Document:

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                                PREDICT IT, INC.

                                LICENSE AGREEMENT
                                -----------------

This License Agreement (the "Agreement") effective as of this 2nd day of March,
2000 (the "Effective Date") by and between Predict It China, LLC, a limited
liability company organized under the laws of the State of Delaware with offices
at 995 Ashokan Road, Kingston, New York 12401 ("Licensee"), and Predict It,
Inc., a Delaware corporation with offices at 268 West 44th Street, New York, NY
10036 ("Licensor").

RECITALS

         A. Licensee plans to develop and operate, using certain technology
owned or controlled by Licensor, a Web-based service targeted and marketed to
Persons (including without limitation in the Chinese or English languages) in
The Peoples Republic of China (including Hong Kong) (the "PRC").

         B. Licensor is willing to grant Licensee certain rights in the Licensed
Technology (as defined below) and Licensee desires to obtain a license to use,
translate and modify such Licensed Technology for use on Licensee's services
subject to the terms and conditions set forth in this Agreement.

         NOW, THEREFORE in consideration of the mutual promises and undertakings
herein contained, it is hereby agreed:

1.   DEFINITIONS

         When used in this Agreement, the following defined terms shall have the
meanings set forth below. Additional terms are defined throughout this
Agreement.

         "CIMG" means China Interactive Media Group, LLC, a Delaware limited
liability company.

         "Derivative Works" means all modifications, translations or
enhancements of the Licensed Technology created by or on behalf of Licensee in
accordance with the terms of this Agreement, including without limitation, all
Chinese language translation of text content contained within the Licensed
Technology (such translated text, the "Derivative Content"); however,
"Derivative Works" and "Derivative Content" shall not include or mean (i) any
Licensee Website or any domain name with respect thereto, except to the extent
that such Licensee Website contains Derivative Works or Derivative Content or
such domain name contains, in whole or in part, a Licensor Mark, or (ii)
residuals resulting from access to or work with the Licensed Technology,
provided that Licensee shall maintain the confidentiality of such residuals as
the Confidential Information of Licensor. The term "residuals" means ideas,
concepts and know-how, in non-tangible form, which may be retained by Licensor
through access to the Licensed Technology. Notwithstanding the foregoing,
however, Licensee shall not be deemed, by virtue of clause (ii) of this
paragraph, to have been granted any license under any Intellectual Property
Rights of Licensor.

         "Government" shall mean (or in the case of "Governmental" shall refer
to):

         (i) the governments of the United States of America and any country
     wherein the Licensee engages in business;

         (ii) the government of any state, province, county, municipality, city,
     town or district of any such country; and

         (iii) any ministry, agency, department, authority, commission,
     administration, corporation, bank, court, magistrate, tribunal, arbitrator,
     instrumentality or political subdivision of, or within the geographical
     jurisdiction of, any government described in the foregoing clauses (i) and
     (ii).

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         "Initial Service Date" means such date on which Licensed Technology is
first made available through the Licensee Service in non-beta form.

         "Licensed Technology" means the interactive, online technology
specified and described in Schedule A attached hereto (including, without
limitation, all Licensor proprietary software (including the source code
therefor), methods of operation, hardware designs and interfaces), together with
all modifications, translations or enhancements of the Licensed Technology
created by or on behalf of Licensor during the Term and all flowcharts,
programmers' notes and such other materials as may be reasonably necessary for a
competent programmer to modify and maintain all of the foregoing. Such flow
charts, programmers' notes and other materials shall be delivered to Licensee as
soon as practicable following, or concurrent with, the delivery of the Licensed
Technology to Licensee, but in no event later than one hundred and twenty (120)
days following such delivery of the Licensed Technology. "Licensed Technology"
does not include, and Licensor shall not provide, third party software or
technology, the licensing of which is necessary for the operation and
functionality of the Licensed Technology ("Third Party Software"), provided,
however, that such Third Party Software, as of the date hereof, shall be listed
on Schedule A.

         "Licensee Service" means all Web-based or other on-line services owned,
operated, maintained or hosted by Licensee utilizing, in whole or in part, the
Licensed Technology that are targeted and marketed solely to Persons (whether in
the Chinese or English languages) in the PRC (including without limitation the
Websites located at www. ).

         "Licensee Website" shall mean any Website (whether in the Chinese or
English languages) created or developed by or for Licensee (whether using the
Licensed Technology or other technology or software), including without
limitation the text content of any Website developed or owned by or for
Licensee. However, any website having a Uniform Resource Locator (URL) in the
English language shall be subject to the prior approval of Licensor, which
approval shall not be unreasonably withheld.

         "Licensee Website Implementation Requirements" shall mean and shall be
deemed to have been satisfied when the following actions have been substantially
completed:

         (i) "Phase I": the Operational Date of the Project shall have occurred
     on or before August 31, 2001; and

         (ii) "Phase II": the Licensee Service shall have at least 100,000
     registered users and the Licensee Website shall have received at least five
     million page views by users per month for each of at least three
     consecutive months ending on or before March 31, 2003.

Licensee shall use commercially reasonable efforts to achieve and satisfy the
Licensee Website Implementation Requirements.

         "Operational Date of the Project" shall mean that Licensee Website has
been launched and is substantially operational, a core management team and
employees are in place at the Licensee and all necessary published Governmental
licenses and approvals for the operation of the Licensee Website and the
Licensee Service have been obtained in a manner consistent with prevailing
practices in the PRC.

         "Person" shall mean shall mean: any corporation, partnership, joint
venture, trust, unincorporated association or organization, business,
enterprise, or other entity; any individual; and any Government.

         "Simplified Chinese Characters" means the characters of the Chinese
language that have been simplified from their ancient counterparts.

         "Year 2000 Compliant" shall mean the software is capable of accurately
processing, calculating, manipulating, storing and exchanging date/time data
from, into, and between the twentieth

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and twenty-first centuries, including, without limitation, the years 1999 and
2000 and any leap year calculations, provided that all other information
technology used in combination with such software, properly exchanges date/time
date with such software.

         "Web" means a global, interactive, dynamic, cross-platform,
distributed, graphical hypertext information system that runs over the Internet
that is known as the World Wide Web and any successor thereto.

2.   GRANT OF LICENSE

         2.1 License. Licensor hereby grants to Licensee, and Licensee hereby
accepts, for the Term of this Agreement and subject to its terms and conditions,
the limited right, license and privilege to use, reproduce, modify, translate,
archive, display, perform, market, publish, distribute, transmit and operate the
Licensed Technology, solely in connection with the Licensee Service, as well as
the right to promote the Licensed Technology, solely in connection with the
promotion of the Licensee Service (including without limitation screenshots and
other graphics contained in same) within content provided by Licensee and other
content providers, in each case by any method or means or in any medium now
known. Licensee may make such copies of the Licensed Technology, as applicable,
as may be reasonably necessary for Licensee's needs, provided that such copies
contain any copyright, trademark or other protective notices that are contained
on or within the original copy of such Licensed Technology.

         2.2 Trademark Usage. Licensor hereby grants to Licensee a license
during the term of this Agreement to use any and all current and future
trademarks, service marks, design marks or trade names associated with Licensor
and the Licensed Technology, set forth on Schedule B (collectively, the
"Licensor Marks") in connection with and for the use, marketing and promotion of
the Licensed Technology, Derivative Works and the Licensee Service, subject to
the terms and conditions and as otherwise contemplated by this Agreement.
Licensee acknowledges and agrees that: (a) the Licensor Marks, are owned
exclusively by Licensor; and (b) except as set forth in this Agreement, Licensee
has no rights, title or interest in or to the Licensor Marks. Licensee agrees:
(w) not to apply for registration of the Licensor Marks (or any mark confusingly
similar thereto) anywhere in the world; (x) not to engage, participate or
otherwise become involved in any activity or course of action that diminishes
and/or tarnishes the image and/or reputation of Licensor or any Licensor Mark;
(y) not to use any of the Licensor Marks except as authorized by Licensor; and
(z) not to challenge Licensor's rights in the Licensor Marks. Licensor in its
sole discretion may withdraw specific or general permission to use Licensor
Marks upon twenty four (24) hours written notice to Licensee. Upon expiration of
such notice period, Licensee shall immediately discontinue use of the applicable
Licensor Marks.

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         2.3      Ownership.

         (a) By Licensor. Licensee recognizes that Licensor retains all rights,
title and interest in and to the Licensed Technology, including without
limitation, all Derivative Works thereof and the Derivative Content, and all
modifications to the Licensed Technology, as well as any and all tangible and
intangible rights, copyrights, moral rights, trademark, trade secret rights,
patents, industrial property rights, and all other proprietary rights and/or
common law intellectual property rights (collectively, "Intellectual Property
Rights") of every kind as well as all registrations, technologies, renewals,
extensions, continuations, divisions, or reissues of the foregoing, now or
hereafter in force with respect thereto. With respect to all Derivative Content
and Derivative Works created by Licensee, the development and creation by
Licensee of such Derivative Content and Derivative Works, pursuant to or under
rights granted by this Agreement or otherwise, such development and creation
shall be considered "works made for hire" on behalf of Licensor under the United
States copyright laws and made pursuant to this Agreement. In the event any
Derivative Content or Derivative Works do not fall within the specifically
enumerated works that constitute "works made for hire" under the United States
copyright laws or the ownership of all of the Intellectual Property Rights in
and to any such Derivative Content or Derivative Works does not vest, solely and
exclusively, in Licensor pursuant to the previous sentence, Licensee hereby
agrees to assign and, upon their authorship or creation (or upon the Effective
Date, whichever occurs later), expressly and automatically assigns all
Intellectual Property Rights in and to such Derivative Content and Derivative
Works to Licensor. Licensee agrees to render all reasonably required assistance
to Licensor to protect the rights hereinabove described. To the extent
applicable, copies of all Derivative Content and Derivative Works created or
developed by Licensee at any time shall be delivered to Licensor, together with
copies of all applicable commented source code. Licensee agrees that it shall
not claim any title to or right to the Licensed Technology, Derivative Content
and Derivative Works except for the specific rights granted by Licensor pursuant
to this Agreement, and it shall not at any time attack or challenge the right of
Licensor or its grantor(s) in and to the Licensed Technology, Derivative Content
and Derivative Works. Licensee acknowledges that all use of Licensor's Marks
hereunder inures to the benefit of Licensor or its grantor(s).

         (b) By Licensee. Licensee shall be responsible for the design of the
Licensee Service and the Licensee Website, and retains all of the rights, title
and interest in and to the Licensee Service and the Licensee Website, including,
but not limited to the domain names owned by Licensee, as well as all graphical
designs, icons, interfaces and other design elements (e.g. the selection and
arrangement of materials therein and the "look and feel" thereof), subject, in
all cases to the rights of Licensor hereunder. Any information regarding the
users of the Licensee Service or the Licensee Website generated by Licensee's
use of the Licensed Technology shall be the exclusive property of Licensee and,
as such, may be used at the sole discretion of Licensee.

         2.4 Restrictions on Use. In any identification of Licensor, the
Licensed Technology or the Licensor Marks, Licensee shall not alter or otherwise
impair the branding or other identification of Licensor, nor alter or remove any
copyright, trademark or other protective notices of Licensor. Licensee may not
alter the color, size or similar attributes of the Licensor Marks without the
prior consent of Licensor. The right of Licensee to place advertising,
promotional or any other information or materials visible with, near or
surrounding or within the Licensed Technology or the Licensor Marks is limited
to those which will not impair or adversely affect the name, reputation or
goodwill of Licensor, and those which will not tarnish, dilute or be confusingly
similar to the Licensor Marks.

         2.5 Exclusivity. For the Term of this Agreement, Licensor shall not
permit: (i) the Licensed Technology to be deployed by any Person (including
without limitation Licensor and its affiliates) other than Licensee for the
purpose of targeting or marketing to Persons in the PRC (whether in the Chinese
or English languages); or (ii) Simplified Chinese Characters to be deployed or
utilized in connection with the Licensed Technology by any Person (including
without limitation Licensor and its affiliates) other than Licensee. For the
avoidance of doubt, nothing contained in the Agreement shall be construed to
prevent Licensor from deploying the Licensed Technology for the purpose of
targeting or marketing to Persons in

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the Republic of China (Taiwan) (whether in the Chinese or English languages) or
Chinese speaking Persons anywhere else in the world (other than the PRC) that do
not utilize Simplified Chinese Characters. The rights granted to Licensee under
this Agreement shall be exclusive also as against Licensor.

3.   DELIVERY AND TRANSLATION

         3.1 Creation of Chinese Language Versions. Licensee shall be solely
responsible for the creation of a localized Chinese-language version of the
Licensed Technology and all text strings contained within the Licensed
Technology for use in connection with the Licensee Service. Licensee shall
translate all such text strings into Chinese, and shall deliver a copy of these
translations to Licensor. Licensee shall be solely responsible for completing
all work necessary to integrate the translated text strings into the Licensed
Technology and complete any additional localization procedures.

         3.2 Installation and Integration. Licensor shall deliver to Licensee in
electronic form all source code, and all HTML, Java text and other formatted
files employed in the Licensed Technology. Licensor shall make available to
Licensee via telephone, during Licensor's regular business hours, a senior
engineer of Licensor to provide such assistance as Licensee may reasonably
require with installing, integrating and testing the Licensed Technology on
Licensee's systems and designing and implementing links, interfaces, and
operating features for the Licensed Technology, for an aggregate total of ten
(10) days (eighty (80) hours) during the three (3) month period following
delivery of the items specified in the first sentence of this Section 3.2. Any
additional assistance required by Licensee shall be charged by Licensee at
Licensor's then-prevailing rates for time and materials. In the event that
Licensee requests that an engineer or other employee of Licensor visit the
premises of Licensee in order to provide services under this Section 3.2 or
Section 3.3, all expenses reasonably incurred in connection with such visit,
including without limitation, travel and lodging expenses, shall be payable
directly by Licensee. Licensor shall also provide to Licensee all documentation
that is available in order to assist in using, maintaining, modifying and
improving the Licensed Technology.

         3.3 Maintenance and Support. Licensor shall deliver to Licensee, within
thirty (30) days following the conclusion of each calendar quarter during the
Term, as soon as practicable and at no charge to Licensee, all new releases,
corrections, bug fixes, upgrades and improvements, to the Licensed Technology
which were developed and released by Licensor during the preceding calendar
quarter. Upon delivery to Licensee, all such releases, corrections, bug fixes,
upgrades and improvements shall be deemed Licensed Technology for all purposes
of this Agreement. To the extent applicable, any text content contained in such
new releases or modifications shall be translated to Chinese in the same manner
as the original Licensed Technology. In addition to the services and assistance
under Section 3.2 hereof, Licensor shall use commercially reasonable efforts to
provide, at no charge to Licensee, telephone assistance, not to exceed four (4)
hours per month, during normal business hours of Licensor to answer questions
related to the Licensed Technology, to assist Licensee to cause the Licensed
Technology to perform in accordance with the documentation and specifications
with respect thereto and to cause the Licensed Technology to conform to the
warranties set forth in this Agreement, including, but not limited to,
diagnosing whether a problem is related to hardware or to the Licensed
Technology. In connection with the foregoing telephone assistance, Licensor
shall respond within four (4) hours after Licensor receives, during Licensor's
normal business hours, notice from Licensee of any problem with the Licensed
Technology. Any additional assistance required by Licensee shall be charged to
Licensee at Licensor's then-prevailing rates for time and materials.

4.   COMPENSATION

         4.1 Royalty. Within thirty (30) days following the conclusion of each
calendar quarter during the Term, Licensee shall remit to Licensor an amount
equal to [RTC] (including without limitation, the market value of any "barter"
arrangements) received by Licensee in the previous calendar quarter through or
in connection with the Licensee Service (the "Royalty"). Such

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remittance shall be accompanied by a report, in detail reasonably acceptable to
Licensor, specifying the calculation of Royalty, and a written certification by
an officer of Licensee, indicating that the calculation is true and correct.

         4.2 Audit Rights. Licensee agrees to keep and to maintain for a period
of three (3) years after the end of the year to which they pertain, sufficient
books, records and accounts regarding Licensee's business activities in order to
calculate and confirm the Royalty payment obligations. Licensor will have the
right, exercisable not more than once every twelve (12) months, and only after
giving Licensee notice of not less than five (5) business days' written notice,
to appoint an independent representative to examine and audit such books,
records and accounts during Licensee's business hours to verify the Royalty
payment obligations to Licensor under this Agreement, subject to such
independent representative's being bound to reasonable terms of confidentiality.
The cost of any such audit shall be paid by Licensor; provided, however, that if
any such review shall reveal an underpayment in excess of the greater than five
percent (5%) of monies due to Licensor from Licensee, Licensee shall promptly
pay to Licensor the reasonable costs of such review. The results of any such
audit shall be final, binding and conclusive as between the parties.

5.   TERM AND TERMINATION

         5.1 Term. This Agreement shall commence on the Initial Service Date and
shall continue in full force and effect for a period of three (3) years, unless
terminated earlier in accordance with this Agreement. Provided that the Licensee
Website Implementation Requirements have been met, this Agreement will be
automatically renewed, at Licensee's option, in perpetuity (the initial term and
such renewal, collectively, the "Term"). In the event that the Licensee Website
Implementation Requirements have not been met for the initial term, the parties
may nevertheless agree, in writing, to extend the Term as if the Licensee
Website Implementation Requirements have been met, or as otherwise as mutually
agreed by the parties.

         5.2 Termination. If at any time a party is in material breach of this
Agreement, then in addition to all other rights and remedies available under
applicable law or in equity, the other party shall have the right to terminate
this Agreement, unless such breach shall have been remedied within thirty (30)
days after such notice has been received by such party; however, except in the
case of a termination by Licensor resulting from a breach of this Agreement by
Licensee, any such termination shall not be effective prior to one hundred and
eighty (180) days following such notice. Notwithstanding the foregoing, however,
the restrictions of Licensor contained in Section 2.5 above shall terminate upon
the commencement of any such one hundred and eighty (180) day period. In
addition, (i) this Agreement shall terminate automatically and without further
notice if Phase I of the Licensee Website Implementation Requirements has not
been timely achieved and (ii) Licensor may terminate this Agreement, upon ninety
(90) days' notice, if Phase II of the Licensee Website Implementation
Requirements is not timely achieved; however, the right of termination under
this clause (ii) shall not be effective if the requirements of Phase II are
satisfied as of the end of any consecutive three-month period ending subsequent
to March 31, 2003 and prior to giving of any such notice of termination.

         5.3 Rights Upon Termination. Unless the rights of Licensee pursuant to
Section 5.4 below are exercised, upon the effective date of any termination or
expiration hereof, Licensee shall immediately cease any and all use of the
Licensed Technology, the Derivative Works, the Derivative Content and the
Licensor Marks, including without limitation, all promotion, reproduction,
distribution and archiving of the Licensed Technology, Derivative Works and
Derivative Content, and each party shall promptly return to the other party all
Confidential Information (as defined below) received from such other party and
Licensee shall return to Licensor all copies of the Licensed Technology, the
Derivative Works and the Derivative Content in the possession of Licensee.
Notwithstanding the foregoing, sections that by their nature survive expiration
or termination shall survive any expiration or termination of this Agreement. No
such expiration or termination shall affect the right of Licensee to continue
the Licensee Service or to use

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the Licensee Website based on other technology or software, utilizing content
other than Derivative Works and Derivative Content and utilizing trademarks and
other indicia other than Licensor Marks.

         5.4 License Purchase Option. In the event of any expiration of the Term
due to failure to meet the Licensee Website Implementation Requirements (but not
in the event of any other expiration or any termination), Licensee shall have
the option, to be exercised within fifteen days following the effective date of
such expiration, upon written notice to Licensor and the payment of one million
dollars ($1,000,000), to purchase the license conferred pursuant to Section 2.1
above, in perpetuity, with respect to the Licensed Technology, as such Licensed
Technology exists as of the effective date of expiration. SUCH LICENSE, IF
PURCHASED BY LICENSEE, SHALL BE "AS IS" WITHOUT WARRANTIES OF ANY KIND AND,
WITHOUT LIMITATION, LICENSOR SHALL HAVE NO FURTHER OBLIGATION TO SUPPORT OR
MAINTAIN SUCH LICENSED TECHNOLOGY, OR UNDER SECTION 8.1 HEREOF.

6.   CONFIDENTIALITY

         Licensor and Licensee agree that all information (whether in writing,
orally or in any other format) disclosed by each of them to the other during the
negotiation of this Agreement or to be disclosed during the Term, including
without limitation, business plans, product ideas, marketing concepts, financial
information and projections, shall constitute "Confidential Information";
provided, however, Confidential Information does not include information that is
or becomes publicly known through no wrongful act of either party (or any of its
employees), has been approved for release by written authorization of the
originating party, or has been disclosed pursuant to a requirement of a
government agency or of law. During the term and at all times thereafter, the
party to whom Confidential Information has been imparted shall maintain such
information as confidential and shall not disclose or permit the same to be
disclosed to any Person. Each party shall take all reasonable steps to prevent
unauthorized disclosure of Confidential Information that it uses to protect its
own confidential information of a similar nature. Each of the parties further
agrees that the unauthorized disclosure by it of Confidential Information
received from the other will cause irreparable harm and significant injury to
the other which may be difficult to ascertain. Accordingly, each party agrees
that the other shall be entitled to equitable relief, including, without
limitation, an immediate injunction enjoining any breach by it of this Section
6, in addition to all other remedies available to such party at law or in
equity.

7.   REPRESENTATIONS

         7.1 By Licensor. Licensor represents and warrants that: (i) it has the
full power and authority to enter into this Agreement, carry out its obligations
hereunder and grant the rights granted to Licensee herein; (ii) it is the sole
owner or is a valid licensee of the Licensed Technology, and it has secured all
necessary licenses, consents, authorizations and waivers for the use of the
Licensed Technology as contemplated by this Agreement, including without
limitation, all text, logos and copy contained in all Licensed Technology and
there are no conflicting claims with respect to Licensor's rights thereto; (iii)
no part of the Licensed Technology violates or infringes upon any third party's
Intellectual Property Rights; (iv) Licensor has not previously and will not
grant any rights in the Licensed Technology to any third party which are
inconsistent with Licensor's obligations and the rights granted to Licensee
under this Agreement; (v) Licensor has not otherwise made or entered into, and
will not make or enter into during the term of this Agreement, any commitment or
obligation in conflict with its obligations and rights under this Agreement;
(vi) the Licensed Technology is the most recent version thereof; (vii) the
Licensed Technology is Year 2000 Compliant and, when delivered to Licensee, will
be free of any and all computer viruses, copy protect mechanisms or any other
features which may disable it or render it incapable of operation (whether after
a certain time, after transfer to another central processing unit, or
otherwise); (viii) except for Third Party Software, the Licensed Technology
includes all items, components, and services necessary to provide all processing
capabilities and functional characteristics represented by Licensor as being
included in the Licensed Technology, as set forth in the documentation and
specifications provided by Licensor to Licensee, and necessary to establish and
operate the Licensee Website in a manner comparable to the website operated by
Licensor in the United States, as of the Effective Date; however, the
representation and warranty contained in this clause (viii) is made by

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Licensor with respect to Third Party Software only to the best knowledge of
Licensor; (ix) the unmodified Licensed Technology shall be free from material
defects in materials and workmanship and shall operate in accordance with
documentation and specifications with respect thereto during the period
commencing upon the Effective Date and ending upon the earlier of August 31,
2001 and the achievement of the Phase I portion of the Licensee Website
Implementation Requirements (the "Initial Warranty Period"), and, thereafter,
for a period of ninety (90) days following delivery thereof by Licensor to
Licensee; and (x) all services provided by Licensor under this Agreement shall
be performed in a competent and professional workmanlike manner, equal to or
above the standards of the software development industry. During the Term,
Licensor shall promptly notify Licensee in writing of any material event or
change in circumstance which would reasonably make, or threaten to make, the
foregoing representations and warranties untrue or inaccurate. For the avoidance
of doubt, (a) the representation and warranty contained in clause (ix) above
shall apply to all new releases, corrections, bug fixes, upgrades and
improvements for a period of ninety (90) days following delivery thereof by
Licensor to Licensee (or for the Initial Warranty Period, if applicable), but
shall not apply to any other portion of the Licensed Technology, unless the
Initial Warranty Period is in effect or such representation and warranty is
otherwise independently applicable thereto and (b) such representation and
warranty shall be conditioned upon the Licensee's implementation of all new
releases, corrections, bug fixes, upgrades and improvements provided by
Licensor, if such implementation would have avoided any alleged breach of such
representation and warranty.

         7.2 By Licensee. Licensee represents, warrants and covenants as
follows: (i) Licensee has the full power and authority to enter in this
Agreement and to carry out its obligations hereunder; (ii) all materials and
services provided by Licensee hereunder are owned by Licensee or are in the
public domain; (iii) Licensee has not made or entered into and during the term
of this Agreement will not make or enter into, any commitment or obligation in
conflict with its obligations and rights under this Agreement; (iv) no addition
to the Licensed Technology contained in the Derivative Content and no Derivative
Works will violate or infringe upon any third party's Intellectual Property
Rights; and, (v) Licensee has received (and shall maintain until the expiration
of the Term) all approvals, consents, authorizations, and waivers from
governmental and other regulatory agencies (including without limitation, the
United States Department of State Office of Defense Trade Controls, the United
States Department of Commerce Bureau of Export Administration, the United States
Department of the Treasury and all analogous governmental and regulatory
agencies in and of the PRC) required and published with respect to import and
export restrictions, or restrictions on trans-border data flow, relating to the
distribution or use of the Licensed Technology outside the United States and
into and within the PRC. During the term of this Agreement, Licensee shall
promptly notify Licensor in writing of any material event or change in
circumstance which would reasonably make, or threaten to make, the foregoing
representations and warranties untrue or inaccurate.

         7.3 EXCEPT AS SPECIFICALLY SET FORTH HEREIN, EACH PARTY DISCLAIMS ANY
AND ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTIES OF FITNESS FOR ANY PARTICULAR PURPOSE OR MERCHANTABILITY. EXCEPT
IN CONNECTION WITH THE FULFILLMENT OF ITS OBLIGATIONS UNDER SECTION 8 OR ARISING
OUT OF A BREACH BY A PARTY OF ITS OBLIGATIONS UNDER SECTION6, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS OR OTHER
INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT.

8.   INDEMNITIES

         8.1 By Licensor. Licensor shall indemnify, defend, and hold harmless
Licensee and Licensee's directors, officers, employees, agents, consultants, and
distributors from and against all claims, actions, liabilities, losses,
expenses, damages and costs (including, but not limited to, reasonable
attorneys' fees) that may at any time be incurred by reason of any claim arising
out of or related to (i) any breach or alleged breach of, or any claim that is
otherwise inconsistent with, the representations and warranties

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contained in Section 7.1, above; (ii) the infringement of a third party's
Intellectual Property Rights by the Licensed Technology or Licensor's Marks
(other than any of the foregoing if modified without the consent of Licensor);
OR (iii) any gross negligence or willful misconduct by Licensor, or any employee
or agent thereof.

         8.2 By Licensee. Licensee shall indemnify, defend and hold harmless
Licensor and Licensor's directors, officers, employees, agents, or consultants
from and against all claims, actions, liabilities, losses, expenses, damages and
costs (including without limitation, reasonable attorneys' fees) that may at any
time be incurred by any claim arising out of or related to (i) any breach or
alleged breach of, or any claim that is otherwise inconsistent with, the
representations and warranties contained in Section 7.2 above; (ii) Licensee's
actions in reproducing, marketing and distributing the Licensed Technology and
the Derivative Content to the extent not authorized herein; (iii) the
infringement of a third party's Intellectual Property Rights by the Licensee
Service or any modifications made to the Licensed Technology by or on behalf of
Licensee without the consent of Licensor; (iv) the use or misuse of the personal
information of any individual by Licensee, or any Person to whom Licensee
provided any such information or (v) any gross negligence or willful misconduct
by Licensee, or any employee or agent thereof.

         8.3 Procedures. The indemnifying party ("Indemnifying Party") shall
notify the indemnified party ("Indemnified Party") in writing of the claim
promptly upon becoming aware of such claim; and shall give the Indemnified Party
sole control of the defense and all related settlement negotiations, provided
however that the Indemnifying Party shall not settle any claim or proceeding
unless the Indemnified Party shall have consented to such settlement in writing,
and provided further the Indemnified Party provides the Indemnifying Party with
all commercially reasonable assistance, information and authority to perform the
above at the Indemnifying Party's expense. Notwithstanding the foregoing, in the
event that the Indemnified Party shall fail to promptly notify the Indemnifying
Party of any claim for which the Indemnified Party is entitled to
indemnification hereunder, the obligations of the Indemnifying Party hereunder
shall be relieved only to the extent that such Indemnifying Party is actually
prejudiced by such failure

9.   GENERAL

         9.1 Notices. Any notices or consents required or permitted by this
Agreement shall be in writing and delivered in person or by registered or
certified mail, postage prepaid, return receipt requested, or by a reputable
courier delivery service, or by facsimile during regular business hours
(provided that a confirmation copy follows any other method of delivery
permitted under this Section 9.1), as follows unless such address is changed by
written notice hereunder, and such notice shall be deemed given for purposes of
this Agreement on the day that such writing is sent to the intended recipient
thereof in accordance with this section:

<PAGE>

         If to Licensor:                     If to Licensee:

         Predict It, Inc.                    Predict It China LLC
         Attn: Andrew P. Merkatz             995 Ashokan Road
         268 West 44th Street                Kingston, New York 12401
         New York, NY 10036                  Attention: Keith Abell
         Telephone: (212) 217-1200           Telephone: (212) 816-8531
         Fax: (212) 217-1201                 Fax: (212) 816-0166

                                             with copies to:

                                             Keith Abell via e-mail
                                             at:  kabell@gscpartners.com

                                             Dechert Price & Rhoads
                                             30 Rockefeller Plaza
                                             New York. New York 10112
                                             Attention: Ronald R. Jewell
                                             Fax:     (212) 698-3599

         9.2 Publicity. During the Term, either party may use the other party's
name in news releases, articles, brochures, marketing materials, advertisements
and other publicity or promotions, subject to the other party's prior written
approval; provided that no advance approval shall be required for use of
Licensor's name and Licensor's Marks on the Licensee Service.

         9.3 Confidentiality of Agreement. Both Licensor and Licensee agree that
the terms and conditions of this Agreement, including the general existence of
this Agreement, shall be treated as Confidential Information and that no
reference to the terms and conditions of this Agreement or to activities
pertaining thereto can be made in any form without the prior written consent of
the other party; provided, however, that either party may disclose the terms and
conditions of this Agreement (i) as required by any court or other governmental
body, (ii) as otherwise required by law, (iii) to legal counsel of the parties,
(iv) in confidence, to accountants, banks, proposed investors, and financing
sources and their advisors, (v) in confidence, in connection with the
enforcement of this Agreement or rights under this Agreement; or (vi) in
confidence, in connection with a merger or acquisition or proposed merger or
acquisition, or the like.

         9.4 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the prior
written consent of the other party hereto which consent shall not be
unreasonably be withheld. Notwithstanding anything in this Agreement to the
contrary, either party may assign this Agreement (i) to any entity in which the
party has a greater than fifty percent (50%) equity ownership interest or of
which the party has voting control, or (ii) to any entity which acquires more
than fifty percent (50%) of that party's equity ownership interests (whether by
merger or otherwise) or substantially all that party's assets.

         9.5 Force Majeure. Neither party shall have any obligation to the other
party for acts of God or events beyond the reasonable control of such party
which affect such party's ability to perform its obligations hereunder,
provided, however, that each party agrees to use its best efforts, respectively,
to minimize the extent and the impact of the inability to perform properly

<PAGE>

         9.6 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York, the United States, without
reference to choice of law principles, including all matters of construction,
validity and performance. The parties agree that jurisdiction and venue of all
matters relating to this Agreement shall be vested exclusively in the federal or
state courts located within the State and County of New York.

         9.7 Headings. The headings used in this Agreement are for convenience
of reference only and shall not affect the construction or interpretation of any
of the provisions hereof.

         9.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereon were upon the same instrument.

         9.9 Waivers and Amendments. The failure by either party to insist upon
strict enforcement of any terms and conditions of this Agreement shall not be
construed as a waiver or relinquishment of the right to assert or rely upon any
such terms on any future occasion. No modification, amendment, renewal,
extension, or waiver of this Agreement or any of its provisions shall be binding
unless made in writing and signed by authorized representatives of each party.

         9.10 Relationship of the Parties. The relationship of Licensee and
Licensor established by this Agreement is that of independent contractors, and
nothing contained in this Agreement will be construed to constitute the parties
as partners, joint venturers, co-owners or otherwise as participants in a joint
or common undertaking and neither party shall have any authority to obligate the
other party.

         9.11 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.

         9.12 Reliance and Benefit. This Agreement is intended for the sole and
exclusive benefit of the parties hereto and is not intended to confer any
benefit upon any other Persons whatsoever. Except for the parties hereto, no
other Person shall have any right to rely upon this Agreement for any purpose
whatsoever, absent the written consent of the party to be charged with such

         9.13 Entire Agreement. This Agreement, together with the schedules
attached hereto and the other documents referred to herein, constitutes the sole
and entire understanding between and among the parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings
among the parties with respect to such subject matter.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the day and year first above written.

PREDICT IT CHINA LLC ("Licensee")                 PREDICT IT INC. ("Licensor")
By: China Interactive Media
    Group, LLC, a Member

By: /s/  Keith Abell                                 By: /s/ Andrew P. Merkatz
   -----------------------------------                --------------------------
         Keith Abell                                         Andrew P. Merkatz
         Member                                              President

<PAGE>

                                   SCHEDULE A

                       DESCRIPTION OF LICENSED TECHNOLOGY

3rd Party Software that is required and recommended

o Oracle 8 (Required)
o ATG Dynamo (Required)
o Veritas Volume Manager (Recommended)
o Veritas NetBackup (Recommended)
o Netscape Enterprise Server or Apache. (Netscape Recommended)
o Toad (Tool for Oracle Application Developers - Recommended
  http://www.quest.com/ )
o MS Access is recommended in order to use the back office reporting tool.

Documentation on these products must be obtained from the vendor directly.

What will be delivered by Predict It USA

Database

Predict It China will receive database creation scripts to execute on their
instance of Oracle 8 or Oracle 8i. This script will create the database, table
spaces, and all tables, indexes, constraints, primary and foreign keys, stored
procedures, and triggers necessary. Predict It China will also receive a file
containing Oracle configuration parameters based on Predict It USA's hardware
specification. SQL scripts that are run manually by the DBA for maintenance will
also be included and documented.

This database will not contain any of Predict It, USA's data. We will provide a
script to create Initialization data for the tables that require it.

Source Code

A release of java source code and jhtml will be provided for the functions and
features listed below, as well as the relational views file that contains all of
the database SQL queries.

Functions and Features

o Administration screens for the creation of events, entities, and domains.
o Administration screens for the scoring of events.
o Proposition Types for Against the Spread (ATS), Over-Under, Straight-Up,
  Futures.
o Distributor code. Distributor types, palettes, default domains.
o Earnings per page view code.
o User performance, User profile, registration, log-in, User past, pending,
  future picks.
o Most Active Events code.
o Intelligence Report code.
o Advanced Search code
o Top Analysts code
o Back office reports to show number of page views, earnings by distributor.

<PAGE>

Delivery

The code will be delivered to Predict It China on a CD along with documentation
that will outline the recommended hardware platform, and the 3rd Party software
required by the Predict It application. The following documentation in English
will be included:

1.  Object Model
2.  Data Model
3.  Stored Procedures Documentation
4.  Documentation of any sql scripts that are run manually by the DBA for
    maintenance.
5.  Data Model and Data Definition Document
6.  Predict It USA Server and Network Specification Document
7.  Data Flow Documentation
8.  Commented Code
9.  Data Feed Documentation  (If applicable. See Sports Ticker Feeds Below)
10. System Architecture Overview

Additional Information:

ESPN Sports Ticker Data Feed Parsers

We have written parsers in perl to recognize schedules, scores, and lines from
the ESPN Sports Ticker Data Feed. The sports that we currently parse from Sports
Ticker are NFL, MLB, NHL, NCAA Football, and NCAA Men's Basketball. All other
sports that we offer such as Soccer, Rugby, Horse Racing, Golf, Tennis, and
Boxing are inserted into the database manually through the use of an
administration screen. These administration screens will be provided to Predict
It China, for the creation of sports events in the Predict It China database.

Technical Staffing Recommendations:

Predict It USA recommends that Predict It China make the following critical
technical hires as soon as possible.

Oracle 8 or Oracle 8i Database Administrator. This person should have experience
writing stored procedures in PL/SQL.

Java Programmers. These persons should have experience with Java servlets, Java
beans, and SQL.

Unix Systems Administrator. This person should have experience building and
maintaining a 24/7 internet production environment. Knowledge of Netscape
Enterprise Server or Apache is recommended. He or She must have strong Solaris
experience.

<PAGE>

                                   SCHEDULE B
                                 LICENSOR MARKS

SERVICE MARKS

PredictIt    *
Predict It   *

Can You Predict It    *

Predict The Madness

Predict It Sports
Predict It Stocks
Predict It Entertainment
Predict It Politics

Predict It Pro
Predict It Pro Plus
My Predict It

Virtual Stock Exchange

*Existing Service Mark<PAGE>

                                 PREDICT IT INC.

         SUBSCRIPTION AGREEMENT made as of this __ day of ________ , 2000
between Predict It Inc., a corporation organized under the laws of the State of
Delaware with offices at 268 West 44th Street, New York, New York 10036 (the
"Company"), and the undersigned (the "Subscriber").

         WHEREAS, the Company desires to issue a minimum of 40 units ("Units")
and a maximum of 80 Units in a private placement (the "Offering"), each Unit
consisting of: (i) 10,000 shares (the "Preferred Shares") of Series B
Convertible Preferred Stock (the "Preferred Stock"), each Preferred Share
initially convertible into ten shares of the Company's common stock, $0.01 par
value (the "Common Stock") as described in the Certificate of the Designations,
Powers, Preferences and Rights ("Certificate of Designations") attached as
Exhibit B to the Confidential Private Placement Memorandum dated March 13, 2000
(together with all the Exhibits thereto, the "Memorandum"); and (ii) 7-year
warrants (the "Warrants") to purchase 100,000 shares of Common Stock in the form
attached as Exhibit C to the Memorandum, all on the terms and conditions
hereinafter set forth;

         WHEREAS, up to twenty-three (23) Units will be purchased by holders of
the Company's outstanding indebtedness and will be paid for by delivering the
notes representing such indebtedness to the Company; and

         WHEREAS, the Subscriber desires to acquire the number of Units set
forth on the signature page hereof on the terms and conditions hereinafter set
forth.

         NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:

         I.       SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY AND COVENANTS OF
                  SUBSCRIBER

                  1.1 Subject to the terms and conditions hereinafter set forth,
the Subscriber hereby subscribes for and agrees to purchase from the Company
such number of Units as is set forth upon the signature page hereof at a price
equal to $100,000 per Unit and the Company agrees to sell such Units to the
Subscriber for said purchase price subject to the Company's right to sell to the
Subscriber such lesser number of Units, or no Units, as the Company may, in its
sole discretion, deem necessary or desirable. The purchase price is payable by
certified or bank check made payable to "American Stock Transfer & Trust
Company, as Escrow Agent for Predict It Inc." or by wire transfer of funds or by
delivery of notes evidencing indebtedness of the Company, in each case
contemporaneously with the execution and delivery of this Subscription
Agreement. The Preferred Shares and Warrants will be delivered by the Company
within 10 days following the consummation of the Offering as set forth in
Article III hereof.

                  1.2 The Subscriber recognizes that the purchase of Units
involves a high degree of risk in that (i) the Company has incurred substantial
losses from operations; (ii) an investment in the Company is highly speculative
and only investors who can afford the loss of their entire

<PAGE>

investment should consider investing in the Company and the Units; (iii) an
investment in the Units is illiquid; and (iv) transferability of the securities
comprising the Units is extremely limited, as well as other risk factors as more
fully set forth in the Memorandum.

                  1.3 The Subscriber represents and warrants that he is an
"accredited investor" as such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the "Act"), as
indicated by his responses to the Investor Questionnaire, and that he is able to
bear the economic risk of an investment in the Units. The Subscriber further
represents and warrants that the information furnished in the Investor
Questionnaire is accurate and complete in all material respects.

                  1.4 The Subscriber acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities and
that he recognizes the highly speculative nature of this investment.

                  1.5 The Subscriber acknowledges receipt and careful review of
the Memorandum and all other documents furnished in connection with this
transaction (collectively, the "Offering Documents") and hereby represents that
he has been furnished by the Company during the course of this transaction with
all information regarding the Company which he has requested or desires to know,
and that such information and documents have, in his opinion, afforded the
Subscriber all of the same information that would be provided him in a
registration statement filed under the Act; that he has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of the Company concerning the terms and
conditions of the Offering, and any additional information which he had
requested.

                  1.6 The Subscriber acknowledges that this offering of Units
may involve tax consequences and that the contents of the Memorandum do not
contain tax advice or information. The Subscriber acknowledges that he must
retain his own professional advisors to evaluate the tax and other consequences
of an investment in the Units.

                  1.7 The Subscriber acknowledges that this offering of Units
has not been reviewed by the United States Securities and Exchange Commission
("SEC") or any state securities administrator because the Company is relying on
an exemption from registration provided by Regulation D promulgated under the
Act and the resulting exemption from state securities or "blue sky" laws. The
Subscriber represents that the Preferred Shares arid Warrants comprising his
Units are being purchased for his own account, for investment and not for
distribution or resale to others. The Subscriber agrees that he will not sell or
otherwise transfer the Preferred Shares or the Warrants unless they are
registered under the Act or unless an exemption from such registration is
available.

                  1.8 The Subscriber understands that there is no public market
for the Preferred Stock or the Warrants and that only a limited public market
exists for the Common Stock. The Subscriber understands that Rule 144 (the
"Rule") promulgated under the Act requires, among other conditions, a one year
holding period prior to the resale (in limited amounts) of securities acquired
in a non-public offering without having to satisfy the registration requirements
under the Act. The

<PAGE>

Subscriber understands that the Company makes no representation or warranty
regarding its fulfillment in the future of any reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or its
dissemination to the public of any current financial or other information
concerning the Company, as is required by the Rule as one of the conditions of
its availability and that to date the Company is not subject to the reporting
requirements of the Exchange Act. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register the Securities
under the Act, with the exception of certain registration rights set forth in
Article IV herein. The Subscriber agrees that the Company may, if it desires,
permit the transfer of the Preferred Shares, the shares of Common Stock issuable
upon conversion of the Preferred Shares (the "Conversion Shares"), the Warrants
or the shares of Common Stock issuable upon exercise of the Warrants (the
"Warrant Shares" and, together with the Preferred Shares, Conversion Shares and
Warrants, the "Securities") out of his name only when his request for transfer
is accompanied by an opinion of counsel reasonably satisfactory to the Company
that neither the sale nor the proposed transfer results in a violation of the
Act or any applicable state "blue sky" laws (collectively "Securities Laws").

                  1.9 The Subscriber hereby agrees that, without the prior
consent of Commonwealth Associates, L.P. (the "Placement Agent"), the Subscriber
will not sell, transfer or otherwise dispose of the Securities or any other
securities of the Company held by Subscriber until the later of (i) the six
month anniversary of the final closing of the Offering or (ii) the date the
registration statement required by Section 4.1 hereof is declared effective by
the SEC (the "Lock-Up Period").

                  1.10 The Subscriber consents to the placement of a legend on
any certificate or other document evidencing the Securities or any other
securities of the Company held by Subscriber stating that they have not been
registered under the Act and setting forth or referring to the restrictions on
transferability and sale thereof, and to the issuance of stop transfer
instructions with respect thereto.

                  1.11 The Subscriber acknowledges that if he is a Registered
Representative or an affiliated person of an NASD member firm, he must give such
firm the notice required by the NASD's Rules of Fair Practice, receipt of which
must be acknowledged by such firm on the signature page hereof.

                  1.12 If the undersigned Subscriber is a partnership,
corporation, trust or other entity, such partnership, corporation, trust or
other entity further represents and warrants that: (i) it was not formed for the
purpose of investing in the Company; (ii) it is authorized and otherwise duly
qualified to purchase and hold the Units; and (iii) that this Subscription
Agreement has been duly and validly authorized, executed and delivered and
constitutes the legal, binding and enforceable obligation of the undersigned.

                  1.13 The Subscriber hereby represents that the address of
Subscriber furnished by him at the end of this Subscription Agreement is the
undersigned's principal residence if he is an individual or its principal
business address if it is a corporation or other entity.

<PAGE>

                  1.14 The Subscriber hereby represents that, except as set
forth in the Offering Documents, no representations or warranties have been made
to the Subscriber by the Company or any agent, employee or affiliate of the
Company, including the Placement Agent, and in entering into this transaction,
the Subscriber is not relying on any information, other than that contained in
the Offering Documents and the results of independent investigation by the
Subscriber.

                  1.15 The Subscriber acknowledges that at such time as the
Reserved Shares (as defined in Section 2.1 (d) hereof) are registered, sales of
such securities will be subject to state securities laws, including those of
states which may require any securities sold therein to be sold through a
registered broker-dealer or in reliance upon an exemption from registration.

                  1.16 The Subscriber acknowledges that the maximum number of
Units to be sold in the Offering may be increased by up to 40 Units ($4,000,000)
without notice to Subscribers.

                  1.17 The Subscriber represents and warrants that the
Subscriber did not learn of the Offering directly or indirectly through any
general solicitation or advertising, including, but not limited to, learning of
the Company or the Offering as a result of viewing any press release or similar
types of publicly available information which directly or indirectly resulted in
the Subscriber subscribing for Units in the Offering. The Subscriber further
understands that the Company is relying, in part, on this representation to
ensure compliance with the federal securities laws.

                  1.18 The Subscriber acknowledges that the Placement Agent and
a committee to be designated by the Placement Agent whose members hold in the
aggregate not less than 20 % of the outstanding Preferred Shares (the
"Committee") may consent to any amendments, modifications or waivers with
respect to the Preferred Shares, thereby binding the Subscriber to any such
amendment, modification or waiver. The Subscriber hereby authorizes the
Placement Agent and the Committee to act on the Subscribers' behalf and grants
the Placement Agent and the Committee an irrevocable proxy to vote for any
amendment or waiver to the Certificate of the Designations to effect the
foregoing; provided, however, no amendment or waiver may decrease the number of
shares of Common Stock issuable upon conversion of the Preferred Stock or
increase the Conversion Price of the Preferred Stock without the requisite vote
required by the Certificate of Designations. The Subscriber agrees that neither
the Placement Agent nor any of its directors, officers, employees or agents nor
the Committee or any of its members shall be liable to any Subscriber for any
action taken or omitted to be taken by it in connection therewith, except for
wilful misconduct or gross negligence. The Subscriber acknowledges that one or
more members of the Committee may be affiliated with the Placement Agent. Any
transferee of the Preferred Shares shall agree to he bound by this Section 1.18.

<PAGE>

         II.      REPRESENTATIONS BY THE COMPANY

                  2.1 The Company represents and warrants to the Subscriber that
prior to the consummation of this offering, at the Initial Closing and at each
subsequent closing date:

                    (a) The Company and each of its subsidiaries (each a
"Subsidiary") is a corporation duly organized, existing and in good standing
under the laws of its jurisdiction of incorporation and has the corporate power
to conduct the business which it conducts and proposes to conduct.

                    (b) The execution, delivery and performance of this
Subscription Agreement by the Company will have been duly approved by the Board
of Directors of the Company and all other actions required to authorize and
effect the offer and sale of the Units and the Securities will have been duly
taken and approved.

                    (c) The Preferred Shares and Warrants have been duly and
validly authorized and when issued and paid for in accordance with the terms
hereof, will be duly and validly issued and fully paid and non assessable. The
Conversion Shares and Warrant Shares when issued upon conversion of the
Preferred Stock and exercise of the Warrants in accordance with their terms will
be duly and validly issued and fully paid and non assessable.

                    (d) The Company will at all times have authorized and
reserved a sufficient number of Conversion Shares and Warrant Shares
(collectively, the "Reserved Shares") to provide for conversion of the Preferred
Shares and exercise of the Warrants.

                    (e) The Company and each Subsidiary has, to the best of the
Company's knowledge, obtained, or is in the process of obtaining, all licenses,
permits and other governmental authorizations necessary to the conduct of its
respective business; such licenses, permits and other governmental
authorizations obtained are in full force and effect; and the Company and each
Subsidiary is in all material respects complying therewith; except where such
failure to obtain comply with, or have in full force and effect licenses,
permits and other governmental authorizations would not have a material adverse
effect on the Company's or any Subsidiary's business, property, financial
condition or operations.

                    (f) The Company knows of no pending or threatened legal or
governmental proceedings to which the Company or any Subsidiary is a party which
could materially adversely affect the business, property, financial condition or
operations of the Company or any Subsidiary.

                    (g) Neither the Company nor any Subsidiary is in violation
of or default under, nor will the execution and delivery of this Subscription
Agreement, the issuance of the Preferred Shares, the Warrants or the Unit
Purchase Option (as hereinafter defined), the incurrence of the obligations set
forth herein and therein and the consummation of the transactions contemplated
hereby or thereby, result in a violation of, or constitute a default under, the
Company's

<PAGE>

or any Subsidiary's certificate of incorporation or by-laws, any material
obligations, agreement, covenant or condition contained in any bond, debenture,
note or other evidence of indebtedness or in any material contract, indenture,
mortgage, loan agreement, lease, joint venture or other agreement or instrument
to which the Company or any Subsidiary is a party or by which any of them or any
of their properties may be bound or any material order, rule, regulation, writ,
injunction, or decree of any government, governmental instrumentality or court,
domestic or foreign; except where such violation or default would not have a
material adverse effect on the Company's or any Subsidiary's business, property,
or financial condition or operations.

                    (h) The financial information contained in the Memorandum
presents fairly the financial condition of the Company and its Subsidiaries as
of the dates and for the periods indicated.

         III.     TERMS OF SUBSCRIPTION

                  3.1 The subscription period will begin as of March 13, 2000
and will terminate at 11:59 PM Eastern time on May 1, 2000, unless extended by
the Company and the Placement Agent until May 31, 2000 (the "Termination Date").
Such extension may be effected without notice to the Subscribers. The first 40
Units will be offered on a "best efforts - all or none" basis and the remaining
Units will be offered on a "best efforts" basis. The maximum number of Units
which may be sold in the Offering may be increased by up to 40 Units
($4,000,000) at the discretion of the Placement Agent in the event of
over-subscription.

                  3.2 As compensation for its services, the Placement Agent will
receive: (i) a sales concession equal to 7% of the aggregate purchase price of
the Units sold; (ii) a structuring fee equal to 3% of the aggregate purchase
price of the Units; provided, however, (x) the sales concession fees shall not
be payable with respect to the purchase of Units upon the conversion of up to
$1.3 million of outstanding indebtedness and certain other bridge debt incurred
prior to the Initial Closing and (y) a combined sales concession and structuring
fee equal to 6.5% of the aggregate purchase price of the Units sold shall be
payable with respect to investments by certain individuals and entities agreed
to by the Placement Agent and the Company; (iii) reimbursement of up to $100,000
of accountable expenses of which $25,000 has been paid to the Placement Agent;
and (iv) a 7-year option (the "Unit Purchase Option") to purchase from the
Company up to the number of Units equal to 20% of the total number of Units sold
in the Offering (including Units sold in the event of an over-subscription) at
an exercise price equal to $100,000 per Unit. The Company shall also pay all
expenses in connection with the qualification of the Units and the Securities
under the securities or Blue Sky laws of the states which the Placement Agent
shall designate, including reasonable legal fees and filing fees.

                  3.3 Pending the sale of the Units, all funds paid hereunder
shall be deposited by the Company in escrow with American Stock Transfer &
Trust Company. If the Company shall not have obtained subscriptions (including
this subscription) for purchases of 40 Units on or before the Termination Date,
then this subscription shall be void and all funds paid hereunder by the
Subscriber shall be promptly returned to the Subscriber, without interest,
subject to paragraph 3.5

<PAGE>

hereof. If 40 Units are subscribed for at or prior to the Termination Date, then
all subscription proceeds shall be paid over to the Company within ten business
days thereafter at an initial closing (the "Initial Closing"). In such event,
placements of additional Units may continue until the Termination Date, with
subsequent releases of funds to be at the mutual consent of the Company and the
Placement Agent. At the Initial Closing and each subsequent closing, payment for
the Units issued and sold by the Company shall be made against delivery of the
Preferred Shares and Warrants comprising such Units. All funds received from a
Subscriber whose subscription for Units is not accepted will be returned to the
Subscriber, without interest and without any deduction, subject to paragraph 3.5
hereof.

                  3.4 The Subscriber hereby authorizes and directs the Company
to deliver certificates representing the Securities to be issued to such
Subscriber pursuant to this Subscription Agreement either (a) to the residential
or business address indicated in the Confidential Purchaser Questionnaire or (b)
directly to the Subscriber's account maintained with the Placement Agent, if
any.

                  3.5 The Subscriber hereby authorizes and directs the Company
to return any funds for unaccepted subscriptions to the same account from which
the funds were drawn, including any customer account maintained with the
Placement Agent.

                  3.6 If the Subscriber is not a United States person, such
Subscriber hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the securities comprising the Units or any use of this
Subscription Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Units, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the securities comprising the Units. Such Subscriber's
subscription and payment for, and his or her continued beneficial ownership of
the Units, will not violate any applicable securities or other laws of the
Subscriber's jurisdiction.

         IV.      REGISTRATION RIGHTS

                  4.1 Required Registration. The Company hereby agrees with the
holders of the Securities or their transferees (collectively, the "Holders") to
prepare and file with the SEC no later than the six month anniversary of the
final closing of the Offering, a registration statement under the Act covering
the resale of the Reserved Shares and to use its best efforts to cause such
registration statement to become effective as soon as practicable thereafter and
to keep such registration statement effective until such time as the Reserved
Shares have been sold or may be sold under Rule 144 without volume limitation.

                  4.2 "Piggyback" Registration Rights. If the Company shall at
any time determine to proceed with the actual preparation and filing of a
registration statement under the Act in connection with a proposed offer and
sale of any of its equity securities by it or any of its security

<PAGE>

holders (other than a registration statement on Form S-4, S-8 or other limited
purpose form), the Company will give written notice of its determination to all
record holders of the Securities. Upon the written request from any Holders,
within 15 days after receipt of any such notice from the Company, the Company
will, except as herein provided, cause all such Reserved Shares with respect to
which a request for inclusion has been received to be included in such
registration statement, all to the extent required to permit the sale or other
disposition by the prospective seller or sellers of the Reserved Shares to be so
registered; provided, further, that nothing herein shall prevent the Company
from, at any time, abandoning or delaying any registration. If any registration
pursuant to this Section 4.2 shall be underwritten in whole or in part, the
Company may require that the Reserved Shares requested for inclusion pursuant to
this Section 4.2 be included in the underwriting on the same terms and
conditions as the securities otherwise being sold through the underwriters. In
such event, the Holders requesting inclusion in the registration statement
shall, if requested by the underwriters, execute an underwriting agreement
containing customary representations and warranties by selling stockholders and
a lock-up on shares not being sold. If in the good faith judgment of the
managing underwriter of such public offering the inclusion of all of the
Reserved Shares originally covered by a request for registration (the "Requested
Stock") would reduce the number of shares which could be sold by the Company or
interfere with the successful marketing of the shares of stock offered by the
Company, the number of shares of Requested Stock otherwise to be included in the
underwritten public offering may be reduced pro rata (by number of shares) among
the holders thereof requesting such registration pursuant to the "piggyback"
registration rights herein or excluded in their entirety if so required by the
underwriter. To the extent only a portion of the Requested Stock is included in
the underwritten public offering, those shares of Requested Stock which are thus
excluded from the underwritten public offering shall be withheld from the market
by the holders thereof for a period, not to exceed 90 days, which the managing
underwriter reasonably determines is necessary in order to effect the
underwritten public offering.

                  The obligation of the Company under this Section 4.2 shall not
apply to Reserved Shares that at such time are eligible for immediate resale
pursuant to Rule 144(k) under the Act.

                  4.3 Registration Procedures. In connection with any
registration statement filed pursuant to Section 4.1 or in which any Requested
Stock is included, the Company shall:

                    (a) use its best efforts to cause such registration
statement to become and remain effective;

                    (b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective;

                    (c) furnish to the Holders participating in such
registration and to the underwriters, if any, of the securities being registered
such reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities;

<PAGE>

                    (d) use its best efforts to register or qualify the
securities covered by such registration statement under the state securities or
blue sky laws of such jurisdictions as the Holders may reasonably request in
writing within 20 days following the original filing of such registration
statement, except that the Company shall not for any purpose be required to
execute a general consent to service of process or to qualify to do business as
a foreign corporation in any jurisdiction wherein it is not so qualified;

                    (e) notify the Holders, promptly after it shall receive
notice thereof, of the time when such registration statement has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed;

                    (f) notify the Holders promptly of any request by the SEC
for the amending or supplementing of such registration statement or prospectus
or for additional information;

                    (g) prepare and file with the SEC, promptly upon the request
of any Holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such Holders (and concurred in
by counsel for the Company), is required under the Act or the rules and
regulations thereunder in connection with the distribution of Common Stock by
such Holders;

                    (h) prepare and promptly file with the SEC, and promptly
notify the Holders of the filing of, any amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Act, any event shall have
occurred as the result which any such prospectus or any other prospectus as then
in effect includes or would include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the
light of the circumstances in which they were made, not misleading; and

                    (i) advise the Holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued.

         The Holders shall cooperate with the Company in providing the
information necessary to effect the registration of their Reserved Shares,
including completion of customary questionnaires.

<PAGE>

                  5.2 This Subscription Agreement shall not be changed, modified
or amended except by a writing signed by the parties to be charged, and this
Subscription Agreement may not be discharged except by performance in accordance
with its terms or by a writing signed by the party to be charged; provided that
no modification or amendment may be made to Section 1.18 hereof without the
consent of the Committee.

                  5.3 This Subscription Agreement shall be binding upon and
inure to the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.

                  5.4 Notwithstanding the place where this Subscription
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be construed in accordance
with and governed by the laws of the State of New York without regard to such
State's laws regarding conflicts of laws. The parties hereby agree that any
dispute which may arise between them arising out of or in connection with this
Subscription Agreement shall be adjudicated before a court located in New York
City and they hereby submit to the exclusive jurisdiction of the courts of the
State of New York located in New York, New York and of the federal courts in the
Southern District of New York with respect to any action or legal proceeding
commenced by any party relating to or arising out of this Subscription Agreement
or any acts or omissions relating to the sale of the securities hereunder, and
irrevocably waive any objection they now or hereafter may have respecting the
venue of any such action or proceeding brought in such a court or respecting the
fact that such court is an inconvenient forum and consent to the service of
process in any such action or legal proceeding by means of registered or
certified mail, return receipt requested, in care of the address specified in
Section 5.1 hereof or by notice given in accordance with Section 5.1 hereof.

                  5.5 This Subscription Agreement may be executed in
counterparts. Upon the execution and delivery of this Subscription Agreement by
the Subscriber, this Subscription Agreement shall become a binding obligation of
the Subscriber with respect to the purchase of Units as herein provided;
subject, however, to the right hereby reserved to the Company to enter into the
same agreements with other subscribers and to add and/or to delete other persons
as subscribers.

                  5.6 The holding of any provision of this Subscription
Agreement to be invalid or unenforceable by a court of competent jurisdiction
shall not affect any other provision of this Subscription Agreement, which shall
remain in full force and effect.

                  5.7 It is agreed that a waiver by either party of a breach of
any provision of this Subscription Agreement shall not operate, or be construed,
as a waiver of any subsequent breach by that same party.

                  5.8 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement as of the day and year first written above.

<TABLE>
<CAPTION>

<S>                                                           <C>
 SUBSCRIBER**:                                                CO-SUBSCRIBER**:

 ---------------------------------------                      ----------------------------------------
 Signature of Subscriber                                      Signature of Co-Subscriber

 ---------------------------------------                      ----------------------------------------
 Name of Subscriber [please print]                            Name of Co-Subscriber [please print]

 ---------------------------------------                      ----------------------------------------
 Address of Subscriber                                        Address of Co-Subscriber

 ---------------------------------------                      ----------------------------------------
 Social Security or Taxpayer                                  Social Security or Taxpayer Identification
 Identification Number of Subscriber                          Number of Co-Subscriber

 ---------------------------------------                      ----------------------------------------
 Name of Holder(s) as it should appear on the
 security certificates* [please print]

<CAPTION>

 * Please provide the exact names that you wish to see on the certificates
 (1) For individuals, print full name of subscriber.
 (2) For joint, print full name of subscriber and all co-subscribers.
 (3) For corporations, partnerships, LLC, print full name of entity, including "& ", "Co. ", "Inc.", "etc",
     "LLC ", "LP", etc.
 (4) For Trusts, print trust name (please contact your trustee for the exact name that should appear on the
     certificates.)
 (5) For IRA account maintained at Commonwealth, print "Wexford Clearing Corp as C/F FBO [client name]".

<S>                                                           <C>

 LRX-                                                         Subscription Accepted:
 -----------------------                                      Predict It, Inc.
 Subscriber's Account Number at
 Commonwealth Associates, if applicable                       By:
                                                                 --------------------------------
                                                              Name:
 Dollar Amount of Units Subscribed For:                       Title:

$
 -----------------------------
                                                              $
                                                               ------------------------------------
                                                               Amount of Unit Subscription Accepted

                                                              The undersigned NASD member firm acknowledges
 **If Subscriber is a Registered Representative               receipt of the notice required by Rule 3050 of the
 with an NASD member firm or an affiliated                    NASD Conduct Rules.
 person of an NASD member firm, have the
 acknowledgment to the left signed by the
 appropriate party:                                           -------------------------------
                                                              Name of NASD Member Firm

                                                              By:
                                                                 ----------------------------
                                                                           Authorized Officer
</TABLE>

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