Exhibit
10.3

    

    


    
      CONVERTIBLE NOTE PURCHASE
AGREEMENT

       

    

    This NOTE
PURCHASE AGREEMENT (the "Agreement")
is made and entered into as of the 12th day of
February, 2010 between China
For-Gen Corp., a corporation organized and existing under the laws of the
State of Delaware (“China For-Gen Corp.” or the “Company”) and [Investor], a Delaware limited
liability company and Investors
listed in Schedule A, (the “Investor”).

    


    PRELIMINARY
STATEMENT:


     

    WHEREAS, the Investor wishes
to purchase from the Company, upon the terms and subject to the conditions of
this Agreement, Convertible Notes with a face value of up to
[     ] (“Purchase Price”) and Common Stock Purchase
Warrants, with such Convertible Notes being as described in the Convertible
Promissory Note (the “Promissory Note”) in
substantially the form attached hereto as Exhibit
A (the “Convertible
Note”) for the
amount set forth in Section 1.3.13 hereof. Subject to the limitations set forth
herein and in the Promissory Note and this Note Purchase Agreement, the
Convertible Note shall be initially convertible into shares of common stock of
the Company at any time at a conversion price of One Dollar and One Cent ($1.01)
per share (the “Conversion
Value”). In
addition, the Company will issue to the Investor Common Stock Purchase Warrants
(the “Warrants”) to purchase up to an
additional [     ] shares of common stock of the
Company at exercise prices as stated in the Warrants; and

     

    WHEREAS, the parties intend to
memorialize the purchase and sale of such Convertible Notes and the
Warrants.

    


    NOW, THEREFORE, in
consideration of the mutual covenants and premises contained herein, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby conclusively acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

    


    ARTICLE
I


     

    INCORPORATION BY REFERENCE,
SUPERSEDER AND DEFINITIONS

     

    1.1           Incorporation
by Reference. The foregoing recitals and the Exhibits and Schedules
attached hereto and referred to herein, are hereby acknowledged to be true and
accurate, and are incorporated herein by this reference.

    


    NOTE
PURCHASE AGREEMENT BETWEEN CHINA FOR-GEN CORPORATION

    AND
INVESTORS LISTED IN SCHEDULE A

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    1.2           Superseder.
This Agreement, to the extent that it is inconsistent with any other instrument
or understanding among the parties governing the affairs of the Company, shall
supersede such instrument or understanding to the fullest extent permitted by
law.  A copy of this Agreement shall be filed at the Company’s
principal office.

     

    1.3           Certain
Definitions. For purposes of this Agreement, the following capitalized
terms shall have the following meanings (all capitalized terms used in this
Agreement that are not defined in this Article 1 shall have the meanings set
forth elsewhere in this Agreement):

     

    1.3.1     “1933
Act” means the Securities Act of 1933, as amended.

     

    1.3.2     “1934
Act” means the Securities Exchange Act of 1934, as amended.

     

    1.3.3     “Affiliate”
means a Person or Persons directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with the
Person(s) in question. The term “control,” as used in the immediately preceding
sentence, means, with respect to a Person that is a corporation, the right to
the exercise, directly or indirectly, of more than 50 percent of the voting
rights attributable to the shares of such controlled corporation and, with
respect to a Person that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such controlled Person.

     

    1.3.4    
“Articles” means the Certificate of
Incorporation of the Company, as the same may be amended from time to
time.

     

    1.3.5     “Closing” shall mean the Closing of
the transactions contemplated by this Agreement on the Closing
Date.

     

    1.3.6     “Closing
Date” means the date on which the payment of the Purchase Price (as
defined herein) by the Investor to the company is completed pursuant to this
Agreement to purchase the Convertible Note and Warrants.

     

    1.3.7     “Common
Stock” means shares of common stock of the Company, par value $0.001 per
share.

     

    1.3.8     Reserved

     

    1.3.9     "Exempt
Issuance" means the issuance of (a) shares of Common Stock or options to
employees, officers, or directors of the Company pursuant to any stock or option
plan duly adopted by a majority of the non-employee members of the Board of
Directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon the
exercise of or conversion of any securities issued hereunder, and (c) securities
issued pursuant to acquisitions or strategic transactions, provided any such
issuance shall only be to a Person which is, itself or through its subsidiaries,
an operating company in a business synergistic with the business of the Company
and in which the Company receives benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.

    


    NOTE
PURCHASE AGREEMENT BETWEEN CHINA FOR-GEN CORPORATION

    AND
INVESTORS LISTED IN SCHEDULE A

    PAGE
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    1.3.10   "Material
Adverse Effect" shall mean any adverse effect on the business,
operations, properties or financial condition of the Company that is material
and adverse to the Company and its subsidiaries and affiliates, taken as a whole
and/or any condition, circumstance, or situation that would prohibit or
otherwise materially interfere with the ability of the Company to perform any of
its material obligations under this Agreement or the Registration Rights
Agreement or to perform its obligations under any other material
agreement.

     

    1.3.11   “Delaware
Act” means the Delaware General Corporation Law, as amended.

     

    1.3.12   “Person”
means an individual, partnership, firm, limited liability company, trust, joint
venture, association, corporation, or any other legal entity.

     

    1.3.13   “Purchase
Price” means up to [    ] paid by the [Investor] to
the Company for the Convertible Note and the Warrants.

     

    1.3.14   “Registration
Rights Agreement" shall mean the registration rights agreement between
the Investor and the Company attached hereto as Exhibit
B.

     

    1.3.15   "Registration
Statement" shall mean the registration statement under the 1933 Act to be
filed with the Securities and Exchange Commission for the registration of the
Shares pursuant to the Registration Rights Agreement attached hereto as Exhibit
B.

     

    1.3.16   “SEC”
means the Securities and Exchange Commission.

     

    1.3.17   "SEC
Documents" shall mean the Company's latest Form 10-K or 10-KSB as of the
time in question, all Forms 10-Q or 10-QSB and 8-K filed thereafter, and the
Proxy Statement for its latest fiscal year as of the time in question until such
time as the Company no longer has an obligation to maintain the effectiveness of
a Registration Statement as set forth in the Registration Rights
Agreement.

     

    1.3.18 
"Shares"
shall mean, collectively, the shares of Common Stock of the Company issued upon
conversion of the Convertible Note subscribed for hereunder and those shares of
Common Stock issuable to the Investor upon exercise of the
Warrants.

     

    1.3.19 
“Subsequent
Financing” shall mean any offer and sale of shares of preferred stock,
common stock, common stock equity line or debt that is convertible into shares
of common stock or otherwise senior or superior to the Convertible
Note.

     

    1.3.20 
“Transaction
Documents” shall mean this Agreement, all Schedules and Exhibits attached
hereto and all other documents and instruments to be executed and delivered by
the parties in order to consummate the transactions contemplated hereby,
including, but not limited to the documents listed in Sections 3.2 and 3.3
hereof.

    


    NOTE
PURCHASE AGREEMENT BETWEEN CHINA FOR-GEN CORPORATION

    AND
INVESTORS LISTED IN SCHEDULE A

    PAGE
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    1.3.21   “Warrants”
shall mean the Common Stock Purchase Warrants in the form attached hereto as
Exhibit C-1 and
Exhibit C-2.

    


    ARTICLE
II

    


    SALE
AND PURCHASE OF CHINA FOR-GEN CORP

    CONVERTIBLE
NOTE AND WARRANTS PURCHASE PRICE

    


    2.1          Sale of
Convertible Note and Issuance of Warrants.

    


    (a)        Upon
the terms and subject to the conditions set forth in this Agreement, and in
accordance with applicable law, the Company agrees to sell to the Investor, and
the Investor agrees to purchase from the Company, on the Closing Date
Convertible Notes with a face value of up to [    ] and the
Warrants set forth in
Exhibit C. The Purchase Price shall be paid by the Investor to the
Company in two separate installments. The first installment of
[       ] will be paid by [Investor] on the
initial Closing Date by a wire transfer in immediately available funds payable
to an account at the direction of the Company (the “Initial
Payment”).  The remainder of the Purchase Price will be funded post
the 2008 audit and interim periods of 2009 review are completed to the
Investors’ reasonable satisfaction and the Company has completed a reverse
merger with a United States listed public shell company as described in Section
6.23 (the “Second Payment”).  The Company shall cause the Convertible
Note and the Warrants to be issued to the Investor upon delivery of the Purchase
Price by the Investor.  The Company shall register the shares of
Common Stock into which the Convertible Note is convertible pursuant to the
terms and conditions of a Registration Rights Agreement attached hereto as Exhibit
B.

     

    (b)        The
Convertible Note shall initially be convertible by the Investor into up to
[       ] shares of Common Stock; provided,
however, that each Investor shall not be entitled to convert the Convertible
Note into shares of Common Stock that would result in beneficial ownership by
that particular Investor and its affiliates of more than 4.9% of the then
outstanding number of shares of Common Stock on such date.  For the
purposes of the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulation 13d-3 thereunder.

     

     (c)        Upon
execution and delivery of this Agreement and the Company’s receipt of the
consideration, the Company shall issue to the Investor the Warrants to purchase
an aggregate of up to [    ] shares of Common Stock at
exercise prices as stated in the Warrants, all pursuant to the terms and
conditions of the form of Warrants attached hereto as Exhibits
C-1 and C-2; provided, however, that each Investor shall not be entitled
to exercise the Warrants and receive shares of Common Stock that would result in
beneficial ownership by that particular Investor and its affiliates of more than
4.9% of the then outstanding number of shares of Common Stock on such
date.  For the purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder.

    


    NOTE
PURCHASE AGREEMENT BETWEEN CHINA FOR-GEN CORPORATION

    AND
INVESTORS LISTED IN SCHEDULE A

    PAGE
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    2.2           Purchase
Price.  The Purchase
Price shall be delivered by the Investor pursuant to the terms of Section 2.1(a)
and in the form of a check or wire transfer made payable to the Company in
United States Dollars from the Investor on the Closing Date.

    


    2.3           Additional
Investment Right  The Investor shall have the option to
purchase from the Company, and the Company shall issue and sell to the
Investors, in the event that the Investor exercises such option, up to
[     ] of Convertible Notes pursuant to the terms
hereof (the “Investor
Option”).  The Investor Option shall expire the earlier of six
(6) months following the date of the Second Payment of the Purchase Price, or
the filing of a registered offering by the Company (with such terms of the
offering approved by [Investor], unless extended by the Company. Such Investor
Option shall be proportional to the amount of the Purchase Price paid by the
Investor.  The Investors may exercise the Investor Option by
delivering to the Company an Exercise Form in the form attached hereto as Exhibit
D.  Within five (5) days of receipt of such Exercise Form, the
Company shall deliver to the Investor a Convertible Note purchased pursuant to
the Investor Option (the “Option
Shares ”).

    


    ARTICLE
III

    


      CLOSING DATE AND DELIVERIES AT
CLOSING

    


    3.1           Closing
Date.    The
closing of the transactions contemplated by this Agreement (the “Closing”),
unless expressly determined herein, shall be held at the offices of the Company,
at 5:00 P.M. local time, on the Closing Date or on such other date and at such
other place as may be mutually agreed by the parties, including closing by
facsimile with originals to follow.

    


    3.2           Deliveries
by the Company.  In addition to
and without limiting any other provision of this Agreement, the Company agrees
to deliver, or cause to be delivered, to the Investor, the
following:

     

    
      	
               
      

            	
              (a)

            	
              At
      or prior to Closing, an executed Agreement with all exhibits and schedules
      attached hereto;

            


    

    
      	
               
      

            	
              (b)

            	
              At
      or prior to Closing, an executed Warrant in the name of the Investor in
      the form attached hereto as Exhibit
      C;

            


    

    
      	
               
      

            	
              (c)

            	
              The
      executed Registration Rights
Agreement;

            


    

    
      	
               
      

            	
              (d)

            	
              Certifications
      in form and substance acceptable to the Company and the Investor from any
      and all brokers or agents involved in the transactions contemplated hereby
      as to the amount of commission or compensation payable to such broker or
      agent as a result of the consummation of the transactions contemplated
      hereby and from the Company or Investor, as appropriate, to the effect
      that reasonable reserves for any other commissions or compensation that
      may be claimed by any broker or agent have been set
  aside;

            


    

    


    NOTE
PURCHASE AGREEMENT BETWEEN CHINA FOR-GEN CORPORATION

    AND
INVESTORS LISTED IN SCHEDULE A

    
      PAGE
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              (e)

            	
              An
      opinion from the Company’s counsel concerning the Transaction Documents
      and the transactions contemplated hereby in form and substance reasonably
      acceptable to Investor;

            


    

    
      	
               
      

            	
              (f)

            	
              Executed
      Convertible Note and agreements in the name of Investor and for the amount
      of the investment;

            


    

    
      	
               
      

            	
              (g)

            	
              All
      past and present litigation documents and historical financials;
      and

            


    

    
      	
               
      

            	
              (h)

            	
              Such
      other documents or certificates as shall be reasonably requested by
      Investor or its counsel.

            


    

     

    3.3           Deliveries
by Investor.  In addition to
and without limiting any other provision of this Agreement, the Investor agrees
to deliver, or cause to be delivered, to the Company, the
following:

     

    
      	
               
      

            	
              (a)

            	
              A
      payment to the Company of the Initial
Payment;

            


    

    
      	
               
      

            	
              (b)

            	
              The
      executed Agreement with all Exhibits and Schedules attached
      hereto;

            


    

    
      	
               
      

            	
              (c)

            	
              The
      executed Registration Rights
Agreement;

            


    

    
      	
               
      

            	
              (d)

            	
              Such
      other documents or certificates as shall be reasonably requested by the
      Company or its counsel.

            


    

     

    In the
event any document provided to the other party in Paragraphs 3.2 and 3.3 herein
are provided by facsimile, the party shall forward an original document to the
other party within seven (7) business days.

     

    3.4           Further
Assurances.  The Company and the Investor shall, upon request,
on or after the Closing Date, cooperate with each other (specifically, the
Company shall cooperate with the Investor, and the Investor shall cooperate with
the Company) by furnishing any additional information, executing and delivering
any additional documents and/or other instruments and doing any and all such
things as may be reasonably required by the parties or their counsel to
consummate or otherwise implement the transactions contemplated by this
Agreement.

     

    3.5           Waiver.  The Investor may
waive any of the requirements of Section 3.2 of this Agreement, and the Company
at its discretion may waive any of the provisions of Section 3.3 of this
Agreement.

    


    ARTICLE
IV

    


    REPRESENTATIONS
AND WARRANTIES OF

    CHINA
FOR-GEN CORP

    


    The
Company represents and warrants to the Investor as of the date hereof and as of
Closing (which warranties and representations shall survive the Closing
regardless of what examinations, inspections, audits and other investigations
the Investor has heretofore made or may hereinafter make with respect to such
warranties and representations) as follows:

    


    NOTE
PURCHASE AGREEMENT BETWEEN CHINA FOR-GEN CORPORATION

    AND
INVESTORS LISTED IN SCHEDULE A

    PAGE
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    4.1           Organization
and Qualification.  The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being conducted
and is duly qualified to do business in any other jurisdiction by virtue of the
nature of the businesses conducted by it or the ownership or leasing of its
properties, except where the failure to be so qualified will not, when taken
together with all other such failures, have a Material Adverse Effect on the
business, operations, properties, assets, financial condition or results of
operation of the Company and its subsidiaries taken as a whole.

     

    4.2           Articles
of Incorporation and By-Laws.  The complete and correct copies
of the Company’s Articles and By-Laws, as amended or restated to date which have
been filed with the Securities and Exchange Commission  are a complete
and correct copy of such document as in effect on the date hereof and as of the
Closing Date.

     

    4.3           Capitalization.

     

    4.3.1 The
authorized and outstanding capital stock of the Company is set forth in The
Company’s latest audited report dated December 31, 2007 and updated on the
Audited Reports furnished by Paritz & Company on December 31, 2008 and
interim 2009 report as of June 30, 2009.  All shares of capital stock
have been duly authorized and are validly issued, and are fully paid and no
assessable, and free of preemptive rights.

     

    4.3.2 As
of the date of this Agreement, the authorized capital stock of the Company
consists of 30,000,000 shares of common Stock ($.001 par value) and 1,000,000
shares of preferred stock ($.001 par value), of which 23,427,798 share of common
stock are issued and outstanding (including shares owned by China Financial
Services, Inc.) and the authorized but unissued shares of Common Stock shall be
adequate to accommodate for full conversion of the Convertible Note and Warrants
issued pursuant to this agreement.  As of Closing, the holders of
Company stock options will hold options to purchase an aggregate of 2,500,000
shares of Common Stock.  All outstanding shares of capital stock have
been duly authorized and are validly issued, and are fully paid and
nonassessable and free of preemptive rights.  All shares of capital
stock described above to be issued have been duly authorized and when issued,
will be validly issued, fully paid and nonassessable and free of preemptive
rights. Schedule 4.3.2 hereby contains all shares and derivatives currently and
potentially outstanding.  The company hereby represents that any and
all shares and current potentially dilutive events have been included in
Schedule 4.3.2, including employment agreements, acquisition, consulting
agreements, debts, payments, financing or business relationships that could be
paid in equity, derivatives or resulting in additional equity issuances that
could potentially occur.

    


    NOTE
PURCHASE AGREEMENT BETWEEN CHINA FOR-GEN CORPORATION

    AND
INVESTORS LISTED IN SCHEDULE A

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    4.3.3  Except
pursuant to this Agreement and as set forth in Schedule 4.3 hereto, and as set
forth in the Company’s Audit Report, as of the date hereof and as of the Closing
Date, there are not now outstanding options, warrants, rights to subscribe for,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of any class of capital
stock of the Company, or agreements, understandings or arrangements to which the
Company is a party, or by which the Company is or may be bound, to issue
additional shares of its capital stock or options, warrants, scrip or rights to
subscribe for, calls or commitment of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, any shares of any
class of its capital stock.  The Company agrees to inform the Investor
in writing of any additional warrants granted prior to the Closing
Date.

     

    4.3.4   The
Company on the Closing Date (i) will have full right, power, and authority to
sell, assign, transfer, and deliver, by reason of record and beneficial
ownership, to the Investor, the Company Shares hereunder, free and clear of all
liens, charges, claims, options, pledges, restrictions, and encumbrances
whatsoever; and (ii) upon conversion of the Convertible Note or exercise of the
Warrants, the Investor will acquire good and marketable title to such Shares,
free and clear of all liens, charges, claims, options, pledges, restrictions,
and encumbrances whatsoever, except as otherwise provided in this Agreement as
to the limitation on the voting rights of such Shares in certain
circumstances.

     

    4.4           Authority.
The Company has all requisite corporate power and authority to execute and
deliver this Agreement, the Convertible Note, and the Warrants, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.  The execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company is necessary to authorize this
Agreement or to consummate the transactions contemplated hereby except as
disclosed in this Agreement.  This Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.

     

    4.5           No
Conflict; Required Filings and Consents. The execution and delivery of
this Agreement by the Company does not, and the performance by the Company of
their respective obligations hereunder will not:  (i) conflict with or
violate the Articles or By-Laws of the Company; (ii) conflict with, breach or
violate any federal, state, foreign or local law, statute, ordinance, rule,
regulation, order, judgment or decree (collectively, "Laws")
in effect as of the date of this Agreement and applicable to the Company; or
(iii) result in any breach of, constitute a default (or an event that with
notice or lapse of time or both would become a default) under, give to any other
entity any right of termination, amendment, acceleration or cancellation of,
require payment under, or result  in the creation of a lien or
encumbrance on any of the properties or assets of the Company pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company is a party or
by the Company or any of its properties or assets is bound.  Excluding
from the foregoing are such violations, conflicts, breaches, defaults,
terminations, accelerations, creations of liens, or incumbency that would not,
in the aggregate, have a Material Adverse Effect.

    


    NOTE
PURCHASE AGREEMENT BETWEEN CHINA FOR-GEN CORPORATION

    AND
INVESTORS LISTED IN SCHEDULE A

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    4.6           Report
and Financial Statements. The Company’s Audited Report dated _December
31, 2007 contains the audited financial statements of the
Company.  The Company agrees to provide the Investor, once it becomes
available, the Audited Reports and interim periods for 2008 and 2009
(collectively, the “Financial
Statements”). Each of the balance sheets contained in or incorporated by
reference into any such Financial Statements (including the related notes and
schedules thereto) fairly presented the financial position of the Company, as of
its date, and each of the statements of income and changes in stockholders’
equity and cash flows or equivalent statements in such Financial Statements
(including any related notes and schedules thereto) fairly presents, changes in
stockholders’ equity and changes in cash flows, as the case may be, of the
Company, for the periods to which they relate, in each case in accordance with
United States generally accepted accounting principles (“U.S.
GAAP”) consistently applied during the periods involved, except in each
case as may be noted therein, subject to normal year-end audit adjustments in
the case of unaudited statements.  The books and records of the
Company have been, and are being, maintained in all material respects in
accordance with U.S. GAAP and any other applicable legal and accounting
requirements and reflect only actual transaction.

     

    4.7           Compliance
with Applicable Laws. The Company is not in violation of, or, to the
knowledge of the Company is under investigation with respect to or has been
given notice or has been charged with the violation of any Law of a governmental
agency, except for violations which individually or in the aggregate do not have
a Material Adverse Effect.

     

    4.8           Brokers. Except as set forth on
Schedule 4.8, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or Commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.  All costs of brokers, finders, investment
bankers, and any costs associated with the identification, purchase, and fees of
the shell or any other vehicle to go public will be borne solely by the
Company.

     

    4.9           Litigation.
To the knowledge of the Company, no litigation, claim, or other proceeding
before any court or governmental agency is pending or to the knowledge of the
Company, threatened against the Company, the prosecution or outcome of which may
have a Material Adverse Effect.

    


    NOTE
PURCHASE AGREEMENT BETWEEN CHINA FOR-GEN CORPORATION

    AND
INVESTORS LISTED IN SCHEDULE A

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    4.10         Exemption
from Registration. Subject to the accuracy of the Investor’s
representations in Article V, except as required pursuant to the Registration
Rights Agreement, the sale of the Common Note and Warrants by the Company to the
Investor will not require registration under the 1933 Act, but may require
registration under New York State securities law if applicable to the
Investor.  When validly converted in accordance with the terms of the
Convertible Note, and upon exercise of the Warrants in accordance with their
terms, the Shares underlying the Convertible Note and the Warrants will be duly
and validly issued, fully paid, and non-assessable.  The Company is
issuing the Convertible Note and the Warrants in accordance with and in reliance
upon the exemption from securities registration afforded, inter alia, by Rule
506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or
Section 4(2) of the 1933 Act; provided, however, that certain filings and
registrations may be required under state securities “blue sky” laws depending
upon the residency of the Investor.

     

    4.11         No
General Solicitation or Advertising in Regard to this Transaction.
Neither the Company nor any of its Affiliates nor, to the knowledge of the
Company, any Person acting on its or their behalf (i) has conducted or will
conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D as promulgated by the SEC under the 1933 Act) or general
advertising with respect to the sale of the Convertible Note or Warrants, or
(ii) made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the
Convertible Note or Warrants, under the 1933 Act, except as required
herein.

     

    4.12         No
Material Adverse Effect. Except as set forth in Schedule 4.13 attached
hereto, since December 31, 2007, no event or circumstance resulting in a
Material Adverse Effect has occurred or exists with respect to the Company. No
material supplier or customer has given notice, oral or written, that it intends
to cease or reduce the volume of its business with the Company from historical
levels. Since December 31, 2007, no event or circumstance has occurred or exists
with respect to the Company or its businesses, properties, prospects, operations
or financial condition, that, under any applicable law, rule or regulation,
requires public disclosure or announcement prior to the date hereof by the
Company but which has not been so publicly announced or disclosed in writing to
the Investor.

     

    4.13         Material
Non-Public Information. The Company has not disclosed to the Investor any
material non-public information that (i) if disclosed, would reasonably be
expected to have a material effect on the price of the Common Stock or (ii)
according to applicable law, rule or regulation, should have been disclosed
publicly by the Company prior to the date hereof but which has not been so
disclosed.

    


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    AND
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    4.14         Internal
Controls And Procedures. The Company maintains books and records and
internal accounting controls which provide reasonable assurance that (i) all
transactions to which the Company or any subsidiary is a party or by which its
properties are bound are executed with management's authorization; (ii) the
recorded accounting of the Company's consolidated assets is compared with
existing assets at regular intervals; (iii) access to the Company's consolidated
assets is permitted only in accordance with management's authorization; and (iv)
all transactions to which the Company or any subsidiary is a party or by which
its properties are bound are recorded as necessary to permit preparation of the
financial statements of the Company in accordance with U.S. generally accepted
accounting principles.

     

    4.15         Full
Disclosure.  No representation or warranty made by the Company
in this Agreement and no certificate or document furnished or to be furnished to
the Investor pursuant to this Agreement contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not
misleading.

     

    4.16         Independent
Board.  Within three (3) months post becoming a publicly traded
entity on a United States exchange, the Company agrees to establish a Board of
Directors consisting of a minimum of five directors with a majority being
independent as defined by the NASDAQ Rules.  Such Audit and
Compensation Committees of the Board of Directors of the Company will be
comprised of independent directors.

    


    ARTICLE
V

    


     REPRESENTATIONS
AND WARRANTIES OF THE INVESTORS

    


    The
Investor represents and warrants to the Company that:

    


    5.1           Organization
and Standing of the Investor. The Investor is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware. The state in which any offer to purchase shares
hereunder was made or accepted by such Investor is the state shown as such
Investor’s address. The Investor was not formed for the purpose of investing
solely in the Convertible Note, the Warrants or the shares of Common Stock which
are the subject of this Agreement.

     

    5.2           Authorization
and Power. The Investor has the requisite power and authority to enter
into and perform this Agreement and to purchase the securities being sold to it
hereunder. The execution, delivery and performance of this Agreement by the
Investor and the consummation by the Investor of the transactions contemplated
hereby have been duly authorized by all necessary limited liability company
action where appropriate. This Agreement and the Registration Rights Agreement
have been duly executed and delivered by the Investor and at the Closing shall
constitute valid and binding obligations of the Investor enforceable against the
Investor in accordance with their 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, creditors' rights and remedies or by
other equitable principles of general application.

    


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

     

    5.4           Financial
Risks. The Investor acknowledges that such Investor is able to bear the
financial risks associated with an investment in the securities being purchased
by the Investor from the Company and that it 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. The Investor is capable of evaluating the risks and
merits of an investment in the securities being purchased by the Investor from
the Company by virtue of its experience as an investor and its knowledge,
experience, and sophistication in financial and business matters and the
Investor is capable of bearing the entire loss of its investment in the
securities being purchased by the Investor from the Company.

     

    5.5           Accredited
Investor. The Investor is (i) an “accredited investor” as that term is
defined in Rule 501 of Regulation D promulgated under the 1933 Act by reason of
Rule 501(a)(3) and (6), (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the entire loss of its investment
in the securities being purchased by the Investor from the Company.

    


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    5.6           Brokers.
Except as set forth in Schedule 4.8, no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or Commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Investor.

     

    5.7           Knowledge
of Company. The
Investor and such Investor’s advisors, if any, have been, upon request,
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the securities
being purchased by the Investor from the Company.  The Investor and
such Investor’s advisors, if any, have been afforded the opportunity to ask
questions of the Company and have received complete and satisfactory answers to
any such inquiries.

     

    5.8           Risk
Factors. The
Investor understands that such Investor’s investment in the securities being
purchased by the Investor from the Company involves a high degree of
risk.  The Investor understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the securities being purchased by the Investor
from the Company. The Investor warrants that such Investor is able to bear the
complete loss of such Investor’s investment in the securities being purchased by
the Investor from the Company.

     

    5.9           Full
Disclosure. No representation or warranty made by the Investor in this
Agreement and no certificate or document furnished or to be furnished to the
Company pursuant to this Agreement contains or will contain any untrue statement
of a material fact, or omits or will omit to state a material fact necessary to
make the statements contained herein or therein not misleading. Except as set
forth or referred to in this Agreement, Investor does not have any agreement or
understanding with any person relating to acquiring, holding, voting or
disposing of any equity securities of the Company.

     

    5.10         Payment
of Due Diligence Expenses. Upon any investment in the Company post the
initial [    ] investment by [Investor], the Company will
first disburse at the instruction of [Investor] the amount of
[     ] for due diligence expenses.


     

    ARTICLE
VI

    


    COVENANTS
OF THE COMPANY

    


    6.1           Registration
Rights. The Company shall cause the Registration Rights Agreement to
remain in full force and effect according to the provisions of the Registration
Rights Agreement and the Company shall comply in all material respects with the
terms thereof.

     

    6.2           Reservation
of Common Stock. As of the date hereof, the Company has reserved and the
Company shall continue to reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling the
Company to issue all of the shares of Common Stock underlying the Convertible
Note and Warrants.

    


    NOTE
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    AND
INVESTORS LISTED IN SCHEDULE A

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    6.3           Compliance
with Laws. The Company hereby agrees to comply in all respects with the
Company's reporting, filing and other obligations under the Laws.

     

    6.4           Corporate
Existence; Conflicting Agreements. The Company will take all steps
necessary to preserve and continue the corporate existence of the Company. The
Company shall not enter into any agreement, the terms of which agreement would
restrict or impair the right or ability of the Company to perform any of its
obligations under this Agreement or any of the other agreements attached as
exhibits hereto.

     

    6.5           Listing,
Securities Exchange Act of 1934 and Rule 144 Requirements. Once publicly
traded on a United States exchange, the Company is required to maintain that
current listing or a listing on a higher exchange and maintain its status as a
Company regulated under the 1934 Act. If for any time within the 24 month period
after the Closing the Company shall become delinquent in its reporting such that
the Investor are unable to utilize Rule 144 for re-sales of Common Stock, then
the Company shall pay to the Investor as liquidated damages and not as a
penalty, two percent (2%) of the face amount of Convertible Notes which
remain outstanding per month in cash or PIK at the option of the Investor.
Such damages shall cease at the time the Company begins complying with the
standards as mentioned above in Section 6.6.

     

    6.6           Preferred
Stock. On or
prior to the Closing Date, the Company will cause to be cancelled all preferred
stock of the Company. For a period of three years from the closing the Company
will not issue any preferred stock of the Company.

     

    6.7           Convertible
Debt. On or prior
to the Second Payment, the Company will cause to be cancelled all convertible
debt in the Company with the exception of the Convertible Notes issued to the
Investor. For a period of three years from the Closing Date the Company will not
issue any convertible debt.

     

    6.8           Debt
Limitation. The
Company agrees for two years after the Second Payment not to enter into any
borrowings of more than three times as much as the sum of the EBITDA (defined as
earnings before interest, tax, depreciation and amortization) from recurring
operations over the past four quarters.

     

    6.9           Reset
Equity Deals. On
or prior to the Closing Date, the Company will cause to be cancelled any and all
reset features related to any securities outstanding that could result in
additional securities being issued. For a period of 24 months from the Closing
the Company will not enter into any transactions that have any reset features
that could result in additional securities being issued.

    


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INVESTORS LISTED IN SCHEDULE A

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    6.10         Independent
Directors. The Company shall have caused the appointment of the majority
of the board of directors to be qualified independent directors, as defined by
the NASDAQ listing requirements, before Closing. If at any time after Closing
the board shall not be composed in the majority of qualified independent
directors, the Company shall pay to the Investor, pro rata, as liquidated
damages and not as a penalty, an amount equal to twenty-four percent (24%) of
the Purchase Price per annum, payable monthly in cash or Convertible Notes at
the option of the Investor.  The parties agree that the only damages
payable for a violation of the terms of this Agreement with respect to which
liquidated damages are expressly provided shall be such liquidated
damages.  Nothing shall preclude the Investor from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement. The parties hereto agree that the liquidated damages provided for in
this Section 6.10 constitute a reasonable estimate of the damages that may be
incurred by the Investor by reason of the failure of the Company to appoint at
least two independent directors in accordance with the provision
hereof.

     

    6.11         Independent
Directors Become Majority of Audit and Compensation
Committees.  The Company will cause the appointment of a
majority of outside directors to the audit and compensation committees of the
board of directors within three (3) months of becoming a publicly traded entity
on a United States Exchange.  If at any time after three months of
becoming a publicly traded entity on the OTCBB, NYSE AMEX, NASDAQ, or NYSE, such
independent directors do not compose the majority of the audit and compensation
committees, the Company shall pay to the Investors, pro rata, as liquidated
damages and not as a penalty, an amount equal to twenty-four percent (24%) of
the Purchase Price per annum, payable monthly in cash or Convertible Notes at
the option of the Investor.  The parties agree that the only damages
payable for a violation of the terms of this Agreement with respect to which
liquidated damages are expressly provided shall be such liquidated
damages.  Nothing shall preclude the Investor from pursuing other
remedies or obtaining specific performance or other equitable relief with
respect to this Agreement.

     

    6.12         Use of
Proceeds. The Company will use $135,000 of the proceeds from the sale of
the Convertible Notes for the completion of 2008 and 2009 interim audits and
legal fees.  The balance of the Purchase Price and the Warrants
(excluding amounts paid by the Company for legal and administrative fees in
connection with the sale of such securities) shall be used for the purchase of a
United States listed public shell company, registered capital requirements, and
working capital.

     

    6.13         Price
Adjustment. From
the date hereof until such time as the Investor hold less than 10% of the
original principal amount of the Convertible Notes, if the Company closes on the
sale of a note or notes, shares of Common Stock, or shares of any class of
preferred stock at a price per share of Common Stock, or with a conversion right
to acquire Common Stock at a price per share of Common Stock, that is less than
the Conversion Price (as adjusted to the capitalization per share as of the
Closing Date, following any stock splits, stock dividends, or the like)
(collectively, the “Subsequent Conversion Price”), the Company shall make a
post-closing adjustment in the Conversion Price so that the effective price per
share paid by the Investor is reduced to being equivalent to such lower
conversion price after taking into account any prior conversions of the
Convertible Note and/or exercises of the Warrant.

    


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    6.14         Price
Adjustment Based on Earnings Per Share. In the event the Company’s
Net Income for the year ended December 31, 2009 is less than $.4565 per share on
a fully-diluted basis, then the Conversion Price shall be reduced by a
percentage equal to the percentage shortfall from $.4565 per share (where Net
Income on a fully diluted basis shall always be defined as earnings from
continuing operations before any non-cash items on a pre- tax fully diluted
basis (including dilution from any options, warrants and convertible securities)
as reported for the fiscal year ended December 31, 2009)..  The
Conversion Price shall be reduced proportionately by 0% if the earnings are
$.4565 per share and by 75% if the earnings are $.1141 per share. For example,
if the Company earns $.3652 per share, or 20% below $.4565 per share, then the
Conversion Price shall be reduced by 20%. Such reduction shall automatically be
in effect at the time the December 31, 2009 financial results are reported or at
any other time that the Investor and the Company have a written and executed
agreement stating otherwise, and shall be made from the starting Conversion
Price of the Convertible Notes being the Conversion Price of the Convertible
Notes at that time, and shall be cumulative upon any other changes to the
Conversion Price of the Convertible Note that may already have been made.


     

     In
the event the Company’s Net Income for the year ended December 31, 2010 is less
than $.6163 per share on a fully-diluted basis, then the Conversion Price shall
be reduced by a percentage equal to the percentage shortfall from $.6163 per
share (where Net Income on a fully diluted basis shall always be defined as
earnings from continuing operations before any non-cash items on a pre- tax
fully diluted basis (including dilution from any options, warrants and
convertible securities) as reported for the fiscal year ended December
31,  2010)..  The Conversion Price shall be reduced
proportionately by 0% if the earnings are $.6163 per share and by 75% if the
earnings are $.1541 per share. For example, if the Company earns $.4930 per
share, or 20% below $.6163 per share, then the Conversion Price shall be reduced
by 20%. Such reduction shall automatically be in effect at the time the December
31, 2010 financial results are reported or at any other time that the Investor
and the Company have a written and executed agreement stating otherwise, and
shall be made from the starting Conversion Price of the Convertible Notes being
the Conversion Price of the Convertible Notes at that time, and shall be
cumulative upon any other changes to the Conversion Price of the Convertible
Note that may already have been made.

     

    Such
adjustments shall be made automatically within five business days of the audited
numbers being reported to the SEC.

     

    6.15         Insider
Selling. The
earliest any “Insiders” can start selling their shares shall be 24 months from
the date the Registration Statement that is to be filed to register the common
stock underlying the Convertible Note and Warrants becomes effective. Insiders
shall include all officers, consultants and directors of the Company. The
managing members of the Investor and the Investor shall not be considered
“Insiders”.

    


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    AND
INVESTORS LISTED IN SCHEDULE A

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    6.16         Employment
and Consulting Contracts. For two years after the
Closing, before granting such awards, the Company must have a unanimous opinion
and approval from the Compensation Committee of the Board of Directors that any
awards other than salary are usual, appropriate and reasonable for any
officer, director, employee or consultant holding a similar position in other
fully reporting public companies with independent majority boards with similar
market capitalizations in the same industry with securities listed on the OTCBB,
ASE, NYSE or NASDAQ.

     

    6.17         Subsequent
Equity Sales.  From the date
hereof until such time as the Investor hold less than 10% of the original
principal amount of the Convertible Notes, the Company shall be prohibited from
effecting or entering into an agreement to effect any Subsequent Financing
involving a “Variable
Rate Transaction” or an “MFN Transaction”
(each as defined below).  The term “Variable Rate
Transaction” shall mean a transaction in which the Company issues or
sells (i) any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive additional shares of Common
Stock either (A) at a conversion, exercise or exchange rate or other price that
is based upon and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or
equity securities, or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock.  The term “MFN Transaction”
shall mean a transaction in which the Company issues or sells any securities in
a capital raising transaction or series of related transactions which grants to
an investor the right to receive additional shares based upon future
transactions of the Company on terms more favorable than those granted to such
investor in such offering.  Any Purchaser shall be entitled to obtain
injunctive relief against the Company to preclude any such issuance, which
remedy shall be in addition to any right to collect damages. Notwithstanding the
foregoing, this Section 6.19 shall not apply in respect of an Exempt Issuance,
except that no Variable Rate Transaction or MFN Transaction shall be an Exempt
Issuance.

     

    6.18         Stock
Splits. All forward and reverse stock splits shall affect all equity and
derivative holders proportionately.

     

    6.19         Chief
Financial Officer. Within three (3) months post the Company reverse
merging with a public entity to become the surviving entity the Company will
have employed an English-speaking Chief Financial Officer with US GAAP
accounting and public reporting experience to the satisfaction of
[Investor].  If at any time after three months post Closing such Chief
Financial Officer is not employed by the Company, the Company shall pay to the
Investor, pro rata, as liquidated damages and not as a penalty, an amount equal
to twenty-four percent (24%) of the Purchase Price per annum, payable monthly in
cash or Convertible Notes at the option of the Investor.  The parties
agree that the only damages payable for a violation of the terms of this
Agreement with respect to which liquidated damages are expressly provided shall
be such liquidated damages.  Nothing shall preclude the Investor from
pursuing other remedies or obtaining specific performance or other equitable
relief with respect to this Agreement.

    


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    6.20         Purchase
of United States listed Shell Company (the “Shell”).  Out of
the investment proceeds, the Company will reserve up to Three Hundred and Fifty
Thousand Dollars ($350,000.00) and a maximum of Three and One-Half Percent
(3.50%) of the equity of the Company (such capitalization based on post reverse
merger into the Shell, but pre the Investor Option and any Warrant
exercise).  Such Shell and terms of purchase shall be subject to the
approval of [Investor].

     

    6.21         Investor
Relations and Awareness.  The Company agrees to allocate a
minimum of $120,000 of the Purchase Price to establish an investor relations and
public marketing program, at the approval of
[Investor].  Additionally, management of the Company agrees to travel
to the United States a minimum of three times per year for the next four years
for the sole purpose of communicating with current and prospective investors in
the Company.  For each time the Company fails to travel to the United
States each year, the Company shall pay to the Investors, pro rata, as
liquidated damages and not as a penalty, an amount equal to ten percent (10%) of
the Purchase Price per annum, payable monthly in cash or Convertible Notes at
the option of the Investor.  The parties agree that the only damages
payable for a violation of the terms of this Agreement with respect to which
liquidated damages are expressly provided shall be such liquidated
damages.  Nothing shall preclude the Investor from pursuing other
remedies or obtaining specific performance or other equitable relief with
respect to this Agreement.

     

    6.22         2008
Audit.    Upon Closing, the Company agrees to
expeditiously complete the 2008 audit and review of relevant quarters in 2009 in
order to comply with 1934 Act upon the reverse merger with the
Shell.  Should the audit show less than $8.35 million in net income
for the fiscal year 2008, then the conversion price of the Convertible Note will
be adjusted by such percentage which is equal to the percentage that net income
for such year is less than $8.35 million (the “2008 Missed
Percentage”).  If the 2008 Missed Percentage is greater than 30%, or
if the Company fails to complete the process of becoming a public company listed
on a United States exchange, then the [     ]
Convertible Note held by [Investor] shall become payable immediately, plus
accrued interest, plus liquidated damages in the amount of $25,000.00, this
Agreement shall be terminated and the Warrants shall be cancelled and of no
further force of effect.  China Financial Services, Inc. will be held
fully liable for payment of such principal, interest, and liquidated damages
under this Section 6.25 to [Investor] should the Company fail to make such
payment, in full, within 10 business days of notification by the [Investor] of
the requirement of payment.

    


    ARTICLE
VII

    


    COVENANTS
OF THE INVESTOR

    


    7.1           Compliance
with Law. The Investor's trading activities with respect to shares of the
Company's Common Stock will be in compliance with all applicable state and
federal securities laws, rules and regulations and rules and regulations of any
public market on which the Company's Common Stock is listed.

    


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    7.2           Transfer
Restrictions. The Investor’s
acknowledge that the issuance of (1) the Convertible Note, Warrants and Shares
underlying the Convertible Note and Warrants have not been registered under the
provisions of the 1933 Act, and may not be transferred unless (A) subsequently
registered thereunder or (B) the Investor shall have delivered to the Company an
opinion of counsel, reasonably satisfactory in form, scope and substance to the
Company, to the effect that the Convertible Note, Warrants and shares underlying
the Notes and Warrants to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; and (2) any sale of the
Convertible Note, Warrants and Shares underlying the Convertible Note and
Warrants made in reliance on Rule 144 promulgated under the 1933 Act may be made
only in accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such securities under circumstances in which the
seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC
thereunder.

     

    7.3           Restrictive
Legend. The
Investor acknowledges and agrees that the Convertible Note, the Warrants and the
Shares underlying the Convertible Note and Warrants, and, until such time as the
Shares underlying the Convertible Note and Warrants have been registered under
the 1933 Act and sold in accordance with an effective Registration Statement,
certificates and other instruments representing any of the Shares, shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of any such securities):

     

    "THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED,
SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT."

     

    7.4           Amendment
to Certificate of Incorporation. Investor hereby agrees to
vote any shares of capital stock that it may own directly or beneficially, for
the amendment to the Certificate of Incorporation referenced in Section
6.20.  Pending adoption of such amendment, Investor hereby agrees for
itself and its successors and assigns that neither this Section 7.4 or Section
6.20 above, or any restriction on exercise of the Warrant shall be amended,
modified or waived without the consent of the holders of a majority of the
shares of Common Stock held by Persons who are not Affiliates of the Company, or
the Investor or Affiliates of the Investor.

    


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    AND
INVESTORS LISTED IN SCHEDULE A

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    ARTICLE
VIII

     

    CONDITIONS PRECEDENT TO THE COMPANY’S
OBLIGATIONS

    


    The obligation of the Company to
consummate the transactions contemplated hereby shall be subject to the
fulfillment, on or prior to Closing Date, of the following
conditions:

    


    8.1           No
Termination. This Agreement shall not have been terminated pursuant to
Article X hereof.

    


    8.2           Representations
True and Correct. The representations and warranties of the Investor
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as if made on as of
the Closing Date.

    


    8.3           Compliance
with Covenants. The Investor shall have performed and complied in all
material respects with all covenants, agreements, and conditions required by
this Agreement to be performed or complied by it prior to or at the Closing
Date.

    


    8.4           No
Adverse Proceedings. On the Closing Date, no action or proceeding shall
be pending by any public authority or individual or entity before any court or
administrative body to restrain, enjoin, or otherwise prevent the consummation
of this Agreement or the transactions contemplated hereby or to recover any
damages or obtain other relief as a result of the transactions proposed
hereby.

    


    ARTICLE
IX

    


    CONDITIONS PRECEDENT TO INVESTOR’S
OBLIGATIONS

    


    The
obligation of the Investors to consummate the transactions contemplated hereby
shall be subject to the fulfillment, on or prior to Closing Date unless
specified otherwise, of the following conditions:

    


    9.1           No
Termination. This Agreement shall not have been terminated pursuant to
Article X hereof.

     

    9.2           Representations
True and Correct. The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as if made on as of
the Closing Date.

     

    9.3           Compliance
with Covenants . The Company
shall have performed and complied in all material respects with all covenants,
agreements, and conditions required by this Agreement to be performed or
complied by it prior to or at the Closing Date.

    


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    9.4           No
Adverse Proceedings. On the Closing Date, no action or proceeding shall
be pending by any public authority or individual or entity before any court or
administrative body to restrain, enjoin, or otherwise prevent the consummation
of this Agreement or the transactions contemplated hereby or to recover any
damages or obtain other relief as a result of the transactions proposed
hereby.

    


    ARTICLE
X

    


    TERMINATION,
AMENDMENT AND WAIVER

    


    10.1         Termination.
This Agreement may be terminated at any time prior to the Closing
Date

     

      10.1.1     by
mutual written consent of the Investor and the Company;

     

      10.1.2     by
the Company upon a material breach of any representation, warranty, covenant or
agreement on the part of the Investor set forth in this Agreement, or the
Investor upon a material breach of any representation, warranty, covenant or
agreement on the part of the Company set forth in this Agreement, or if any
representation or warranty of the Company or the Investor, respectively, shall
have become untrue, in either case such that any of the conditions set forth in
Article VIII or Article IX hereof would not be satisfied (a "Terminating Breach"), and such
breach shall, if capable of cure, not have been cured within five (5) business
days after receipt by the party in breach of a notice from the non-breaching
party setting forth in detail the nature of such breach.

     

    10.2         Effect of
Termination. Except as otherwise provided herein, in the event of the
termination of this Agreement pursuant to Section 10.1 hereof, there shall be no
liability on the part of the Company or the Investor or any of their respective
officers, directors, agents or other representatives and all rights and
obligations of any party hereto shall cease; provided that in the event of a
Terminating Breach, the breaching party shall be liable to the non-breaching
party for all costs and expenses incurred by the non-breaching party not to
exceed $10,000.00.

     

    10.3         Amendment.
This Agreement may be amended by the parties hereto any time prior to the
Closing Date by an instrument in writing signed by the parties
hereto.

     

    10.4         Waiver.
At any time prior to the Closing Date, the Company or the Investor, as
appropriate, may: (a) extend the time for the performance of any of the
obligations or other acts of other party or; (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto which have been made to it or them; or (c) waive compliance with
any of the agreements or conditions contained herein for its or their
benefit.  Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party or parties to be bound
hereby.

    


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    AND
INVESTORS LISTED IN SCHEDULE A

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    ARTICLE
XI

    


    GENERAL
PROVISIONS

    


    11.1         Transaction
Costs. Except as otherwise provided herein, each of the parties shall pay
all of his or its costs and expenses (including attorney fees and other legal
costs and expenses and accountants’ fees and other accounting costs and
expenses) incurred by that party in connection with this Agreement; provided,
the Company shall pay Investor such due diligence expenses as described in
section 5.10.

     

    11.2         Indemnification.
The Investor agrees to indemnify, defend and hold the Company (following the
Closing Date) and its officers and directors harmless against and in respect of
any and all claims, demands, losses, costs, expenses, obligations, liabilities
or damages, including interest, penalties and reasonable attorney’s fees, that
it shall incur or suffer, which arise out of or result from any breach of this
Agreement by such Investor or failure by such Investor to perform with respect
to any of its representations, warranties or covenants contained in this
Agreement or in any exhibit or other instrument furnished or to be furnished
under this Agreement.  The Company agrees to indemnify, defend and
hold the Investor harmless against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, liabilities or damages, including
interest, penalties and reasonable attorney’s fees, that it shall incur or
suffer, which arise out of, result from or relate to any breach of this
Agreement or failure by the Company to perform with respect to any of its
representations, warranties or covenants contained in this Agreement or in any
exhibit or other instrument furnished or to be furnished under this
Agreement.  In no event shall the Company or the Investors be entitled
to recover consequential or punitive damages resulting from a breach or
violation of this Agreement nor shall any party have any liability hereunder in
the event of gross negligence or willful misconduct of the indemnified
party.  In the event of a breach of this Agreement by the Company, the
Investor shall be entitled to pursue a remedy of specific performance upon
tender into the Court an amount equal to the Purchase Price hereunder. The
indemnification by the Investor shall be limited to the Fifty Thousand Dollars
($50,000.00) paid at any given time.

     

    11.3         Headings.
The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

     

    11.4         Entire
Agreement. This Agreement (together with the Schedule, Exhibits, Warrants
and documents referred to herein) constitute the entire agreement of the parties
and supersede all prior agreements and undertakings, both written and oral,
between the parties, or any of them, with respect to the subject matter
hereof.

    


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    AND
INVESTORS LISTED IN SCHEDULE A

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    11.5         Notices.
All notices and other communications hereunder shall be in writing and shall be
deemed to have been given (i) on the date they are delivered if delivered in
person; (ii) on the date initially received if delivered by facsimile
transmission followed by registered or certified mail confirmation; (iii) on the
date delivered by an overnight courier service; or (iv) on the third business
day after it is mailed by registered or certified mail, return receipt requested
with postage and other fees prepaid as follows:

    


    If to the
Company:

    


    China
For-Gen

    87 Dennis
Street

    Garden
City Park, NJ 11040

    Attention:
Sherry Li

    


    If to the
Investor:

    


    To
addresses listed in Schedule A

    


    11.6         Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party.  Upon such determination that any such term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent
possible.

     

    11.7         Binding
Effect. All the terms and provisions of this Agreement whether so
expressed or not, shall be binding upon, inure to the benefit of, and be
enforceable by the parties and their respective administrators, executors, legal
representatives, heirs, successors and assignees.

     

    11.8         Preparation
of Agreement. This Agreement shall not be construed more strongly against
any party regardless of who is responsible for its preparation.  The
parties acknowledge each contributed and is equally responsible for its
preparation.

     

    11.9         Governing
Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to applicable
principles of conflicts of law.

    


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    11.10      
Jurisdiction.
This Agreement shall be exclusively governed by and construed in accordance with
the laws of the State of New York. If any action is brought among the parties
with respect to this Agreement or otherwise, by way of a claim or counterclaim,
the parties agree that in any such action, and on all issues, the parties
irrevocably waive their right to a trial by jury. Exclusive jurisdiction and
venue for any such action shall be the Federal Courts serving the State of New
York. In the event suit or action is brought by any party under this Agreement
to enforce any of its terms, or in any appeal therefrom, it is agreed that the
prevailing party shall be entitled to reasonable attorneys fees to be fixed by
the arbitrator, trial court, and/or appellate court.

     

    11.11      
Preparation
and Filing of Securities and Exchange Commission filings. The Investor shall
reasonably assist and cooperate with the Company in the preparation of all
filings with the SEC after the Closing Date due after the Closing
Date.

     

    11.12      
Further
Assurances, Cooperation. Each party shall, upon reasonable request by the
other party, execute and deliver any additional documents necessary or desirable
to complete the transactions herein pursuant to and in the manner contemplated
by this Agreement.  The parties hereto agree to cooperate and use
their respective best efforts to consummate the transactions contemplated by
this Agreement.

     

    11.13      
Survival.
The representations, warranties, covenants and agreements made herein shall
survive the Closing of the transaction contemplated hereby.

     

    11.14      
Third
Parties. Except
as disclosed in this Agreement, nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties hereto and their respective
administrators, executors, legal representatives, heirs, successors and
assignees.  Nothing in this Agreement is intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action over or against any party to this Agreement.

     

    11.15      
Failure
or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the
part of any party hereto in the exercise of any right hereunder shall impair
such right or be construed to be a waiver of, or acquiescence in, any breach of
any representation, warranty, covenant or agreement herein, nor shall nay single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right.  All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

     

    11.16      
Counterparts.
This Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. A facsimile transmission of this signed Agreement shall
be legal and binding on all parties hereto.

    


    [SIGNATURES
ON FOLLOWING PAGE]

    


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    AND
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    IN WITNESS WHEREOF, the
Investors and the Company have as of the date first written above executed this
Agreement.

    


    THE
COMPANY:

    


    CHINA
FOR-GEN CORP

    


    
      
        
          	
                  By:

                	
                    

                
	 
      	
                  Chief
      Executive Officer

                
	 
      	 
      
	
                  By:

                	
                    

                
	 
      	
                  Chairman of the
Board

                


        

      

    

    


    INVESTORS:

    


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    AND
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