG DIGITAL EQUIPMENT LTD.

    SHANGHAI
      CHENG FENG DIGITAL TECHNOLOGY CO., LTD.

    SHANGHAI
      CHENG FENG PUBLIC SAFETY PREVENTION TECHNOLOGY CO., LTD.

    SHENZHEN
      HONGTIANZHI ELECTRONICS CO., LTD.

    SHENZHEN
      TONGXING SHIXUN TECHNOLOGY CO., LTD.

    CHINA
      SECURITY & SURVEILLANCE TECHNOLOGY (PRC), INC.

    as
      the
      Subsidiaries

    

    

    AND

    

    

    CITADEL
      EQUITY FUND LTD.

    as
      the
      Purchaser

    

    

    Dated:
      April 24, 2007

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    This
      Notes Purchase Agreement (this “Agreement”)
      is
      dated as of April 24, 2007, by and between China Security & Surveillance
      Technology, Inc., a Delaware corporation (the “Company”),
      the
      other Group Companies listed on the signature pages hereto, and Citadel Equity
      Fund Ltd. (the “Purchaser”).

     

    WHEREAS,
      the Company proposes to issue, and the Purchaser proposes to purchase,
      US$50,000,000 Guaranteed Senior Unsecured Convertible Notes due 2012 on the
      terms of this Agreement. 

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and promises contained
      herein and for other good and valuable consideration the receipt and adequacy
      of
      which are hereby acknowledged, the parties hereto agree as follows:

     

    1.    Definitions

     

    For
      all
      purposes of this Agreement, except as otherwise expressly provided or unless
      the
      context otherwise requires the following terms shall have the meanings set
      forth
      below. Defined terms used but not otherwise defined herein shall have the
      meanings given to such terms in the other Sections of this Agreement or the
      Indenture (as defined below).

     

    “Act”
means
      the Securities Act of 1933, as amended.

     

    “Affiliate”
of
      any
      specified Person means:

     

    
      	 	
              (a)

            	
              any
                other Person directly or indirectly controlling or controlled by
                or under
                direct or indirect common control with such specified Person, or
                

            

    

     

    
      	 	
              (b)

            	
              any
                other Person who is a director or officer
                of:

            

    

     

    
      	 	
              (1)

            	
              such
                specified Person, 

            

    

     

    
      	 	
              (2)

            	
              any
                Subsidiary of such specified Person,
                or

            

    

     

    
      	 	
              (3)

            	
              any
                Person described in clause (a) above.

            

    

     

    For
      the
      purposes of this definition, “control” when used with respect to any Person,
      means the power to direct the management and policies of such Person, directly
      or indirectly, whether through the ownership of voting securities, by contract
      or otherwise; and the terms “controlling” and “controlled” have meanings
      correlative to the foregoing. 

     

    “Agreement”
has
      the
      meaning given in the recitals.

     

    “Amended
      Investor Rights Agreement”
means
      the amended and restated investor rights agreement dated as of April 24, 2007
      by
      and among the Company, the other Group Companies, the Shareholders and the
      Purchaser, a form which is attached hereto as Exhibit
      B.

     

    “Applicable
      Agreements”
has
      the
      meaning given in Section 6(i).

     

    “Applicable
      Law”
has
      the
      meaning given in Section 6(i).

     

    “Business
      Day”
has
      the
      meaning given in the Conditions.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “BVI”
means
      the British Virgin Islands.

     

    “Capital
      Stock”
means,
      with respect to any Person, any shares or other equivalents (however designated)
      of any class of corporate stock or partnership interests or any other
      participations, rights, warrants, options or other interests in the nature
      of an
      equity interest in such Person, including Preferred Stock, but excluding any
      debt security convertible or exchangeable into such equity
      interest.

     

    “Chain
      Star”
means
      Chain Star Investments Ltd., a wholly-owned subsidiary of Safetech, incorporated
      under the laws of Hong Kong.

     

    “Charter
      Documents”
has
      the
      meaning given in Section 6(i).

     

    “Cheng
      Feng”
means
      Shanghai Cheng Feng Digital Technology Co., Ltd., a wholly-owned subsidiary
      of
      CSST HK, incorporated under the laws of PRC.

     

    “Cheng
      Feng Equipment”
means
      Shanghai Cheng Feng Digital Equipment Ltd., a ninety percent (90%) owned
      subsidiary of Cheng Feng, incorporated under the laws of PRC.

     

    “Cheng
      Feng Public Safety”
means
      Shanghai Cheng Feng Public Safety Prevention Technology Co., Ltd., a seventy
      percent (70%) owned subsidiary of Cheng Feng, incorporated under the laws of
      PRC.

     

    “Clearing
      Facilities”
means
      Clearstream and Euroclear.

     

    “Clearstream”
means
      Clearstream Banking, société anonyme, and any successor thereto.

     

    “Closing”
has
      the
      meaning given in Section 5.

     

    “Closing
      Date”
means
      the date of the Closing.

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
means
      shares of common stock of the Company, par value US$0.0001 per
      share.

     

    “Company”
has
      the
      meaning given in the recitals.

     

    “Conditions”
means
      the terms and conditions of the Notes.

     

    “Conversion
      Shares”
means
      shares of Common Stock issuable under the conversion of the Notes.

     

    “CSST
      HK”
means
      China Security & Surveillance Technology (HK) Ltd., a wholly-owned
      subsidiary of Safetech, incorporated under the laws of Hong Kong.

     

    “CSST
      PRC”
means
      China Security & Surveillance Technology (PRC), Inc., a wholly-owned
      subsidiary of the Company, incorporated under the laws of PRC.

     

    “Disclosure
      Schedule”
has
      the
      meaning given in Section 6.

     

    “Environmental
      Laws”
has
      the
      meaning given in Section 6(bb).

     

    “Euroclear”
means
      Euroclear Bank, S.A./N.V. and any successor thereto.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “FCPA”
has
      the
      meaning given in Section 6(dd).

     

    “Fully-Diluted”
has
      the
      meaning given in Section 6(d)(ii).

     

    “GAAP”
has
      the
      meaning given in Section 6(a)(i).

     

    “Golden”
means
      Golden Group Corporation (Shenzhen) Limited, a wholly-owned subsidiary of
      Safetech, incorporated under the laws of PRC.

     

    “Governmental
      Authority”
has
      the
      meaning given in Section 6(i).

     

    “Group
      Companies”
means
      the Company, Safetech, CSST HK, Chain Star, Golden, Cheng Feng, Cheng Feng
      Equipment, Cheng Feng Public Safety, Hongtianzhi, Tongxing, Shixing and CSST
      PRC
      and the Company’s other existing and future, direct and indirect, Subsidiaries.

     

    “Guarantees”
has
      the
      meaning given in Section 4. 

     

    “Guarantor”
has
      the
      meaning given in Section 4. 

     

    “Hongtianzhi”
means
      Shenzhen Hongtianzhi Electronics Co., Ltd., a wholly-owned subsidiary of Chain
      Star, incorporated under the laws of PRC.

     

    “Indemnified
      Party”
has
      the
      meaning given in Section 10(a).

     

    “Indemnifying
      Party”
has
      the
      meaning given in Section 10(a).

     

    “Indenture”
means
      an indenture dated as of the Closing Date by and among the Company, other Group
      Companies and the Trustee, a form of which is attached hereto as Exhibit
      A.

     

    “Intellectual
      Property”
has
      the
      meaning given in Section 6(q)(i).

     

    “Lien”
means
      a
      mortgage, charge, pledge, lien, hypothecation or other security interest
      securing any obligation of any person or any other agreement or arrangement
      having a similar effect.

     

    “Material
      Adverse Change”
has
      the
      meaning given in Section 6(s)(ii).

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on:

     

    (a)    the
      business, operations, property, earnings, assets, liabilities or condition
      (financial or otherwise) of the Group Companies taken as a whole;

     

    (b)    the
      ability of the Group Companies or any Shareholder to perform its material
      obligations under the Transaction Documents; or

     

    (c)    the
      validity or enforceability of the Transaction Documents or the rights and
      remedies of any holder of the Notes under the Notes.

     

    “Money
      Laundering Laws”
has
      the
      meaning given in Section 6(jj).

     

    “Most
      Recent Balance Sheet”
has
      the
      meaning given in Section 6(s)(iii).

     

    “Notes”
has
      the
      meaning given in Section 3.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “OFAC”
has
      the
      meaning given in Section 6(ii).

     

    “Outside
      Financing”
has
      the
      meaning given in Section 7(l).

     

    “Permits”
has
      the
      meaning given in Section 6(m).

     

    “Person”
means
      any individual, corporation, company (including any limited liability company),
      association, partnership, joint venture, trust, unincorporated organization,
      government or any agency or political subdivision thereof or any other
      entity.

     

    “PFIC”
has
      the
      meaning given in Section 6(hh).

     

    “PRC”
means
      the People’s Republic of China, not including Taiwan, Hong Kong and
      Macau.

     

    “Proceedings”
has
      the
      meaning given in Section 6(l).

     

    “Proposal”
has
      the
      meaning given in Section 7(u).

     

    “Purchaser”
has
      the
      meaning given in the recitals.

     

    “Safetech”
means
      China Safetech Holdings Limited, a wholly-owned subsidiary of the Company,
      incorporated under the laws of British Virgin Islands.

     

    “SEC
      Reports”
has
      the
      meaning given in Section 6(a)(i).

     

    “Securities”
means,
      collectively, the Notes, the Conversion Shares and the Guarantees.

     

    “Shareholder”
means
      any of Mr. Tu Guo Shen, Ms. Li Zhi Qun and Whitehorse.

     

    “Shixing”
means
      Guangzhou Shixing Digital Technology Co., Ltd., a seventy percent (70%) owned
      subsidiary of Hongtianzhi, incorporated under the laws of PRC.

     

    “Subsidiary”
means,
      in respect of any Person, any corporation, company (including any limited
      liability company), association, partnership, joint venture or other business
      entity of which at least a majority of the total voting power of the voting
      stock is at the time owned or controlled, directly or indirectly,
      by:

     

    (a)    such
      Person, 

     

    (b)    such
      Person and one or more Subsidiaries of such Person, or 

     

    (c)    one
      or
      more Subsidiaries of such Person. 

     

    “Superior
      Proposal”
has
      the
      meaning given in Section 7(u).

     

    “Tax”
has
      the
      meaning given in Section 6(p).

     

    “Tongxing”
means
      Shenzhen Tongxing Shixun Technology Co., Ltd., a seventy percent (70%) owned
      subsidiary of Hongtianzhi, incorporated under the laws of PRC.

     

    “Trading
      Market”
has
      the
      meaning given in Section 5.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Transaction
      Document”
means
      this Agreement, the Indenture, the Notes, the Guarantees and the Amended
      Investor Rights Agreement, or any of them as the context may so
      require.

     

    “Trustee”
means
      The Bank of New York, a New York banking corporation, acting as trustee under
      the Indenture.

     

    “US$”
means
      the lawful currency of the United States from time to time.

     

    “Whitehorse”
means
      Whitehorse Technology Limited, a British Virgin Islands company wholly owned
      by
      Mr. Tu Guo Shen and the registered owner of Mr. Tu Guo Shen’s equity interest in
      the Company.

     

    2.    Rules
      of Construction.

     

    Unless
      the context otherwise requires:

    

    (a)    a
      term
      has the meaning assigned to it;

     

    (b)    “or”
is
      not exclusive;

     

    (c)    words
      in
      the singular include the plural, and in the plural include the
      singular;

     

    (d)    all
      references in this Agreement to “Sections”, “Exhibits” and other subdivisions
      are to the designated Sections, Exhibits and subdivisions of this Agreement
      as
      originally executed;

     

    (e)    a
      reference to any person is, where relevant, deemed to be a reference to or
      to
      include, as appropriate, that person’s successors and permitted assignees or
      transferees;

     

    (f)    a
      reference to (or to any specified provision of) any agreement or document
      (including any Transaction Document) is to be construed as a reference to that
      agreement or document as it may be amended from time to time;

     

    (g)    the
      words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
      this Agreement as a whole and not to any particular Section or other
      subdivision.

     

    (h)    “including”
      means “including without limitation;”

     

    (i)    
provisions
      apply to successive events and transactions; and

     

    (j)    references
      to a statute or statutory provision is to be construed as a reference to that
      statute or statutory provision as it may be amended from time to
      time.

     

    3.    Issuance
      of Notes.
      

     

    Subject
      to the terms and conditions of this Agreement, the Company will, on the Closing
      Date, (i) issue and sell to the Purchaser, and the Purchaser will purchase
      from
      the Company, the Company’s 500 Guaranteed Senior Unsecured Convertible Notes due
      2012 (the “Notes”)
      of
      US$100,000 principal amount each, convertible into shares of Common Stock,
      at an
      initial conversion price of US$23.60 per share, and (ii) cause the Guarantors
      to
      issue the Guarantees. The Notes will be issued pursuant to the provisions of
      the
      Indenture.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    The
      Notes
      will be offered and sold to the Purchaser pursuant to Regulation S or other
      exemption from the registration requirements under the Act. Upon original
      issuance thereof, and until such time as the same is no longer required under
      the applicable requirements of the Act, the Notes and the Conversion Shares
      shall bear the legends relating to the offer and the sale of the Notes and
      the
      Conversion Shares as required by (i) Regulation S under the Act or (ii) any
      other applicable laws or regulations relating to the issuance of the
      Notes.

     

    4.    Guarantees.

     

    Pursuant
      to the Indenture and to the fullest extent permitted by Applicable Laws,
      Safetech, CSST HK, Chain Star and
      all
      of the Company’s other existing and future direct and indirect Subsidiaries
      (only to the extent such Subsidiary is permitted under Applicable Laws to do
      so)
      (each, a “Guarantor”)
      shall
      irrevocably and unconditionally guarantee, on a senior basis, to the Purchaser
      and to the Trustee the payment and performance of the Company’s obligations
      under this Agreement, the Notes and the Indenture (collectively, the
“Guarantees”).

     

    5.    Purchase,
      Sale and Delivery.

     

    The
      issue
      and sale of the Notes to be purchased by the Purchaser shall occur at the Hong
      Kong office of Simpson Thacher & Bartlett LLP, on or about 9:00 a.m., New
      York time, at a closing (the “Closing”)
      on
      April 24, 2007 or on such other time or Business Day thereafter on or prior
      to
      31, 2007 as may be agreed upon by the Company and the Purchaser. At the Closing,
      the Company shall deliver to the Purchaser one or more global certificates
      representing the Notes, registered in such names and denominations as the
      Purchaser may request, against payment by the Purchaser of US$50,000,000 as
      the
      purchase price therefor by immediately available federal funds bank wire
      transfer to such bank account or accounts as the Company shall have beforehand
      designated to the Purchaser. The Notes to be represented by one or more global
      certificates in book-entry form, will be deposited on the Closing Date, by
      or on
      behalf of the Company, with the Trustee as common depositary for Clearstream
      and
      Euroclear, or its designated custodian, and registered in the name of the
      Trustee. The Common Stock is approved for quotation on the Over The Counter
      Bulletin Board (the “Trading
      Market”).

     

    6.    Representations
      and Warranties of the Group Companies.
      Except
      as set forth in the Disclosure Schedule attached hereto as Exhibit
      C
      (“Disclosure
      Schedule”)
      which
      exceptions shall be deemed part of the representations and warranties made
      hereunder, each of the Group Companies, jointly and severally, represents and
      warrants to the Purchaser the following:

     

    
      	 	
              (a)

            	
              SEC
                Reports; Financial Statements.
                

            

    

     

    (i)     Except
      as
      set forth on Schedule
      6(a)
      of the
      Disclosure Schedule, the Company has filed all reports, schedules, forms,
      statements and other documents required to be filed by it under the Act and
      the
      Exchange Act (the foregoing materials, including the exhibits thereto and
      documents incorporated by reference therein, being collectively referred to
      herein as the “SEC
      Reports”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension, and
      to
      the Company’s best knowledge after due inquiry, no disciplinary actions or
      proceedings have been initiated against the Company and no such actions are
      threatened. As of the date of filing, in the case of SEC Reports filed pursuant
      to the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
      for
      the twenty-four months preceding the date hereof (or such shorter period as
      the
      Company was required by law to file such reports, forms or other information)
      (and to the extent any such SEC Report was amended, then as of the date of
      filing of such amendment), and as of the date of effectiveness in the case
      of
      SEC Reports filed pursuant to the Act (and to the extent any such SEC Report
      was
      amended, then as of the date of effectiveness of such amendment), the SEC
      Reports complied in all material respects with the requirements of the Act
      and
      the Exchange Act and the rules and regulations of the Commission promulgated
      thereunder, as applicable, and none of the SEC Reports, as of the date of
      filing, in the case of SEC Reports filed pursuant to the Exchange Act (and
      to
      the extent any such SEC Report was amended, then as to the date of filing of
      such amendment), and as of the date of effectiveness in the case of SEC Reports
      filed pursuant to the Act (and to the extent any such SEC Report was amended,
      then as of the date of effectiveness of such amendment), contained any untrue
      statement of a material fact or omitted to state a material fact required to
      be
      stated therein or necessary in order to make the statements therein, in the
      light of the circumstances under which they were made, not misleading. The
      financial statements of the Company included in the SEC Reports have been
      prepared in accordance with the applicable accounting requirements and the
      rules
      and regulations of the Commission with respect thereto as in effect at the
      time
      of filing. Such financial statements have been prepared in accordance with
      United States generally accepted accounting principles applied on a consistent
      basis during the periods involved (“GAAP”),
      except as may be otherwise specified in such financial statements or the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects the
      financial condition, results of operations and cash flows of the Company and
      its
      consolidated Subsidiaries as of and for the dates thereof and the results of
      operations and cash flows for the periods then ended, subject, in the case
      of
      unaudited statements, to normal, immaterial, year-end audit adjustments. All
      other financial, statistical, and market and industry-related data included
      in
      the SEC Reports are based on or derived from sources that the Company reasonably
      believes to be reliable and accurate. For the purposes of this Agreement, the
      term “filed” (or any derivations thereof) includes filing, furnishing or
      otherwise providing any reports, forms or other information provided to the
      Commission.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (ii)
       Except
      as
      set forth on Schedule
      6(a)
      of the
      Disclosure Schedule, the Company has not, in the 12 months preceding the date
      hereof, received notice from the Trading Market to the effect that the Company
      is not in compliance with the requirements of the Trading Market, and to the
      Company’s best knowledge after due inquiry, no disciplinary actions or
      proceedings have been initiated against the Company and no such actions are
      threatened. The Company is, and upon consummation of the transactions
      contemplated hereby expects to be, in compliance with all of the listing
      requirements of the Trading Market. 

     

    
      	 	
              (b)

            	
              Ownership
                of Shares of Subsidiaries;
                Affiliates.

            

    

     

    (i)    
Schedule
      6(b)(i)
      of the
      Disclosure Schedule contains complete and correct lists of each Person in which
      the Company owns, directly or indirectly, any Capital Stock, showing, as to
      each
      Subsidiary, the correct name thereof, the jurisdiction of its organization,
      and
      the percentage of shares of each class of its Capital Stock outstanding owned
      by
      the Company and each other Subsidiary.

     

    (ii)    All
      of
      the outstanding shares of Capital Stock of each Subsidiary shown in Schedule
      6(b)(i)
      of the
      Disclosure Schedule as being owned by the Company and its Subsidiaries have
      been
      validly issued, are fully paid and non-assessable and are owned by the Company
      or another Subsidiary free and clear of any Lien.

     

    (iii)   No
      Subsidiary is a party to, or otherwise subject to any legal or regulatory
      restriction or any agreement (other than this Agreement) restricting the ability
      of such Subsidiary to pay dividends out of profits or make any other similar
      distributions of profits to the Company or any of its Subsidiaries that owns
      outstanding shares of Capital Stock of such Subsidiary.

     

    (c)    Organization.
      Each of
      the Group Companies (i) has been duly organized, is validly existing and is
      in
      good standing under the laws of its jurisdiction of organization, (ii) has
      all
      requisite power and authority to carry on its business and to own, lease and
      operate its properties and assets, and (iii) is duly qualified or licensed
      to do
      business and is in good standing as a domestic or foreign corporation or limited
      liability company, as the case may be, authorized to do business in each
      jurisdiction in which the nature of such business or the ownership or leasing
      of
      such properties requires such qualification, except where, for the purposes
      of
      (ii) or (iii) only, the failure to have all such requisite power and authority
      or to be so duly qualified or licensed does not, and would not, individually
      or
      in the aggregate, have a Material Adverse Effect.
      The
      constitutional documents and certificates of each of Golden, Cheng Feng, Cheng
      Feng Equipment, Cheng Feng Public Safety, Hongtianzhi, Tongxing, Shixing and
      CSST PRC are valid and have been duly approved or registered (as applicable)
      by
      competent PRC Governmental Authorities.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (d)    Capitalization
      and Voting Rights.
      

     

    (i)    Capital
      Stock.
      All of
      the outstanding shares of Capital Stock of the Company have been validly issued
      and are fully paid and non-assessable.

     

    (ii)   Issued
      and Issuable Shares.
      Except
      as set forth on Schedule
      6(d)(ii)
      of the
      Disclosure Schedule, as at the date hereof and immediately prior to the Closing,
      there is no Capital Stock issued or issuable pursuant to any exercise,
      conversion, exchange, subscription or otherwise in connection with any warrants,
      options (including pursuant to the Company’s stock option plan), convertible
      securities or any agreement to sell or issue Capital Stock or securities which
      may be exercised, converted or exchanged for Capital Stock (collectively,
“Fully-Diluted”).
      The
      Conversion Shares issuable upon conversion of the Notes have been duly reserved
      for issuance, and will constitute 5.16% of the Company’s Capital Stock on a
      Fully-Diluted basis. All of the issued and outstanding shares of each of the
      Group Company’s Capital Stock as of the Closing are duly authorized, validly
      issued, fully paid and non-assessable, were issued in accordance with the
      registration or qualification provisions of the Act, if applicable, and any
      relevant “blue sky” laws of the United States, if applicable, or pursuant to
      valid exemptions therefrom and were issued in compliance with other applicable
      laws (including, without limitation, applicable PRC or BVI laws, rules and
      regulations) and are not subject to any rescission right or put right on the
      part of the holder thereof nor does any holder thereof have the right to require
      the Company to repurchase such Capital Stock.

     

    (iii)    Voting
      and Other Agreements.
      There
      are no outstanding (A) options, warrants or other rights to purchase from any
      Group Company, (B) agreements, contracts, arrangements or other obligations
      of
      any Group Company to issue, or (C) other rights to convert any obligation into
      or exchange any securities for, in the case of each of clauses (A) through
      (C),
      shares of Capital Stock of, or other ownership or equity interests in, any
      Group
      Company. The Company is not a party or subject to any agreement or understanding
      and there is no agreement or understanding with any Person that affects or
      relates to (x) the voting or giving of written consents with respect to any
      security of the Company (including, without limitation, any voting agreements,
      voting trust agreements, shareholder agreements or similar agreements) or the
      voting by a director of the Company or (y) the sale, transfer or other
      disposition with respect to any security of the Company.

     

    (e)    No
      Registration Rights.
      Except
      as set forth on Schedule 6(e) of the Disclosure Schedule, no holder of
      securities of any of the Group Companies is or will be entitled to have any
      registration rights with respect to such securities.

     

    (f)    Authorization.
      (i)
      Each of the Group Companies has all requisite corporate power and authority
      to
      execute, deliver and perform its obligations under each of the Transaction
      Documents to which it is a party and to consummate the transactions contemplated
      thereby, (ii) this Agreement has been duly authorized, executed and delivered
      by
      the Group Companies. and (iii) each of the Transaction Document has been duly
      authorized and when executed and delivered by the Group Companies (to the extent
      they are parties thereto) shall constitute a legal, valid and binding obligation
      of each of the Group Companies (to the extent they are parties thereto)
      enforceable against the Group Companies (to the extent they are parties thereto)
      in accordance with its terms, except as limited by applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (g)    Valid
      Issuance of Notes and the Guarantees.
      The
      Notes, when issued, sold and delivered in accordance with the terms thereof
      and
      for the consideration set forth herein, will be free of restrictions on
      transfer, other than restrictions on transfer under applicable state and federal
      securities laws. Assuming the accuracy of the Purchaser’s representations in
      Section 8 below, the Notes will be issued in compliance with applicable state
      and federal securities laws. The Notes have been duly authorized by the Company
      and, when executed and delivered by the Company, authenticated by the Trustee,
      and delivered to the Purchaser, in accordance with the terms of this Agreement,
      the Notes will have been duly executed, issued and delivered by the Company
      and
      will constitute legal, valid and binding obligations of the Company, enforceable
      against the Company in accordance with their terms, except as limited by
      applicable bankruptcy, insolvency, reorganization, moratorium and other laws
      of
      general application affecting enforcement of creditors’ rights generally. The
      Guarantees have been duly authorized, and, when the Notes have been duly
      executed, authenticated and issued in accordance with the provisions of the
      Indenture and delivered to and paid for by the Purchaser with the Guarantees
      endorsed thereon by the Guarantors, will constitute the legal, valid and binding
      obligations of each Guarantor entitled to the benefits of the
      Indenture.

     

    (h)    Valid
      Issuance of Conversion Shares.
      The
      conversion rights attached to the Notes, when the Notes are issued on the
      Closing Date, will provide for the right to convert the Notes into up to
      2,118,644 shares of Common Stock of the Company (subject to subdivision or
      consolidation thereof) as of the Closing Date (as calculated immediately
      following the Closing and assuming the conversion of all the Notes). The
      Conversion Shares have been duly and validly authorized for issuance by the
      Company, and when issued pursuant to the terms of the Notes and the Indenture,
      will be validly issued, fully paid and non-assessable, not subject to any
      preemptive or similar rights, free from all taxes, Liens, charges and security
      interests with respect to the issuance thereof and free of restrictions on
      transfer other than as expressly contemplated by the Transaction
      Documents.

     

    (i)    Compliance
      with Instruments.
      None of
      the Group Companies is in violation of its respective articles of incorporation,
      certificate of incorporation, by-laws or other organizational documents (the
      “Charter
      Documents”).
      None
      of the Group Companies is, nor does any condition exist (with the passage of
      time or otherwise) that could reasonably be expected to cause any of the Group
      Companies to be, (i) in violation of any statute, rule, regulation, law or
      ordinance, or any judgment, decree or order applicable to any of the Group
      Companies or any of their properties (collectively, “Applicable
      Law”)
      of any
      federal, state, national, provincial, local or other governmental authority,
      governmental or regulatory agency or body, court, arbitrator or self-regulatory
      organization of applicable jurisdictions (each, a “Governmental
      Authority”),
      or
      (ii) in breach of or in default under any bond, debenture, note or other
      evidence of indebtedness, indenture, mortgage, deed of trust, lease or any
      other
      agreement or instrument to which any of them is a party or by which any of
      them
      or their respective property is bound (collectively, “Applicable
      Agreements”),
      other
      than in each of clause (i) and (ii) such violations, breaches or defaults that
      do not, and would not, individually or in the aggregate, have a Material Adverse
      Effect.

     

    (j)    No
      Conflicts.
      Neither
      the execution, delivery or performance of this Agreement or any other
      Transaction Document nor the consummation of any of the transactions
      contemplated herein or therein will conflict with, violate, constitute a breach
      of or a default (with the passage of time or otherwise) under, require the
      consent of any Person or a Governmental Authority (other than consents already
      obtained) or result in the imposition of a Lien on any assets of any of the
      Group Companies under or pursuant to (i) the Charter Documents, (ii) any
      Applicable Agreement, or (iii) any Applicable Law, other than in each of clause
      (ii) and (iii) such violations, breaches or defaults that do not, and would
      not,
      individually or in the aggregate, have a Material Adverse Effect. Immediately
      following consummation of the transactions contemplated in the Transaction
      Documents, no default will exist under the Indenture.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (k)   Governmental
      Filings.
      No
      filing with, consent, approval, authorization or order of, any Governmental
      Authority is required to be made by any of the Group Companies for the
      consummation of the transactions contemplated by the Transaction Documents,
      except (i) as have been made or obtained prior to the date of this Agreement
      or
      obtained after the Closing in accordance with the terms of the Transaction
      Documents, and (ii) as may be required under the Act or state securities or
      “blue sky” laws. 

     

    (l)    Proceedings.
      There
      is no action, claim, suit, demand, hearing, notice of violation or deficiency,
      or proceeding, domestic or foreign (collectively, “Proceedings”),
      pending or, to the knowledge of the Company, threatened, that seeks to restrain,
      enjoin, prevent the consummation of, or otherwise challenges any of the
      Transaction Documents or any of the transactions contemplated
      therein.

     

    (m)   Permits.
      Each of
      the Group Companies possesses all material licenses, permits, certificates,
      consents, orders, approvals and other authorizations from, and has made all
      declarations and filings with, all Governmental Authorities, presently required
      or necessary to own or lease, as the case may be, and to operate their
      respective properties and to carry on their respective businesses as now
      conducted (“Permits”),
      except where the failure to possess such Permits could not, individually or
      in
      the aggregate, have a Material Adverse Effect. All of the Permits are valid
      and
      in full force and effect. Each of the Group Companies has fulfilled and
      performed all of its respective obligations with respect to such Permits and
      no
      event has occurred which allows, or after notice or lapse of time could allow,
      revocation or termination thereof or result in any other material impairment
      of
      the rights of the holder of any such Permit. None of the Group Companies has
      received actual notice of any Proceeding relating to revocation or modification
      of any such Permit.

     

    (n)    Title
      to Property.
      Each of
      the Group Companies has good and marketable title to all real property and
      personal property owned by it that is material to their respective businesses,
      in each case free and clear of any Liens as of the Closing Date. For real
      property not owned by any of the Group Companies and currently used or planned
      to be used for the business operations of the Group Companies, each of such
      Group Companies has good and marketable title to all leasehold estates in real
      and personal property being leased by it that is material to their respective
      businesses and, in each case free and clear of all Liens as of the Closing
      Date.

     

    (o)    Insurance.
      Each of
      the Group Companies maintains reasonably adequate insurance covering its
      material properties, operations, personnel and business, and is insured by
      insurers of recognized financial responsibility against such losses and risks
      and in such amounts as are prudent and customary in the businesses in which
      it
      is engaged. All policies of insurance insuring the Group Companies and their
      respective businesses, assets, employees, officers and directors are in full
      force and effect. Each of the Group Companies is in compliance with the terms
      of
      such policies and instruments in all material respects, and there are no claims
      by any of the Group Companies under any such policy or instrument as to which,
      to the Company’s knowledge, any insurance company is denying liability or
      defending under a reservation of rights clause. None of the Group Companies
      has
      been refused any insurance coverage sought or applied for, and none of the
      Group
      Companies has any reason to believe that it will not be able to renew its
      existing insurance coverage as and when such coverage expires or to obtain
      similar coverage from similar insurers as may be necessary to continue its
      business at a cost that does not, and would not, individually or in the
      aggregate, have a Material Adverse Effect.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (p)    Taxes.
      All Tax
      returns required to be filed by each of the Group Companies have been filed
      (taking into account all extensions of due dates), and all such returns are
      true, complete and correct in all material respects. All material Taxes that
      are
      due from each of the Group Companies have been paid other than those (i)
      currently payable without penalty or interest or (ii) being diligently contested
      in good faith and by appropriate proceedings and for which adequate reserves
      have been established in accordance with GAAP. To the knowledge of the Company,
      there are no proposed Tax assessments against any of the Group Companies. The
      accruals and reserves on the books and records of each of Group Companies in
      respect of any Tax liability for any Taxable period not finally determined
      are
      adequate to meet any assessments of Tax for any such period. For purposes of
      this Agreement, the term “Tax”
and
      “Taxes”
shall
      mean all federal, state, national, provincial, local and foreign taxes, and
      other assessments of a similar nature (whether imposed directly or through
      withholding), including any interest, additions to tax, or penalties applicable
      thereto.

     

    (q)    Intellectual
      Property.
      

     

    (i)    
Each
      of
      the Group Companies owns, or is validly licensed under, or has the right to use,
all
      patents, patent rights, licenses, inventions, copyrights, know-how (including
      trade secrets and other unpatented and/or unpatentable proprietary or
      confidential information, systems, software or procedures), trademarks, service
      marks, trade names or master works, whether or not
      registered, filed, or issued under the authority of any governmental
      authority,
      (collectively, “Intellectual
      Property”)
      necessary
      for the conduct of its business and all Intellectual Properties owned by the
      Group Companies necessary for the conduct of their businesses are valid and
      in
      full force and effect. As of the Closing Date, such Intellectual Property is
      or
      will be free and clear of all Liens, except where the failure to own, possess,
      or have the right to use such Intellectual Property does not, and would not,
      individually or in the aggregate, have a Material Adverse Effect. To the
      Company’s knowledge, no Proceedings have been asserted by any Person challenging
      the use of any such Intellectual Property by any of the Group Companies or
      questioning the validity or effectiveness of the Intellectual Property or any
      license or agreement related thereto, and, to the Company’s knowledge, there are
      no facts which would form a valid basis for any such Proceeding. To the
      Company’s knowledge, the use of such Intellectual Property any of the Group
      Companies will not infringe on the Intellectual Property rights of any other
      Person. 

     

    (ii)    
Each
      of
      the Group Companies has taken reasonable steps and measures to establish and
      preserve ownership of or right to use all Intellectual Property material to
      the
      operation of its business, including any Intellectual Property that was jointly
      developed with any third-parties, or any Intellectual Property for which
      improper or unauthorized disclosure would impair its value or validity, and
      has
      had executed appropriate nondisclosure and confidentiality agreements and made
      all appropriate filings, registrations and payments of fees in connection with
      the foregoing. To the Company’s knowledge, there is no infringement or
      misappropriation by any other Person of any Intellectual Property of any of
      the
      Group Companies. No Proceedings in which any of the Group Companies alleges
      that
      any Person is infringing upon, or otherwise violating, any Intellectual Property
      of any of the Group Companies are pending, and none has been served, instituted
      or asserted by any of the Group Companies.

     

    (iii)    No
      former
      or current employee, no former or current consultant, and no third-party joint
      developer of any of the Group Companies has any rights in any Intellectual
      Property made, developed, conceived, created or written by the aforesaid
      employee or consultant during the period of his or her retention by the Group
      Companies which can be asserted against any Group Company.

     

    (iv)    No
      Intellectual Property owned by any Group Company is the subject of any Lien,
      license or other contract granting rights or security interest therein to any
      other Person, except for Liens, licenses or other contracts granting rights
      or
      security interest that do not materially interfere with the use made and
      proposed to be made of such Intellectual Property by any Group Company. Each
      of
      the Group Companies has not (A) transferred or assigned, (B) granted an
      exclusive license to or (C) provided or licensed, any Intellectual Property
      owned by the Group Companies and necessary for the conduct of their business
      to
      any Person.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (r)    Internal
      Controls.
      Each of
      the Group Companies maintains a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorization, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorization and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any material differences.

     

    (s)    Financial
      Statements; No Undisclosed Liabilities.
      

     

    (i)    The
      audited consolidated financial statements and related notes of the Company
      contained in the Form 10-K for the three years ended December 31, 2006 present
      fairly in all material respects the financial position, results of operations
      and cash flows of the Company and its Subsidiaries, as of the respective dates
      and for the respective periods to which they apply and have been prepared in
      accordance with GAAP and comply as to form with the applicable requirements
      of
      Regulation S-X of the Act. 

     

    (ii)    Subsequent
      to the date of the Company’s audited financial statements filed for the year
      ended December 31, 2006, except as disclosed therein or in any subsequent SEC
      Report, (A) none of the Group Companies has incurred any liabilities, direct
      or
      contingent, that are material, individually or in the aggregate, to the Company,
      or has entered into any material transactions not in the ordinary course of
      business, (B) there has not been any material decrease in the Capital Stock
      or
      any material increase in long-term indebtedness or any material increase in
      short-term indebtedness of the Group Companies, or any payment of or declaration
      to pay any dividends or any other distribution with respect to the Group
      Companies, and (C) there has not been any material adverse change in the
      properties, business, operations, earnings, assets, liabilities or condition
      (financial or otherwise) of the Group Companies taken as a whole; excluding
      any
      changes caused by (x) the condition of the industry of the Company that do
      not
      disproportionately affect the Company, (y) the failure of the Company to meet
      its financial projections or (z) the execution and delivery of this Agreement
      and consummation of the transactions contemplated hereby (each of clauses (A),
      (B) and (C), a “Material
      Adverse Change”).
      To
      the knowledge of the Company, there is no event that is reasonably likely to
      occur in the foreseeable future, which if it were to occur, could, individually
      or in the aggregate, have a Material Adverse Change.

     

    (iii)   Without
      limiting the generality of the foregoing paragraph (ii), except as disclosed
      in
      the SEC Reports, the Company has no liabilities or obligations (whether actual,
      accrued, absolute, fixed, contingent, liquidated, unliquidated or otherwise,
      and
      whether due or to become due), except for (i) liabilities or obligations shown
      on the balance sheet as of December 31, 2006 (the “Most
      Recent Balance Sheet”),
      (ii)
      liabilities under any agreements, contracts, commitments, licenses or leases
      which have arisen prior to the date of the Most Recent Balance Sheet and which
      are not required to be reflected in a balance sheet, or the notes thereto,
      prepared in accordance with GAAP (none of which relates to a breach of contract,
      breach of warranty, tort, infringement, environmental, health or safety matter,
      violation of Applicable Laws or proceeding brought by Governmental Authorities),
      (iii) liabilities incurred in the ordinary course of business since December
      31,
      2006 (none of which relates to a breach of contract, breach of warranty, tort,
      infringement, environmental, health or safety matter, violation of Law or
      proceeding brought by Governmental Authorities) and/or (iv) other liabilities
      that are, individually and in the aggregate, immaterial.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (t)    Debt.
      All
      Debt represented by the Notes and the Guarantees is being incurred for proper
      purposes and in good faith. 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 fair saleable value
      of the Group Companies’ assets exceeds the amount that will be required to be
      paid on or in respect of the Group Companies’ existing Debts and other
      liabilities (including contingent liabilities) as they mature; (ii) the present
      fair saleable value of the assets of the Group Companies is greater than the
      amount that will be required to pay the probable liabilities of the Group
      Companies on their respective Debt as they become absolute and mature; (iii)
      the
      Group Companies are able to realize upon their assets and pay their Debt and
      other liabilities (including contingent obligations) as they mature; (iv) the
      Group Companies’ assets do not constitute unreasonably small capital to carry on
      their respective businesses as now conducted and as proposed to be conducted
      including their respective capital needs taking into account the particular
      capital requirements of the business conducted by the Group Companies, and
      projected capital requirements and capital availability thereof; and (v) the
      current cash flow of each of the Group Companies, 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 liabilities when such amounts are required to be paid.
      None of the Group Companies intends 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). The Company has no knowledge of any
      facts or circumstances which lead it to believe that it or any other Group
      Companies will file for reorganization or liquidation under the bankruptcy
      or
      reorganization laws of any jurisdiction within one year from the Closing Date.
      None of the Group Companies is, or has reason to believe it is likely to be,
      in
      default with respect to any Debt and no waiver of default is currently in
      effect. None of the Group Companies has agreed or consented to cause or permit
      in the future (upon the happening of a contingency or otherwise) any of its
      property, whether now owned or hereafter acquired, to be subject to a Lien.
      None
      of the Group Companies is a party to, or otherwise subject to any provision
      contained in, any instrument evidencing Debt of any of the Group Companies,
      any
      agreement relating thereto or any other agreement (including, but not limited
      to, its charter or other organizational document) which limits the amount of,
      or
      otherwise imposes restrictions on the incurring of, Debt of the Company.

     

    (u)    No
      Stabilization.
      None of
      the Group Companies has and, to each of its knowledge after due inquiry, no
      one
      acting on its behalf has, (i) taken, directly or indirectly, any action designed
      to cause or to result in, or that has constituted or which might reasonably
      be
      expected to constitute, the stabilization or manipulation of the price of any
      security of any of the Group Companies to facilitate the sale or resale of
      any
      of the Securities, (ii) sold, bid for, purchased, or paid anyone any
      compensation for soliciting purchases of, the Notes, or (iii) paid or agreed
      to
      pay to any person any compensation for soliciting another to purchase any other
      securities of the Group Companies.

     

    (v)    No
      Sale to the U.S.
      None of
      the Group Companies, their respective Affiliates, or any person acting on its
      or
      their behalf has, directly or indirectly, made offers or sales of any security,
      or solicited offers to buy, sell or offer to sell or otherwise negotiate in
      respect of, in the United States or to any United States citizen or resident,
      any security which is or would be integrated with the sale of the Securities
      in
      a manner or under circumstances that would require the registration of the
      Securities under the Act.

     

    (w)    No
      Directed Selling Efforts.
      None of
      the Group Companies, their respective Affiliates, or any person acting on its
      or
      their behalf (other than the Purchaser, its Affiliates or persons acting on
      its
      behalf, as to whom the Company makes no representation) has engaged in any
      directed selling efforts (within the meaning of Regulation S) with respect
      to
      the Securities; and each of the Company, its Subsidiaries, their respective
      Affiliates and each person acting on its or their behalf has complied with
      the
      offering restrictions requirement of Regulation S. 

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (x)    
No
      Registration.
      Assuming the accuracy of the Purchaser’s representations and warranties set
      forth in Section 8, no registration under the Act of the Securities is required
      for the offer and sale of the Securities in the manner contemplated herein
      or to
      qualify the Indenture under the Trust Indenture Act of 1939, as
      amended.

     

    (y)    
Eligibility.
      The
      Notes satisfy the eligibility requirements of Rule 144A(d)(3) under the
      Act.

     

    (z)    
Labor
      Matters.
      There
      is no strike or other labor dispute involving any of the Group
      Companies pending
      or threatened, which could, individually or in the aggregate, have a Material
      Adverse Effect. There is no employment related charge, complaint, grievance,
      investigation, unfair labor practice claim or inquiry of any kind, pending
      against any of the Group
      Companies that
      could, individually or in the aggregate, have a Material Adverse Effect.

     

    (aa)   Brokers
      and Finders.
      The
      Company has not engaged any broker, finder, commission agent or other similar
      person in connection with the transactions contemplated under the Transaction
      Documents, and the Company is not under any obligation to pay any broker’s fee
      or commission in connection with such transactions.

     

    (bb)   Environmental
      Matters.
      Each of
      the Group Companies (i) is in compliance with any and all currently applicable
      foreign, federal, state, national, provincial, and local laws and regulations
      relating to the protection of the environment or hazardous or toxic substances
      or wastes, pollutants or contaminants (“Environmental
      Laws”),
      (ii) has received and is in compliance with all permits, licenses or other
      approvals required of it under applicable Environmental Laws to conduct its
      business, (iii) has not received actual notice of any actual or potential
      liability for the investigation or remediation of any disposal or release of
      hazardous or toxic substances or wastes, pollutants or contaminants, (iv) none
      of the Group Companies has knowledge of any facts which would give rise to
      any
      Proceedings, public or private, against it of violation of Environmental Laws
      arising out of the operations of the Group Companies, except, in each case,
      such
      as would not reasonably be expected to result in a Material Adverse Effect;
      and
      (v) none of the Group Companies has stored any hazardous materials on real
      properties now or formerly owned, leased or operated by any of them, and has
      not
      disposed of any hazardous materials, in a manner contrary to any Environmental
      Laws; except as to each of the foregoing where such non-compliance with
      Environmental Laws, failure to receive required permits, licenses or other
      approvals, or liability would not, individually or in the aggregate, have a
      Material Adverse Effect.

     

    In
      the
      ordinary course of its business, the Company periodically reviews the effect
      of
      Environmental Laws on the business, operations and properties of the Group
      Companies, in the course of which it identifies, estimates and evaluates
      associated costs and liabilities (including, without limitation, any capital
      or
      operating expenditures required for clean-up, closure of properties or
      compliance with Environmental Laws, or any permit, license or approval, any
      related constraints on operating activities and any potential liabilities to
      third parties). On the basis of such review, the Company has reasonably
      concluded that such associated costs would not, individually or in the
      aggregate, have a Material Adverse Effect.

     

    (cc)   Encumbrances.
      As of
      the Closing Date, except for any such restrictions provided under the laws
      of
      the jurisdiction of incorporation of any of the Group Companies, as applicable,
      there will be no encumbrances or restrictions on the ability of any of the
      Group
      Companies (i) to pay dividends or make other distributions on such parties’
Capital Stock or to make loans or advances or pay any indebtedness to, or
      investments in, any of the Group Companies, or (ii) to transfer any of its
      property or assets to any of the Group Companies, except for such restrictions
      set forth in the Transaction Documents.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (dd)    Foreign
      Corrupt Practices Act.
      None of
      the Group Companies, nor to the knowledge of the Company, any agent or other
      person acting on behalf of any of the Group Companies, has, directly or
      indirectly, (i) has used any funds, or will use any proceeds from the sale
      of
      the Notes, for unlawful contributions, gifts, entertainment or other unlawful
      expenses related to foreign or domestic political activity, (ii) has made any
      unlawful payment to foreign or domestic government officials or employees or
      to
      any foreign or domestic political parties or campaigns from corporate funds,
      (iii) has failed to disclose fully any contribution made by the Group Companies
      (or made by any person acting on its behalf of which the Company is aware)
      which
      is in violation of law, or (iv) has violated in any material respect any
      provision of the Foreign Corrupt Practices Act of 1977, as amended, and the
      rules and regulations thereunder (the “FCPA”).

     

    (ee)    Ranking
      of Obligations.
      The
      payment obligations of the Company under this Agreement will rank at least
      pari
      passu,
      without
      preference or priority, with all other senior unsecured and unsubordinated
      indebtedness of the Company. 

     

    (ff)    
Related
      Party Transactions.
      Other
      than as set forth in the SEC Reports, no material relationship, direct or
      indirect, exists between or among any of the Group Companies or any Affiliate
      of
      the Group Companies, on the one hand, and any former or current director,
      officer, stockholder, customer or supplier of any of them (including any member
      of their immediate family), on the other hand.

     

    (gg)    Investment
      Company.
      None of
      the Group Companies is, and as a result of the offer and sale of the Securities
      contemplated herein will not be, required to register as an “investment company”
under, and as such term is defined in, the U.S. Investment Company Act of 1940,
      as amended in connection with or as a result of the offer and sale of the
      Securities.

     

    (hh)    PFIC. None
      of
      the Group Companies is or intends to become a “passive foreign investment
      company” within the meaning of Section 1297 of the Code (“PFIC”). 

     

    (ii)     
      OFAC.
      Neither
      the Company nor, to the knowledge of the Company, any director, officer, agent,
      employee, Affiliate or Person acting on behalf of the Company is currently
      subject to any U.S. sanctions administered by the Office of Foreign Assets
      Control of the U.S. Treasury Department (“OFAC”);
      and
      the Company will not directly or indirectly use the proceeds of the sale of
      the
      Notes, or lend, contribute or otherwise make available such proceeds to any
      Subsidiary, joint venture partner or other Person or entity, towards any sales
      or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other
      country sanctioned by OFAC or for the purpose of financing the activities of
      any
      person currently subject to any U.S. sanctions administered by
      OFAC.

     

    (jj)     
      Money
      Laundering Laws.
      The
      operations of each of the Group Companies are and have been conducted at all
      times in compliance with the money laundering statutes of applicable
      jurisdictions, the rules and regulations thereunder and any related or similar
      rules, regulations or guidelines, issued, administered or enforced by any
      applicable governmental agency (collectively, the “Money
      Laundering Laws”)
      and no
      action, suit or proceeding by or before any court or governmental agency,
      authority or body or any arbitrator involving any of the Group Companies with
      respect to the Money Laundering Laws is pending or, to the best knowledge of
      the
      Company, threatened.

     

    (kk)    Other
      Representations and Warranties Relating to Golden, Cheng Feng, Cheng Feng
      Equipment, Cheng Feng Public Safety, CSST PRC, Hongtianzhi, Shixing and
      Tongxing.
      

     

    (i)    All
      material consents, approvals, authorizations or licenses requisite under PRC
      law
      for the due and proper establishment and operation of each of Golden, Cheng
      Feng, Cheng Feng Equipment, Cheng Feng Public Safety, CSST PRC, Hongtianzhi,
      Shixing and Tongxing has been duly obtained from the relevant PRC Governmental
      Authorities and are in full force and effect.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    (ii)    All
      filings and registrations with the PRC Governmental Authorities required in
      respect of each of Golden, Cheng Feng, Cheng Feng Equipment, Cheng Feng Public
      Safety, CSST PRC, Hongtianzhi, Shixing and Tongxing and its operations
      including, without limitation, the registrations with the Ministry of Commerce,
      the State Administration of Industry and Commerce, the State Administration
      for
      Foreign Exchange, tax bureau and customs authorities have been duly completed
      in
      accordance with the relevant PRC rules and regulations, except where, the
      failure to complete such filings and registrations does not, and would not,
      individually or in the aggregate, have a Material Adverse Effect.

     

    (iii)    Each
      of
      Golden, Cheng Feng, Cheng Feng Equipment, Cheng Feng Public Safety, CSST PRC,
      Hongtianzhi, Shixing and Tongxing has complied with all relevant PRC laws and
      regulations regarding the contribution and payment of its registered share
      capital, the payment schedule of which has been approved by the relevant PRC
      Government Authorities. There are no outstanding rights of, or commitments
      made
      by the Company or any Subsidiary to sell any equity interest in Golden, Cheng
      Feng, Cheng Feng Equipment, Cheng Feng Public Safety, CSST PRC, Hongtianzhi,
      Shixing and Tongxing.

     

    (iv)    None
      of
      Golden, Cheng Feng, Cheng Feng Equipment, Cheng Feng Public Safety, CSST PRC,
      Hongtianzhi, Shixing and Tongxing is in receipt of any letter or notice from
      any
      relevant PRC Governmental Authority notifying it of revocation of any licenses
      or qualifications issued to it or any subsidy granted to it by any PRC
      Governmental Authority for non-compliance with the terms thereof or with
      applicable PRC laws, or the need for compliance or remedial actions in respect
      of the activities carried out by Golden, Cheng Feng, Cheng Feng Equipment,
      Cheng
      Feng Public Safety, CSST PRC, Hongtianzhi, Shixing or Tongxing, except such
      revocation does not, and would not, individually or in the aggregate, have
      a
      Material Adverse Effect.

     

    (v)    
Each
      of
      Golden, Cheng Feng, Cheng Feng Equipment, Cheng Feng Public Safety, CSST PRC,
      Hongtianzhi, Shixing and Tongxing has conducted its business activities within
      the permitted scope of business or has otherwise operated its business in
      compliance with all relevant legal requirements and with all requisite licenses
      and approvals granted by competent PRC Governmental Authorities other than
      such
      non-compliance that do not, and would not, individually or in the aggregate,
      have a Material Adverse Effect. As to licenses, approvals and government grants
      and concessions requisite or material for the conduct of any part of Golden’s,
      Cheng Feng’s, Cheng Feng Equipment’s, Cheng Feng Public Safety’s, CSST PRC’s,
      Hongtianzhi’s, Shixing’s or Tongxing’s business which are subject to periodic
      renewal, the Company has no knowledge of any grounds on which such requisite
      renewals will not be granted by the relevant PRC Governmental
      Authorities.

     

    (vi)    With
      regard to employment and staff or labor, each of Golden,
      Cheng Feng, Cheng Feng Equipment, Cheng Feng Public Safety, CSST PRC,
      Hongtianzhi, Shixing and Tongxing
      has
      complied with all applicable PRC laws and regulations in all material respects,
      including without limitation, laws and regulations pertaining to welfare funds,
      social benefits, medical benefits, insurance, retirement benefits, pensions
      or
      the like, other than such non-compliance that do not, and would not,
      individually or in the aggregate, have a Material Adverse Effect.

     

    (ll)    Full
      Disclosure.
      All
      disclosure furnished by or on behalf of the Company to the Purchaser regarding
      any of the Group Companies, their respective businesses and the transactions
      contemplated under the Transaction Documents (to the extent they are parties
      thereto), including the SEC Reports and the Disclosure Schedules to this
      Agreement, with respect to the representations and warranties made herein are
      true and correct with respect to such representations and warranties and do
      not
      contain any untrue statement of a material fact or omit to state any material
      fact necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading. The Company
      acknowledges and agrees that the Purchaser does not make any representations
      or
      warranties with respect to the transactions contemplated hereby other than
      those
      specifically set forth in Section 8 hereof.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    The
      Company does not make any representations or warranties with respect to the
      transactions contemplated in this Agreement other than those specifically set
      forth in this Section 6.

     

    7.    Covenants
      of the Group Companies.

     

    Each
      of
      the Group Companies, jointly and severally, hereby agrees: 

     

    (a)    To
      (i)
      advise the Purchaser promptly after obtaining knowledge (and, if requested
      by
      the Purchaser, confirm such advice in writing) of the issuance by any state
      securities commission of any stop order suspending the qualification or
      exemption from qualification of the Securities for offer or sale in any
      jurisdiction, or the initiation of any proceeding for such purpose by any state
      securities commission or other regulatory authority, (ii) use its commercially
      reasonable efforts to prevent the issuance of any stop order or order suspending
      the qualification or exemption from qualification of the Securities under any
      state securities or “blue
      sky”
laws,
      and (iii) if at any time any state securities commission or other regulatory
      authority shall issue an order suspending the qualification or exemption from
      qualification of the Securities under any such laws, use its commercially
      reasonable efforts to obtain the withdrawal or lifting of such order at the
      earliest possible time.

     

    (b)    So
      long
      as any of the Securities are “restricted securities” within the meaning of Rule
      144(a)(3) or Rule 905 under the Act, to, during any period in which the Company
      is not subject to and in compliance with Section 13 or 15(d) of the Exchange
      Act, provide to each holder of such restricted securities and to each
      prospective purchaser (as designated by such holder) of such restricted
      securities, upon the request of such holder or prospective purchaser, any
      information required to be provided by Rule 144A(d)(4) under the
      Act.

     

    (c)    Whether
      or not any of the transactions contemplated under the Transaction Documents
      are
      consummated or this Agreement is terminated, to pay (i) all costs, expenses,
      fees and taxes incident to and in connection with the preparation, issuance
      and
      delivery of the Securities, (ii) all fees and expenses of counsels, accountants
      and any other advisors, if any, retained by the Company, (iii) all expenses
      in
      connection with qualifying the Notes for settlement in the Clearing Facilities,
      (iv) all fees and expenses of the Company in connection with approval of the
      Notes for “book entry” transfer, and (v) all fees and expenses of the Trustee,
      the Conversion Agent, the Paying Agent, the Registrar and any other agents
      contemplated in the Transaction Documents.

     

    (d)    To
      do and
      perform all things required to be done and performed under the Transaction
      Documents prior to and after the Closing Date.

     

    (e)    Prior
      to
      making any public disclosure or filings as may be required by Applicable Laws
      with respect to any of the Transaction Documents and the transactions
      contemplated hereby and thereby, to provide the Purchaser and its counsels
      with
      the reasonable opportunity to review and comment on such public disclosure
      documents and consider in good faith any comments received by the Purchaser
      or
      its counsels.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    (f)    To
      maintain the listing and trading of the Common Stock on the Trading Market
      or on
      an alternative trading market reasonably acceptable to the
      Purchaser.

     

    (g)    For
      so
      long as the Purchaser owns any of the Securities, the Company will furnish
      to
      the Purchaser copies of all reports and other communications (financial or
      otherwise) furnished by the Company to the Trustee or to the holders of its
      Securities and, as soon as available, copies of any reports or financial
      statements furnished to or filed by the Company with the Commission or any
      national securities exchange on which any class of securities of the Company
      may
      be listed; provided,
      however,
      that
      any such report or financial statements filed on the Commission’s EDGAR database
      need not be separately furnished.

     

    (h)    During
      the two year period after the Closing Date (or such shorter period as may be
      provided for in Rule 144(k) under the Act, as the same may be in effect from
      time to time), not to, and not to permit any current or future Subsidiaries
      of
      the Company or any other affiliates (as defined in Rule 144(a) under the Act)
      controlled by the Company to, resell any of the Securities which constitute
      “restricted securities” under Rule 144 that have been reacquired by the Company,
      any current or future Subsidiaries of the Company or any other affiliates (as
      defined in Rule 144(a) under the Act) controlled by the Company, except pursuant
      to an effective registration statement under the Act.

     

    (i)    
To
      pay
      all stamp, documentary and transfer taxes and other duties, if any, which may
      be
      imposed by any Governmental Authorities or any political subdivision thereof
      or
      taxing authority thereof or therein with respect to the issuance of the Notes
      or
      the sale thereof to the Purchaser.

     

    (j)    
The
      Company will use its commercially reasonable efforts not to become, and cause
      its Subsidiaries not to become, a PFIC. If the Company determines that it or
      any
      of its Subsidiaries has become a PFIC, the Company will promptly notify the
      Purchaser and provide all information requested by the Purchaser that is
      necessary for it to make a qualified electing fund (QEF) election.

     

    (k)    Not
      register any transfer of the Notes that is not (i) made in accordance with
      the
      provisions of Regulation S under the Act, (ii) made pursuant to registration
      under the Act, or (iii) made pursuant to an available exemption under the
      Act.

     

    (l)    
Prior
      to
      the Closing Date, the Company shall not, without the express prior written
      consent of the Purchaser (which consent shall be at the Purchaser’s sole
      discretion), pursue or discuss any capital raising transaction or transactions
      with any Person other than the Purchaser or its Affiliates (“Outside
      Financing”).
      

     

    (m)    The
      Company shall procure that the proceeds from the sale and purchase of the Notes
      are used by it for Capital Expenditures, working capital, general corporate
      purposes and acquisitions (if any), and pending the application of all of such
      net proceeds in such manner, shall invest the portion of such net proceeds
      not
      yet so applied in Cash Equivalents. Following the application of net proceeds
      in
      such manner, any remaining net proceeds may be applied for general corporate
      purposes not otherwise prohibited by the terms of the Indenture.

     

    (n)    The
      Company shall not, and shall procure that its Subsidiaries shall not, do
      anything or take any step, action or measure (or omit to take the same), that
      has or could be reasonably expected to have, individually or in the aggregate,
      a
      Material Adverse Effect.

     

    (o)    The
      Company shall not, and shall procure that its Subsidiaries shall not, directly
      or indirectly, incur, grant or suffer to exist any Lien, other than Liens
      arising by operation of law, any Lien or retention of title arrangement arising
      by agreement to substantially the same effect and in the ordinary course of
      business and not as a result of any default or omission, or Permitted Lien
      as
      defined in the Indenture.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    (p)    The
      Company shall at all times keep reserved for issuance and delivery upon
      conversion of the Notes such number of Conversion Shares or other shares of
      the
      Company as are from time to time issuable upon conversion of any Notes and
      will,
      from time to time, take all necessary steps to amend its articles of
      incorporation to provide a sufficient reserve of Conversion Shares for issuance
      upon conversion of the Notes.

     

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

     

    (r)    
Each
      of
      the Group Companies undertakes that (i) they will comply with the FCPA,
      including, without limitation, not 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 value to
      any
“foreign official” (as the 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, (ii) they will conduct its business in compliance
      with the FCPA, and (iii) they will institute and maintain policies and
      procedures designed to ensure, and which are reasonably expected to continue
      to
      ensure, continued compliance therewith.

     

    (s)    The
      Company shall, by no later than the day following the Closing Date, file a
      Form
      8-K announcing the Closing of the transactions contemplated hereby and the
      material terms thereof, which must be reviewed and consented to by the Purchaser
      prior to the filing, which consent shall not be unreasonably withheld or
      delayed; and to provide the draft of such Form 8-K to the Purchaser reasonably
      in advance for review. The Company and the Purchaser shall consult with each
      other in issuing any other press releases with respect to the transactions
      contemplated hereby, and neither the Company nor the Purchaser shall issue
      any
      such press release or otherwise make any such public statement (i) without
      the
      prior consent of the Company, with respect to any press release of the
      Purchaser, or (ii) without the prior consent of the Purchaser, with respect
      to
      any press release of the Company, in either case of (i) and (ii), which consent
      shall not unreasonably be withheld or delayed, except if such disclosure is
      required by law, in which case the disclosing party shall promptly provide
      the
      other party with prior notice of such public statement or communication.

     

    (t)    Until
      all
      amounts outstanding under the Notes have been repaid in full, the Company shall
      not, and shall procure that its Subsidiaries shall not, declare, make or pay,
      or
      pay interest on any unpaid amount of, any dividend, charge, fee or other
      distribution (whether in cash or in-kind) on or in respect of its Capital Stock
      (or any class of its share capital) where this would result in any amounts
      being
      paid to any Person other than the Company.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    (u) From
      the
      date of this Agreement to the Closing Date, each of the Group Companies and
      their respective officers and directors will not, and the Company will cause
      its
      other representatives not to, directly or indirectly, (i) solicit, or
      initiate any proposal (a “Proposal”)
      relating to (A) direct or indirect acquisition or purchase of any equity
      securities (any and all shares of Capital Stock of the Group Companies,
      securities of the Group Companies convertible into, or exchangeable or
      exercisable for, such shares, and options, warrants or other rights to acquire
      such shares and any securities that represent the right to receive such equity
      securities) or any tender offer or exchange offer or (B) a merger, amalgamation,
      share exchange or consolidation or (C) a sale of all or substantially all of
      the
      assets of the Group Companies, (ii) participate in any discussions or
      negotiations regarding or furnish to any Person any information or otherwise
      facilitate any inquiries or the making of any proposal that constitutes, or
      may
      reasonably be expected to lead to, any Proposal (other than a modified Proposal
      of the Purchaser, if any), or (iii) authorize, engage in, or enter into any
      agreement or understanding with respect to, any Proposal;
      provided
      that, in
      the event the board of directors of the Company receives a bona
      fide
      Proposal
      and concludes in good faith that such Proposal would, if consummated, result
      in
      a Superior Proposal (as defined below), the board of directors of the Company
      may take actions described above to the extent that the board of directors
      of
      the Company concludes in good faith (based on the advice of its outside counsel)
      that failure to take such actions would result in a violation of its fiduciary
      duties under applicable law; provided,
      further that
      the
      Company shall also furnish to the Purchaser a copy of any confidential data
      or
      information that it is furnishing to any third party pursuant to this Section
      7(u) to the extent not previously furnished to the Purchaser. “Superior
      Proposal”
means
      any bona
      fide
      written
      Proposal which the Company’s board of directors concludes in good faith to be
      more favorable from a financial point of view to its stockholders than the
      transaction contemplated hereby, (i) after receiving the advice of its financial
      advisors (who shall be nationally recognized investment banking firms), (ii)
      after taking into account the likelihood of consummation of such transaction
      on
      the terms set forth therein (as compared to, and with due regard for, the terms
      herein) and (iii) after taking into account all appropriate legal (with the
      advice of outside counsel), financial (including the financing terms of any
      such
      proposal), regulatory and other aspects of such proposal and any other relevant
      factors permitted under applicable law. Each
      of
      the Group Companies and their respective officers and directors will, and each
      of the Group Companies will cause its other representatives to, terminate any
      existing activities or discussions in relation to any Proposal with any other
      party other than the Purchaser and its representatives.

     

    The
      Company will immediately (within one Business Day) advise the Purchaser of,
      and
      inform the Purchaser of the terms of, and the identity of the Person making
      any
      Proposal that any of the Group
      Companies
      or any
      of their representatives or Affiliates may receive from
      the
      date of this Agreement to the Closing Date.

     

    8.    Purchaser’s
      Representations, Warranties and Agreements.
      The
      Purchaser represents and warrants to the Company that:

     

    (a)    The
      Purchaser is not a “U.S. Person” (as defined in Rule 902 of Regulation S under
      the Act) and it understands that no action has been or will be taken in any
      jurisdiction by the Company that would permit a public offering of the Notes
      or
      the Conversion Shares in any country or jurisdiction where action for that
      purpose is required. The Purchaser is not acquiring the Notes or the Conversion
      Shares for the account or benefit of any U.S. persons except in accordance
      with
      exemption from registration requirements of the Act below or in a transaction
      not subject thereto.

     

    (b)    The
      Purchaser is not acquiring the Notes or the Conversion Shares with a view to
      any
      distribution thereof that would violate the Act or the securities laws of any
      state of the United States or any other applicable jurisdiction.

     

    (c)    The
      Purchaser (A) agrees on its own behalf and on behalf of any investor account
      for
      which it has purchased the Notes and/or the Conversion Shares that it will
      not
      offer, sell or otherwise transfer any of the Notes and/or the Conversion Shares
      prior to (x) the date which is 1 year after the later of the date of the
      commencement of the offering and the date of original issuance (or of any
      predecessor of any Security proposed to be transferred by the Purchaser) and
      (y)
      such later date, if any, as may be required by applicable law, except (a) to
      the
      Company, (b) pursuant to a registration statement that has been declared
      effective under the Act, (c) for so long as any Security is eligible for resale
      pursuant to Rule 144A under the Act, to a person it reasonably believes is
      a
“qualified institutional buyer” as defined in Rule 144A that purchases for its
      own account or for the account of another qualified institutional buyer to
      whom
      notice is given that the transfer is being made in reliance on Rule 144A, (d)
      pursuant to offers and sales to Persons who are not “U.S. Persons” (within the
      meaning of Regulation S) that occur outside the United States within the meaning
      of Regulation S or (e) pursuant to any other available exemption from the
      registration requirements of the Act, and (B) agrees that it will give to each
      person to whom such Security is transferred a notice substantially to the effect
      of this paragraph. 

     

    
      
         

      

      
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    (d)    The
      Purchaser acknowledges that the Notes and the Conversion Shares are “restricted
      securities” as defined in Rule 144 under the Act.

     

    (e)    No
      form
      of “directed selling efforts” (as defined in Rule 902 of Regulation S under the
      Act), general solicitation or general advertising in violation of the Act has
      been or will be used nor will any offers by means of any directed selling
      efforts in the United States be made by the Purchaser or any of its
      representatives in connection with the offer and sale of any of the Notes and/or
      the Conversion Shares.

     

    (f)    The
      Notes
      and/or the Conversion Shares to be acquired by the Purchaser will be acquired
      for investment for the Purchaser’s own account, not as a nominee or agent, and
      not with a view to the resale or distribution of any part thereof, and that
      the
      Purchaser has no present intention of selling, granting any participation in,
      or
      otherwise distributing the same. The Purchaser does not presently have any
      contract, undertaking, agreement or arrangement with any Person to sell,
      transfer or grant participations to such Person or to any third Person, with
      respect to any of the Notes or the Conversion Shares. 

     

    9.    Conditions
      to Purchase Notes at Closing.

     

    9.1 Conditions
      Precedent to the Obligations of the Purchaser to Purchase the
      Notes:
      The
      Purchaser’s obligation to purchase the Notes under this Agreement is subject to
      the satisfaction or waiver of each of the following conditions:

     

    (a)    All
      the
      representations and warranties of each of the Group Companies and the
      Shareholders contained in each Transaction Document shall be true and correct
      as
      of the date hereof and at the Closing Date. Each of the Group Companies and
      the
      Shareholders shall have performed, satisfied and complied with all covenants,
      agreements and conditions required by the Transaction Documents, to which it
      is
      a party, to be performed, satisfied or complied with by them at or prior to
      the
      Closing. 

     

    (b)    No
      injunction, restraining order or order of any nature by a Governmental Authority
      shall have been issued as of the Closing Date that could prevent or materially
      interfere with the consummation of the transactions contemplated under the
      Transaction Documents; and no stop order suspending the qualification or
      exemption from qualification of any of the Securities in any jurisdiction shall
      have been issued and no Proceeding for that purpose shall have been commenced
      or, to the knowledge of the Company after due inquiry, be pending or threatened
      as of the Closing Date.

     

    (c)    No
      action
      shall have been taken and no Applicable Law shall have been enacted, adopted
      or
      issued that could, as of the Closing Date, reasonably be expected to prevent
      the
      consummation of the transactions contemplated under the Transaction Documents.
      No Proceeding shall be pending or, to the knowledge of the Company after due
      inquiry, threatened other than Proceedings that if adversely determined could
      not, individually or in the aggregate, adversely affect the issuance or
      marketability of the Notes, or could not, individually or in the aggregate,
      have
      a Material Adverse Effect.

     

    
      
         

      

      
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    (d)    The
      Company shall have obtained any and all approvals, consents and waivers
      necessary for consummation of the transactions contemplated by this Agreement,
      including, but not limited to, all Permits, authorizations, approvals or
      consents of any Governmental Authority.

     

    (e)    The
      Purchaser shall have received on the Closing Date:

     

    (i)    
a
      certificate dated the Closing Date, signed by the Chief Executive Officer of
      the
      Company on behalf of the Company to the effect that (a) the representations
      and
      warranties set forth in Section 6 are true and correct with the same force
      and
      effect as though expressly made at and as of the Closing Date, (b) the Company
      has complied with all agreements and satisfied all conditions on its part to
      be
      performed or satisfied hereunder at or prior to the Closing Date, (c) at the
      Closing Date, since the date hereof or since the date of the most recent
      financial statements in the SEC Reports, no event or events have occurred,
      no
      information has become known nor does any condition exist that could,
      individually or in the aggregate, have a Material Adverse Effect, and (d) the
      sale of any of the Notes has not been enjoined (temporarily or
      permanently);

     

    (ii)    a
      certificate dated the Closing Date, signed by each of the Shareholders (or
      an
      authorized director of such Shareholder in the case of Whitehorse), to the
      effect that (a) the representations and warranties set forth in the Transaction
      Documents which are given by the Shareholders are true and correct with the
      same
      force and effect as though expressly made at and as of the Closing Date, and
      (b)
      each of the Shareholders has complied with all agreements and satisfied all
      conditions on its part to be performed or satisfied under the Transaction
      Documents at or prior to the Closing Date,

     

    (iii)    certificates
      dated the Closing Date, signed by each of the Group Companies other than the
      Company, to the effect that (a) the representations and warranties set forth
      in
      the Transaction Documents which are given by such Group Company are true and
      correct with the same force and effect as though expressly made at and as of
      the
      Closing Date, and (b) such Group Company has complied with all agreements and
      satisfied all conditions on its part to be performed or satisfied under the
      Transaction Documents at or prior to the Closing Date,

     

    (iv)    a
      certificate dated the Closing Date, signed by the Secretary of the Company,
      including specimen signatures of those officers of the Company authorized to
      sign the Transaction Documents, to which the Company is a party, on behalf
      of
      the Company, attaching true, complete and up to date copies of the certificate
      of incorporation and by-laws of the Company, attaching the certificate of good
      standing of the Company and certifying as to such other maters as the Purchaser
      may reasonably require;

     

    (v)    
a
      certificate dated the Closing Date, signed by the Secretary of each of the
      Group
      Companies other than the Company, including specimen signatures of those
      officers of such Group Company authorized to sign the Transaction Documents,
      to
      which such Group Company is a party, on behalf of such Group Company, attaching
      true, complete and up to date copies of the certificate of incorporation and
      by-laws of such Group Company, attaching the certificate of good standing of
      such Guarantor and certifying as to such other maters as the Purchaser may
      reasonably require;

     

    (vi)    a
      certificate dated the Closing Date, executed by the authorized director of
      Whitehorse, including specimen signatures of the directors of Whitehorse
      authorized to sign the Transaction Documents, to which Whitehorse is a party,
      on
      behalf of Whitehorse, attaching true, complete and up to date copies of the
      certificate of incorporation and by-laws of Whitehorse, attaching the
      certificate of good standing of the Whitehorse and certifying as to such other
      maters as the Purchaser may reasonably require;

     

    
      
         

      

      
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    (vii)   the
      opinions of Thelen Reid Brown Raysman & Steiner LLP, U.S. counsel to the
      Company, dated the Closing Date, in the form and substance satisfactory to
      the
      Purchaser;

     

    (viii)          the
      opinions of Harney Westwood & Riegels, British Virgin Islands counsel to
      Safetech and Whitehorse, dated the Closing Date, in the form and substance
      satisfactory to the Purchaser; 

     

    (ix)    
the
      opinions of Michael Pang & Co., Hong Kong counsel to CSST HK and Chain Star,
      dated the Closing Date, in the form and substance satisfactory to the Purchaser;
      and

     

    (x)    
       the
      opinions of Guangdong Guanghe Law Firm, PRC counsel to the Group Companies
      and
      the Shareholders, dated the Closing Date, in the form and substance satisfactory
      to the Purchaser.

     

    (f)    Each
      of
      the Transaction Documents shall have been executed and delivered by all parties
      thereto, and the Purchaser shall have received a fully executed original (or
      clearly legible facsimile copy) of each Transaction Document.

     

    (g)    The
      Purchaser shall have received copies of all documents delivered under or in
      connection with the transactions contemplated in the Transaction Documents
      that
      are required to be delivered at or prior to the Closing Date.

     

    (h)    None
      of
      the other parties to any of the Transaction Documents shall be in breach or
      default under their respective obligations thereunder.

     

    (i)    
The
      respective board of directors of each of the Group Companies and the
      Shareholders, as the case may be, shall have approved and authorized by all
      necessary corporate or other action (i) the execution and delivery of the
      Transaction Documents, (ii) all actions to be performed or satisfied under
      the
      Transaction Documents (including, without limitation, the reserve for issuance
      of the Conversion Shares issuable upon exercise of the Notes), (iii) the
      consummation of the transactions contemplated by the Transaction Documents,
      (iv)
      the pricing terms of the Notes, and (v) all other actions necessary in
      connection with the transactions contemplated by the Transaction Documents
      and
      the offering of the Notes, and shall have provided the Purchaser with a copy
      of
      such authorizations. 

     

    (j)    
The
      Purchaser shall have completed and be satisfied with the results of all
      business, legal and financial due diligence, and any items requiring correction
      identified by the Purchaser shall have been corrected to the Purchaser’s
      satisfaction.

     

    (k)    The
      Purchaser shall have received all necessary internal approval for the
      transactions contemplated hereunder or under the Transaction
      Documents.

     

    9.2
      Conditions Precedent to the Obligations of the Company to Sell the
      Notes:
      The
      Company’s obligation to sell the Notes under this Agreement is subject to the
      satisfaction or waiver of each of the following conditions:

     

    (a)    All
      the
      representations and warranties of the Purchaser contained in each Transaction
      Document shall be true and correct as of the date hereof and at the Closing
      Date. 

     

    (b)    No
      injunction, restraining order or order of any nature by a Governmental Authority
      shall have been issued as of the Closing Date that could prevent or materially
      interfere with the consummation of the transactions contemplated under the
      Transaction Documents; and no stop order suspending the qualification or
      exemption from qualification of any of the Securities in any jurisdiction shall
      have been issued and no Proceeding for that purpose shall have been commenced
      or, to the knowledge of the Company after due inquiry, be pending or threatened
      as of the Closing Date.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    (c)    No
      action
      shall have been taken and no Applicable Law shall have been enacted, adopted
      or
      issued that could, as of the Closing Date, reasonably be expected to prevent
      the
      consummation of the transactions contemplated under the Transaction Documents.
      No Proceeding shall be pending or, to the knowledge of the Company after due
      inquiry, threatened other than Proceedings that if adversely determined could
      not, individually or in the aggregate, adversely affect the issuance or
      marketability of the Securities, or could not, individually or in the aggregate,
      have a Material Adverse Effect.

     

    (d)    Each
      of
      the Transaction Documents shall have been executed and delivered by all parties
      thereto, and the Company shall have received a fully executed original (or
      clearly legible facsimile copy) of each Transaction Document to which the
      Purchaser is a party.

     

    10.    Indemnification.

     

    (a) Each
      of
      the Group Companies (each such Person being referred to as an “Indemnifying
      Party”),
      jointly and severally, agrees to indemnify and hold harmless the Purchaser,
      each
      of its Affiliates and their respective officers, directors, partners,
      shareholders, counsel, employees and agents (the Purchaser and each such other
      person being referred to as an “Indemnified
      Party”),
      to
      the fullest extent lawful, from and against any losses, claims, damages,
      liabilities and reasonable expenses (or actions in respect thereof), as
      incurred, related to or arising out of or in connection with:

     

    (i)    actions
      taken or omitted to be taken by any of the Group Companies or their respective
      Affiliates, officers, directors, employees or agents; or

     

    (ii)   any
      breach by any of the Group Companies or their respective Affiliates of any
      of
      the representations, warranties, covenants and agreements set forth in any
      Transaction Document,

     

    and
      will
      reimburse the Indemnified Parties for all reasonable expenses (including,
      without limitation, fees and expenses of counsel) as they are incurred in
      connection with investigating, preparing, defending or settling any such action
      or claim, whether or not in connection with litigation in which any Indemnified
      Party is a named party. If any of the Indemnified Parties’ personnel appears as
      witnesses, are deposed or are otherwise involved in the defense of any action
      against an Indemnified Party, the Indemnifying Parties will reimburse the
      Purchaser for all reasonable expenses incurred by the Purchaser by reason of
      any
      of the Indemnified Parties being involved in any such action. 

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    (b)    As
      promptly as reasonably practical after receipt by an Indemnified Party under
      this Section 10 of notice of the commencement of any action for which such
      Indemnified Party is entitled to indemnification under this Section 10, such
      Indemnified Party will, if a claim in respect thereof is to be made against
      the
      Indemnified Party under this Section 10, notify the Indemnifying Party of the
      commencement thereof in writing; but the omission to so notify the Indemnifying
      Party (i) will not relieve such Indemnifying Party from any liability under
      paragraph (a) above unless and only to the extent it is materially prejudiced
      as
      a result thereof and (ii) will not, in any event, relieve the Indemnifying
      Party
      from any obligations to any Indemnified Party otherwise than the indemnification
      obligation provided in paragraph (a) above. In case any such action is brought
      against any Indemnified Party, and it notifies the Indemnifying Party of the
      commencement thereof, the Indemnifying Party will be entitled to participate
      therein and, to the extent that it may determine, jointly with any other
      Indemnifying Party similarly notified, to assume the defense thereof, with
      counsel satisfactory to such Indemnified Party (who shall not, except with
      the
      consent of the Indemnified Party, be counsel to the Indemnifying Party) at
      the
      expense of the Indemnifying Party; provided, however, that if (i) the use of
      counsel chosen by the Indemnifying Party to represent the Indemnified Party
      would present such counsel with a conflict of interest, (ii) the actual or
      potential defendants in, or targets of, any such action include both the
      Indemnified Party and the Indemnifying Party and the Indemnified Party shall
      have been advised by counsel that there may be one or more legal defenses
      available to it and/or other Indemnified Party that are different from or
      additional to those available to the Indemnifying Party, (iii) the Indemnifying
      Party shall not have employed counsel satisfactory to the Indemnified Party
      to
      represent the Indemnified Party within a reasonable time after notice of the
      institution of such action or (iv) the Indemnifying Party shall authorize the
      Indemnified Party to employ separate counsel at the expense of the Indemnifying
      Party, then, in each such case, the Indemnifying Party shall not have the right
      to direct the defense of such action on behalf of such Indemnified Party or
      parties and such Indemnified Party or parties shall have the right to select
      separate counsel (including local counsel) to defend such action on behalf
      of
      such Indemnified Party or parties at the expense of the Indemnifying Party.
      After notice from the Indemnifying Party to such Indemnified Party of its
      election so to assume the defense thereof and approval by such Indemnified
      Party
      of counsel appointed to defend such action, the Indemnifying Party will not
      be
      liable to such Indemnified Party under this Section 10 for any legal or other
      expenses, other than reasonable costs of investigation, subsequently incurred
      by
      such Indemnified Party in connection with the defense thereof, unless the
      Indemnified Party shall have employed separate counsel in accordance with the
      proviso to the immediately preceding sentence (it being understood, however,
      that in connection with such action the Indemnifying Party shall not be liable
      for the expenses of more than one separate counsel (in addition to local
      counsel) in any one action or separate but substantially similar actions in
      the
      same jurisdiction arising out of the same general allegations or circumstances,
      representing the Indemnified Party who are parties to such action or actions).
      The Indemnifying Party shall not, without the prior written consent of the
      Indemnified Party, effect the settlement or compromise of, or consent to the
      entry of any judgment with respect to, any pending or threatened action or
      claim
      in respect of which indemnification or contribution may be sought hereunder
      (whether or not the Indemnified Party is an actual or potential party to such
      action or claim) unless such settlement, compromise or judgment (i) includes
      an
      unconditional release of the Indemnified Party from all liability arising out
      of
      such action or claim and (ii) does not include a statement as to or an admission
      of fault, culpability or a failure to act, by or on behalf of any Indemnified
      Party.

     

    (c)    The
      indemnity and expense reimbursement obligations set forth herein (i) shall
      be in
      addition to any liability any of the Group Companies may otherwise have to
      any
      Indemnified Party, (ii) shall remain operative and in full force and effect
      regardless of any investigation made by or on behalf of the Purchaser or any
      other Indemnified Party and (iii) shall be binding on any successor or assign
      of
      the Group Companies or their respective business and assets. 

     

    (d)    Without
      limiting the generality of the foregoing paragraphs in this Section 10, each
      of
      the Group Companies and Mr. Tu Guo Shen will, jointly and severally, agree
      to
      indemnify, defend and hold harmless the Indemnified Parties from and against
      (i)
      any and all losses (including without limitation, losses arising from or as
      a
      result of a decrease in the value of the Company or the value of the Common
      Stock or the Notes) incurred by any member of the Indemnifies Parties and (ii)
      any and all claims, actions or causes of action, assessments, demands, damages,
      judgments, settlements, liabilities, costs and expenses (including, without
      limitation, interest, penalties and attorneys’ and accounting fees and expenses)
      of any nature whatsoever, asserted against or imposed upon any member of the
      Indemnified Parties, in each case, by reason of or resulting from any breach
      or
      violation (whether such breach or violation was due to actions taken or failure
      to take actions, in whole or in part, prior to or after the date hereof) of
      laws, rules, regulations or orders of any Governmental Authority by any of
      the
      Group Companies, the Subsidiaries, the Shareholders or other former or current
      shareholders of any Group Company (except in the case of such other former
      or
      current shareholders, only to the extent that any such breach or violation
      would
      have a Material Adverse Effect or a material adverse effect on the value of
      the
      Company, or the value of the Conversion Shares or the Notes).

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    11.    Termination.
      

     

    (a)    The
      Purchaser may terminate this Agreement at any time prior to the Closing Date
      by
      written notice to the Company if any of the following has occurred:

     

    (i)    since
      the
      date hereof, any Material Adverse Effect or development involving or reasonably
      expected to result in a prospective Material Adverse Effect that could, in
      the
      Purchaser’s reasonable judgment, be expected to (A) make it impracticable or
      inadvisable to proceed with the offering or delivery of the Notes on the terms
      and in the manner contemplated in this Agreement and the Indenture or (B)
      materially impair the investment quality of any of the Securities;

     

    (ii)   the
      failure of any of the Group Companies or the Shareholders to satisfy the
      conditions contained in Section 9 on or prior to the Closing Date;

     

    (iii)   any
      outbreak or escalation of hostilities or other national or international
      calamity or crisis, including acts of terrorism, or material adverse change
      or
      disruption in economic conditions in, or in the financial markets of, the United
      States, the European Union, the Peoples’ Republic of China or Hong Kong (it
      being understood that any such change or disruption shall be relative to such
      conditions and markets as in effect on the date hereof), if the effect of such
      outbreak, escalation, calamity, crisis, act or material adverse change in the
      economic conditions in, or in the financial markets of, the United States,
      the
      European Union, the Peoples’ Republic of China or Hong Kong could be reasonably
      expected to make it, in the Purchaser’s sole judgment, impracticable or
      inadvisable to proceed with the consummation of the transactions on the terms
      and in the manner contemplated in this Agreement or the Indenture;

     

    (iv)    trading
      in the Common Stock shall have been suspended by the Trading Market or the
      suspension or limitation of trading generally in securities on the New York
      Stock Exchange, the American Stock Exchange, the London Stock Exchange, the
      Hong
      Kong Stock Exchange, the NASDAQ Capital Market or the NASDAQ Global Market
      or
      any setting of limitations on prices for securities on any such exchange or
      the
      NASDAQ Capital Market or the NASDAQ Global Market;

     

    (v)    the
      enactment, publication, decree or other promulgation after the date hereof
      of
      any Applicable Law that could be reasonably expected to have a Material Adverse
      Effect; or

     

    (vi)    the
      declaration of a banking moratorium by any federal or New York state
      Governmental Authority; or the taking of any action by any Governmental
      Authority after the date hereof in respect of its monetary or fiscal affairs
      that could reasonably be expected to have a material adverse effect on the
      financial markets in the United States, European Union, the Peoples’ Republic of
      China, Hong Kong or elsewhere.

     

    (b)    The
      Company may terminate this Agreement at any time prior to the Closing Date
      by
      written notice to the Purchaser based upon the Purchaser’s intentional breach of
      its representations, warranties, covenants and obligations under this
      Agreement.

     

    12.    Survival
      of Representations and Indemnities.
      The
      representations and warranties, covenants, indemnities and contribution and
      expense reimbursement provisions and other agreements of any of the Group
      Companies and the Shareholder set forth in this Agreement shall remain operative
      and in full force and effect, and will survive, regardless of (i) any
      investigation, or statement as to the results thereof, made by or on behalf
      of
      the parties hereto, and (ii) acceptance of the Notes, and payment for them
      hereunder.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    13.    Substitution
      of Purchaser.
      The
      Purchaser shall have the right to substitute any one of its Affiliates as the
      purchaser of the Notes, by written notice to the Company, which notice shall
      be
      signed by both the Purchaser and such Affiliate, shall contain such Affiliate’s
      agreement to be bound by this Agreement and shall contain a confirmation by
      such
      Affiliate of the accuracy with respect to it of the representations and
      warranties set forth in Section 8. Upon receipt of such notice, wherever the
      word “Purchaser” is used in this Agreement (other than in this Section 13), such
      word shall be deemed to refer to such Affiliate in lieu of the original
      Purchaser. In the event that such Affiliate is so substituted as a purchaser
      hereunder and such Affiliate thereafter transfers to the original Purchaser
      all
      of the Notes then held by such Affiliate, upon receipt by the Company of notice
      of such transfer, wherever the word “Purchaser” is used in this Agreement (other
      than in this Section 13), such word shall no longer be deemed to refer to such
      Affiliate, but shall refer to the original Purchaser, and the original Purchaser
      shall have all the rights of an original holder of the Notes under this
      Agreement.

     

    14.    Miscellaneous.
      

     

    (a)    Notices
      given pursuant to any provision of this Agreement shall be addressed as follows:
      (i) if to any of the Group Companies, to: 13/F, Shenzhen Special Zone Press
      Tower, Shennan Road, Futian, Shenzhen, China, Fax: (86) 755-83510815, Attention:
      Mr. Tu Guo Shen, with a copy to Thelen Reid Brown Raysman & Steiner LLP, 701
      8th
      Street,
      N.W., Washington, DC 20001, Fax: (1-202) 654-1804, Attention: Mr. Lou
      Bevilacqua, Esq., (ii) if to the Purchaser, to: c/o
      131
      South Dearborn Street, Chicago, Illinois 60609, USA,
      Fax:
(1-312)
      267 7300,
      Attention: Mr.
      Adam
      C. Cooper,
      with a
      copy to 18/F
      Chater House, 8 Connaught Road, Central, Hong Kong, Fax: (852) 3667 5511,
      Attention: Mr. Andrew Fong and Mr. Max Liu,
      and with
      a copy to Simpson Thacher & Bartlett LLP, ICBC Tower 35th Floor, 3 Garden
      Road, Central, Hong Kong SAR, China, Fax: (852) 2869 7694, Attention: Mr.
      Youngjin Sohn, Esq.

     

    (b)    Except
      with respect to the material terms and conditions of the transactions
      contemplated by the Transaction Documents, the Company covenants and agrees
      that
      neither it nor any other person acting on its behalf will provide the Purchaser
      or its agents or counsel with any information that the Company believes
      constitutes material non-public information, unless prior thereto the Purchaser
      shall have executed a written agreement regarding the confidentiality and use
      of
      such information. The Company understands and confirms that the Purchaser shall
      be relying on the foregoing representations in effecting transactions
      contemplated hereunder.

     

    (c)    This
      Agreement has been and is made solely for the benefit of and shall be binding
      upon the parties hereto and, to the extent provided in Section 10 hereof, the
      controlling persons and their respective agents, employees, officers, directors,
      partners, counsel, and shareholders referred to in Section 10, and their
      respective heirs, executors, administrators, successors and assigns, all as
      and
      to the extent provided in this Agreement, and no other person shall acquire
      or
      have any right under or by virtue of this Agreement.

     

    (d)    THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
      OF
      THE STATE OF NEW YORK.

     

    (e)    The
      parties hereto agree that any suit, action or proceeding arising out of or
      based
      upon this Agreement or the transactions contemplated hereby may be instituted
      in
      any State or U.S. federal court in The City of New York and County of New York,
      and waives any objection which it may now or hereafter have to the laying of
      venue of any such proceeding, and irrevocably submits to the non-exclusive
      jurisdiction of such courts in any suit, action or proceeding.

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    (f)    The
      parties hereto each hereby waive any right to trial by jury in any action,
      proceeding or counterclaim arising out of or relating to this
      Agreement.

     

    (g)    No
      failure to exercise, and no course of dealing with respect to, and no delay
      in
      exercising, any right, power or remedy hereunder shall operate as a waiver
      thereof; nor shall any single or partial exercise of any right, power or remedy
      hereunder preclude any other or further exercise thereof or the exercise of
      any
      other right, power or remedy.

     

    (h)   This
      Agreement may be signed in various counterparts which together shall constitute
      one and the same instrument. In the event that any signature is delivered by
      facsimile transmission, such signature shall create a valid and binding
      obligation of the party executing (or on whose behalf such signature is
      executed) with the same force and effect as if such facsimile signature page
      were an original thereof.

     

    (i)    
The
      headings in this Agreement are for convenience of reference only and shall
      not
      constitute part of this Agreement nor limit or otherwise affect the meaning
      of
      any provision of this Agreement.

     

    (j)    
If
      any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, in each case to the extent permitted by applicable law, and
      the
      parties hereto shall use their best efforts to find and employ an alternative
      means to achieve the same or substantially the same result as that contemplated
      by such term, provision, covenant or restriction. It is hereby stipulated and
      declared to be the intention of the parties that they would have executed the
      remaining terms, provisions, covenants and restrictions without including any
      of
      such that may be hereafter declared invalid, illegal, void or unenforceable,
      to
      the extent permitted by applicable law.

     

    (k)    This
      Agreement may be amended, modified or supplemented, and waivers or consents
      to
      departures from the provisions hereof may be given; provided
      that the
      same are in writing and signed by all of the signatories hereto.

     

    
      	 	 	 
	 	
              For
                and on behalf of:

               

              CHINA
                SECURITY & SURVEILLANCE TECHNOLOGY, INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ Tu
              Guo
              Shen
	 	
              

              Name:
                Tu Guo Shen

              Title:
                CEO

            
	 	 

    

    
       

      
        	 	 	 
	 	
                
                  For
                    and on behalf of:

                   

                  CHINA
                    SAFETECH HOLDINGS LIMITED

                

              
	 
 	 
 	 
 
	 	By:  	/s/ Tu
                Guo
                Shen
	 	
                

                Name:
                  Tu Guo Shen

                Title:
                  CEO

              
	 	 

      

      
         

        
          
             

          

          
            29

            
              

            

          

          
             

          

        

         

        
          	 	 	 
	 	
                  
                    For
                      and on behalf of:

                     

                    CHINA
                      SECURITY & SURVEILLANCE TECHNOLOGY (HK)
                      LTD.

                  

                
	 
 	 
 	 
 
	 	By:  	/s/ Tu
                  Guo
                  Shen
	 	
                  

                  Name:
                    Tu Guo Shen

                  Title:
                    CEO

                
	 	 

        

        
           

          
            	 	 	 
	 	
                    
                      
                        For
                          and on behalf of:

                         

                        GOLDEN
                          GROUP CORPORATION (SHENZHEN)
                          LIMITED

                      

                    

                  
	 
 	 
 	 
 
	 	By:  	/s/ Tu
                    Guo
                    Shen
	 	
                    

                    Name:
                      Tu Guo Shen

                    Title:
                      CEO

                  
	 	 

          

          
             

            
              	 	 	 
	 	
                      
                        
                          For
                            and on behalf of:

                           

                          SHANGHAI
                            CHENG FENG DIGITAL TECHNOLOGY CO.,
                            LTD.

                        

                      

                    
	 
 	 
 	 
 
	 	By:  	/s/ Tu
                      Guo
                      Shen
	 	
                      

                      Name:
                        Tu Guo Shen

                      Title:
                        CEO

                    
	 	 

            

            
              
                 

                
                  	 	 	 
	 	
                          
                            
                              
                                For
                                  and on behalf of:

                                 

                                CHINA
                                  SECURITY & SURVEILLANCE TECHNOLOGY (PRC),
                                  INC.

                              

                            

                          

                        
	 
 	 
 	 
 
	 	By:  	/s/ Tu
                          Guo
                          Shen
	 	
                          

                          Name:
                            Tu Guo Shen

                          Title:
                            CEO

                        
	 	 

                

                
                  
                     

                    
                      	 	 	 
	 	
                              
                                
                                  
                                    For
                                      and on behalf of:

                                     

                                    CHAIN
                                      STAR INVESTMENTS
                                      LTD.

                                  

                                

                              

                            
	 
 	 
 	 
 
	 	By:  	/s/ Tu
                              Guo
                              Shen
	 	
                              

                              Name:
                                Tu Guo Shen

                              Title:
                                CEO

                            
	 	 

                    

                    
                      
                         

                        
                          
                             

                          

                          
                            30

                            
                              

                            

                          

                          
                             

                          

                        

                         

                        
                          	 	 	 
	 	
                                  
                                    
                                      
                                        
                                          For
                                            and on behalf of:

                                           

                                          SHENZHEN
                                            TONGXING SHIXUN TECHNOLOGY CO.,
                                            LTD.

                                        

                                      

                                    

                                  

                                
	 
 	 
 	 
 
	 	By:  	/s/ Tu
                                  Guo
                                  Shen
	 	
                                  

                                  Name:
                                    Tu Guo Shen

                                  Title:
                                    CEO

                                
	 	 

                        

                        
                          
                             

                            
                              
                                
                                  	 	 	 
	 	
                                          
                                            
                                              
                                                
                                                  
                                                    For
                                                      and on behalf of:

                                                     

                                                    SHENZHEN
                                                      HONGTIANZHI ELECTRONICS CO.,
                                                      LTD.

                                                  

                                                

                                              

                                            

                                          

                                        
	 
 	 
 	 
 
	 	By:  	/s/ Huang
                                          Zheng
	 	
                                          

                                          
                                            Name:
                                              Huang Zheng

                                            Title:
                                              Director

                                          

                                        
	 	 

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

      
         

        
          	 	 	 
	 	
                  
                    
                      
                        
                          
                            
                              For
                                and on behalf of:

                               

                              SHANGHAI
                                CHENG FENG PUBLIC SAFETY PREVENTION TECHNOLOGY CO.,
                                LTD.

                            

                          

                        

                      

                    

                  

                
	 
 	 
 	 
 
	 	By:  	/s/
                  Yang
                  Shu Fang
	 	
                  

                  
                    
                      Name:
                        Yang Shu Fang

                      Title:
                        Director

                    

                  

                
	 	 

        

      

      
         

        
          	 	 	 
	 	
                  
                    
                      
                        
                          
                            
                              
                                For
                                  and on behalf of:

                                 

                                SHANGHAI
                                  CHENG FENG DIGITAL EQUIPMENT
                                  LTD.

                              

                            

                          

                        

                      

                    

                  

                
	 
 	 
 	 
 
	 	By:  	/s/
                  Yang
                  Shu Fang
	 	
                  

                  
                    
                      Name:
                        Yang Shu Fang

                      Title:
                        Director

                    

                  

                
	 	 

        

      

      
         

        
          	 	 	 
	 	
                  
                    
                      
                        
                          
                            
                              
                                
                                  For
                                    and on behalf of:

                                   

                                  GUANGZHOU
                                    SHIXING DIGITAL TECHNOLOGY CO.,
                                    LTD.

                                

                              

                            

                          

                        

                      

                    

                  

                
	 
 	 
 	 
 
	 	By:  	/s/
                  Huang Bo
	 	
                  

                  
                    
                      
                        Name:
                          Huang Bo

                        Title:
                          Director

                      

                    

                  

                
	 	 

        

      

      
         

        
          	 	 	 
	 	
                  
                    
                      
                        
                          
                            
                              
                                
                                  FOR
                                    THE PURPOSE OF SECTION 10(d) ONLY 

                                

                              

                            

                          

                        

                      

                    

                  

                
	 
 	 
 	 
 
	 	 	/s/
                  Tu
                  Guo Shen
	 	
                  

                  
                    
                      
                        Name: Tu
                          Guo Shen

                      

                    

                  

                
	 	 

        

         

      

    

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    
      
         

        
          	 	 	 
	 	
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    For
                                      and on behalf of:

                                     

                                    CITADEL
                                      EQUITY FUND LTD.

                                     

                                    By:
                                      Citadel Limited Partnership, its Portfolio
                                      Manager

                                    By:
                                      Citadel Investment Group, L.L.C., its General
                                      Partner

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                
	 
 	 
 	 
 
	 	By:  	/s/
                  Andrew Fong
	 	
                  

                  
                    
                      
                        
                          Name: Andrew
                            Fong

                          Title: Authorized
                            Signatory

                        

                      

                    

                  

                
	 	

                

        

      

      
         

        
          
             

          

          
            32

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]