EXECUTION COPY



                               SECURITIES PURCHASE

                                    AGREEMENT




                          DATED AS OF JANUARY 30, 2006




                                      AMONG




                              STRONG TECHNICAL INC.


                         FALCON LINK INVESTMENT LIMITED



                                       AND



                       THE PURCHASERS LISTED ON EXHIBIT A



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                                TABLE OF CONTENTS
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                                                                                                              PAGE
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<S>              <C>                                                                                          <C>
ARTICLE I        Purchase and Sale of Preferred Stock and Warrants.............................................1
         Section 1.1    Purchase and Sale of Preferred Stock and Warrants......................................1
         Section 1.2    The Closing............................................................................1
         Section 1.3    Conversion Shares and Warrant Shares...................................................2

ARTICLE II       Representations and Warranties................................................................2
         Section 2.1    Representations and Warranties Relating to the Company.................................2
         Section 2.2    Representations and Warranties Relating to Falcon.....................................13
         Section 2.3    Representations and Warranties of the Purchasers......................................20

ARTICLE III      Covenants....................................................................................22
         Section 3.1    Consummation of the Exchange..........................................................22
         Section 3.2    Disclosure of Transactions and Other Material Information.............................22
         Section 3.3    Registration under Exchange Act.......................................................23
         Section 3.4    Inspection Rights.....................................................................23
         Section 3.5    Compliance with Laws..................................................................23
         Section 3.6    Keeping of Records and Books of Account...............................................24
         Section 3.7    Other Agreements......................................................................24
         Section 3.8    Reservation of Shares.................................................................24
         Section 3.9    Non-public Information................................................................24
         Section 3.10   Nasdaq or Exchange Listing............................................................24
         Section 3.11   Subsequent Registrations..............................................................24
         Section 3.12   Make Good Escrow Shares...............................................................24
         Section 3.13   New York City Agency..................................................................24

ARTICLE IV       Conditions...................................................................................25
         Section 4.1    Conditions Precedent to the Obligation of the Company to
                        Close and to Sell the Shares and Warrants.............................................25
         Section 4.2    Conditions Precedent to the Obligation of the Purchasers to
                        Close and to Purchase the Shares and Warrants.........................................25

ARTICLE V        Certificate Legend...........................................................................28
         Section 5.1    Legend................................................................................28

ARTICLE VI       Termination..................................................................................29
         Section 6.1    Termination of Obligations to Effect Closing..........................................29
         Section 6.2    Effect of Termination.................................................................30

ARTICLE VII      Indemnification..............................................................................30
         Section 7.1    General Indemnity.....................................................................30
         Section 7.2    Indemnification Procedure.............................................................30
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                                       -i-
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                                TABLE OF CONTENTS
                                   (continued)
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<S>              <C>                                                                                          <C>
ARTICLE VIII     Miscellaneous................................................................................31
         Section 8.1    Fees and Expenses.....................................................................31
         Section 8.2    Specific Enforcement; Consent to Jurisdiction.........................................32
         Section 8.3    Entire Agreement; Amendment...........................................................32
         Section 8.4    Notices...............................................................................33
         Section 8.5    Waivers...............................................................................34
         Section 8.6    Headings..............................................................................34
         Section 8.7    Successors and Assigns................................................................34
         Section 8.8    No Third Party Beneficiaries..........................................................34
         Section 8.9    Governing Law.........................................................................34
         Section 8.10   Survival..............................................................................34
         Section 8.11   Counterparts..........................................................................35
         Section 8.12   Publicity.............................................................................35
         Section 8.13   Severability..........................................................................35
         Section 8.14   Further Assurances....................................................................35
         Section 8.15   Independent Nature of Purchaser's Obligations and Rights..............................35
         Section 8.16   Consent to Jurisdiction and Service of Process........................................36
         Section 8.17   Notification Under Certification of Designation.......................................37
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                                      -ii-
<PAGE>

                          SECURITIES PURCHASE AGREEMENT


         This  SECURITIES  PURCHASE  AGREEMENT this  ("AGREEMENT"),  dated as of
January 30, 2006,  by and among Strong  Technical  Inc., a Delaware  corporation
(the "COMPANY"),  Falcon Link Investment Limited, a corporation formed under the
laws of the  British  Virgin  Islands  ("FALCON"),  and the  entities  listed on
EXHIBIT A hereto (each a "PURCHASER" and collectively,  the  "PURCHASERS"),  for
the  purchase and sale to the  Purchasers  of shares of the  Company's  Series A
Convertible  Preferred Stock, par value $.001 per share (the "PREFERRED STOCK"),
and warrants to purchase shares of the Company's  common stock,  par value $.001
per share (the "COMMON STOCK").

         The parties hereto agree as follows:

                                    ARTICLE I

                PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS

         Section 1.1 PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS. Upon the
following  terms  and  conditions,  the  Company  shall  issue  and  sell to the
Purchasers,  and the Purchasers shall, severally and not jointly,  purchase from
the Company,  an aggregate of 6,900,000 shares of Preferred Stock (the "SHARES")
and warrants to purchase an aggregate of 121,954,050  shares of Common Stock, in
substantially the form attached hereto as EXHIBIT B (the "WARRANTS"). The Shares
and the Warrants  shall be sold as units  consisting  of two shares of Preferred
Stock and one Warrant at a price per unit of $8.00,  for an  aggregate  purchase
price of $27,600,000 (the "PURCHASE PRICE").  The Company and the Purchasers are
executing and delivering  this Agreement in accordance with and in reliance upon
the exemption from securities  registration afforded by Section 4(2) of the U.S.
Securities Act of 1933, as amended,  and the rules and  regulations  promulgated
thereunder (the  "SECURITIES  ACT"),  including  Regulation D ("REGULATION  D"),
and/or  upon such other  exemption  from the  registration  requirements  of the
Securities Act as may be available with respect to any or all of the investments
to be made hereunder.  The Preferred  Stock shall have such powers,  preferences
and rights, and the qualifications,  limitations or restrictions thereof, as set
forth in the  Certificate of  Designation of Rights and  Preferences of Series A
Preferred   Stock   attached   hereto  as   EXHIBIT  D  (the   "CERTIFICATE   OF
DESIGNATIONS"), subject to the applicable terms and conditions of this Agreement
and the Registration Rights Agreement (as defined below).

         Section 1.2 THE  CLOSING.  The Company  agrees to issue and sell to the
Purchasers  and,  in   consideration   of  and  in  express  reliance  upon  the
representations,  warranties, covenants, terms and conditions of this Agreement,
the  Purchasers,  severally  but not  jointly,  agree to purchase  the number of
Shares and Warrants set forth opposite their  respective names on EXHIBIT A. The
closing of the  purchase  and sale of the Shares and  Warrants to be acquired by
the Purchasers from the Company under this Agreement (the "Closing")  shall take
place (i) at the  offices of Pryor  Cashman  Sherman & Flynn LLP  located at 410
Park Avenue, New York, New York 10022 at 10:00 a.m., New York time, on or before
January 30, 2006, PROVIDED, that all of the conditions set forth in Article IV

<PAGE>

hereof and  applicable  to the Closing  shall have been  fulfilled  or waived in
accordance herewith,  or (ii) at such other time and place or on such other date
as the Purchasers and the Company may agree (the "CLOSING DATE").

         Section  1.3  CONVERSION  SHARES AND  WARRANT  SHARES.  The Company has
authorized and reserved and covenants to continue to reserve, free of preemptive
rights  and  other  similar  contractual  rights  of  stockholders,  out  of its
authorized  but unissued  Common  Stock or its Common Stock held in treasury,  a
number  of shares of Common  Stock  equal to the  aggregate  number of shares of
Common Stock  necessary to effect the  conversion of the Shares and the exercise
of the Warrants.  The Company shall,  from time to time, in accordance  with the
Delaware General  Corporation Law,  increase the authorized amount of its Common
Stock  if at any  time the  authorized  amount  of its  Common  Stock  remaining
unissued  shall not be sufficient to permit the  conversion of all Shares at the
time outstanding,  subject,  however, to stockholder  approval. If any shares of
Common Stock required to be reserved for issuance upon  conversion of the Shares
or exercise of the Warrants  hereunder require  registration with or approval of
any governmental  authority under any federal or state law before the shares may
be issued,  the Company will cause the shares to be so registered  and approved.
All shares of Common Stock  delivered upon  conversion of the Shares or exercise
of the Warrants  shall,  upon delivery,  be duly  authorized and validly issued,
fully  paid and  nonassessable,  free from all  taxes,  liens and  charges  with
respect  to the  issue  thereof.  Any  shares  of  Common  Stock  issuable  upon
conversion of the Shares (and such shares when issued) are herein referred to as
the  "CONVERSION  SHARES".  Any shares of Common Stock issuable upon exercise of
the  Warrants  (and such  shares  when  issued)  are herein  referred  to as the
"WARRANT  SHARES".  The Shares,  the  Conversion  Shares,  the  Warrants and the
Warrant   Shares  are   sometimes   collectively   referred  to  herein  as  the
"SECURITIES".

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

         Section 2.1  REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY. In
order to induce the  Purchasers to enter into this Agreement and to purchase the
Shares and the  Warrants,  the Company and Falcon  hereby  jointly and severally
make the following representations and warranties to the Purchasers:

                  (a)  ORGANIZATION,  GOOD STANDING AND POWER.  The Company is a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the State of  Delaware  and has the  requisite  corporate  power to own,
lease and operate its properties and assets and to conduct its business as it is
now being  conducted.  The Company does not have any Subsidiaries (as defined in
Section  2.1(g)) or own securities of any kind in any other entity.  The Company
is  duly  qualified  as a  foreign  corporation  to do  business  and is in good
standing in every  jurisdiction in which the nature of the business conducted or
property  owned  by it  makes  such  qualification  necessary,  except  for  any
jurisdiction(s)  (alone  or in the  aggregate)  in which  the  failure  to be so
qualified  will not have a Material  Adverse  Effect.  For the  purposes of this
Agreement,  "MATERIAL  ADVERSE EFFECT" means any adverse effect on the business,
operations, assets, prospects or financial condition of the


                                        2
<PAGE>

Company or, following  consummation of the Exchange (as defined in Section 3.1),
the Company  and its  Subsidiaries,  taken as a whole,  and which is material to
such entity or other  entities  controlling  or controlled by such entity or the
Company or which is likely to materially  hinder the performance by the Company,
Falcon  or any  Subsidiary  of its  obligations  hereunder  and  under the other
Transaction  Documents  (as defined in Section  2.1(b)  hereof) and the Exchange
Documents (as defined in Section 2.1(b) hereof).

                  (b) AUTHORIZATION;  ENFORCEMENT. The Company has the requisite
corporate  power and  authority  to enter into and perform this  Agreement,  the
Registration  Rights  Agreement,  the  Warrants,  and the other  agreements  and
documents  contemplated  hereby and  thereby  and  executed by the Company or to
which the Company is a party (collectively, the "TRANSACTION DOCUMENTS"), and to
issue and sell the Shares and the Warrants in accordance  with the terms hereof.
The Company has the  requisite  corporate  power and authority to enter into and
perform its obligations  under the Share Exchange  Agreement dated as of January
30,  2006  (the  "EXCHANGE  AGREEMENT")  between  the  Company,  Falcon  and the
stockholders  of Falcon  and the other  agreements  and  documents  contemplated
thereby  and  executed  by  the  Company  or  to  which  the  Company  is  party
(collectively,   the  "EXCHANGE   DOCUMENTS").   The  execution,   delivery  and
performance  of the  Transaction  Documents  and the  Exchange  Documents by the
Company and the  consummation  by the Company of the  transactions  contemplated
thereby have been duly and validly authorized by all necessary corporate action,
and no further consent or authorization of the Company or its Board of Directors
or stockholders is required.  This Agreement and the Exchange Agreement has been
duly executed and delivered by the Company. The other Transaction  Documents and
Exchange  Documents will have been duly executed and delivered by the Company at
the  Closing.  Each of the  Transaction  Documents  and the  Exchange  Documents
constitutes,  or shall  constitute  when  executed  and  delivered,  a valid and
binding obligation of the Company  enforceable against the Company in accordance
with its terms,  except as such  enforceability  may be  limited  by  applicable
bankruptcy,    reorganization,    moratorium,   liquidation,    conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of,  creditor's  rights and remedies or by equitable  principles  or remedies of
general application.

                  (c)  CAPITALIZATION.  The  authorized  capital  stock  of  the
Company and the shares  thereof  issued and  outstanding as of January 30, 2006,
after giving effect to the shares of capital stock to be issued in the Exchange,
are set forth on SCHEDULE 2.1(c) hereto.  All of the  outstanding  shares of the
Company's  Common Stock and any other security of the Company have been duly and
validly authorized and, to the extent applicable, are validly issued, fully paid
and non-assessable.  Except as set forth on SCHEDULE 2.1(c) hereto, no shares of
Common  Stock or any other  security of the Company are  entitled to  preemptive
rights or registration  rights and there are no outstanding  options,  warrants,
scrip,  rights to subscribe to, call or commitments of any character  whatsoever
relating to, or securities  or rights  convertible  into,  any shares of capital
stock of the Company. Furthermore, except as set forth on SCHEDULE 2.1(c) hereto
or in any  Commission  Documents (as defined in Section 2.1(f) below) and except
for  the  Transaction  Documents  and  the  Exchange  Documents,  there  are  no
contracts, commitments,  understandings, or arrangements by which the Company is
or may  become  bound to issue  additional  shares of the  capital  stock of the
Company or  options,  securities  or rights  convertible  into shares of capital
stock of the Company. Except as provided on SCHEDULE 2.1(c) hereto and except as
disclosed in any Commission Documents, the Company is not a party to or bound by
any agreement or understanding  granting registration or anti-dilution rights to
any person with respect to any of its equity or debt  securities.  Except as set
forth on SCHEDULE 2.1(c) or in any Commission


                                        3
<PAGE>

Documents,  the  Company  is not a party to,  and it has no  knowledge  of,  any
agreement or  understanding  restricting the voting or transfer of any shares of
the capital stock of the Company.  Except as set forth on SCHEDULE 2.1(c) hereto
or disclosed or in any Commission  Documents,  the offer and sale of all capital
stock,  convertible  securities,  rights,  warrants,  or options of the  Company
issued  prior to the  Closing  complied  with all  applicable  federal and state
securities  laws,  and to the best  knowledge of the Company,  no holder of such
securities  has a right of  rescission or has made or threatened to make a claim
for  rescission  or damages  with  respect  thereto  which could have a Material
Adverse  Effect.  The Company has furnished or made  available to the Purchasers
true and correct  copies of the Company's  Certificate  of  Incorporation  as in
effect on the date hereof (the  "CERTIFICATE"),  and the Company's  Bylaws as in
effect on the date hereof (the "BYLAWS").

                  (d) ISSUANCE OF SECURITIES.  The Shares and the Warrants to be
issued at the  Closing  have been duly  authorized  by all  necessary  corporate
action and,  when paid for or issued in accordance  with the terms  hereof,  the
Shares shall be validly issued and outstanding, fully paid and nonassessable and
free and clear of all liens,  encumbrances  and  rights of first  refusal of any
kind and the holders  shall be  entitled  to all rights  accorded to a holder of
Preferred Stock. The Shares have the relative rights,  powers and privileges set
forth in the Certificate of Designations.  When the Conversion Shares are issued
in accordance  with the terms of the Preferred  Stock,  such shares will be duly
authorized by all necessary corporate action and validly issued and outstanding,
fully  paid and  nonassessable,  free and clear of all liens,  encumbrances  and
rights of first  refusal of any kind and the  holders  shall be  entitled to all
rights accorded to a holder of Common Stock.  When the Warrant Shares are issued
and paid for in accordance  with the terms of the Warrants,  such shares will be
duly  authorized  by all  necessary  corporate  action  and  validly  issued and
outstanding,  fully  paid  and  nonassessable,  free  and  clear  of all  liens,
encumbrances  and rights of first  refusal of any kind and the holders  shall be
entitled to all rights accorded to a holder of Common Stock.

                  (e) NO CONFLICTS.  The execution,  delivery and performance of
the  Transaction  Documents  and the  Exchange  Documents by the Company and the
consummation by the Company of the transactions  contemplated hereby and thereby
do not and will not (i) violate any  provision of the  Certificate  or Bylaws or
any Subsidiary's comparable charter documents, (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration  or  cancellation  of,  any  agreement,  mortgage,  deed of  trust,
indenture,  note, bond,  license,  lease agreement,  instrument or obligation to
which the Company is a party or by which the Company's  properties or assets are
bound, (iii) create or impose a lien,  mortgage,  security  interest,  charge or
encumbrance  of any nature on any property or asset of the Company or any of its
Subsidiaries  under any agreement or any  commitment to which the Company or any
Subsidiary  is a party or by which the Company or any  Subsidiary is bound or by
which any of their  respective  properties  or assets  are bound (in each  case,
after  giving  effect to the  Exchange),  or (iv) result in a  violation  of any
federal,  state, local or foreign statute, rule, regulation,  order, judgment or
decree (including federal and state securities laws and regulations)  applicable
to the  Company  or any  Subsidiary  or by which  any  property  or asset of the
Company or any  Subsidiary  is bound or  affected  (in each case,  after  giving
effect to the Exchange), except, in the case of (i) above and in all cases other
than violations pursuant to clause (iv) (with respect to federal and


                                        4
<PAGE>

state  securities  laws)  above,  for such  conflicts,  defaults,  terminations,
amendments,   acceleration,   cancellations   and   violations   as  would  not,
individually or in the aggregate,  have a Material Adverse Effect.  The business
of the Company is not being  conducted in violation of any laws,  ordinances  or
regulations of any governmental entity,  except for possible  violations,  which
singularly  or in the  aggregate,  do not and will not have a  Material  Adverse
Effect. The Company is not required under federal,  state, foreign or local law,
rule or regulation to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute,  deliver or perform any of its obligations under the Exchange Documents
or the  Transaction  Documents  or issue  and sell the  Shares,  the  Conversion
Shares,  the Warrants or the Warrant Shares in accordance  with the terms hereof
or thereof  (other  than any  filings  which may be  required  to be made by the
Company with the Securities and Exchange  Commission (the "COMMISSION") or state
securities  administrators  subsequent  to  the  Closing,  or  any  registration
statement which may be filed pursuant hereto or thereto).

                  (f)  COMMISSION  DOCUMENTS;   COMMISSION  FILINGS;   FINANCIAL
STATEMENTS.  The Common Stock is not  currently  registered  pursuant to Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"),  but  the  Company  has  timely  filed  all  reports,  schedules,  forms,
statements  and other  documents  required to be filed by it with the Commission
pursuant to the reporting  requirements of the Exchange Act,  including material
filed pursuant to Section 13(a) or 15(d) of the Exchange Act, including, but not
limited to,  current  reports on Form 8-K (and all of the  foregoing,  including
filings incorporated by reference therein,  filed prior to the date hereof being
referred to herein as the  "COMMISSION  DOCUMENTS").  At the time of its filing,
the Company's  Form 10-QSB for the fiscal  quarter ended  December 31, 2005 (the
"FORM 10-Q")  complied in all material  respects  with the  requirements  of the
Exchange  Act  and the  rules  and  regulations  of the  Commission  promulgated
thereunder  and  other  federal,  state and local  laws,  rules and  regulations
applicable  to such  documents,  and the Form 10-Q did not  contain  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 light of
the circumstances under which they were made, not misleading. At the time of its
filing,  the Company's  Form 10-KSB for the fiscal year ended June 30, 2005 (the
"FORM 10-K")  complied in all material  respects  with the  requirements  of the
Exchange  Act  and the  rules  and  regulations  of the  Commission  promulgated
thereunder  and  other  federal,  state and local  laws,  rules and  regulations
applicable  to such  documents,  and the Form 10-K did not  contain  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 light of
the  circumstances  under  which they were  made,  not  misleading.  As of their
respective  dates,  the  financial  statements  of the  Company  included in the
Commission  Documents  complied  as  to  form  in  all  material  respects  with
applicable  accounting  requirements  and the published rules and regulations of
the Commission or other  applicable  rules and regulations with respect thereto.
Such  financial  statements  have been  prepared in  accordance  with  generally
accepted accounting principles ("GAAP") applied on a consistent basis during the
periods  involved  (except (i) as may be otherwise  indicated in such  financial
statements  or the  notes  thereto,  or (ii) in the  case of  unaudited  interim
statements,  to the extent they may not include footnotes or may be condensed or
summary  statements),  and fairly present in all material respects the financial
position  of the Company as of the dates  thereof and the results of  operations
and cash flows for the periods  then ended  (subject,  in the case of  unaudited
statements, to normal year-end audit adjustments).

                                        5
<PAGE>


                  (g)  SUBSIDIARIES.  SCHEDULE  2.1(g)  hereto  sets  forth each
Subsidiary  of the Company  after  giving  effect to the  Exchange,  showing the
jurisdiction of its  incorporation or organization and showing the percentage of
each  person's  ownership of the  outstanding  stock or other  interests of such
Subsidiary.  For the purposes of this Agreement,  "SUBSIDIARY"  shall mean, with
respect to any  corporation or other entity,  any corporation or other entity of
which at least a majority of the securities or other  ownership  interest having
ordinary voting power (absolutely or contingently) for the election of directors
or other persons  performing similar functions are at the time owned directly or
indirectly  by  such  corporation  or  other  entity  and/or  any of  its  other
Subsidiaries.  All of the  outstanding  shares  of  capital  stock of each  such
Subsidiary have been duly authorized and validly issued,  and are fully paid and
nonassessable.  There are no outstanding preemptive, conversion or other rights,
options,  warrants or  agreements  granted or issued by or binding upon any such
Subsidiary for the purchase or acquisition of any shares of capital stock of any
Subsidiary  or  any  other  securities  convertible  into,  exchangeable  for or
evidencing the rights to subscribe for any shares of such capital stock. Neither
the Company nor any such Subsidiary is subject to any obligation  (contingent or
otherwise)  to  repurchase  or  otherwise  acquire  or retire  any shares of the
capital stock of any such  Subsidiary  or any  convertible  securities,  rights,
warrants or options of the type  described in the preceding  sentence  except as
set forth on SCHEDULE  2.1(g)  hereto.  Except as set forth on  SCHEDULE  2.1(g)
hereto,  neither  the  Company  nor any  Subsidiary  is  party  to,  nor has any
knowledge of, any agreement  restricting the voting or transfer of any shares of
the capital stock of any Subsidiary.

                  (h) NO MATERIAL  ADVERSE  CHANGE.  Since December 31, 2005, no
event or condition has occurred which has had or could reasonably be expected to
have a Material Adverse Effect.

                  (i)  NO   UNDISCLOSED   LIABILITIES.   The   Company   has  no
liabilities,  obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured,  absolute,  accrued,  contingent or otherwise)  other than
those set forth on the  balance  sheet  included in the Form 10-Q or incurred in
the ordinary  course of the  Company's  business  since  December 31, 2005,  and
which,  individually  or in the  aggregate,  do not or would not have a Material
Adverse Effect on the Company.

                  (j) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since December 31,
2005, except as disclosed in the Commission Documents,  no event or circumstance
has occurred or exists with respect to the Company or its business,  properties,
prospects,  operations or financial condition, which, under applicable law, rule
or regulation,  requires  public  disclosure or  announcement by the Company but
which has not been so publicly announced or disclosed.

                  (k)  INDEBTEDNESS.  Except  as  disclosed  in  the  Commission
Documents,  as of the date hereof, there is no outstanding secured and unsecured
Indebtedness  of  the  Company,  or  Indebtedness  for  which  the  Company  has
commitments.  For the purposes of this Agreement,  "INDEBTEDNESS" shall mean (i)
any  liabilities  for  borrowed  money in excess of  $100,000  (other than trade
accounts  payable  incurred  in the  ordinary  course  of  business),  (ii)  all
guaranties,   endorsements  and  other  contingent  obligations  in  respect  of
Indebtedness  of others in excess of  $100,000,  whether  or not the same are or
should be reflected in the Company's balance sheet (or


                                        6
<PAGE>

the notes thereto),  except guaranties by endorsement of negotiable  instruments
for deposit or  collection  or similar  transactions  in the ordinary  course of
business,  and  (iii)  the  present  value of any  lease  payments  in excess of
$100,000 due under leases  required to be capitalized  in accordance  with GAAP.
Except as disclosed in any Commission  Documents,  the Company is not in default
with respect to any Indebtedness.

                  (l) TITLE TO ASSETS. The Company has good and marketable title
to all of its  real  and  personal  property,  if any,  free  and  clear  of any
mortgages,  pledges, charges, liens, security interests or other encumbrances of
any nature whatsoever, except for those disclosed in any Commission Documents or
such that,  individually  or in the  aggregate,  do not have a Material  Adverse
Effect.

                  (m)  ACTIONS  PENDING.   There  is  no  action,  suit,  claim,
investigation,  arbitration,  alternate dispute  resolution  proceeding or other
proceeding  pending or, to the knowledge of the Company,  threatened against the
Company  which  questions  the  validity of this  Agreement  or any of the other
Transaction   Documents  or  any  of  the  Exchange  Documents  or  any  of  the
transactions  contemplated  hereby or thereby or any action taken or to be taken
pursuant  hereto or thereto.  There is no action,  suit,  claim,  investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the knowledge of the Company, threatened against or involving the Company
or any of its  properties or assets,  which  individually  or in the  aggregate,
would  have  a  Material  Adverse  Effect.  There  are  no  outstanding  orders,
judgments,   injunctions,   awards  or  decrees  of  any  court,  arbitrator  or
governmental or regulatory body against the Company or any officers or directors
of the  Company  in their  capacities  as such,  which,  individually  or in the
aggregate, would have a Material Adverse Effect.

                  (n) COMPLIANCE  WITH LAW. The business of the Company has been
and is presently  being  conducted in accordance  with all  applicable  federal,
state and local governmental laws, rules, regulations and ordinances,  except as
set forth in the  Commission  Documents  or such  that,  individually  or in the
aggregate, the noncompliance therewith would not have a Material Adverse Effect.
The  Company  has  all  franchises,   permits,  licenses,   consents  and  other
governmental  or  regulatory  authorizations  and  approvals  necessary  for the
conduct of its  business  as now being  conducted  by it unless  the  failure to
possess such franchises,  permits, licenses,  consents and other governmental or
regulatory authorizations and approvals, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

                  (o) TAXES.  The Company has accurately  prepared and filed all
federal, state and other tax returns required by law to be filed by it, has paid
or  made  provisions  for  the  payment  of all  taxes  shown  to be due and all
additional  assessments,  and adequate provisions have been and are reflected in
the financial  statements of the Company for all current taxes and other charges
to which the Company is subject  and which are not  currently  due and  payable.
None of the federal  income tax  returns of the Company has been  audited by the
Internal  Revenue  Service.  The  Company  has no  knowledge  of any  additional
assessments,  adjustments or contingent tax liability (whether federal or state)
of any nature whatsoever,  whether pending or threatened against the Company for
any period, nor of any basis for any such assessment, adjustment or contingency.

                                        7
<PAGE>

                  (p) CERTAIN  FEES.  The Company has not employed any broker or
finder or incurred any liability  for any brokerage or investment  banking fees,
commissions, finders' structuring fees, financial advisory fees or other similar
fees in connection with the Transaction Documents.

                  (q)  DISCLOSURE.  To  the  best  of the  Company's  knowledge,
neither this  Agreement nor any other  documents,  certificates  or  instruments
furnished to the  Purchasers by or on behalf of the Company in  connection  with
the transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements made herein or therein, in the light of the circumstances under which
they were made herein or therein, not misleading.

                  (r) INTELLECTUAL PROPERTY. SCHEDULE 2.1(r) contains a complete
and  correct  list of all  patents,  trademarks,  domain  names  (whether or not
registered) and any patentable  improvements or  copyrightable  derivative works
thereof,  websites and intellectual  property rights relating  thereto,  service
marks, trade names, copyrights, licenses and authorizations, and all rights with
respect to the foregoing  held by the Company  (collectively,  the  "PROPRIETARY
RIGHTS").  The Company owns or possesses  all the  Proprietary  Rights which are
necessary for the conduct of its business as now conducted  without any conflict
with the rights of others. As of the date of this Agreement, the Company has not
received  any written  notice  that any  Proprietary  Rights have been  declared
unenforceable  or otherwise  invalid by any court or  governmental  agency,  and
there is, to the knowledge of the Company,  no material  existing  infringement,
misuse or misappropriation of any Proprietary Rights by others that could have a
Material  Adverse  Effect.  The Company  has not  received  any  written  notice
alleging  that the  operation  of the  business of the Company  infringes in any
material respect upon the intellectual property rights of others.

                  (s)  ENVIRONMENTAL  COMPLIANCE.  Except  as  disclosed  in the
Commission   Documents,   the  Company  has  obtained  all  material  approvals,
authorization,  certificates,  consents,  licenses,  orders and permits or other
similar  authorizations  of all  governmental  authorities,  or from  any  other
person, that are required under any U.S.  Environmental Laws. The Company has no
permits,  licenses and other authorizations issued under any U.S.  Environmental
Laws.  "U.S.  ENVIRONMENTAL  LAWS"  shall  mean all U.S.  Federal  or state laws
applicable  to the  Company  relating  to  the  protection  of  the  environment
including,   without  limitation,  all  requirements  pertaining  to  reporting,
licensing,  permitting,  controlling,  investigating  or remediating  emissions,
discharges,  releases or threatened releases of hazardous  substances,  chemical
substances,  pollutants,  contaminants or toxic substances, materials or wastes,
whether  solid,  liquid or  gaseous  in  nature,  into the air,  surface  water,
groundwater or land, or relating to the manufacture,  processing,  distribution,
use,  treatment,   storage,   disposal,   transport  or  handling  of  hazardous
substances, chemical substances,  pollutants,  contaminants or toxic substances,
material or wastes,  whether solid, liquid or gaseous in nature. The Company has
all necessary  governmental approvals required under all U.S. Environmental Laws
and used in its business, except for such instances as would not individually or
in the  aggregate  have a  Material  Adverse  Effect.  The  Company  is  also in
compliance  with all other  limitations,  restrictions,  conditions,  standards,
requirements,   schedules   and   timetables   required  or  imposed  under  all
Environmental


                                        8
<PAGE>

Laws where non-compliance could have a Material Adverse Effect.  Except for such
instances as would not  individually or in the aggregate have a Material Adverse
Effect or as disclosed in the Commission Documents, there are no past or present
events, conditions,  circumstances,  incidents, actions or omissions relating to
or  in  any  way   affecting  the  Company  that  violate  or  may  violate  any
Environmental  Law after the Closing or that may give rise to any  Environmental
Liabilities,  or otherwise form the basis of any claim,  action,  demand,  suit,
proceeding,  hearing,  study or investigation  (i) under any U.S.  Environmental
Law, or (ii) based on or related to the manufacture,  processing,  distribution,
use,  treatment,  storage (including,  without  limitation,  underground storage
tanks), disposal, transport or handling, or the emission,  discharge, release or
threatened release of any hazardous substance. "ENVIRONMENTAL LIABILITIES" means
all liabilities of a person (whether such liabilities are owed by such person to
governmental authorities,  third parties or otherwise) currently in existence or
arising hereafter and which arise under or relate to any U.S. Environmental Law.

                  (t) BOOKS  AND  RECORDS;  INTERNAL  ACCOUNTING  CONTROLS.  The
books,  records and documents of the Company  accurately reflect in all material
respects the information  relating to the business of the Company,  the location
and collection of their assets,  and the nature of all transactions  giving rise
to the obligations or accounts receivable of the Company.  The Company maintains
a system of internal  accounting  controls  sufficient,  in the  judgment of the
Company's  board  of  directors,   to  provide  reasonable  assurance  that  (i)
transactions  are executed in accordance with  management's  general or specific
authorizations,   (ii)   transactions   are  recorded  as  necessary  to  permit
preparation  of financial  statements  in  conformity  with 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 actions are taken with respect to any differences.

                  (u) MATERIAL AGREEMENTS. Except for the Transaction Documents,
the Exchange  Documents or as disclosed in the  Commission  Documents,  or those
that are included as exhibits to the Commission Documents,  the Company is not a
party  to any  written  or oral  contract,  instrument,  agreement,  commitment,
obligation,  plan or arrangement,  a copy of which would be required to be filed
with the  Commission  if the  Company  were  registering  securities  under  the
Securities Act (collectively, "MATERIAL AGREEMENTS"). Except as set forth in the
Commission Documents, the Company has in all material respects performed all the
obligations  required to be performed by the Company to date under the foregoing
agreements,  has received no notice of default and, to the best of the Company's
knowledge,  is not in default under any Material  Agreement  now in effect,  the
result of which  could  cause a  Material  Adverse  Effect.  No  written or oral
contract, instrument,  agreement (other than the Certificate of Designation with
respect  to  the  Preferred  Stock,  this  Agreement  or any  other  Transaction
Document(s)), commitment, obligation (other than any obligation imposed by state
law),  plan or  arrangement  of the Company limits or shall limit the payment of
dividends on its Common Stock.

                  (v) TRANSACTIONS WITH AFFILIATES.  There are no loans, leases,
agreements,  contracts, royalty agreements, management contracts or arrangements
or other continuing transactions between (i) the Company or any of its customers
or  suppliers,  on the one  hand,  and  (ii) on the  other  hand,  any  officer,
employee,  consultant  or  director  of the  Company,  or any


                                       9
<PAGE>

person  owning any capital  stock of the Company or any member of the  immediate
family of such officer,  employee,  consultant,  director or  stockholder or any
corporation or other entity  controlled by such officer,  employee,  consultant,
director or stockholder.

                  (w)  SECURITIES  ACT  OF  1933.   Assuming  the  accuracy  and
completeness of the representations,  warranties and covenants of the Purchasers
contained  herein,  the Company has complied and will comply with all applicable
federal and state  securities  laws in connection  with the offer,  issuance and
sale of the Shares,  the Conversion  Shares, the Warrants and the Warrant Shares
hereunder,  and no  registration  under the  Securities  Act is required for the
offer and sale of the  Securities  by the Company to the  Purchasers  under this
Agreement.  Neither  the Company  nor anyone  acting on its behalf,  directly or
indirectly,  has or will sell, offer to sell or solicit offers to buy any of the
Securities,  or similar  securities to, or solicit  offers with respect  thereto
from,  or enter into any  preliminary  conversations  or  negotiations  relating
thereto with, any person,  or has taken or will take any action so as to require
registration  of the  issuance  and  sale  of any of the  Securities  under  the
registration  provisions of the Securities Act and applicable  state  securities
laws.  Neither the Company nor any of its  affiliates,  nor any person acting on
its or their behalf, has engaged in any form of general  solicitation or general
advertising  (within the meaning of  Regulation D under the  Securities  Act) in
connection  with the  offer or sale of any of the  Securities.  The  Company  is
eligible to register the resale of its Common Stock for resale by the Purchasers
under Form S-1  promulgated  under the  Securities  Act.  Except as set forth on
SCHEDULE  2.1(w)  hereto,  the Company has not granted or agreed to grant to any
person  any  rights  (including  "piggy-back"  registration  rights) to have any
securities  of  the  Company   registered  with  the  Commission  or  any  other
governmental authority that have not been satisfied.

                  (x)  GOVERNMENTAL  APPROVALS.  Except  for the  filing  of any
notice prior or subsequent to the Closing that may be required under  applicable
state and/or  federal  securities  laws (which if required,  shall be filed on a
timely basis),  no  authorization,  consent,  approval,  license,  exemption of,
filing or registration  with any court or governmental  department,  commission,
board,  bureau,  agency or  instrumentality,  domestic or foreign, is or will be
necessary  for,  or in  connection  with,  the  execution  or  delivery  of this
Agreement and the other  Transaction  Documents or the Exchange  Documents,  the
issuance  of the  Shares  and the  Warrants,  or,  except  as set  forth in this
Agreement or any other Transaction Document,  for the performance by the Company
of its obligations under the Transaction Documents or the Exchange Documents.

                  (y) EMPLOYEES. The Company has no employees.

                  (z)  ABSENCE OF CERTAIN  DEVELOPMENTS.  Except as set forth in
the  Commission  Documents,  since  December 31, 2005,  the Company has not:

                       (i) issued any stock, bonds or other corporate securities
          or any rights, options or warrants with respect thereto;

                       (ii) borrowed any amount or incurred or become subject to
          any liabilities  (absolute or contingent)  except current  liabilities
          incurred in the ordinary  course of business  which are  comparable in
          nature and amount to the current liabilities  incurred in the ordinary
          course of business  during the comparable  portion of its prior fiscal
          year,  as adjusted  to reflect  the  current  nature and volume of the
          Company's business;

                                       10
<PAGE>


                       (iii)  discharged  or  satisfied  any  material  lien  or
          encumbrance  or paid a material  amount of any obligation or liability
          (absolute or contingent),  other than current  liabilities paid in the
          ordinary course of business;

                       (iv) declared or made any payment or distribution of cash
          or other  property  to  stockholders  with  respect to its  stock,  or
          purchased  or  redeemed,  or made any  agreements  so to  purchase  or
          redeem, any shares of its capital stock;

                       (v) sold,  assigned  or  transferred  any other  tangible
          assets, or canceled any debts or claims, except in the ordinary course
          of business;

                       (vi) sold,  assigned or  transferred  any patent  rights,
          trademarks, trade names, copyrights, trade secrets or other intangible
          assets or  intellectual  property  rights,  which sale,  assignment or
          transfer  has  had  a  Material  Adverse  Effect,   or  disclosed  any
          proprietary  confidential  information  to any  person  except  in the
          ordinary   course  of   business  or  to  the   Purchasers   or  their
          representatives;

                       (vii)  suffered  any  substantial  losses or  waived  any
          rights of material  value,  whether or not in the  ordinary  course of
          business,  or suffered the loss of any material  amount of prospective
          business;

                       (viii) made any changes in employee  compensation  except
          in the ordinary course of business and consistent with past practices;


                       (ix) made capital  expenditures  or commitments  therefor
          that aggregate in excess of $25,000;

                       (x) entered into any other  transaction other than in the
          ordinary  course of  business,  or  entered  into any  other  material
          transaction, whether or not in the ordinary course of business;

                       (xi) made charitable  contributions  or pledges in excess
          of  $25,000;  (xii)  suffered  any  material  damage,  destruction  or
          casualty loss, whether or not covered by insurance;

                       (xiii)  experienced  any material  problems with labor or
          management  in  connection  with the  terms  and  conditions  of their
          employment; or

                       (xiv) entered into an agreement, written or otherwise, to
          take any of the foregoing actions.

                                       11
<PAGE>


                  (aa) USE OF PROCEEDS. Except as set forth on SCHEDULE 2.1(AA),
the proceeds  from the sale of the Shares and the  Warrants  will be used by the
Company and its  Subsidiaries  for working  capital  purposes and, except as set
forth  on  SCHEDULE  2.1(AA),  shall  not  be  used  to  repay  any  outstanding
Indebtedness or any loans to any officer, director,  affiliate or insider of the
Company or any Subsidiary (after giving effect to the Exchange).

                  (bb) PUBLIC UTILITY HOLDING COMPANY ACT AND INVESTMENT COMPANY
ACT STATUS. The Company is not a "holding company" or a "public utility company"
as such terms are defined in the Public Utility  Holding Company Act of 1935, as
amended. The Company is not, and as a result of and immediately upon Closing and
after giving  effect to the Exchange will not be, an  "investment  company" or a
company  "controlled"  by an  "investment  company",  within the  meaning of the
Investment Company Act of 1940, as amended.

                  (cc)  ERISA.  No  liability  to the Pension  Benefit  Guaranty
Corporation  has been  incurred with respect to any Plan by the Company which is
or would cause a Material  Adverse  Effect.  The  execution and delivery of this
Agreement and the issue and sale of the Shares and the Warrants will not involve
any transaction  which is subject to the prohibitions of Section 406 of ERISA or
in connection with which a tax could be imposed  pursuant to Section 4975 of the
Internal  Revenue Code of 1986, as amended (the "Code");  provided  that, if any
Purchaser,  or any  person or  entity  that owns a  beneficial  interest  in any
Purchaser,  is an "employee pension benefit plan" (within the meaning of Section
3(2) of ERISA)  with  respect  to which  the  Company  is a "party in  interest"
(within the meaning of Section  3(14) of ERISA),  the  requirements  of Sections
407(d)(5) and 408(e) of ERISA,  if applicable,  are met. As used in this Section
2.1(cc),  the term "PLAN"  shall mean an  "employee  pension  benefit  plan" (as
defined in Section 3 of ERISA) which is or has been  established  or maintained,
or to  which  contributions  are  or  have  been  made,  by the  Company  or any
Subsidiary  or by any trade or  business,  whether or not  incorporated,  which,
together  with the  Company  or any  Subsidiary,  is under  common  control,  as
described in Section 414(b) or (c) of the Code.

                  (dd) PRESS RELEASES.  The press releases, if any, disseminated
by the Company  during the twelve months  preceding the date of this  Agreement,
taken as a whole, do not contain any untrue statement of a material fact or omit
to state a material fact required to be stated  therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made and when made, not misleading.

                  (ee) SOLVENCY. Based on the financial condition of the Company
as of the Closing Date (and  assuming that the Closing and the  consummation  of
the Exchange shall have occurred),  (i) the Company's fair saleable value of its
assets  exceeds  the amount that will be required to be paid on or in respect of
the Company's  existing debts and other liabilities  (including known contingent
liabilities)  as they  mature,  (ii)  the  Company's  assets  do not  constitute
unreasonably  small capital to carry on its business for the current fiscal year
as now conducted,  and as proposed to be conducted,  including its capital needs
taking  into  account  the  particular  capital  requirements  of  the  business
conducted  by the  Company,  and  projected  capital  requirements  and  capital
availability  thereof, and (iii) the current cash flow of the Company,  together
with the proceeds the Company  would  receive,  were it to liquidate  all of its
assets,  after taking into account all  anticipated  uses of the cash,  would be
sufficient to pay all amounts on or


                                       12
<PAGE>

in respect of its debt when such  amounts are  required to be paid.  The Company
does not  intend to incur  debts  beyond  its  ability to pay such debts as they
mature  (taking  into account the timing and amounts of cash to be payable on or
in respect of its debt).

                  (ff) LISTING AND MAINTENANCE REQUIREMENTS. Except as specified
in the Commission Documents, the Company has not, in the two years preceding the
date  hereof,  received  notice from any  trading  market to the effect that the
Company  is not in  compliance  with the  listing  or  maintenance  requirements
thereof.  The Company  is, and has no reason to believe  that it will not in the
foreseeable   future  continue  to  be,  in  compliance  with  the  listing  and
maintenance  requirements  for  continued  listing  of the  Common  Stock on the
trading  market on which the Common  Stock is  currently  listed or quoted.  The
issuance and sale of the Securities under this Agreement does not contravene the
rules  and  regulations  of the  trading  market on which  the  Common  Stock is
currently listed or quoted.

                  (gg)  APPLICATION  OF  TAKEOVER  PROTECTIONS.  The Company has
taken all necessary action, if any, in order to render  inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights  agreement) or other similar  anti-takeover  provision  under the
Company's  Certificate of  Incorporation  (or similar charter  documents) or the
laws of its state of  incorporation  that is or could become  applicable  to the
Purchasers  as a result  of the  Purchasers  and the  Company  fulfilling  their
obligations or exercising their rights under this Agreement,  including, without
limitation,  the  Company's  issuance  of the  Securities  and  the  Purchasers'
ownership of the Securities.

                  (hh) NO ADDITIONAL  AGREEMENTS.  The Company does not have any
agreement or  understanding  with any Purchaser with respect to the transactions
contemplated by this Agreement other than as specified in this Agreement.

         Section 2.2 REPRESENTATIONS AND WARRANTIES RELATING TO FALCON. In order
to induce the Purchasers to enter into this Agreement and to purchase the Shares
and  Warrants,  the Company and Falcon  hereby  jointly and  severally  make the
following representations and warranties to the Purchasers:

                  (a)  ORGANIZATION,  GOOD  STANDING  AND  POWER.  Falcon  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the British Virgin Islands and has the requisite corporate power to own,
lease and operate its properties and assets and to conduct its business as it is
now being conducted.  Falcon and each of its Subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification  necessary,  except  for  any  jurisdiction(s)  (alone  or in  the
aggregate)  in which the  failure  to be so  qualified  will not have a Material
Adverse Effect.

                  (b)  AUTHORIZATION;  ENFORCEMENT.  Falcon  has  the  requisite
corporate  power and authority to enter into and perform this  Agreement and the
Exchange  Agreement.  The execution,  delivery and performance of this Agreement
and the  Exchange  Agreement  by Falcon  and the  consummation  by Falcon of the
transactions  contemplated  thereby have been duly and validly authorized by all
necessary corporate action, and no further consent or authorization of Falcon or

                                       13
<PAGE>

its Board of Directors or stockholders  is required.  Each of this Agreement and
the Exchange  Agreement has been duly executed and delivered by Falcon.  Each of
this  Agreement  and the  Exchange  Agreement  constitutes  a valid and  binding
obligation of Falcon  enforceable  against Falcon in accordance  with its terms,
except  as  such  enforceability  may  be  limited  by  applicable   bankruptcy,
reorganization,   moratorium,  liquidation,  conservatorship,   receivership  or
similar laws relating to, or affecting  generally the enforcement of, creditor's
rights  and  remedies  or  by  equitable   principles  or  remedies  of  general
application.

                  (c) NO CONFLICTS.  The execution,  delivery and performance of
this  Agreement  and the Exchange  Agreement by Falcon and the  consummation  by
Falcon of the  transactions  contemplated  hereby  and  thereby,  including  the
Exchange, do not and will not (i) violate any provision of the charter or bylaws
of Falcon or any Subsidiary's comparable charter documents,  (ii) conflict with,
or  constitute a default (or an event which with notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of  termination,
amendment,  acceleration or cancellation  of, any agreement,  mortgage,  deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which Falcon or any of its  Subsidiaries is a party or by which Falcon or any
of its Subsidiaries'  respective properties or assets are bound, (iii) create or
impose a lien, mortgage,  security interest, charge or encumbrance of any nature
on any  property  or  asset  of  Falcon  or any of its  Subsidiaries  under  any
agreement  or any  commitment  to which Falcon or any of its  Subsidiaries  is a
party or by which Falcon or any of its  Subsidiaries is bound or by which any of
their  respective  properties or assets are bound, or (iv) result in a violation
of any  federal,  state,  local or foreign  statute,  rule,  regulation,  order,
judgment or decree (including federal and state securities laws and regulations)
applicable  to Falcon or any of its  Subsidiaries  or by which any  property  or
asset of Falcon or any of its Subsidiaries is bound or affected,  except, in all
cases other than violations pursuant to clause (iv) (with respect to federal and
state  securities  laws)  above,  for such  conflicts,  defaults,  terminations,
amendments,   acceleration,   cancellations   and   violations   as  would  not,
individually or in the aggregate,  have a Material Adverse Effect.  The business
of Falcon and its  Subsidiaries is not being conducted in violation of any laws,
ordinances  or  regulations  of any  governmental  entity,  except for  possible
violations  which,  singularly or in the  aggregate,  do not and will not have a
Material Adverse Effect.  Neither Falcon nor any of its Subsidiaries is required
under  federal,  state,  foreign or local law,  rule or regulation to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver, perform any of
its obligations under the this Agreement or the Exchange Agreement or consummate
the Exchange.

                  (d) FINANCIAL  STATEMENTS.  As of their respective  dates, the
financial  statements of Henan  Zhongpin Food Share Co., Ltd.  annexed hereto as
Exhibit G (the "FALCON FINANCIAL  STATEMENTS") comply as to form in all material
respects with  applicable  accounting  requirements  and the published rules and
regulations of the Commission.  Such financial  statements have been prepared in
accordance with GAAP applied on a consistent  basis during the periods  involved
(except (i) as may be otherwise  indicated in such  financial  statements or the
notes  thereto,  or (ii) in the case of  unaudited  interim  statements,  to the
extent  they  may  not  include   footnotes  or  may  be  condensed  or  summary
statements),  and fairly present in all material respects the financial position
of Henan  Zhongpin  Food Share Co., Ltd. as of 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 year-end audit adjustments).

                                       14
<PAGE>


                  (e)  SUBSIDIARIES.  SCHEDULE  2.2(e)  hereto  sets  forth each
Subsidiary  of  Falcon,   showing  the  jurisdiction  of  its  incorporation  or
organization  and showing  the  percentage  of each  person's  ownership  of the
outstanding stock or other interests of such Subsidiary.  All of the outstanding
shares of capital stock of each Subsidiary have been duly authorized and validly
issued,  and  are  fully  paid  and  nonassessable.  There  are  no  outstanding
preemptive,  conversion or other rights, options, warrants or agreements granted
or issued by or binding upon any  Subsidiary  for the purchase or acquisition of
any  shares  of  capital  stock  of  any  Subsidiary  or  any  other  securities
convertible into, exchangeable for or evidencing the rights to subscribe for any
shares of such capital  stock.  Neither  Falcon nor any Subsidiary is subject to
any obligation  (contingent or otherwise) to repurchase or otherwise  acquire or
retire any shares of the  capital  stock of any  Subsidiary  or any  convertible
securities,  rights,  warrants or options of the type described in the preceding
sentence.  Neither  Falcon nor any Subsidiary is party to, nor has any knowledge
of,  any  agreement  restricting  the  voting or  transfer  of any shares of the
capital stock of any Subsidiary.

                  (f) NO MATERIAL  ADVERSE CHANGE.  Since September 30, 2005, no
event or condition has occurred  with respect to Falcon and/or its  Subsidiaries
which has had or could reasonably be expected to have a Material Adverse Effect,
except as disclosed on SCHEDULE 2.2(f) hereto.

                  (g)  NO  UNDISCLOSED  LIABILITIES.   Except  as  disclosed  on
SCHEDULE  2.2(g)  hereto,  neither  Falcon nor any of its  Subsidiaries  has any
liabilities,  obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured,  absolute,  accrued,  contingent or otherwise)  other than
those set forth on the balance  sheet as of September  30, 2005  included in the
Falcon  Financial  Statements or incurred in the ordinary  course of Falcon's or
its  Subsidiaries  respective  businesses  since  September 30, 2005, and which,
individually  or in the aggregate,  do not or would not have a Material  Adverse
Effect on Falcon or its Subsidiaries.

                  (h) INDEBTEDNESS.  SCHEDULE 2.1(k) hereto sets forth as of the
date hereof all outstanding secured and unsecured  Indebtedness of Falcon or any
Subsidiary  of  Falcon,  or for which  Falcon or any  Subsidiary  of Falcon  has
commitments,  which  Indebtedness  is  not  disclosed  in the  Falcon  Financial
Statements.  Neither  Falcon nor any  Subsidiary  of Falcon is in  default  with
respect to any Indebtedness.

                  (i) TITLE TO ASSETS.  Each of Falcon and its  Subsidiaries has
and,  after  giving  effect to the  Exchange  will  continue  to have,  good and
marketable title to all of its real and personal property, free and clear of any
mortgages,  pledges, charges, liens, security interests or other encumbrances of
any nature  whatsoever,  except for those indicated on SCHEDULE 2.2(i) hereto or
such that,  individually  or in the  aggregate,  do not have a Material  Adverse
Effect. All material leases of Falcon and each of its Subsidiaries are valid and
subsisting and in full force and effect.

                                       15
<PAGE>


                  (j)  ACTIONS  PENDING.   There  is  no  action,  suit,  claim,
investigation,  arbitration,  alternate dispute  resolution  proceeding or other
proceeding pending or, to the knowledge of Falcon,  threatened against Falcon or
any of its Subsidiaries which questions the validity of this Agreement or any of
the other  Transaction  Documents,  any of the Exchange  Documents or any of the
transactions  contemplated  hereby or thereby or any action taken or to be taken
pursuant  hereto or thereto.  There is no action,  suit,  claim,  investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the  knowledge of Falcon,  threatened  against or involving  Falcon,  any
Subsidiary  of Falcon or any of their  respective  properties  or assets,  which
individually or in the aggregate,  would have a Material  Adverse Effect.  There
are no  outstanding  orders,  judgments,  injunctions,  awards or decrees of any
court,  arbitrator  or  governmental  or regulatory  body against  Falcon or any
Subsidiary of Falcon or any officers or directors of Falcon or any Subsidiary of
Falcon in their  capacities as such,  which  individually,  or in the aggregate,
would have a Material Adverse Effect.

                  (k)  COMPLIANCE  WITH LAW.  The  business  of  Falcon  and its
Subsidiaries  has been and is presently  being  conducted in accordance with all
applicable governmental laws, rules,  regulations and ordinances,  except as set
forth on SCHEDULE 2.2(k) hereto or such that,  individually or in the aggregate,
the noncompliance therewith would not have a Material Adverse Effect. Falcon and
each of its Subsidiaries have all franchises,  permits,  licenses,  consents and
other governmental or regulatory  authorizations and approvals necessary for the
conduct of its  business  as now being  conducted  by it unless  the  failure to
possess such franchises,  permits, licenses,  consents and other governmental or
regulatory authorizations and approvals, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

                  (l)  TAXES.  Except as set forth on  SCHEDULE  2.2(l)  hereto,
Falcon  and each of its  Subsidiaries  has  accurately  prepared  and  filed all
governmental  and other tax returns  required by law to be filed by it, has paid
or  made  provisions  for  the  payment  of all  taxes  shown  to be due and all
additional  assessments,  and adequate provisions have been and are reflected in
the financial  statements of Falcon and its  Subsidiaries  for all current taxes
and other charges to which Falcon or any Subsidiary is subject and which are not
currently  due  and  payable.   Falcon  has  no  knowledge  of  any   additional
assessments,  adjustments or contingent tax liability of any nature  whatsoever,
whether  pending or threatened  against Falcon or any Subsidiary for any period,
nor of any basis for any such assessment, adjustment or contingency.

                  (m)  CERTAIN  FEES.  Except  as set forth on  SCHEDULE  2.1(p)
hereto,  Falcon has not employed any broker or finder or incurred any  liability
for any brokerage or investment banking fees, commissions,  finders' structuring
fees,  financial  advisory  fees or other  similar fees in  connection  with the
Transaction Documents.

                  (n)  DISCLOSURE.  To the best of Falcon's  knowledge,  neither
this Agreement nor any Exchange  Document nor any other documents,  certificates
or  instruments  furnished  to the  Purchasers  by or on behalf of Falcon or any
Subsidiary in connection with the transactions contemplated by this Agreement or
the Exchange Agreement contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the  statements  made herein
or therein,  in the light of the circumstances under which they were made herein
or therein, not misleading.

                                       16
<PAGE>


                  (o) INTELLECTUAL PROPERTY. SCHEDULE 2.1(r) contains a complete
and  correct  list of all  patents,  trademarks,  domain  names  (whether or not
registered) and any patentable  improvements or  copyrightable  derivative works
thereof,  websites and intellectual  property rights relating  thereto,  service
marks, trade names, copyrights, licenses and authorizations, and all rights with
respect  to  the   foregoing   held  by  Falcon  or  any  of  its   Subsidiaries
(collectively,  the  "FALCON  PROPRIETARY  RIGHTS").  Falcon  and  each  of  its
Subsidiaries  owns or possesses  and,  after giving  effect to the Exchange will
continue  to own or  possess,  all  the  Falcon  Proprietary  Rights  which  are
necessary for the conduct of its business as now conducted  without any conflict
with the rights of others. Except as disclosed on SCHEDULE 2.2(o) hereto, (i) as
of the date of this Agreement,  neither Falcon nor any of its  Subsidiaries  has
received  any  written  notice  that any  Falcon  Proprietary  Rights  have been
declared  unenforceable or otherwise invalid by any court or governmental agency
or will become  unenforceable or otherwise  invalid as a result of the Exchange,
and (ii) as of the date of this  Agreement,  there is, to the  knowledge  of the
Company,  no material existing  infringement,  misuse or misappropriation of any
Falcon  Proprietary  Rights by others that could have a Material Adverse Effect.
Neither  Falcon nor any of its  Subsidiaries  has  received  any written  notice
alleging that the operation of the business of Falcon or any of its Subsidiaries
infringes  in any  material  respect upon the  intellectual  property  rights of
others.

                  (p) ENVIRONMENTAL COMPLIANCE.  Except as disclosed on SCHEDULE
2.2(p) hereto,  Falcon and each of its  Subsidiaries  have obtained all material
approvals, authorization,  certificates,  consents, licenses, orders and permits
or other similar  authorizations  of all governmental  authorities,  or from any
other  person,  that are required  under any Falcon  Environmental  Laws for the
operation of their  respective  businesses  as currently  conducted  and for the
consummation  of the  Exchange.  SCHEDULE  2.2(p) hereto sets forth all material
permits, licenses and other authorizations issued under any Falcon Environmental
Laws to Falcon or its Subsidiaries.  "FALCON  ENVIRONMENTAL LAWS" shall mean all
governmental  laws applicable to Falcon or any of its  Subsidiaries  relating to
the  protection  of  the  environment   including,   without   limitation,   all
requirements  pertaining  to  reporting,  licensing,  permitting,   controlling,
investigating  or  remediating  emissions,  discharges,  releases or  threatened
releases of hazardous substances, chemical substances, pollutants,  contaminants
or toxic substances,  materials or wastes,  whether solid,  liquid or gaseous in
nature,  into the air,  surface  water,  groundwater or land, or relating to the
manufacture,   processing,  distribution,  use,  treatment,  storage,  disposal,
transport or handling of hazardous substances, chemical substances,  pollutants,
contaminants or toxic substances,  material or wastes,  whether solid, liquid or
gaseous in nature.  Except as set forth on SCHEDULE  2.2(p) hereto,  Falcon has,
and after giving  effect to the Exchange  will  continue to have,  all necessary
governmental  approvals required under all Falcon Environmental Laws and used in
its  business  or in the  business of any of its  Subsidiaries,  except for such
instances as would not  individually or in the aggregate have a Material Adverse
Effect.  Falcon and each of its  Subsidiaries  are also in  compliance  with all
other limitations,  restrictions, conditions, standards, requirements, schedules
and  timetables  required or imposed under all Falcon  Environmental  Laws where
non-compliance  could have a Material Adverse Effect.  Except for such instances
as would not  individually  or in the aggregate have a Material  Adverse Effect,
there  are no past or  present  events,  conditions,  circumstances,  incidents,
actions or omissions


                                       17
<PAGE>

relating to or in any way affecting Falcon or its  Subsidiaries  that violate or
may violate any Falcon Environmental Law after the Closing or that may give rise
to any  Environmental  Liabilities,  or  otherwise  form the basis of any claim,
action, demand, suit, proceeding,  hearing, study or investigation (i) under any
Falcon  Environmental  Law,  or (ii)  based on or  related  to the  manufacture,
processing,   distribution,   use,  treatment,   storage   (including,   without
limitation,  underground storage tanks), disposal, transport or handling, or the
emission,  discharge,  release or threatened release of any hazardous substance.
"FALCON  ENVIRONMENTAL  LIABILITIES"  means all liabilities of a person (whether
such  liabilities  are owed by such person to  governmental  authorities,  third
parties or  otherwise)  currently in existence  or arising  hereafter  and which
arise under or relate to any Falcon Environmental Law.

                  (q) BOOKS  AND  RECORDS;  INTERNAL  ACCOUNTING  CONTROLS.  The
books,  records and documents of Falcon and its Subsidiaries  accurately reflect
in all material respects the information  relating to the business of Falcon and
its Subsidiaries, the location and collection of their assets, and the nature of
all transactions giving rise to the obligations or accounts receivable of Falcon
or its  Subsidiary  of Falcon.  Falcon and each of its  Subsidiaries  maintain a
system of  internal  accounting  controls  sufficient,  in the  judgment  of the
Falcon's  board  of  directors,   to  provide  reasonable   assurance  that  (i)
transactions  are executed in accordance with  management's  general or specific
authorizations,   (ii)   transactions   are  recorded  as  necessary  to  permit
preparation  of financial  statements  in  conformity  with 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 actions are taken with respect to any differences.

                  (r) MATERIAL AGREEMENTS. Except for the Transaction Documents,
the Exchange Documents or as set forth on SCHEDULE 2.2(r) hereto, neither Falcon
nor any  Subsidiary  of  Falcon  is a party  to any  written  or oral  contract,
instrument,  agreement,  commitment,  obligation, plan or arrangement, a copy of
which  would be  required  to be filed  with the  Commission  if  Falcon  or any
Subsidiary  of Falcon  were  registering  securities  under the  Securities  Act
(collectively,  "FALCON MATERIAL  AGREEMENTS").  Except as set forth on SCHEDULE
2.2(r) hereto, Falcon and each Subsidiary of Falcon has in all material respects
performed all the obligations required to be performed by them to date under the
foregoing  agreements,  have  received no notice of default  and, to the best of
Falcon's and the  Company's  knowledge,  are not now, and after giving effect to
the Exchange will not be, in default under any Falcon Material  Agreement now in
effect, the result of which could cause a Material Adverse Effect.

                  (s)  TRANSACTIONS  WITH  AFFILIATES.  Except  as set  forth on
SCHEDULE  2.2(s)  hereto,  there are no loans,  leases,  agreements,  contracts,
royalty  agreements,  management  contracts or arrangements or other  continuing
transactions  between  (i)  Falcon,  any  Subsidiary  of  Falcon or any of their
respective  its customers or suppliers,  on the one hand,  and (ii) on the other
hand,  any officer,  employee,  consultant or director of Falcon,  or any of its
Subsidiaries, or any person owning any capital stock of Falcon or any Subsidiary
of  Falcon or any  member of the  immediate  family of such  officer,  employee,
consultant,   director  or  stockholder  or  any  corporation  or  other  entity
controlled by such officer, employee, consultant, director or stockholder.

                                       18
<PAGE>


                  (t) EMPLOYEES. Neither Falcon nor any Subsidiary of Falcon has
any  collective  bargaining  arrangements  or  agreements  covering  any  of its
employees.  Neither  Falcon nor any  Subsidiary  of Falcon has, and after giving
effect  to the  Exchange  will not  have,  any  employment  contract,  agreement
regarding proprietary information,  non-competition agreement,  non-solicitation
agreement,   confidentiality   agreement,  or  any  other  similar  contract  or
restrictive  covenant,  relating  to the  right  of  any  officer,  employee  or
consultant  to be  employed  or  engaged  by  Falcon or such  Subsidiary.  Since
September  30,  2005,  no officer,  consultant  or key employee of Falcon or any
Subsidiary of Falcon whose termination, either individually or in the aggregate,
could have a Material  Adverse  Effect,  has  terminated or, to the knowledge of
Falcon,  has any present  intention  of  terminating  his or her  employment  or
engagement with Falcon or any Subsidiary of Falcon.

                  (u)  ABSENCE OF CERTAIN  DEVELOPMENTS.  Except as set forth on
SCHEDULE  2.2(u)  hereto,  since  September  30,  2005,  neither  Falcon nor any
Subsidiary has:

                       (i) issued any stock, bonds or other corporate securities
          or any rights, options or warrants with respect thereto;

                       (ii) borrowed any amount or incurred or become subject to
          any liabilities (absolute or contingent) except current liabilities
          incurred in the ordinary course of business which are comparable in
          nature and amount to the current liabilities incurred in the ordinary
          course of business during the comparable portion of its prior fiscal
          year, as adjusted to reflect the current nature and volume of Falcon's
          or such Subsidiary's business;

                       (iii) discharged or satisfied any material lien or
          encumbrance or paid a material amount of any obligation or liability
          (absolute or contingent), other than current liabilities paid in the
          ordinary course of business;

                       (iv) declared or made any payment or distribution of cash
          or other property to stockholders with respect to its stock, or
          purchased or redeemed, or made any agreements so to purchase or
          redeem, any shares of its capital stock;

                       (v) sold, assigned or transferred any other tangible
          assets, or canceled any debts or claims, except in the ordinary course
          of business;

                       (vi) sold, assigned or transferred any patent rights,
          trademarks, trade names, copyrights, trade secrets or other intangible
          assets or intellectual property rights, which sale, assignment or
          transfer has had a Material Adverse Effect, or disclosed any
          proprietary confidential information to any person except in the
          ordinary course of business or to the Purchasers or their
          representatives;

                       (vii) suffered any substantial losses or waived any
          rights of material value, whether or not in the ordinary course of
          business, or suffered the loss of any material amount of prospective
          business;

                                       19
<PAGE>


                       (viii) made any changes in employee compensation except
          in the ordinary course of business and consistent with past practices;

                       (ix) made capital expenditures or commitments therefor
          that aggregate in excess of $25,000;

                       (x) entered into any other transaction other than in the
          ordinary course of business, or entered into any other material
          transaction, whether or not in the ordinary course of business;

                       (xi) made charitable contributions or pledges in excess
          of $25,000;

                       (xii) suffered any material damage, destruction or
          casualty loss, whether or not covered by insurance;

                       (xiii) experienced any material problems with labor or
          management in connection with the terms and conditions of their
          employment; or

                       (xiv) entered into an agreement, written or otherwise, to
          take any of the foregoing actions.

                  (v) PRESS RELEASES.  The press releases,  if any, disseminated
by Falcon during the twelve months  preceding the date of this Agreement,  taken
as a whole,  do not contain any untrue  statement of a material  fact or omit to
state a material  fact  required to be stated  therein or  necessary in order to
make the statements therein, in light of the circumstances under which they were
made and when made, not misleading.

                  (w)  NO  ADDITIONAL  AGREEMENTS.  Falcon  does  not  have  any
agreement or  understanding  with any Purchaser with respect to the transactions
contemplated by this Agreement other than as specified in this Agreement.  Other
than the  Exchange  Documents,  true and  complete  copies  of which  have  been
provided to the Purchasers,  Falcon does not have any agreement or understanding
with the Company or any other  person or entity with  respect to the Exchange or
the transactions contemplated thereby.

         Section 2.3 REPRESENTATIONS  AND WARRANTIES OF THE PURCHASERS.  Each of
the   Purchasers   hereby   severally   and  not  jointly  makes  the  following
representations  and warranties to the Company with respect solely to itself and
not with respect to any other Purchaser:

                  (a)  ORGANIZATION  AND  STANDING  OF THE  PURCHASERS.  If such
Purchaser is an entity,  such  Purchaser  is a  corporation,  limited  liability
company or partnership duly  incorporated or organized,  validly existing and in
good  standing  under  the  laws of the  jurisdiction  of its  incorporation  or
organization.

                  (b)  AUTHORIZATION AND POWER. Such Purchaser has the requisite
corporate,  limited  liability  company or  partnership  power to enter into and
perform  this  Agreement,  the  Registration  Rights  Agreement  and  the  other
agreements  and  documents  contemplated  hereby


                                       20
<PAGE>

and thereby and  executed by the  Purchaser  or to which the  Purchaser is party
(collectively, the "PURCHASER TRANSACTION DOCUMENTS") and to purchase the Shares
and Warrants being sold to it hereunder. The execution, delivery and performance
of the Purchaser Transaction Documents by such Purchaser and the consummation by
it of the  transactions  contemplated  hereby have been duly  authorized  by all
necessary  corporate,  limited liability company or partnership  action,  and no
further  consent or  authorization  of such Purchaser or its Board of Directors,
stockholders,  members,  managers or partners,  as the case may be, is required.
This  Agreement  has  been  duly  authorized,  executed  and  delivered  by such
Purchaser.  Each of the Purchaser  Transaction Documents  constitutes,  or shall
constitute  when executed and delivered,  valid and binding  obligations of such
Purchaser  enforceable against it Purchaser in accordance with its terms, except
as such  enforceability  may be limited by  applicable  bankruptcy,  insolvency,
reorganization,   moratorium,  liquidation,  conservatorship,   receivership  or
similar laws relating to, or affecting  generally the enforcement of, creditor's
rights  and  remedies  or  by  equitable   principles  or  remedies  of  general
application.

                  (c) ACQUISITION  FOR INVESTMENT.  Such Purchaser is purchasing
the Shares and acquiring the Warrants solely for its own account for the purpose
of  investment  and  not  with a view  to or for  sale in  connection  with  any
distribution  thereof.  Such Purchaser does not have a present intention to sell
any of  the  Securities,  nor a  present  arrangement  (whether  or not  legally
binding) or intention to effect any  distribution of any of the Securities to or
through  any  person  or  entity;   PROVIDED,   HOWEVER,   that  by  making  the
representations  herein and subject to Section 2.2(e) below, such Purchaser does
not agree to hold any of the  Securities  for any minimum or other specific term
and  reserves  the  right to  dispose  of any of the  Securities  at any time in
accordance with federal and state securities laws applicable to such disposition
provided that the Company  receives an opinion of its counsel to the effect that
such disposition  complies with such laws. Such Purchaser  acknowledges  that it
(i) has such  knowledge and  experience  in financial and business  matters such
that such  Purchaser  is  capable  of  evaluating  the  merits  and risks of its
investment in the Company,  (ii) is able to bear the financial risks  associated
with an  investment in the  Securities,  and (iii) has been given full access to
such  records of the Company  and the  Subsidiaries  and to the  officers of the
Company  and the  Subsidiaries  as it has deemed  necessary  or  appropriate  to
conduct its due diligence investigation.

                  (d) RULE 144. Such Purchaser  understands  that the Securities
must be held  indefinitely  unless  such  Securities  are  registered  under the
Securities Act or an exemption from  registration  is available.  Such Purchaser
acknowledges  that it is familiar with Rule 144 of the rules and  regulations of
the Commission,  as amended,  promulgated  pursuant to the Securities Act ("RULE
144"),  and that such  Purchaser has been advised that Rule 144 permits  resales
only under certain circumstances.  Such Purchaser understands that to the extent
that  Rule 144 is not  available,  such  Purchaser  will be  unable  to sell any
Securities without either registration under the Securities Act or the existence
of another  exemption  from such  registration  requirement,  provided  that the
Company  receives  an  opinion of its  counsel  to the effect  that such sale is
exempt from such registration requirement.

                  (e) GENERAL.  Such Purchaser  understands  that the Securities
are being  offered and sold in reliance on a  transactional  exemption  from the
registration  requirements of federal and state  securities laws and the Company
is relying upon the truth, accuracy and completeness


                                       21
<PAGE>

of   the   representations,    warranties,   agreements,   acknowledgments   and
understandings  of such  Purchaser  set forth herein and in the other  Purchaser
Transaction Documents in order to determine the applicability of such exemptions
and the suitability of such Purchaser to acquire the Securities.  Such Purchaser
understands  that no United States  federal or state agency or any government or
governmental  agency has passed upon or made any  recommendation  or endorsement
with respect to any of the Securities.

                  (f) OPPORTUNITIES FOR ADDITIONAL  INFORMATION.  Such Purchaser
acknowledges that such Purchaser has had the opportunity to ask questions of and
receive  answers  from, or obtain  additional  information  from,  the executive
officers  of the  Company  concerning  the  financial  and other  affairs of the
Company,  and to the extent deemed  necessary by such Purchaser in light of such
Purchaser's  personal  knowledge of the Company's  affairs,  such  Purchaser has
asked such  questions  and  received  answers to the full  satisfaction  of such
Purchaser, and such Purchaser desires to invest in the Company. No investigation
conducted by such  Purchaser  shall limit or otherwise  affect its right to rely
upon the  representations  and  warranties  of the Company and Falcon  contained
herein.

                  (g) NO GENERAL SOLICITATION.  Such Purchaser acknowledges that
the  Securities  were  not  offered  to such  Purchaser  by means of any form of
general or public solicitation or general advertising,  or publicly disseminated
advertisements or sales literature,  including (i) any  advertisement,  article,
notice or other communication  published in any newspaper,  magazine, or similar
media,  or broadcast over television or radio, or (ii) any seminar or meeting to
which  such   Purchaser   was  invited  by  any  of  the   foregoing   means  of
communications.

                  (h)  ACCREDITED  INVESTOR.  Such  Purchaser  is an  accredited
investor (as defined in Rule 501 of Regulation  D), and such  Purchaser has such
experience  in business and  financial  matters that it is capable of evaluating
the  merits  and  risks  of an  investment  in the  Securities.  Such  Purchaser
acknowledges  that an investment in the Securities is speculative and involves a
high degree of risk.

                                   ARTICLE III

                                    COVENANTS

         The Company  and Falcon,  on the one hand,  and each  Purchaser,  as to
itself only,  hereby  covenant with one another as follows,  which covenants are
for the  benefit of each  respective  covenantee  and its  respective  permitted
assignees.

         Section 3.1  CONSUMMATION  OF THE EXCHANGE.  Prior to the Closing,  the
Company and Falcon shall take all required action to consummate the transactions
contemplated by the Exchange  Agreement (the  "EXCHANGE") in accordance with the
terms of the Exchange  Agreement and the other Exchange  Documents,  and neither
the Company nor Falcon shall waive any of the covenants of the parties under the
Exchange Documents or any conditions to the consummation of the Exchange without
the prior written consent of the Purchasers.

         Section 3.2 DISCLOSURE OF TRANSACTIONS AND OTHER MATERIAL  INFORMATION.
On or before 9:00 a.m.,  New York City time,  on the  business  day  immediately
following the Closing Date,


                                       22
<PAGE>

the Company shall issue a press  release,  and on or before 5:30 p.m.,  New York
City time,  on the business day  immediately  following  the Closing  Date,  the
Company shall file a Current Report on Form 8-K with the  Commission  describing
the terms of the  transactions  contemplated  by the Exchange  Agreement and the
Transaction  Documents and including as exhibits to such Current  Report on Form
8-K, the Exchange Agreement,  this Agreement, the Certification of Designations,
the Warrants and the Registration Rights Agreement, and the schedules hereto and
thereto in the form required by the Exchange Act (including all attachments, the
"8-K FILING").  The Company shall not, and shall cause each of its  Subsidiaries
and its and each of their respective officers,  directors,  employees and agents
not to, provide any Purchaser with any material, nonpublic information regarding
the  Company  or any of its  Subsidiaries  from and after the  filing of the 8-K
Filing with the  Commission  without the express prior  written  consent of such
Purchaser.  Neither the Company nor any Purchaser shall issue any press releases
or any other public  statements  with respect to the  transactions  contemplated
hereby; PROVIDED, HOWEVER, that the Company shall be entitled, without the prior
approval of the Purchasers, to make any press release or other public disclosure
with respect to such  transactions  (i) in substantial  conformity  with the 8-K
Filing and  contemporaneously  therewith,  and (ii) as is required by applicable
law  and  regulations  (provided  that in the  case of  clause  (i)  above,  the
Purchasers  shall be  consulted  by the  Company  (although  the  consent of the
Purchasers  shall not be required) in connection  with any such press release or
other public disclosure prior to its release).

         Section 3.3  REGISTRATION  UNDER EXCHANGE ACT. The Company will use its
commercially reasonable efforts to cause its Common Stock to be registered under
Section 12(b) or 12(g) of the Exchange Act, will comply in all respects with its
reporting  and filing  obligations  under the Exchange Act, will comply with all
requirements  related  to any  registration  statement  filed  pursuant  to this
Agreement,  and will not take any action or file any  document  (whether  or not
permitted  by the  Securities  Act  or  the  rules  promulgated  thereunder)  to
terminate or suspend such  registration or to terminate or suspend its reporting
and filing  obligations  under the Exchange Act or the Securities Act, except as
permitted herein.

         Section 3.4 INSPECTION RIGHTS. The Company shall permit,  during normal
business hours and upon reasonable  request and reasonable  notice,  a Purchaser
and its representatives,  so long as such Purchaser shall be obligated hereunder
to  purchase  the  Shares or shall  beneficially  own the  Shares or  Conversion
Shares,  or shall own Warrant  Shares or the Warrants  which,  in the aggregate,
represent more than two percent (2%) of the total  combined  voting power of all
voting securities then outstanding, to examine and make reasonable copies of and
extracts from the records and books of account of, and visit and inspect, during
the term of the Warrants, the properties, assets, operations and business of the
Company and any Subsidiary, and to discuss the affairs, finances and accounts of
the Company and any Subsidiary with any of its officers, consultants, directors,
and key employees.

         Section 3.5 COMPLIANCE  WITH LAWS. The Company shall comply,  and cause
each  Subsidiary to comply,  with all applicable  laws,  rules,  regulations and
orders, the noncompliance with which could have a Material Adverse Effect.

                                       23
<PAGE>


         Section 3.6 KEEPING OF RECORDS AND BOOKS OF ACCOUNT.  The Company shall
keep and cause each Subsidiary to keep adequate records and books of account, in
which  complete  entries  will be  made in  accordance  with  GAAP  consistently
applied.

         Section  3.7 OTHER  AGREEMENTS.  The  Company  shall not enter into any
agreement  containing  any provision  that would violate the terms of,  conflict
with, or cause a default under, any material term of any Transaction Document.

         Section 3.8  RESERVATION  OF SHARES.  So long as the Shares or Warrants
remain outstanding,  the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, the maximum number of
shares of Common Stock to effect the  conversion  of the Shares and the exercise
of the Warrants.

         Section 3.9 NON-PUBLIC INFORMATION.  Neither the Company nor any of its
officers or agents shall disclose any material non-public  information about the
Company to any  Purchaser  without the  express  prior  written  consent of such
Purchaser.

         Section  3.10 NASDAQ OR  EXCHANGE  LISTING.  The Company  shall use its
commercially  reasonable  efforts to file an application  for listing its Common
Stock on the Nasdaq  National  Market,  the Nasdaq  Capital Market or a national
securities  exchange  within  90 days of the  Closing  Date  and to  cause  such
applications to be approved in a timely manner thereafter.

         Section  3.11  SUBSEQUENT  REGISTRATIONS.  Other than  pursuant  to the
registration statement filed in connection with the transactions contemplated by
this Agreement,  prior to the date that such registration  statement is declared
effective  by the  Commission,  the  Company  shall  not file  any  registration
statement  (other than on Form S-8) under the Securities Act with the Commission
with respect to any securities of the Company.

         Section 3.12 MAKE GOOD ESCROW SHARES.  On the Closing Date, the Company
shall  cause  certain  stockholders  of the  Company  to  enter  into an  escrow
agreement  in the form of EXHIBIT H hereto and to deposit  with the escrow agent
thereunder the Escrow Deposit (as defined in such escrow agreement).

         Section 3.13 NEW YORK CITY AGENCY. During the 30-day period immediately
following the Closing Date, the Company shall  establish,  and so long as any of
the Shares or the Warrants  are  outstanding,  the Company  shall  maintain,  an
office or agency (which shall be located in the Borough of Manhattan in The City
of New York) where (i) Shares may be  presented  for  conversion  into shares of
Common Stock,  (ii) Warrants may be presented for exercise and (iii) notices and
demands to or upon the  Company or Falcon in  respect  of the  Securities,  this
Agreement or any of the Transaction  Documents may be served.  The Company shall
promptly  notify the Purchasers of the name and address of any such agent and of
the appointment of any additional or substitute agent.

                                       24
<PAGE>

                                   ARTICLE IV

                                   CONDITIONS

         Section 4.1  CONDITIONS  PRECEDENT TO THE  OBLIGATION OF THE COMPANY TO
CLOSE AND TO SELL THE SHARES  AND  WARRANTS.  The  obligation  hereunder  of the
Company  to close  and  issue  and  sell  the  Shares  and the  Warrants  to the
Purchasers on the Closing Date is subject to the  satisfaction or waiver,  at or
before the Closing,  of the conditions set forth below. These conditions are for
the  Company's  sole benefit and may be waived by the Company at any time in its
sole discretion.

                  (a)   ACCURACY   OF  THE   PURCHASERS'   REPRESENTATIONS   AND
WARRANTIES.  The  representations  and warranties of each Purchaser contained in
the Purchaser  Transaction  Documents  shall be true and correct in all material
respects as of the date when made and as of the  Closing  Date as though made at
that time, except for  representations and warranties that are expressly made as
of a particular date,  which shall be true and correct in all material  respects
as of such date.

                  (b) PERFORMANCE BY THE  PURCHASERS.  Each Purchaser shall have
performed,  satisfied and complied in all material  respects with all covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Purchasers at or prior to the Closing Date.

                  (c) NO INJUNCTION.  No statute,  rule,  regulation,  executive
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or endorsed by any court or  governmental  authority  of  competent
jurisdiction  which  prohibits  the  consummation  of any  of  the  transactions
contemplated by this Agreement.

                  (d) DELIVERY OF PURCHASE  PRICE.  The  Purchase  Price for the
Shares and Warrants shall have been delivered to Law Debenture  Trust Company of
New York, as escrow agent, and shall be subject to release to the Company at the
Closing  pursuant to the terms and conditions of an escrow agreement in the form
of EXHIBIT H attached hereto.

                  (e) DELIVERY OF PURCHASER TRANSACTION DOCUMENTS. The Purchaser
Transaction  Documents  shall  have  been duly  executed  and  delivered  by the
Purchasers to the Company.

         Section 4.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASERS TO
CLOSE AND TO PURCHASE THE SHARES AND WARRANTS.  The obligation  hereunder of the
Purchasers to purchase the Shares and Warrants and consummate  the  transactions
contemplated by this Agreement is subject to the  satisfaction or waiver,  at or
before the Closing,  of each of the conditions set forth below. These conditions
are for the Purchasers'  sole benefit and may be waived by any Purchaser,  as to
itself only, at any time in its sole discretion.

                  (a) ACCURACY OF THE COMPANY'S AND FALCON'S REPRESENTATIONS AND
WARRANTIES. Each of the representations and warranties of the Company and Falcon
in  this  Agreement  and in  each  of the  Transaction  Documents  and  Exchange
Documents  shall be true and correct in all material  respects as of the Closing
Date, except for  representations and warranties that are expressly made as of a
particular date, which shall be true and correct in all material  respects as of
such date.

                                       25
<PAGE>

                  (b) PERFORMANCE BY THE COMPANY AND FALCON. Each of the Company
and Falcon shall have performed, satisfied and complied in all material respects
with all covenants,  agreements and conditions required by this Agreement or the
Exchange Agreement to be performed, satisfied or complied with by the Company or
Falcon, as the case may be, at or prior to the Closing Date.

                  (c) NO SUSPENSION,  ETC. Trading in the Company's Common Stock
shall not have been  suspended by the  Commission  (except for any suspension of
trading of limited duration agreed to by the Company,  which suspension shall be
terminated  prior to the  Closing),  and, at any time prior to the Closing Date,
trading in  securities  generally  as reported by  Bloomberg  Financial  Markets
("BLOOMBERG")  shall not have been suspended or limited, or minimum prices shall
not have been  established on securities whose trades are reported by Bloomberg,
nor shall a banking moratorium have been declared either by the United States or
New York State  authorities,  nor shall  there have  occurred  any  national  or
international  calamity  or  crisis  of  such  magnitude  in its  effect  on any
financial  market  which,  in  each  case,  in the  reasonable  judgment  of any
Purchaser,  makes it  impracticable or inadvisable for it to purchase its Shares
and Warrants.

                  (d) NO INJUNCTION.  No statute,  rule,  regulation,  executive
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or endorsed by any court or  governmental  authority  of  competent
jurisdiction  which  prohibits  the  consummation  of any  of  the  transactions
contemplated by the Exchange Documents,  this Agreement or the other Transaction
Documents.

                  (e)  NO  PROCEEDINGS  OR  LITIGATION.   No  action,   suit  or
proceeding  before any arbitrator or any governmental  authority shall have been
commenced,  and no investigation  by any governmental  authority shall have been
threatened,  against  the  Company  or Falcon or any  Subsidiary,  or any of the
officers,  directors or  affiliates  of the Company or Falcon or any  Subsidiary
thereof, seeking to restrain, prevent or change the Exchange or the transactions
contemplated by the Exchange Documents,  this Agreement or the other Transaction
Documents,   or  seeking  damages  in  connection  with  the  Exchange  or  such
transactions.

                  (f)  OPINION  OF  COUNSEL,  ETC.  The  Purchasers  shall  have
received an opinion of U.S.  counsel to the  Company,  dated the  Closing  Date,
substantially  in the form of EXHIBIT C-1 hereto,  an opinion of Chinese counsel
to the Company, dated the Closing Date, substantially in the form of EXHIBIT C-2
hereto and such other  certificates  and  documents as the  Purchasers  or their
counsel shall reasonably require incident to the Closing.

                  (g) WARRANTS AND SHARES.  The Company shall have  delivered to
the Purchasers the originally  executed Warrants (in such  denominations as each
Purchaser  may  request but in no event in  denominations  of less than 100) and
shall have delivered certificates representing the Shares (in such denominations
as each Purchaser may request) being acquired by the Purchasers at the Closing.

                                       26
<PAGE>

                  (h)  RESOLUTIONS.  The Board of Directors of the Company shall
have  adopted  resolutions  consistent  with  Section  2.1(b)  hereof  in a form
reasonably acceptable to the Purchasers (the "RESOLUTIONS").

                  (i) CERTIFICATE OF  DESIGNATIONS.  As of the Closing Date, the
Company shall have filed with the Delaware Secretary of State the Certificate of
Designations  authorizing  the  Preferred  Stock  in  substantially  the form of
EXHIBIT D attached hereto and such Certificate of Designations shall have become
effective.

                  (j) RESERVATION OF SHARES. As of the Closing Date, the Company
shall have reserved out of its authorized and unissued  Preferred Stock,  solely
for the purpose of effecting  the issuance of the Shares,  a number of shares of
Preferred Stock equal to the aggregate  number of the Shares.  As of the Closing
Date, the Company shall have reserved out of its authorized and unissued  Common
Stock,  solely for the purpose of effecting the conversion of the Shares and the
exercise of the Warrants, a number of shares of Common Stock equal to the number
of Conversion  Shares and the number of Warrant Shares  issuable upon conversion
of the Preferred Stock and the exercise of the Warrants, respectively,  assuming
the  Warrants  are  exercised  and the Shares are  converted on the Closing Date
(assuming the Warrants are fully exercisable and the Shares fully convertible on
such date  regardless of any limitation on the timing or amount of such exercise
or conversion).

                  (k) SECRETARY'S CERTIFICATE.  The Company shall have delivered
to the Purchasers a secretary's certificate, dated as of the Closing Date, as to
(i) the Resolutions,  (ii) the Certificate,  (iii) the Bylaws, each as in effect
at the Closing,  and (iv) the  authority  and  incumbency of the officers of the
Company executing the Transaction  Documents and any other documents required to
be executed or delivered in connection therewith.

                  (l) OFFICER'S  CERTIFICATE.  On the Closing Date,  the Company
shall have delivered to the Purchasers a certificate of an executive  officer of
the  Company,  dated as of the  Closing  Date,  confirming  the  accuracy of the
Company's representations, warranties and covenants contained herein and in each
of the other  Transaction  Documents as of the Closing Date and  confirming  the
compliance  by the  Company  with the  conditions  precedent  set  forth in this
Section 4.2 as of the Closing Date.

                  (m) FEES AND EXPENSES.  As of the Closing  Date,  all fees and
expenses  required to be paid by the Company in connection with the transactions
contemplated by this Agreement shall have been, or authorized to be, paid by the
Company.

                  (n) REGISTRATION RIGHTS AGREEMENT. As of the Closing Date, the
parties shall have entered into the Registration Rights Agreement in the form of
EXHIBIT E attached hereto.

                  (o) MAKE GOOD SHARE ESCROW AGREEMENT.  As of the Closing Date,
the parties shall have entered into an escrow agreement in the form of EXHIBIT F
hereto  and the  escrow  agent  shall  have  acknowledged  receipt of the Escrow
Deposit (as defined in such Escrow Agreement).

                                       27
<PAGE>


                  (p)  CONSUMMATION  OF EXCHANGE.  As of the Closing  Date,  the
Company and Falcon shall have effected the Exchange in accordance with the terms
of the Exchange  Agreement and shall have  performed,  satisfied and complied in
all material respects with all covenants,  agreements and conditions required by
the  Exchange  Agreement  to be  performed,  satisfied  or complied  with by the
Company or Falcon at or prior to the Closing Date.

                  (q)  CONSENT  TO  JURISDICTION.   The  Purchasers  shall  have
received from each  Subsidiary  of the Company  (following  consummation  of the
Exchange)  other than Falcon a consent to  jurisdiction in the form of EXHIBIT I
hereto.

                  (r) LOCK-UP  AGREEMENTS.  The  Purchasers  shall have received
from the Company and each of Xianfu Zhu, Baoke Ben,  Chaoyang Liu,  Qinghe Wang,
Shuichi Si and Juanjuan Wang a letter agreement in the form of EXHIBIT J hereto.

                  (s) MATERIAL ADVERSE EFFECT.  No event or condition shall have
occurred  which  has had or could  reasonably  be  expected  to have a  Material
Adverse Effect.

                                   ARTICLE V

                               CERTIFICATE LEGEND

         Section 5.1  LEGEND.  Each  certificate  representing  the Shares,  the
Conversion  Shares,  the  Warrants  and the Warrant  Shares  shall be stamped or
otherwise  imprinted  with a  legend  substantially  in the  following  form (in
addition to any legend  required by  applicable  state  securities or "blue sky"
laws):

         THE SECURITIES  REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE
         NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES  ACT") OR ANY  STATE  SECURITIES  LAWS AND MAY NOT BE SOLD,
         TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED  UNDER THE
         SECURITIES  ACT  AND  UNDER  APPLICABLE  STATE  SECURITIES  LAWS OR THE
         COMPANY SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION
         OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF
         APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

         Each  certificate  representing  any  Shares  shall  also be stamped or
otherwise imprinted with a legend substantially in the following form:

         THE COMPANY  WILL  FURNISH TO EACH  HOLDER OF ITS SERIES A  CONVERTIBLE
         PREFERRED  STOCK  WHO  SO  REQUESTS   WITHOUT  CHARGE  A  COPY  OF  THE
         CERTIFICATE  OF  DESIGNATION  SETTING  FORTH THE POWERS,  DESIGNATIONS,
         PREFERENCES  AND  RELATIVE,  PARTICIPATING,  OPTIONAL OR OTHER  SPECIAL
         RIGHTS  OF SUCH  STOCK AND ANY OTHER  CLASS OR SERIES  THEREOF  AND THE
         QUALIFICATIONS,  LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR
         RIGHTS.

                                       28
<PAGE>

         Upon  the  earlier  of (i)  registration  for  resale  pursuant  to the
Registration Rights Agreement or (ii) Rule 144(k) becoming available the Company
shall (A)  deliver to the  transfer  agent for the Common  Stock (the  "Transfer
Agent")  irrevocable  instructions  that the  Transfer  Agent  shall  reissue  a
certificate  representing shares of Common Stock without legends upon receipt by
such Transfer Agent of the legended certificates for such shares,  together with
either (1) a customary  representation by the Purchaser that Rule 144(k) applies
to the shares of Common  Stock  represented  thereby or (2) a  statement  by the
Purchaser  that such  Purchaser has sold the shares of Common Stock  represented
thereby  in  accordance  with  the  Plan  of   Distribution   contained  in  the
Registration  Statement,  and (B) cause its  counsel to deliver to the  Transfer
Agent one or more  blanket  opinions  to the  effect  that the  removal  of such
legends in such circumstances may be effected under the Securities Act. From and
after the earlier of such  dates,  upon any  Purchaser's  written  request,  the
Company shall promptly cause certificates  evidencing the Purchaser's Securities
to be replaced with certificates which do not bear such restrictive legends, and
Warrant Shares  subsequently  issued upon due exercise of the Warrants shall not
bear such  restrictive  legends  provided the provisions of either clause (i) or
clause (ii) above,  as  applicable,  are satisfied  with respect to such Warrant
Shares. When the Company is required to cause unlegended certificates to replace
previously  issued legended  certificates,  if unlegended  certificates  are not
delivered to an Purchaser  within three (3) Business  Days of submission by that
Purchaser of legended certificate(s) to the Transfer Agent as provided above (or
to the Company, in the case of the Warrants), the Company shall be liable to the
Purchaser  for  liquidated  damages in an amount equal to 1.5% of the  aggregate
purchase  price of the  Securities  evidenced  by such  certificate(s)  for each
thirty (30) day period (or portion  thereof)  beyond such three (3) Business Day
that the unlegended certificates have not been so delivered.

ARTICLE VI

                                   TERMINATION

         Section 6.1 TERMINATION OF OBLIGATIONS TO EFFECT CLOSING.

                  (a) The  obligations of the Company,  on the one hand, and the
Purchasers, on the other hand, to effect the Closing shall terminate as follows:

                       (i) Upon the mutual  written  consent of the  Company and
          the Purchasers;

                       (ii) By the Company if any of the conditions set forth in
          Section 4.1 shall have become incapable of fulfillment,  and shall not
          have been waived by the Company;

                       (iii) By a Purchaser (with respect to itself only) if any
          of the  conditions  set  forth  in  Section  4.2.  shall  have  become
          incapable  of  fulfillment,  and shall  not have  been  waived by such
          Purchaser; or

                                       29
<PAGE>


                       (iv) By either the Company or any Purchaser (with respect
          to  itself  only)  if the  Closing  has not  occurred  on or  prior to
          February 3, 2006;

provided,  however,  that,  except in the case of clause  (i)  above,  the party
seeking to terminate  its  obligation to effect the Closing shall not then be in
breach  of any of  its  representations,  warranties,  covenants  or  agreements
contained in this  Agreement or the other  Transaction  Documents if such breach
has  resulted  in the  circumstances  giving  rise to such  party's  seeking  to
terminate its obligation to effect the Closing.

         Section 6.2 EFFECT OF  TERMINATION.  In the event of termination by the
Company or any Purchaser, written notice thereof shall forthwith be given to the
other parties and the other  Purchasers  shall have the right to terminate their
obligations  to effect the Closing  upon  written  notice to the Company and the
other  Purchasers.  If this  Agreement is  terminated as provided in Section 6.1
herein,  this  Agreement  shall become void and of no further  force and effect,
except for Sections 8.1 and 8.2, and Article VII herein. Nothing in this Section
6.2 shall be deemed to release the  Company,  Falcon or any  Purchaser  from any
liability  for  any  breach  under  this  Agreement  or  the  other  Transaction
Documents,  or to impair the rights of the Company or such  Purchaser  to compel
specific  performance by any other party of its obligations under this Agreement
or the other Transaction Documents.

                                   ARTICLE VII

                                 INDEMNIFICATION

         Section 7.1  GENERAL  INDEMNITY.  The  Company  and Falcon  jointly and
severally  agree  to  indemnify  and  hold  harmless  each  Purchaser  (and  its
respective directors,  officers, employees,  affiliates,  agents, successors and
assigns) from and against any and all losses, liabilities,  deficiencies, costs,
damages and expenses (including, without limitation, reasonable attorneys' fees,
charges and  disbursements)  incurred by each  Purchaser or any such person as a
result of any  inaccuracy  in or breach of the  representations,  warranties  or
covenants made by the Company or Falcon herein. The Purchasers severally but not
jointly  agree to indemnify  and hold  harmless  the Company and its  directors,
officers, employees,  affiliates, agent, successors and assigns from and against
any and all losses,  liabilities,  deficiencies,  costs,  damages  and  expenses
(including,   without  limitation,   reasonable  attorneys'  fees,  charges  and
disbursements)  incurred  by the  Company or any such  person as a result of any
inaccuracy in or breach of the representations,  warranties or covenants made by
the Purchasers herein.

         Section  7.2   INDEMNIFICATION   PROCEDURE.   Any  party   entitled  to
indemnification  under  this  Article  VII (an  "indemnified  party")  will give
written notice to the  indemnifying  party of any matters giving rise to a claim
for  indemnification;  PROVIDED,  that the  failure  of any  party  entitled  to
indemnification  hereunder  to give notice as provided  herein shall not relieve
the indemnifying  party of its obligations  under this Article VII except to the
extent that the  indemnifying  party is actually  prejudiced  by such failure to
give  notice.  In case any  action,  proceeding  or claim is brought  against an
indemnified party in respect of which  indemnification is sought hereunder,  the
indemnifying  party  shall be  entitled  to  participate  in and,  unless in the

                                       30
<PAGE>

reasonable  judgment of the indemnified  party a conflict of interest between it
and the indemnifying party may exist with respect to such action,  proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified  party.  In  the  event  that  the  indemnifying  party  advises  an
indemnified  party  that  it  will  contest  such a  claim  for  indemnification
hereunder,  or fails,  within thirty (30) days of receipt of any indemnification
notice to notify such person in writing of the indemnifying  party's election to
defend,  settle  or  compromise,  at its sole  cost  and  expense,  any  action,
proceeding or claim (or  discontinues its defense at any time after it commences
such defense),  then the indemnified party may, at its option, defend, settle or
otherwise compromise or pay such action or claim. In any event, unless and until
the  indemnifying  party  elects in  writing  to assume  and does so assume  the
defense of any such claim,  proceeding or action, the indemnified  party's costs
and expenses  arising out of the defense,  settlement  or compromise of any such
action,   claim  or  proceeding  shall  be  losses  subject  to  indemnification
hereunder.  The indemnified  party shall  cooperate fully with the  indemnifying
party in connection  with any negotiation or defense of any such action or claim
by the  indemnifying  party  and shall  furnish  to the  indemnifying  party all
information  reasonably available to the indemnified party which relates to such
action or claim. The indemnifying  party shall keep the indemnified  party fully
apprised  at  all  times  as to the  status  of the  defense  or any  settlement
negotiations  with respect thereto.  If the indemnifying  party elects to defend
any such  action or claim,  then the  indemnified  party  shall be  entitled  to
participate  in such  defense  with  counsel  of its choice at its sole cost and
expense.  The  indemnifying  party shall not be liable for any settlement of any
action,  claim  or  proceeding  effected  without  its  prior  written  consent.
Notwithstanding  anything in this Article VII to the contrary,  the indemnifying
party shall not, without the indemnified  party's prior written  consent,  which
consent may not be  unreasonably  withheld,  settle or  compromise  any claim or
consent to entry of any  judgment in respect  thereof  which  imposes any future
obligation  on  the  indemnified  party  or  which  does  not  include,   as  an
unconditional  term thereof,  the giving by the claimant or the plaintiff to the
indemnified  party of a release from all liability in respect of such claim.  If
the  indemnifying  party fails or refuses to promptly  assume the defense of any
such claim,  proceeding  or action,  then the  indemnification  required by this
Article VII shall be made by periodic  payments of the amount thereof during the
course of investigation  or defense,  as and when bills are received or expense,
loss,  damage  or  liability  is  incurred,  so  long as the  indemnified  party
irrevocably  agrees to refund such moneys if it is  ultimately  determined  by a
court  of   competent   jurisdiction   that  such  party  was  not  entitled  to
indemnification.  The indemnity agreements contained herein shall be in addition
to (a) any cause of action or similar  rights of the  indemnified  party against
the indemnifying party or others, and (b) any liabilities the indemnifying party
may be subject to pursuant to applicable law.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         Section  8.1 FEES  AND  EXPENSES.  Each  party  shall  pay the fees and
expenses of its advisors,  counsel,  accountants and other experts,  if any, and
all  other  expenses,  incurred  by  such  party  incident  to the  negotiation,
preparation, execution, delivery and performance of this Agreement. In addition,
the  Company  shall  pay all  reasonable  fees  and  expenses  incurred  by each
Purchaser in connection  with any amendments,  modifications  or waivers of this
Agreement or any of the other  Transaction  Documents or incurred in  connection
with  the  enforcement  of  this  Agreement  and  any of the  other  Transaction
Documents,  including,  without  limitation,  all  reasonable  attorneys'  fees,
disbursements and expenses.

                                       31
<PAGE>


         Section 8.2 SPECIFIC ENFORCEMENT; CONSENT TO JURISDICTION.

                  (a) The Company,  Falcon and the  Purchasers  acknowledge  and
agree  that  irreparable  damage  would  occur  in  the  event  that  any of the
provisions  of this  Agreement  or the  other  Transaction  Documents  were  not
performed in accordance with their specific terms or were otherwise breached. It
is  accordingly  agreed that the parties  shall be entitled to an  injunction or
injunctions  to prevent or cure breaches of the  provisions of this Agreement or
the  other  Transaction  Documents  and to  enforce  specifically  the terms and
provisions  hereof or thereof,  this being in  addition  to any other  remedy to
which any of them may be entitled by law or equity.

                  (b)  The  Company,   Falcon  and  each  Purchaser  (i)  hereby
irrevocably  submit to the exclusive  jurisdiction of the United States District
Court for the  Southern  District of New York and the courts of the State of New
York  located  in New York  County,  for the  purposes  of any  suit,  action or
proceeding  arising  out of or relating  to this  Agreement  or any of the other
Transaction  Documents or the transactions  contemplated hereby or thereby,  and
(ii)  hereby  waive,  and  agree  not to  assert  in any such  suit,  action  or
proceeding,  any claim that it is not personally  subject to the jurisdiction of
each  such  court,  that  the  suit,  action  or  proceeding  is  brought  in an
inconvenient  forum or that the  venue of the  suit,  action  or  proceeding  is
improper. The Company, Falcon and each Purchaser consent to process being served
in any such suit,  action or  proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this  Agreement and agrees that
such service shall constitute good and sufficient  service of process and notice
thereof.  Nothing in this  Section 8.2 shall  affect or limit any right to serve
process  in any other  manner  permitted  by law.  The  Company,  Falcon and the
Purchasers  hereby  agree  that the  prevailing  party in any  suit,  action  or
proceeding  arising  out of or  relating  to the  Shares,  this  Agreement,  the
Registration   Rights   Agreement  or  the   Warrants,   shall  be  entitled  to
reimbursement for reasonable legal fees from the  non-prevailing  party. EACH OF
THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION
WITH RESPECT TO THIS  AGREEMENT AND  REPRESENTS  THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

         Section  8.3  ENTIRE   AGREEMENT;   AMENDMENT.   This  Agreement,   the
Transaction  Documents,  the Exchange  Documents and the  Purchaser  Transaction
Documents,  including the schedules and Exhibits  hereto and thereto,  set forth
the entire  understanding  and  agreement  of the  parties  with  respect to the
matters covered hereby and, except as specifically set forth herein or in any of
the  Transaction  Documents,  the Exchange  Documents  or Purchaser  Transaction
Documents,   none  of  the   Company,   Falcon  or  any   Purchaser   makes  any
representation,  warranty, covenant or undertaking with respect to such matters.
This Agreement,  the Exchange Documents, the Transaction Documents, the Exchange
Documents  and  the  Purchaser   Transaction   Documents   supersede  all  prior
understandings  and agreements with respect to said subject matter, all of which
are merged herein. No provision of this Agreement may be waived or amended other
than by a written  instrument  signed by the Company,  Falcon and the Purchasers
and their permitted  assigns owning of record at least a majority in interest of
the then-outstanding  Securities issuable hereunder, and no provision hereof may
be waived other than by


                                       32
<PAGE>

a written  instrument  signed by the party against whom  enforcement of any such
waiver is sought.  No  amendment  to this  Agreement  shall be  effective to the
extent  that it  applies  to less than all of the  holders  of the  Shares  then
outstanding or violates any provision of the Delaware  General  Corporation Law.
No consideration shall be offered or paid to any person to amend or consent to a
waiver or  modification  of any  provision of any of the  Transaction  Documents
unless  the same  consideration  is also  offered  to all of the  parties to the
Transaction Documents or holders of Shares, as the case may be.

         Section 8.4  NOTICES.  Any  notice,  demand,  request,  waiver or other
communication  required or permitted to be given  hereunder  shall be in writing
and shall be deemed  given and  received  (a) upon hand  delivery or delivery by
telecopy or facsimile at the address or number designated below (if delivered on
a  business  day  during  normal  business  hours  where  such  notice  is to be
received), or the first business day following such delivery (if delivered other
than on a business day during normal  business  hours where such notice is to be
received),  or (b) on the second  business day  following the date of mailing by
express  courier  service,  fully  prepaid,  addressed to such address,  or upon
actual receipt of such mailing,  whichever shall first occur.  The addresses for
such communications shall be:

If to Falcon or the
Company:                            Strong Technical Inc.
                                    c/o Henan Zhongpin Food Share Co., Ltd.
                                    21 Changshe Road
                                    Changge City, Henan Province
                                    The People's Republic of China

                                    Attention: Chief Executive Officer
                                    Telecopier: 011 (86) 0374-6227818
                                    Telephone: 011 (86) 0374-6226366

with copies (which copies
shall not constitute notice
to Falcon or the Company)
to:                                 DeHeng Chen Chan, LLC
                                    225 Broadway, Suite 19010
                                    New York, New York  10007

                                    Attention:    Wesley J. Paul, Esq.
                                    Telecopier:  (212) 608-9050
                                    Telephone:  (212) 608-6500

                                       33
<PAGE>


and to:                             Pryor Cashman Sherman & Flynn LLP
                                    410 Park Avenue
                                    New York, New York  10022

                                    Attention:    Eric M. Hellige, Esq.
                                    Telecopier:  (212) 798-6380
                                    Telephone:  (212) 326-0846

If to any Purchaser:

                                    At the address of such  Purchaser  set forth
                                    on EXHIBIT A to this Agreement.

         Any party  hereto may from time to time  change its address for notices
by giving at least ten (10) days written  notice of such changed  address to the
other party or parties hereto in accordance  with the provisions of this Section
8.4.

         Section 8.5 WAIVERS. No waiver by any party of any default with respect
to any provision,  condition or requirement of this Agreement shall be deemed to
be a  continuing  waiver  in the  future  or a waiver  of any  other  provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.

         Section 8.6 HEADINGS.  The article,  section and subsection headings in
this Agreement are for convenience  only and shall not constitute a part of this
Agreement  for any other  purpose and shall not be deemed to limit or affect any
of the provisions hereof.

         Section 8.7  SUCCESSORS AND ASSIGNS.  This  Agreement  shall be binding
upon and inure to the benefit of the parties and their  successors and permitted
assigns.  After the Closing,  the assignment by a party to this Agreement of any
rights  hereunder  shall not affect  the  obligations  of such party  under this
Agreement.

         Section 8.8 NO THIRD PARTY  BENEFICIARIES.  This  Agreement is intended
for the benefit of the parties hereto and their respective  permitted successors
and  assigns  and is not for the  benefit  of, nor may any  provision  hereof be
enforced by, any other person (other than indemnified  parties,  as contemplated
by Article VII).

         Section 8.9  GOVERNING  LAW.  This  Agreement  shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving  effect to the  choice of law  provisions.  This  Agreement  shall not be
interpreted  or construed  with any  presumption  against the party causing this
Agreement to be drafted.

         Section  8.10  SURVIVAL.  The  representations  and  warranties  of the
Company and Falcon contained in Sections 2.1(o), 2.1(s), 2.2(l) and 2.2(p) shall
survive until the  expiration of the  applicable  statutes of  limitations,  and
those  contained in Article II, with the exception of Sections  2.1(o),  2.1(s),
2.2(l) and 2.2(p),  shall  survive the  execution  and  delivery  hereof and the
Closing until the date two (2) years from the Closing Date,  and the  agreements
and  covenants  set forth in Articles I, III, V, VII and VIII of this  Agreement
shall survive the execution and delivery hereof and the Closing hereunder.

                                       34
<PAGE>


         Section 8.11 COUNTERPARTS. This Agreement may be executed in any number
of  counterparts,  all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties  hereto,  it being  understood that all
parties need not sign the same counterpart.

         Section 8.12  PUBLICITY.  Each of the Company and Falcon agrees that it
will not disclose, and will not include in any public announcement, the names of
the Purchasers  without the consent of the Purchasers in accordance with Section
8.3, which consent shall not be unreasonably  withheld or delayed, or unless and
until such  disclosure is required by law, rule or  applicable  regulation,  and
then only to the extent of such requirement;  provided, however, that nothing in
this Section 8.12 shall  prohibit the  inclusion of the name of any Purchaser in
the  Registration  Statement  or in  any  exhibits  to  filings  made  with  the
Commission  in respect to the  transactions  contemplated  by this  Agreement in
accordance with the Company's  periodic filing  requirements  under the Exchange
Act.

         Section  8.13  SEVERABILITY.  The  provisions  of  this  Agreement  are
severable  and,  in the event  that any court of  competent  jurisdiction  shall
determine  that  any  one or more of the  provisions  or part of the  provisions
contained  in this  Agreement  shall,  for any  reason,  be held to be  invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect any other provision or part of a provision of
this  Agreement  and this  Agreement  shall be reformed and construed as if such
invalid or illegal or unenforceable  provision,  or part of such provision,  had
never been contained herein,  so that such provisions would be valid,  legal and
enforceable to the maximum extent possible.

         Section  8.14  FURTHER  ASSURANCES.  From  and  after  the date of this
Agreement,  upon the request of any party hereto,  each other party hereto shall
execute and deliver such  instruments,  documents  and other  writings as may be
reasonably  necessary or  desirable  to confirm and carry out and to  effectuate
fully the intent and purposes of this and the other Transaction Documents.

         Section 8.15 INDEPENDENT NATURE OF PURCHASER'S  OBLIGATIONS AND RIGHTS.
The obligations of each Purchaser under this Agreement are several and not joint
with  the  obligations  of any  other  Purchaser,  and  no  Purchaser  shall  be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser  under this  Agreement.  The  decision of each  Purchaser  to purchase
Securities   pursuant  to  this  Agreement  has  been  made  by  such  Purchaser
independently  of any other  Purchaser  and  independently  of any  information,
materials,  statements  or opinions  as to the  business,  affairs,  operations,
assets, property,  liabilities,  results of operations,  condition (financial or
otherwise)  or prospects of the Company which may have been made or given by any
other  Purchaser  or by any agent or  employee of any other  Purchaser.  Nothing
contained herein, and no action taken by any Purchaser  pursuant thereto,  shall
be deemed to constitute the Purchasers as a partnership, an association, a joint
venture or any other kind of entity,  or create a presumption that the Investors
are in any way acting in concert or as a group with respect to such  obligations
or the transactions  contemplated by this Agreement. Each Purchaser acknowledges
that no other Purchaser has acted as agent for such Purchaser in connection with
making its


                                       35
<PAGE>

investment  hereunder  and that no other  Purchaser  has acted as agent for such
Purchaser in connection  with making its investment  hereunder and that no other
Purchaser  will  be  acting  as  agent  of such  Purchaser  in  connection  with
monitoring  its  investment  hereunder.  Each  Purchaser  shall be  entitled  to
independently  protect and enforce its rights,  including without limitation the
rights  arising out of this  Agreement,  and it shall not be  necessary  for any
other  Investor to be jointed as an additional  party in any proceeding for such
purpose.  The Company has elected to provide all Purchasers  with the same terms
and form of this Agreement for the convenience of the Company.

         Section 8.16 CONSENT TO JURISDICTION  AND SERVICE OF PROCESS.  (a) Each
of the Company  and Falcon  consents to the  non-exclusive  jurisdiction  of the
federal and state courts  sitting in the Borough of  Manhattan,  The City of New
York,  United States,  and any appellate court from any thereof,  and waives any
immunity  from  the  jurisdiction  of such  courts  over  any  suit,  action  or
proceeding  that may be brought in connection  with this Agreement or any of the
other Transaction Documents.  Each of the Company and Falcon irrevocably waives,
to the fullest extent  permitted by law, any objection to any suit,  action,  or
proceeding  that may be brought in connection  with this Agreement or any of the
other  Transaction  Documents  in such  courts  whether on the grounds of venue,
residence or domicile or on the ground that any such suit,  action or proceeding
has been brought in an inconvenient forum. Each of the Company and Falcon agrees
that the final judgment in any such suit,  action or proceeding  brought in such
court shall be  conclusive  and binding upon the Company or Falcon,  as the case
may be,  and may be  enforced  in any  court to the  jurisdiction  of which  the
Company or Falcon,  as the case may be, is subject by a suit upon such judgment;
PROVIDED that service of process is effected upon the Company or Falcon,  as the
case may be, in the  manner  provided  by this  Agreement.  Notwithstanding  the
foregoing,  any suit,  action or  proceeding  brought  in  connection  with this
Agreement or any of the other  Transaction  Documents  may be  instituted in any
other court of competent jurisdiction.

                  (b) Each of the Company and Falcon  agrees that service of all
writs,  process  and  summonses  in any suit,  action or  proceeding  brought in
connection with this Agreement or any of the other Transaction Documents against
the Company or Falcon in any court of the State of New York or any United States
federal  court  sitting in the Borough of  Manhattan,  New York City,  New York,
United  States,  may be made upon  DeHeng Chen Chan LLC at 225  Broadway,  Suite
19010, New York, New York 10007, whom each of the Company or Falcon  irrevocably
appoints as its authorized agent for service of process. Each of the Company and
Falcon  represents  and warrants  that DeHeng Chen Chan LLC has agreed to act as
the Company's and Falcons' agent for service of process. Each of the Company and
Falcon agrees that such  appointment  shall be irrevocable so long as any of the
Securities  remain  outstanding  or until  the  irrevocable  appointment  by the
Company  and  Falcon of a  successor  in The City of New York as its  authorized
agent for such purpose and the acceptance of such appointment by such successor.
Each of the  Company  and  Falcon  further  agrees  to take any and all  action,
including  the filing of any and all  documents  and  instructions,  that may be
necessary to continue such appointment in full force and effect as aforesaid. If
DeHeng Chen Chan LLC shall cease to act as the  Company's or Falcon's  agent for
service of process,  the Company or Falcon,  as the case may be,  shall  appoint
without  delay  another  such agent and  provide  prompt  written  notice to the
Purchasers of such appointment.  With respect to any such action in any court of
the State of


                                       36
<PAGE>

New York or any United States  federal  court in the Borough of  Manhattan,  New
York City, service of process upon DeHeng Chen Chan LLC, as the authorized agent
of the  Company or  Falcon,  as the case may be, for  service  of  process,  and
written  notice of such  service to the  Company or Falcon,  as the case may be,
shall be deemed, in every respect, effective service of process upon the Company
or Falcon, as the case may be.

                  (c) Nothing in this Section 8.16 shall affect the right of any
party to serve legal process in any other manner  permitted by law or affect the
right of any party to bring any action or proceeding  against any other party or
its property in the courts of other jurisdictions.

         Section 8.17 NOTIFICATION UNDER  CERTIFICATION OF DESIGNATION.  Each of
Special  Situations  Private Equity Fund, L.P.,  Special  Situations Fund II QP,
L.P. and Special  Situations Fund III, L.P. hereby notifies the Company (and the
Secretary of the Company)  that such person  irrevocably  elects not to have the
provisions of Subsection E.5(i) of the Certificate of Designations  apply to any
Shares  owned or  acquired  by such person  hereunder,  and the  Company  hereby
acknowledges receipt of such notification and confirms that such notification is
sufficient  under such  Subsection and that no additional  action is required by
any of such persons to opt out of the restrictions set forth in such Subsection.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.

                                   STRONG TECHNICAL INC.



                                   By:_____________________________________
                                      Name:
                                      Title:


                                   FALCON LINK INVESTMENT LIMITED



                                   By:_____________________________________
                                      Name:
                                      Title:


                                   AMARANTH GLOBAL EQUITIES MASTER FUND LIMITED


                                   By:_____________________________
                                      Name:
                                      Title:

                                       37
<PAGE>

                                   ATLAS CAPITAL MASTER FUND LP


                                   By:_____________________________
                                      Name:
                                      Title:

                                   ATLAS CAPITAL (Q.P.), LP


                                   By:_____________________________
                                      Name:
                                      Title:

                                   ATLAS CAPITAL OFFSHORE EXEMPT FUND, LTD.


                                   By:_____________________________
                                      Name:
                                      Title:


                                   BFS US SPECIAL OPPORTUNITIES TRUST PLC


                                   By: _____________________________
                                      Name:
                                      Title:


                                   CRESTVIEW CAPITAL MASTER LLC


                                   By:_____________________________
                                      Name:
                                      Title:

                                   D.H. VERMOEGENSVERWALTUNG -
                                     UND BETEILIGUNGSGESELLSCHAFT MBH


                                   By:_____________________________
                                      Name:
                                      Title:

                                       38
<PAGE>

                                   JAYHAWK CHINA FUND (CAYMAN), LTD.


                                   By: _____________________________
                                   Name:
                                   Title:


                                   PINNACLE CHINA FUND, L.P.


                                   By:_____________________________
                                      Name:
                                      Title:


                                   RENAISSANCE US GROWTH INVESTMENT TRUST PLC


                                   By:_____________________________
                                      Name:
                                      Title:



                                   __________________________________
                                   MICHAEL ROSS


                                   SANDOR CAPITAL MATER FUND, LP


                                   By:_____________________________
                                      Name:
                                      Title:

                                   SOUTHWELL PARTNERS, LP


                                   By:_____________________________
                                      Name:
                                      Title:

                                       39
<PAGE>


                                   SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.


                                   By:_____________________________
                                      Name:
                                      Title:

                                   SPECIAL SITUATIONS FUND III QP, L.P.


                                   By:_____________________________
                                      Name:
                                      Title:


                                   SPECIAL SITUATIONS FUND III, L.P.


                                   By:_____________________________
                                      Name:
                                      Title:


                                   SRB GREENWAY OFFSHORE OPERATING FUND, L.P.


                                   By:_____________________________
                                      Name:
                                      Title:

                                   SRB GREENWAY CAPITAL, L.P.


                                   By:_____________________________
                                      Name:
                                      Title:


                                   SRB GREENWAY CAPITAL (QP), L.P.


                                   By:_____________________________
                                      Name:
                                      Title:

                                       40
<PAGE>

                                   VISION OPPORTUNITY MASTER FUND, LTD.


                                   By:_____________________________
                                      Name:
                                      Title:


                                   WS OPPORTUNITY FUND INTERNATIONAL, LTD.


                                   By:_____________________________
                                      Name:
                                      Title:


                                   WS OPPORTUNITY FUND, L.P.


                                   By:_____________________________
                                      Name:
                                      Title:


                                   WS OPPORTUNITY FUND (QP), L.P.


                                   By:_____________________________
                                      Name:
                                      Title:



                                       41
<PAGE>



                                                                       EXHIBIT A

                               LIST OF PURCHASERS

<TABLE>
<CAPTION>
                                                                                NUMBER OF           DOLLAR
                NAMES AND ADDRESSES OF                   NUMBER OF SHARES       WARRANTS            AMOUNT
                     PURCHASERS                              PURCHASED          PURCHASED        OF INVESTMENT
                     ----------                              ---------          ---------        -------------

<S>                                                         <C>                <C>                 <C>
Pinnacle China Fund, L.P.                                   1,500,000          26,511,750          $6,000,000
4965 Preston Park Blvd
Suite 240
Plano, TX 75093

Amaranth Global Equities Master Fund Limited                  250,000           4,418,625          $1,000,000
c/o Dundee Leeds Management Services (Cayman) Ltd.
Waterfront Centre
28 N. Church St, 2nd Fl
George Town, Grand Cayman
Cayman Islands, British West Indies

Atlas Capital Master Fund LP                                  283,750           5,015,139          $1,135,000
c/o Admiral Administration
Admiral Financial Center, 5th Floor
90 Fort Street
Box 32021
SMB
Grand Cayman, Cayman Islands

Atlas Capital (Q.P.), L.P.                                    172,000           3,040,014            $688,000
100 Crescent Court
Suite 880
Dallas, TX 75201

Atlas Capital Offshore Exempt Fund, Ltd.                       44,250             782,097            $177,000
c/o Admiral Administration
Admiral Financial Center, 5th Floor
90 Fort Street
Box 32021
SMB
Grand Cayman, Cayman Islands

BFS US Special Opportunities Trust PLC                        250,000           4,418,625          $1,000,000
Front National Bank
100 W. Houston Street
San Antonio, TX 78205
Attn:  Henri Domingues T-8

Crestview Capital Master LLC                                  250,000           4,418,625          $1,000,000
95 Revere Drive, Suite A
Northbrook IL 60062
</TABLE>
                                      A-1
<PAGE>


<TABLE>
<CAPTION>
                                                                                NUMBER OF           DOLLAR
                NAMES AND ADDRESSES OF                   NUMBER OF SHARES       WARRANTS            AMOUNT
                     PURCHASERS                              PURCHASED          PURCHASED        OF INVESTMENT
                     ----------                              ---------          ---------        -------------
<S>                                                         <C>                <C>                 <C>
D.H. Vermoegensverwaltung - und                             1,250,000          22,093,125          $5,000,000
  Beteiligungsgesellschaft mbH
Op de Loh 7
25337 Elmshorn
Germany

Jayhawk China Fund (Cayman), Ltd.                             500,000           8,837,250          $2,000,000
c/o Genesis Fund Service Limited
8201 Mission Road, Suite 110
Prairie Village, KS 66208

Renaissance US Growth Investment Trust PLC                    250,000           4,418,625          $1,000,000
Front National Bank
100 W. Houston Street
San Antonio, TX 78205
Attn:  Henri Domingues T-8
Dallas, TX 75206

Michael P. Ross                                                75,000           1,325,588            $300,000
300 Central Park West, Apt. 15-C2
New York, New York 10024

Sandor Capital Master Fund, LP                                125,000           2,209,313            $500,000
2828 Routh Street
Suite 500
Dallas, TX 75201

Southwell Partners, LP                                        437,500           7,732,594          $1,750,000
1901 North Akard Street
Dallas, TX 75201

Special Situations Private Equity Fund, L.P.                  214,500           3,791,180            $858,000
527 Madison Avenue, Suite 2600
New York, NY 10022

Special Situations Fund III QP, L.P.                          492,750           8,709,110          $1,971,000
527 Madison Avenue, Suite 2600
New York, NY 10022

Special Situations Fund III, L.P.                              42,750             755,585            $171,000
527 Madison Avenue, Suite 2600
New York, NY 10022

SRB Greenway Offshore Operating Fund, L.P.                      6,674             117,960             $26,700
300 Crescent Court, Suite 1111
Dallas, TX 75201
Attn:  Joe Worsham
</TABLE>


                                      A-2
<PAGE>

<TABLE>
<CAPTION>
                                                                                NUMBER OF           DOLLAR
                NAMES AND ADDRESSES OF                   NUMBER OF SHARES       WARRANTS            AMOUNT
                     PURCHASERS                              PURCHASED          PURCHASED        OF INVESTMENT
                     ----------                              ---------          ---------        -------------

<S>                                                         <C>                <C>                 <C>
SRB Greenway Capital, L.P.                                     13,326             235,530             $53,300
300 Crescent Court, Suite 1111
Dallas, TX 75201
Attn:  Joe Worsham

SRB Greenway Capital (QP), L.P.                               105,000           1,855,823            $420,000
300 Crescent Court, Suite 1111
Dallas, TX 75201
Attn:  Joe Worsham

Vision Opportunity Master Fund, Ltd.                          450,000           7,953,525          $1,800,000
317 Madison Avenue, Suite 1220
New York, NY 10017

WS Opportunity Fund International, Ltd.                        95,000           1,679,078            $380,000
300 Crescent Court, Suite 1111
Dallas, TX 75201
Attn:  Joe Worsham

WS Opportunity Fund, L.P.                                      55,000             972,098            $220,000
300 Crescent Court, Suite 1111
Dallas, TX 75201
Attn:  Joe Worsham

WS Opportunity Fund (QP), L.P.                                 37,500             662,794            $150,000
300 Crescent Court, Suite 1111
Dallas, TX  75201
Attn:  Joe Worsham
</TABLE>



                                       A-3
<PAGE>

                                                                       EXHIBIT B

                                 FORM OF WARRANT








                                       B-1



<PAGE>

                                                                       EXHIBIT C

                                 FORM OF OPINION

         1. The Company is a corporation duly incorporated, validly existing and
in good  standing  under the laws of the State of Delaware and has the requisite
corporate  power to own,  lease and operate its  properties  and assets,  and to
carry on its business as presently conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the failure to so qualify would have a Material Adverse Effect.

         2. The Company has the requisite corporate power and authority to enter
into and perform its  obligations  under (i) the  Transaction  Documents  and to
issue the Shares, the Conversion Shares, the Warrants and the Warrant Shares and
(ii) the Exchange  Documents and to  consummate  the  Exchange.  The  execution,
delivery and performance of each of the  Transaction  Documents and the Exchange
Documents  by  the  Company  and  the  consummation  by it of  the  transactions
contemplated  thereby  have been duly and validly  authorized  by all  necessary
corporate  action and no further consent or  authorization of the Company or its
Board of  Directors  is  required.  Each of the  Transaction  Documents  and the
Exchange Documents have been duly executed and delivered, and the Shares and the
Warrants have been duly  executed,  issued and delivered by the Company and each
of the  Transaction  Documents and the Exchange  Documents  constitutes a legal,
valid and binding obligation of the Company  enforceable  against the Company in
accordance with its respective terms. The Shares,  the Warrants,  the Conversion
Shares and the Warrant Shares are not subject to any preemptive rights under the
Certificate or the Bylaws or any Material Agreement (as defined below).

         3. The Shares have been duly  authorized  and, when  delivered  against
payment in full as provided in the Purchase  Agreement,  will be validly issued,
fully  paid and  nonassessable  and will have the  relative  rights,  powers and
preferences set forth in the Certificate of Designations. The Conversion Shares,
have been duly  authorized  and reserved for issuance,  and, when delivered upon
conversion of the Shares, will be validly issued,  fully paid and nonassessable.
The Warrant Shares,  have been duly  authorized and reserved for issuance,  and,
when  delivered  upon  exercise  or against  payment in full as  provided in the
Warrants, will be validly issued, fully paid and nonassessable.

         4. The execution,  delivery and  performance of and compliance with the
terms of the Transaction  Documents and the Exchange  Documents and the issuance
of the Shares,  the Conversion  Shares,  the Warrants and the Warrant Shares and
the  consummation  of the  Exchange  do not (a)  violate  any  provision  of the
Certificate  or Bylaws,  (b) conflict with, or constitute a default (or an event
which with  notice or lapse of time or both would  become a default)  under,  or
give  to  others  any  rights  of   termination,   amendment,   acceleration  or
cancellation of, any material  agreement,  mortgage,  deed of trust,  indenture,
note,  bond,  license,  lease  agreement,  instrument or obligation to which the
Company  or any of its  Subsidiaries  is a party or by which the  Company or any
Subsidiary  is bound or to which any of the assets or  properties of the Company
or any Subsidiary are subject (in each case after giving effect to the Exchange)
and  identified as a material  agreement in the officer's  certificate  attached
hereto (collectively,  the "Material Agreements"),  (c) create or impose a lien,
charge  or  encumbrance  on any  property  of the


                                      C-1
<PAGE>

Company  under any  Material  Agreement,  or (d)  result in a  violation  of any
Federal,  state, local or foreign statute,  rule,  regulation,  order, judgment,
injunction  or  decree   (including   Federal  and  state  securities  laws  and
regulations)  applicable  to the  Company  or any  Subsidiary  or by  which  any
property or asset of the Company or any Subsidiary is bound or affected (in each
case after  giving  effect to the  Exchange),  except,  in all cases  other than
violations  pursuant to clauses (a) and (d) above, for such conflicts,  default,
terminations,  amendments,  acceleration,  cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect.

         5. No consent, approval or authorization of or designation, declaration
or filing with any governmental authority or any other Person on the part of the
Company is required  under  Federal,  state or local law,  rule or regulation or
under  the  terms  of any  Material  Agreement  in  connection  with  the  valid
execution, delivery and performance of the Transaction Documents or the Exchange
Documents,  the  consummation of the Exchange or the offer,  sale or issuance of
the Shares, the Conversion Shares, the Warrants or the Warrant Shares other than
filings as may be required by applicable  Federal and state  securities laws and
regulations.

         6. To our knowledge,  there is no action, suit, claim, investigation or
proceeding  pending or threatened  against the Company or any Subsidiary  (after
giving  effect to the  Exchange)  which  questions  the  validity  of any of the
Transaction Documents or the Exchange Documents or the transactions contemplated
thereby or any action taken or to be taken pursuant thereto. There is no action,
suit,  claim,   investigation  or  proceeding  pending,  or  to  our  knowledge,
threatened,  against or involving  the Company or any  Subsidiary  (after giving
effect to the  Exchange)  or any of their  respective  properties  or assets and
which,  if adversely  determined,  is reasonably  likely to result in a Material
Adverse Effect. There are no outstanding orders, judgments,  injunctions, awards
or decrees of any court,  arbitrator or  governmental or regulatory body against
the Company or any Subsidiary or any officers or directors of the Company or any
Subsidiary  (in  each  case  after  giving  effect  to the  Exchange)  in  their
capacities as such.

         7. The offer,  issuance and sale of the Shares and the Warrants and the
offer,  issuance  and  sale of the  Conversion  Shares  and the  Warrant  Shares
pursuant to the Agreement and the Warrants,  as applicable,  are exempt from the
registration requirements of the Securities Act of 1933, as amended.

         8. The Company is not, and as a result of and immediately  upon Closing
and after giving effect to the Exchange will not be, an "investment  company" or
a company  "controlled"  by an "investment  company,"  within the meaning of the
Investment Company Act of 1940, as amended.


                                       C-2
<PAGE>


                                                                       EXHIBIT D

                       FORM OF CERTIFICATE OF DESIGNATIONS







                                       D-1
<PAGE>


                                                                       EXHIBIT E

                      FORM OF REGISTRATION RIGHTS AGREEMENT









                                       E-1

<PAGE>


                                                                       EXHIBIT F

                    FORM OF MAKE GOOD SHARE ESCROW AGREEMENT










                                       F-1





<PAGE>


                                                                       EXHIBIT G

                              FINANCIAL STATEMENTS










                                       G-1





<PAGE>


                                                                       EXHIBIT H

                     FORM OF PURCHASE PRICE ESCROW AGREEMENT











                                       H-1

<PAGE>


                                                                       EXHIBIT I

                        FORM OF CONSENTS TO JURISDICTION














                                       I-1



<PAGE>



                                                                       EXHIBIT J

                            FORM OF LOCK-UP AGREEMENT









                                       J-1