STOCK OPTION AGREEMENT




         AGREEMENT,   dated  as  of  July  11,  2001  by  and  between   PANAGRA
INTERNATIONAL  CORPORATION,  a New  York  corporation  (the  "Company"),  and Li
Chuquan ("the Optionee").


                               W I T N E S S E T H


         WHEREAS, pursuant to the terms of an Employment Agreement,  dated as of
July 11,  2001,  (the  "Employment  Agreement),  between  the  Optionee  and the
Company,  the Company is obligated to grant a stock option (the "Option") to the
Optionee for the  purchase of Two Million  (2,000,000)  shares of the  Company's
Common Stock; and


         WHEREAS, the Board of Directors of the Company has authorized the grant
of the Option to the Optionee.


         NOW,  THEREFORE,  in  consideration  of the premises,  mutual covenants
herein set forth and other good and valuable consideration, subject to the terms
and conditions herein, the Company and the Optionee hereby agree as follows:


1.  Grant of Option.


         Subject to the terms and conditions herein, the Company hereby grants
to the Optionee an option (the "Option") to purchase Two Million (2,000,000)
shares of its Common Stock, $.01 par value (the "Option Shares"), at an exercise
price (the "Exercise Price") of $1.75 per share, as may be adjusted from time to
time as provided in this Agreement.


2.  Exercise of the Option.


         2.01 Subject to adjustments as provided in Section 5 herein, the Option
shall be fully exercisable on the date that the Company achieves annual revenues
of $50,000,000.


         2.02 The Option shall expire on July 10, 2006 subject to earlier
termination as provided herein.


3.   Rights of Holder.


         The Optionee shall not have any rights to dividends or any other rights
of a stockholder  with respect to any Option Shares until such Shares shall have
been issued to him (as evidenced by the appropriate  entry on the transfer books
of the  Company)  upon  purchase  of such  Shares  upon  exercise of the Option.
Furthermore,  nothing contained in this Stock Option Agreement shall confer upon
the  Optionee  any right to be  continued  in the  employ of the  Company or its
subsidiaries  beyond  what is called for in the  Employment  Agreement  or shall
prevent the Company from  terminating  his  employment  in  accordance  with the
Employment Agreement.

<PAGE>

4.   Non-Transferability of Option.


         This Option shall not be transferable other than by will or by the laws
of descent and distribution, and may be exercised during the Optionee's lifetime
only by him.


5.   Adjustments.


         5.01  Adjustments  by the  Company.  In the event of a stock  dividend,
stock split-up, share combination, exchange of shares, recapitalization, merger,
consolidation, acquisition or disposition of property or shares, reorganization,
liquidation or other similar changes or transactions,  by the Company during the
term of the  Option,  the Board of  Directors  of the  Company  shall  make such
adjustment  of the number and class of shares then covered by the Option,  or of
the Exercise Price, or both,  whose  determination  shall be conclusive.  To the
extent practicable, the Company shall give the Optionee prior notice of any such
event,  provided  that the failure by the Company to give such notice  shall not
subject the Company to any liability herein.


         5.02 Adjustments Due to Merger,  Consolidation,  Reorganization,  Asset
Sale, Liquidation, etc.


           (a)  If  the  Company  shall  be  the  surviving  corporation  in any
reorganization,  merger,  consolidation,  etc. of the  Company  with one or more
other  corporations,  any then outstanding  Option shall pertain to and apply to
the securities to which a holder of the number of shares of Common Stock subject
to  such  Option   would  have  been   entitled   immediately   following   such
reorganization,  merger, consolidation,  etc. with a corresponding proportionate
adjustment  of the  Exercise  Price as to which such Option may be  exercised so
that the aggregate Exercise Price as to which such Option may be exercised shall
be the same as the  aggregate  Exercise  Price as to which  such  Option  may be
exercised for the shares remaining  subject to the Option  immediately  prior to
such reorganization, merger, consolidation, etc.


           (b) In the event of a merger or consolidation in which the Company is
not the surviving corporation, or sale of all or substantially all of the assets
of the Company in which  outstanding  shares of Common Stock are  exchanged  for
securities,  cash or other property of any other  corporation or business entity
or in the event of a liquidation of the Company (collectively,  ___ a "Corporate
Transaction"),  the Board of Directors of the Company, or the board of directors
of any  corporation  assuming  the  obligations  of  the  Company,  may,  in its
discretion,  take any one or more of the following  actions,  as to  outstanding
Options:  (i) provide that such Options shall be assumed,  or equivalent Options
shall  be  substituted,  by  the  acquiring  or  succeeding  corporation  (or an
affiliate thereof);  (ii) upon written notice to the Optionee,  provide that all
unexercised Options will terminate immediately prior to the consummation of such
transaction unless exercised by the Optionee within a specified period following
the date of such notice; or (iii) in the event of a Corporate  Transaction under
the terms of which  holders of the Common Stock of the Company will receive upon
consummation  thereof a cash payment for each share surrendered in the Corporate
Transaction (the "Transaction Price"), make or provide for a cash payment to the
Optionee equal to the  difference  between (A) the  Transaction  Price times the
number of shares of Common  Stock  subject to such  outstanding  Options (to the
extent then  exercisable at prices not in excess of the  Transaction  Price) and
(B) the aggregate Exercise Price of all such outstanding Options in exchange for
the termination of such Options.

<PAGE>

6.   Reservation of Shares.


         The Company  shall at all times  during the term of the Option  reserve
and keep  available such number of shares of Common Stock or such other class of
stock  then  subject  to the  Option  as  shall be  sufficient  to  satisfy  the
requirements  of this  Agreement.  The Company  shall list such shares of Common
Stock on the national securities exchange or automated quotation system on which
the Company's Common Stock is then listed.


7.   Exercise Procedure.


         7.01 Procedure.


         (a) The Optionee  may exercise the Option,  at any time or from time to
time as provided  herein,  by  delivering  to the Company a written  notice duly
signed by the Optionee stating the number of Option Shares that the Optionee has
elected to purchase  and  accompanied  by payment in an amount equal to the full
purchase price for the Option Shares to be purchased (the  "Purchased  Shares").
The  notice  may be in form of the  "Exercise  of  Option  to  Purchase  Shares"
attached hereto.  The payment may either be in cash or by check or shares of the
Company's  Common Stock with a fair market value equal to the exercise  price on
the date the Option is exercised, or through a combination of cash or shares. If
the  exercise  price of the  Option  is less than the fair  market  value of the
Company's Common Stock,  then the Board of Directors of the Company,  by written
notice to the Optionee, may also permit the Optionee to exercise the Option on a
cashless basis. For purposes of the foregoing, "fair market value" of the Common
Stock shall be  determined  as of the last  business day for which the prices or
quotes are available prior to the date the particular  Options are exercised and
shall mean (i) the last  reported  sale price (on that date) of the Common Stock
on the Nasdaq  National or Small Cap Market System,  if the Common Stock is then
traded on either such System;  (ii) the last reported sale (on that date) of the
Common Stock on the principal national  securities  exchange on which the Common
Stock is traded,  if the Common Stock is not then traded on the Nasdaq  National
or Small Cap Market  System;  or (iii) the  average of the closing bid and asked
prices  last  quoted  (on that date) by an  established  quotation  service  for
over-the-counter  securities,  if the Common Stock is not reported on the Nasdaq
National or Small Cap Market System or a national securities exchange.  However,
if the Common Stock is not then publicly  traded,  the "fair market value" shall
be  deemed  to be the  fair  value of the  Common  Stock  as  determined  by the
Corporation's  Board of Directors  after taking into  consideration  all factors
which it deems appropriate.
<PAGE>


         (b)  Following  receipt by the Company of such  notice of exercise  and
full  payment,  the  Company  shall  issue,  as  soon  as  practicable,  a stock
certificate  for the Purchased  Shares in the name as designated by the Optionee
and deliver the certificate to the Optionee.


         7.02 Compliance.


         The  Company,  however,  shall not be  required to issue or deliver the
stock certificate  pursuant to Section 7.01(b) hereof until it has complied with
all  requirements  of the  Securities  Act of 1933, as amended (the  "Securities
Act"), the Securities Exchange Act of 1934, as amended,  any securities exchange
or automated  quotation  system on which the Company's  Common Stock may then be
listed,  and all  applicable  state laws in connection  with the issuance of the
Option Shares or their listing on said securities exchange or system.


         7.03  Legend.  If the  Purchased  Shares  are  not  then  covered  by a
registration statement in accordance with Section 8 hereof, each certificate for
the Purchased  Shares shall bear a legend that is  substantially  similar to the
following:


         "THESE  SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED
         OR  HYPOTHECATED  UNLESS THE  REGISTRATION  PROVISIONS OF SAID ACT HAVE
         BEEN COMPLIED WITH OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF ITS
         COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED."


8.   Notices.


         Each  notice  relating  to  this  Agreement  shall  be in  writing  and
delivered  in  person  or by  facsimile  or  certified  mail  to  the  following
addresses:


If to PANAGRA:


PanAgra International Corporation
One World Trade Center, 85th Floor
New York, NY 10048
Attn:  President
(212) 329-0963


<PAGE>




If the Optionee:

Li Chuquan
c/o Suite 1105, 11th Floor
Central Plaza
No. 18 Harbor Rd.
Wanchai, Hong Kong


or to such other address as either party hereto may hereinafter duly give to the
other.





9.  Binding.


         This  Agreement  shall be binding  upon and inure to the benefit of the
parties hereto, and their successors, assigns, heirs and administrators.





10.  Entire Agreement.


         This Agreement  constitutes  the entire  agreement  between the parties
hereto with respect to the matters  herein,  and cannot be amended,  modified or
terminated except by an agreement in writing executed by the parties hereto.


11.  Governing Law.


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





                                                  [signature page follows]




<PAGE>






         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date first set forth above.





                                            PANAGRA INTERNATIONAL CORPORATION





                                            By: /s/ Ronald C.H. Lui
                                            -----------------------
                                            Name: Ronald C.H. Lui
                                            Title:  President




<PAGE>



Exercise of Option To Purchase Shares


To:  PanAgra International Corporation


         The undersigned hereby exercises the Option for the purchase of ______
shares (the "Shares") of PanAgra International Corporation Common Stock granted
under a Stock Option Agreement, dated as of July 11, 2001, and herewith makes
payment of the purchase price by the delivery of _______. In the event the
Shares are not registered under the Securities Act of 1933, as amended, the
undersigned shall provide such representations as may be required by the Company
to fulfill any exemptions that may be sought under said Act. Kindly issue the
certificate for the Shares and the Warrants in accordance with the instructions
given below:




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Signature

Instructions for issuance
of stock:

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Name
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Address

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Social Security Number



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