Unassociated Document


    
      EXECUTION
        COPY

    

     

    INVESTMENT
      AGREEMENT

     

    INVESTMENT
      AGREEMENT
      (the
      "Agreement"),
      dated
      as of April 5, 2007, by and among Benda Pharmaceutical, Inc., a Delaware
      corporation, with headquarters located at Changjiang Tower, 23rd
      Floor,
      No.1 Minquan Road, Wuhan, Hubei Province, People’s Republic of China
      (the "Company"),
      and
      the undersigned buyers (each, a "Buyer",
      and
      collectively, the "Buyers").

     

    WHEREAS:

     

    A. The
      Company, through its subsidiary Hubei Tongji Benda Ebei Pharmaceutical Co.,
      Ltd,
      a People’s Republic of China entity) (“Tongji
      Benda”)
      has
      entered into various share purchase agreements with certain shareholders of
      Shenzhan Sibiono Gene Tech Co., Ltd, a People’s Republic of China company
      (“Sibiono” and the shareholders referred to as the “Sibiono
      Shareholders”)
      pursuant to which the Company, through Tongji Benda, would acquire approximately
      sixty eight percent (68%), and possibly more, of the outstanding capital stock
      of Sibiono (the “Sibiono
      Acquisition”)
      which
      is anticipated to be completed and close on or around April 1, 2007.


     

    B. In
      order
      to obtain additional funding to complete the Sibiono Acquisition, the Company
      wishes to sell and Buyer wishes to purchase, upon the terms and conditions
      stated in this Agreement, that aggregate number of Units set forth opposite
      such
      Buyer's name in column (3) on the Schedule of Buyers attached hereto. As used
      herein, a "Unit" shall consist (i) a convertible promissory note (a
“Note”)
      in the
      original principal Amount (“Principal Amount”) of Thirty Thousand Dollars
      ($30,000) which shall be convertible into 54,087 shares of the Company's common
      stock, par value $0.001 per share (the "Common
      Stock"),
      in
      substantially the form attached hereto as Exhibit
      “A”,
      and
      (ii) a warrant, in substantially the form attached hereto as Exhibit
      B
      (a
“Warrant”)
      to
      acquire 54,087 shares of Common Stock (defined herein) at an exercise price
      of
      $0.555 per share. Each Warrant shall be exercisable to purchase shares of Common
      Stock upon the terms and conditions set forth in the Warrants. The shares of
      Common Stock to be issued upon conversion of the Note are referred to herein
      as
      the “Note
      Shares”
and
      those to be issued upon exercise of a Warrant are referred to herein as the
      “Warrant
      Shares”.

     

    C. The
      Company and Buyer are executing and delivering this Agreement in reliance upon
      the exemption from securities registration afforded by Section 4(2) of the
      Securities Act of 1933, as amended (the "1933
      Act"),
      and
      Rule 506 of Regulation D ("Regulation D")
      as
      promulgated by the United States Securities and Exchange Commission (the
      "SEC")
      under
      the 1933 Act. 

     

    D. 
      Contemporaneously with the Closing, the parties hereto will execute and deliver
      a Registration Rights Agreement, substantially in the form attached hereto
      as
Exhibit
      C
      (the
      "Registration
      Rights Agreement"),
      pursuant to which the Company will agree to provide certain registration rights
      with respect to the Registrable Securities (as defined in the Registration
      Rights Agreement) under the 1933 Act and the rules and regulations promulgated
      thereunder, and applicable state securities laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    E. The
      Units, the Notes, the Note Shares, the Warrants and the Warrant Shares
      collectively are referred to herein as the "Securities".

     

    F. The
      Company previously entered into a Securities Purchase Agreement (the
“SPA”)
      dated
      November 15, 2006 between and among the Company, Ever Leader Holdings, Limited
      and the investors (the “Buyers”) listed on the Schedule of Buyers attached
      thereto. Pursuant to the SPA the Company issued a certain number of shares
      of
      Common Stock to the Buyers and warrants (“SPA
      Warrants”)
      to
      purchase additional shares of Common Stock of the Company upon the terms and
      conditions set forth in the SPA Warrants. The Company also entered into a
      registration rights agreement with the Buyers (the “SPA Registration Rights
      Agreement”). In addition, the Company and certain other parties entered into a
      Make-Good Agreement dated November 15, 2006 (the “Make-Good
      Agreement”)
      pursuant to which the number of shares of Common Stock to be issued to the
      Buyers could be increased and the exercise price and number of shares to be
      issued pursuant to the SPA Warrants could be adjusted in certain circumstances.
      

     

    NOW,
      THEREFORE,
      the
      Company and Buyer hereby agree as follows:

     

    1. PURCHASE
      AND SALE OF UNIT.

     

    (a) Purchase
      of Unit.

     

    (i) Units. Subject
      to the satisfaction (or waiver) of the conditions set forth in Sections 6 and
      7
      below, the Company shall issue and sell to Buyer, and Buyer agrees to purchase
      from the Company on the Closing Date (as defined below), the Units.

     

    (ii) Closing.
      The
      date and time of the Closing shall be 10:00 a.m., Eastern Standard Time, on
      the
      Closing Date (or such later date as is mutually agreed to by the Company and
      Buyer) after notification of satisfaction (or waiver) of the conditions to
      the
      Closing set forth in Sections 6 and 7 below, at the offices of Buyer’s.
      Alternatively, the closing can take place by the exchange of final executed
      closing documents between legal counsel for the Company and Buyer. 

     

    (iii) Purchase
      Price.
      The
      purchase price for each Unit (the "Purchase
      Price")
      shall
      be Thirty Thousand Dollars ($30,000).

     

    (b) Form
      of Payment.
      On the
      Closing Date, subject to the satisfaction of the conditions to closing, (i)
      Buyer shall deliver by wire transfer to an account designated by the Company
      no
      later than the close of business, on April 5, 2007 or check, the aggregate
      Purchase Price for the Units, and (ii) the Company shall deliver to Buyer
      the Note and Warrant comprising the Units purchased by Buyer, duly executed
      on
      behalf of the Company and registered in the name of Buyer or its
      designee.

     

    
      
        
        

      

      
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    2. BUYER'S
      REPRESENTATIONS AND WARRANTIES.
      Buyer
      represents and warrants that:

     

    (a) No
      Sale or Distribution.
      Buyer
      is acquiring the Units, Note and Warrant comprising the Units, and upon
      conversion of the Note and exercise of the Warrant (other than pursuant to
      a
      Cashless Exercise (as defined in the Warrant)) will acquire the Note Shares
      and
      Warrant Shares issuable upon the conversion or exercise of the Note or Warrant,
      as the case may be, for its own account and not with a view towards, or for
      resale in connection with, the public sale or distribution thereof, except
      pursuant to sales registered or exempted under the 1933 Act; provided, however,
      that by making the representations herein, Buyer does not agree to hold any
      of
      the Securities for any minimum or other specific term and reserves the right
      to
      dispose of the Securities at any time and from time to time in accordance with
      or pursuant to a registration statement or an exemption under the 1933 Act
      and
      pursuant to the applicable terms of the Transaction Documents (as defined in
      Section 3(b)). Buyer is acquiring the Securities hereunder in the ordinary
      course of its business. Buyer does not presently have any agreement or
      understanding, directly or indirectly, with any Person to distribute any of
      the
      Securities.

     

    (b) Accredited
      Investor Status.
      Buyer
      is an "accredited investor" as that term is defined in Rule 501(a) of Regulation
      D.

     

    (c) Reliance
      on Exemptions.
      Buyer
      understands that the Securities are being offered and sold to it in reliance
      on
      specific exemptions from the registration requirements of United States federal
      and state securities laws and that the Company is relying in part upon the
      truth
      and accuracy of, and Buyer's compliance with, the representations, warranties,
      agreements, acknowledgments and understandings of Buyer set forth herein in
      order to determine the availability of such exemptions and the eligibility
      of
      Buyer to acquire the Securities.

     

    (d) Information.
      Buyer
      and its advisors, if any, have been 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 that have been requested by Buyer. Buyer and
      its advisors, if any, have been afforded the opportunity to ask questions of
      the
      Company. Neither such inquiries nor any other due diligence investigations
      conducted by Buyer or its advisors, if any, or its representatives shall modify,
      amend or affect Buyer's right to rely on the Company's representations and
      warranties contained herein. Buyer understands that its investment in the
      Securities involves a high degree of risk and is able to afford a complete
      loss
      of such investment. Buyer has sought such accounting, legal and tax advice
      as it
      has considered necessary to make an informed investment decision with respect
      to
      its acquisition of the Securities.

     

    (e) No
      Governmental Review.
      Buyer
      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 or the fairness or suitability of the investment
      in the Securities nor have such authorities passed upon or endorsed the merits
      of the offering of the Securities.

     

    (f) Transfer
      or Resale.
      Buyer
      understands that except as provided in the Registration Rights Agreement: (i)
      the Securities have not been and are not being registered under the 1933 Act
      or
      any state securities laws, and may not be offered for sale, sold, assigned
      or
      transferred unless (A) subsequently registered thereunder, (B) Buyer shall
      have
      delivered to the Company an opinion of counsel, in a generally acceptable form,
      to the effect that such Securities to be sold, assigned or transferred may
      be
      sold, assigned or transferred pursuant to an exemption from such registration,
      or (C) Buyer provides the Company with reasonable assurance that such Securities
      can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A
      promulgated under the 1933 Act, as amended (or a successor rule thereto)
      (collectively, "Rule
      144");
      (ii)
      any sale of the Securities made in reliance on Rule 144 may be made only in
      accordance with the terms of Rule 144 and further, if Rule 144 is not
      applicable, any resale of the Securities under circumstances in which the seller
      (or the Person (as defined in Section 3(s)) through whom the sale is made)
      may
      be deemed to be an underwriter (as that term is defined in the 1933 Act) may
      require compliance with some other exemption under the 1933 Act or the rules
      and
      regulations of the SEC thereunder; and (iii) neither the Company nor any other
      Person is under any obligation to register the Securities under the 1933 Act
      or
      any state securities laws or to comply with the terms and conditions of any
      exemption thereunder. The Securities may be pledged in connection with a bona
      fide margin account or other loan or financing arrangement secured by the
      Securities and such pledge of Securities shall not be deemed to be a transfer,
      sale or assignment of the Securities hereunder, and should Buyer effect a pledge
      of Securities it shall not be required to provide the Company with any notice
      thereof or otherwise make any delivery to the Company pursuant to this Agreement
      or any other Transaction Document (as defined in Section 3(b)), including,
      without limitation, this Section 2(f).

     

    
      
        
        

      

      
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    (g) Legends.
      Buyer
      understands that the Note and the Warrant and, until such time as the resale
      of
      the Note Shares or Warrant Shares have been registered under the 1933 Act as
      contemplated by the Registration Rights Agreement, the stock certificates
      representing the Note Shares and Warrant Shares, except as set forth below,
      shall bear any legend as required by the "blue sky" laws of any state and a
      restrictive legend in substantially the following form (and a stop-transfer
      order may be placed against transfer of such stock certificates):

     

    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL,
      IN A
      GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
      NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
      WITH
      A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
      THE
      SECURITIES.

     

    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such legend to the holder of the Securities upon which
      it is
      stamped, if, unless otherwise required by state securities laws, (i) such
      Securities are registered for resale under the 1933 Act, (ii) in connection
      with
      a sale, assignment or other transfer, such holder provides the Company with
      an
      opinion of a law firm reasonably acceptable to the Company (with Wells, Moore,
      Simmons & Hubbard, PLLC being deemed acceptable), in a generally acceptable
      form, to the effect that such sale, assignment or transfer of the Securities
      may
      be made without registration under the applicable requirements of the 1933
      Act,
      or (iii) such holder provides the Company with reasonable assurance that the
      Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule
      144A. If the Company shall fail for any reason or for no reason to issue to
      the
      holder of the Securities within three (3) Trading Days (as defined below) (after
      the occurrence of any of (i) through (iii) above, a certificate without such
      legend to the holder or to issue such Securities to such holder by electronic
      delivery at the applicable balance account at DTC or if the Company fails to
      deliver unlegended Securities within 3 Trading Days of the holder’s election to
      receive such unlegended Securities pursuant to clause (ii) below, and if on
      or
      after such Trading Day the holder purchases (in an open market transaction
      or
      otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
      holder of such Securities that the holder anticipated receiving without legend
      from the Company (a "Buy-In"),
      then
      the Company shall, within three (3) Business Days after the holder's request
      and
      in the holder's discretion, either (i) pay cash to the holder in an amount
      equal
      to the holder's total purchase price (including brokerage commissions, if any)
      for the shares of Common Stock so purchased (the "Buy-In
      Price"),
      at
      which point the Company's obligation to deliver such unlegended Securities
      shall
      terminate, or (ii) promptly honor its obligation to deliver to the holder such
      unlegended Securities as provided above and pay cash to the holder in an amount
      equal to the excess (if any) of the Buy-In Price over the product of (A) such
      number of shares of Common Stock, times (B) the Closing Bid Price (as defined
      in
      the Warrants) on the date of exercise.

     

    
      
        
        

      

      
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    (h) Validity;
      Enforcement.
      This
      Agreement and the Registration Rights Agreement to which Buyer is a party have
      been duly and validly authorized, executed and delivered on behalf of Buyer
      and
      shall constitute the legal, valid and binding obligations of Buyer enforceable
      against Buyer in accordance with their respective terms, except as such
      enforceability may be limited by general principles of equity or to applicable
      bankruptcy, insolvency, reorganization, moratorium, liquidation and other
      similar laws relating to, or affecting generally, the enforcement of applicable
      creditors' rights and remedies.

     

    (i) No
      Conflicts.
      The
      execution, delivery and performance by Buyer of this Agreement and the
      Registration Rights Agreement and the consummation by Buyer of the transactions
      contemplated hereby and thereby will not (i) result in a violation of the
      organizational documents of Buyer 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 Buyer is a
      party, or (iii) result in a violation of any law, rule, regulation, order,
      judgment or decree (including federal and state securities laws) applicable
      to
      Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts,
      defaults, rights or violations which would not, individually or in the
      aggregate, reasonably be expected to have a material adverse effect on the
      ability of Buyer to perform its obligations hereunder.

     

    (j) Certain
      Trading Activities.
      Other
      than with respect to the transactions contemplated herein, since the time that
      Buyer was first contacted by the Company or any other Person regarding this
      investment in the Company neither Buyer nor any Affiliate of Buyer which (x)
      had
      knowledge of the transactions contemplated hereby, (y) has or shares discretion
      relating to Buyer's investments or trading or information concerning Buyer's
      investments and (z) is subject to Buyer's review or input concerning such
      Affiliate's investments or trading (collectively, "Trading
      Affiliates")
      has
      directly or indirectly, nor has any Person acting on behalf of or pursuant
      to
      any understanding with Buyer or Trading Affiliate, effected or agreed to effect
      any transactions in the securities of the Company. Buyer hereby covenants and
      agrees not to, and shall cause its Trading Affiliates not to, engage, directly
      or indirectly, in any transactions in the securities of the Company or involving
      the Company's securities during the period from the date hereof until such
      time
      as (i) the transactions contemplated by this Agreement are first publicly
      announced as described in Section 4(i) hereof or (ii) this Agreement is
      terminated in full pursuant to Section 8 hereof. Notwithstanding
      the foregoing, for avoidance of doubt, nothing contained herein shall constitute
      a representation or warranty, or preclude any actions, with respect to the
      identification of the availability of, or securing of, available shares to
      borrow in order to effect short sales or similar transactions in the
      future.

     

    
      
        
        

      

      
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    3. REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.
      The
      Company represents and warrants to Buyer that, as of the date hereof and as
      of
      the Closing Date as follows (which representations and warranties shall be
      deemed to apply, as appropriate, to each subsidiary of the Company, including,
      without limitation and including Sibiono assuming that the Sibiono Acquisition
      has been fully consummated as of the date hereof):

     

    (a) Organization
      and Qualification.
      The
      Company and its "Subsidiaries"
      (which
      for purposes of this Agreement means any joint venture or any entity in which
      the Company, directly or indirectly, owns any of the capital stock or holds
      an
      equity or similar interest, including without limitation, Sibiono) are entities
      duly organized and validly existing and, to the extent legally applicable,
      in
      good standing under the laws of the jurisdiction in which they are formed,
      and
      have the requisite power and authorization to own their properties and to carry
      on their business as now being conducted. Each of the Company and its
      Subsidiaries is duly qualified as a foreign entity to do business and to the
      extent legally applicable, is in good standing in every jurisdiction in which
      its ownership of property or the nature of the business conducted by it makes
      such qualification necessary, except to the extent that the failure to be so
      qualified or be in good standing would not reasonably be expected to have a
      Material Adverse Effect. As used in this Agreement, "Material
      Adverse Effect"
      means
      any material adverse effect on the business, properties, assets, operations,
      results of operations, condition (financial or otherwise) or prospects of the
      Company and its Subsidiaries, taken as a whole, or on the transactions
      contemplated hereby and the other Transaction Documents or by the agreements
      and
      instruments to be entered into in connection herewith or therewith, or on the
      authority or ability of the Company to perform its obligations under the
      Transaction Documents (as defined below). The Company Subsidiaries are set
      forth
      on Schedule
      3(a).

     

    (b) Authorization;
      Enforcement; Validity.
      The
      Company has the requisite corporate power and authority to enter into and
      perform its obligations under this Agreement, the Registration Rights Agreement,
      the Note, the Warrant and each of the other agreements entered into by the
      parties hereto in connection with the transactions contemplated by this
      Agreement (collectively, the "Transaction
      Documents")
      and to
      issue the Securities in accordance with the terms hereof and thereof. The
      execution and delivery of the Transaction Documents by the Company and the
      consummation by the Company of the transactions contemplated hereby and thereby,
      including, without limitation, the issuance of the Units and the Note and the
      Warrant comprising the Units, the reservation for issuance and the issuance
      of
      the Note Shares and the Warrant Shares issuable upon conversion of the Note
      or
      exercise of the Warrant, as the case may be, have been duly authorized by the
      Company's Board of Directors and other than as set forth in Section 3(e), no
      further filing, consent, or authorization is required by the Company, its Board
      of Directors or its stockholders. This Agreement and the other Transaction
      Documents of even date herewith have been duly executed and delivered by the
      Company, and constitute the legal, valid and binding obligations of the Company,
      enforceable against the Company in accordance with their respective terms,
      except as such enforceability may be limited by general principles of equity
      or
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting generally, the enforcement of applicable
      creditors' rights and remedies.

     

    
      
        
        

      

      
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    (c) Issuance
      of Securities.
      The
      issuance of the Units and Note and Warrant comprising the Units, are duly
      authorized and upon issuance in accordance with the terms of the Transaction
      Documents shall be free from all taxes, liens and charges with respect to the
      issue thereof. As of the Closing, a number of shares of Common Stock shall
      have
      been duly authorized and reserved for issuance which equals or exceeds the
      sum
      of 150% of the maximum aggregate number of shares of Common Stock issuable
      upon
      conversion of the Note and exercise of the Warrant. Upon conversion in
      accordance with the Note and exercise in accordance with the Warrant, the Note
      Shares and Warrant Shares will be validly issued, fully paid and nonassessable
      and free from all preemptive or similar rights, taxes, liens and charges with
      respect to the issue thereof, with the holders being entitled to all rights
      accorded to a holder of Common Stock. Assuming the accuracy of each of the
      representations and warranties set forth in Section 2 of this Agreement, the
      offer and issuance by the Company of the Securities is exempt from registration
      under the 1933 Act.

     

    (d) No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby (including, without limitation, the issuance of the Unit and the Note
      and Warrant which comprise such Unit and reservation for issuance and issuance
      of the Note Shares and Warrant Shares) will not (i) result in a violation of
      any
      certificate of incorporation, certificate of formation, any certificate of
      designations or other constituent documents of the Company or any of its
      Subsidiaries, any capital stock of the Company or any of its Subsidiaries or
      bylaws of the Company or any of its Subsidiaries or (ii) conflict with, or
      constitute a default or breach (or an event which with notice or lapse of time
      or both would become a default or breach) in any respect under, or give to
      others any rights of termination, amendment, acceleration or cancellation of,
      any agreement, indenture or instrument to which the Company or any of its
      Subsidiaries is a party, or (iii) result in a violation of any law, rule,
      regulation, order, judgment or decree (including foreign, federal and state
      securities laws and regulations and the rules and regulations of the National
      Association of Securities Dealer's OTC Bulletin Board (the "Principal
      Market"))
      applicable to the Company or any of its Subsidiaries or by which any property
      or
      asset of the Company or any of its Subsidiaries is bound or affected, except
      in
      the case of clauses (ii) and (iii) above, to the extent that such violations
      conflict, default or right would not reasonably be expected to have a Material
      Adverse Effect. 

     

    
      
        
        

      

      
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    (e) Consents.
      Neither
      the Company nor any of its Subsidiaries is required to obtain any consent,
      authorization or order of, or make any filing or registration with, any court,
      governmental agency or any regulatory or self-regulatory agency or any other
      Person in order for it to execute, deliver or perform any of its obligations
      under or contemplated by the Transaction Documents, in each case in accordance
      with the terms hereof or thereof, except for the filing with the SEC of one
      or
      more Registration Statements in accordance with the requirements of the
      Registration Rights Agreement (which is not required to be filed before the
      Closing). The Company and its Subsidiaries are unaware of any facts or
      circumstances that might prevent the Company from obtaining or effecting any
      of
      the registration, application or filings pursuant to the preceding sentence.
      The
      Company is not in violation of the listing requirements of the Principal Market
      and has no knowledge of any facts that would reasonably lead to delisting or
      suspension of the Common Stock in the foreseeable future, except as described
      on
      Schedule 3(e). .  

     

    (f) Acknowledgment
      Regarding Buyer's Purchase of Securities.
      The
      Company acknowledges and agrees that Buyer is acting solely in the capacity
      of
      an arm's length purchaser with respect to the Transaction Documents and the
      transactions contemplated hereby and thereby and that Buyer is not (i) an
      officer or director of the Company, (ii) an "affiliate" of the Company or any
      of
      its Subsidiaries (as defined in Rule 144 of the 1933 Act) or (iii) to the
      knowledge of the Company, a "beneficial owner" of more than 10% of the shares
      of
      Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange
      Act of 1934, as amended (the "1934
      Act")).
      The
      Company further acknowledges that Buyer is not acting as a financial advisor
      or
      fiduciary of the Company or any of its Subsidiaries (or in any similar capacity)
      with respect to the Transaction Documents and the transactions contemplated
      hereby and thereby, and any advice given by Buyer or any of its representatives
      or agents in connection with the Transaction Documents and the transactions
      contemplated hereby and thereby is merely incidental to Buyer's purchase of
      the
      Securities. The Company further represents to Buyer that the Company's decision
      to enter into the Transaction Documents has been based solely on the independent
      evaluation by the Company and its representatives.

     

    (g) No
      General Solicitation; Placement Agent's Fees.
      Neither
      the Company, nor any of its Subsidiaries or 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) in connection with the offer
      or
      sale of the Securities. The Company shall be responsible for the payment of
      any
      placement agent's fees, if any, financial advisory fees, or brokers' commissions
      (other than for persons engaged by Buyer or its investment advisor) relating
      to
      or arising out of the transactions contemplated hereby. 

     

    (h) No
      Integrated Offering.
      None of
      the Company, its Subsidiaries, any of their affiliates, and any Person acting
      on
      their behalf has, directly or indirectly, made any offers or sales of any
      security or solicited any offers to buy any security, under circumstances that
      would require registration of any of the Securities under the 1933 Act or cause
      this offering of the Securities to be integrated with prior offerings by the
      Company for purposes of any applicable stockholder approval provisions,
      including, without limitation, under the rules and regulations of any exchange
      or automated quotation system on which any of the securities of the Company
      are
      listed or designated. None of the Company, its Subsidiaries, their affiliates
      and any Person acting on their behalf will take any action or steps referred
      to
      in the preceding sentence that would require registration of any of the
      Securities under the 1933 Act or cause the offering of the Securities to be
      integrated with other offerings.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    (i) Dilutive
      Effect.
      The
      Company understands and acknowledges that the number of Note Shares and/or
      Warrant Shares issuable upon conversion of the Note or exercise of the Warrant,
      as the case may be, will increase in certain circumstances. The Company further
      acknowledges that its obligation to issue the Note Shares and Warrant Shares
      upon conversion of the Note and/or exercise of the Warrant in accordance with
      this Agreement, the Note and the Warrant is, in each case, absolute and
      unconditional regardless of the dilutive effect that such issuance may have
      on
      the ownership interests of other stockholders of the Company.

     

    (j) Application
      of Takeover Protections; Rights Agreement.
      The
      Company and its board of directors have 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 Certificate of Incorporation
      (as defined in Section 3(r)) or the laws of the state of its incorporation
      which
      is or could become applicable to Buyer as a result of the transactions
      contemplated by this Agreement, including, without limitation, the Company's
      issuance of the Securities and Buyer's ownership of the Securities. The Company
      and its board of directors have taken all necessary action, if any, in order
      to
      render inapplicable any stockholder rights plan or similar arrangement relating
      to accumulations of beneficial ownership of Common Stock or a change in control
      of the Company.

     

    (k) SEC
      Documents; Financial Statements.
      During
      the two (2) years prior to the date hereof, the Company has filed all reports,
      schedules, forms, statements and other documents required to be filed by it
      with
      the SEC pursuant to the reporting requirements of the 1934 Act (all of the
      foregoing filed prior to the date hereof and all exhibits included therein
      and
      financial statements, notes and schedules thereto and documents incorporated
      by
      reference therein being hereinafter referred to as the "SEC
      Documents").
      The
      Company recently changed its fiscal year end to December 31. Therefore, no
      filings have been made by the Company for the period of October 1, 2006 through
      December 31, 2006. However, when the Company files its December 31, 2006 Form
      10-KSB, this gap period will be accounted for. The Company has delivered to
      Buyer or its representatives true, correct and complete copies of the SEC
      Documents not available on the EDGAR system. As of their respective filing
      dates, the SEC Documents complied in all material respects with the requirements
      of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
      applicable to the SEC Documents, and none of the SEC Documents, at the time
      they
      were filed with the SEC, contained any untrue statement of a material fact
      or
      omitted to state a material fact required to be stated therein or necessary
      in
      order to make the statements therein, in the light of the circumstances under
      which they were made, not misleading. As of their respective filing dates,
      the
      financial statements of the Company included in the SEC Documents complied
      as to
      form in all material respects with applicable accounting requirements and the
      published rules and regulations of the SEC with respect thereto. Such financial
      statements have been prepared in accordance with generally accepted accounting
      principles, consistently applied, 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 exclude
      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 its operations and cash flows for the periods then ended
      (subject, in the case of unaudited statements, to normal year-end audit
      adjustments). No other information provided by or on behalf of the Company
      to
      Buyer which is not included in the SEC Documents, including, without limitation,
      information referred to in Section 2(d) of this Agreement or in any disclosure
      schedules, contains any untrue statement of a material fact or omits to state
      any material fact necessary in order to make the statements therein, in the
      light of the circumstance under which they are or were made not misleading.
      

     

    
      
        
        

      

      
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    (l) Absence
      of Certain Changes.
      Since
      November 15, 2006, there has been no material adverse change and no material
      adverse development in the business, properties, operations, condition
      (financial or otherwise), results of operations or prospects of the Company
      or
      its Subsidiaries. Except as disclosed in Schedule
      3(l),
      and in
      accordance with the Use of proceeds for the SPA, since November 15, 2006, the
      Company has not (i) declared or paid any dividends, (ii) sold any assets,
      individually or in the aggregate, in excess of $100,000 outside of the ordinary
      course of business or (iii) had capital expenditures, individually or in the
      aggregate, in excess of $250,000. Neither the Company nor any of its
      Subsidiaries has taken any steps to seek protection pursuant to any bankruptcy
      law nor does the Company have any knowledge or reason to believe that its
      creditors intend to initiate involuntary bankruptcy proceedings or any actual
      knowledge of any fact that would reasonably lead a creditor to do so. The
      Company and its Subsidiaries, individually and on a consolidated basis, are
      not
      as of the date hereof, and after giving effect to the transactions contemplated
      hereby to occur at the Closing, will not be Insolvent (as defined below). For
      purposes of this Section 3(l), "Insolvent"
      means,
      with respect to any Person (as defined in Section 3(s)), (i) the present fair
      saleable value of such Person's assets is less than the amount required to
      pay
      such Person's total Indebtedness (as defined in Section 3(s)), (ii) such Person
      is unable to pay its debts and liabilities, subordinated, contingent or
      otherwise, as such debts and liabilities become absolute and matured, (iii)
      such
      Person intends to incur or believes that it will incur debts that would be
      beyond its ability to pay as such debts mature or (iv) such Person has
      unreasonably small capital with which to conduct the business in which it is
      engaged as such business is now conducted and is proposed to be
      conducted.

     

    (m) No
      Undisclosed Events, Liabilities, Developments or Circumstances.
      No
      event, liability, development or circumstance has occurred or exists, or is
      contemplated to occur with respect to the Company, its Subsidiaries or their
      respective business, properties, prospects, operations or financial condition,
      that would be required to be disclosed by the Company under applicable
      securities laws on a registration statement on Form S-1 (or SB-2) filed with
      the
      SEC relating to an issuance and sale by the Company of its Common Stock and
      which has not been publicly announced.

     

    (n) Conduct
      of Business; Regulatory Permits.
      Neither
      the Company nor any of its Subsidiaries is in violation of any term of or in
      default under its Certificate of Incorporation, any certificate of designations
      of any outstanding series of preferred stock of the Company or the Bylaws or
      their organizational charter or bylaws, respectively. Neither the Company nor
      any of its Subsidiaries is in violation of any judgment, decree or order or
      any
      statute, ordinance, rule or regulation applicable to the Company or its
      Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
      its business in violation of any of the foregoing, except for possible
      violations which could not, individually or in the aggregate, reasonably be
      expected to have a Material Adverse Effect. Without limiting the generality
      of
      the foregoing, the Company is not in violation of any of the rules, regulations
      or requirements of the Principal Market and has no knowledge of any facts or
      circumstances that would reasonably lead to delisting or suspension of the
      Common Stock by the Principal Market in the foreseeable future, except as
      disclosed in Schedule 3(e). During the two (2) years prior to the date hereof,
      (i) the Common Stock has been designated for quotation on the Principal Market,
      (ii) trading in the Common Stock has not been suspended by the SEC or the
      Principal Market and (iii) the Company has received no communication, written
      or
      oral, from the SEC or the Principal Market regarding the suspension or delisting
      of the Common Stock from the Principal Market. The Company and its Subsidiaries
      possess all certificates, authorizations and permits issued by the appropriate
      regulatory authorities necessary to conduct their respective businesses, except
      where the failure to possess such certificates, authorizations or permits would
      not have, individually or in the aggregate, a Material Adverse Effect, and
      neither the Company nor any such Subsidiary has received any notice of
      proceedings relating to the revocation or modification of any such certificate,
      authorization or permit.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (o) Foreign
      Corrupt Practices.
      Neither
      the Company nor any of its Subsidiaries nor any director, officer, agent,
      employee or other Person acting on behalf of the Company or any of its
      Subsidiaries has, in the course of its actions for, or on behalf of, the Company
      or any of its Subsidiaries (i) used any corporate funds for any unlawful
      contribution, gift, entertainment or other unlawful expenses relating to
      political activity; (ii) made any direct or indirect unlawful payment to any
      foreign or domestic government official or employee from corporate funds; (iii)
      violated or is in violation of any provision of the U.S. Foreign Corrupt
      Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
      payoff, influence payment, kickback or other unlawful payment to any foreign
      or
      domestic government official or employee.

     

    (p) Sarbanes-Oxley
      Act.
      The
      Company is in compliance with any and all applicable requirements of the
      Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any
      and
      all applicable rules and regulations promulgated by the SEC thereunder that
      are
      effective as of the date hereof.

     

    (q) Transactions
      With Affiliates.
      Except
      as set forth in the SEC Documents filed at least ten (10) days prior to the
      date
      hereof, none of the officers, directors or employees of the Company or any
      of
      its Subsidiaries is presently a party to any transaction with the Company or
      any
      of its Subsidiaries (other than for ordinary course services as employees,
      officers or directors), including any contract, agreement or other arrangement
      providing for the furnishing of services to or by, providing for rental of
      real
      or personal property to or from, or otherwise requiring payments to or from
      any
      such officer, director or employee or, to the knowledge of the Company or any
      of
      its Subsidiaries, any corporation, partnership, trust or other entity in which
      any such officer, director, or employee has a substantial interest or is an
      officer, director, trustee or partner. 

     

    (r) Equity
      Capitalization.
      As of
      the date hereof, the authorized capital stock of the Company consists of
      150,000,000 shares of Common Stock, of which as of the date hereof, 96,964,606
      are issued and outstanding, 28,557,936 shares are reserved for issuance pursuant
      to that certain Stock Purchase Agreement dated November 15, 2006 between the
      Company, Ever Leader and the buyers listed on the Schedule of Buyers attached
      thereto (the “SPA”) and the warrants issued in connection therewith. All of such
      outstanding shares have been, or upon issuance will be, validly issued and
      are
      fully paid and nonassessable. Except as disclosed in Schedule
      3(r):
      (i)
      none of the Company's capital stock is subject to preemptive rights or any
      other
      similar rights or any liens or encumbrances suffered or permitted by the
      Company; (ii) other than with respect to the SPA, there are no outstanding
      options, warrants, scrip, rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities or rights convertible into,
      or
      exercisable or exchangeable for, any capital stock of the Company or any of
      its
      Subsidiaries, or contracts, commitments, understandings or arrangements by
      which
      the Company or any of its Subsidiaries is or may become bound to issue
      additional capital stock of the Company or any of its Subsidiaries or options,
      warrants, scrip, rights to subscribe to, calls or commitments of any character
      whatsoever relating to, or securities or rights convertible into, or exercisable
      or exchangeable for, any capital stock of the Company or any of its
      Subsidiaries; (iii) there are no outstanding debt securities, notes, credit
      agreements, credit facilities or other agreements, documents or instruments
      evidencing Indebtedness of the Company or any of its Subsidiaries or by which
      the Company or any of its Subsidiaries is or may become bound; (iv) there are
      no
      financing statements securing obligations in any material amounts, either singly
      or in the aggregate, filed in connection with the Company or any of its
      Subsidiaries; (v) other than with respect to the SPA, there are no agreements
      or
      arrangements under which the Company or any of its Subsidiaries is obligated
      to
      register the sale of any of their securities under the 1933 Act (except pursuant
      to the Registration Rights Agreement and the registration rights agreement
      executed in connection with the SPA); (vi) there are no outstanding securities
      or instruments of the Company or any of its Subsidiaries which contain any
      redemption or similar provisions, and there are no contracts, commitments,
      understandings or arrangements by which the Company or any of its Subsidiaries
      is or may become bound to redeem a security of the Company or any of its
      Subsidiaries; (vii) there are no securities or instruments containing
      anti-dilution or similar provisions that will be triggered by the issuance
      of
      the Securities; (viii) the Company does not have any stock appreciation rights
      or "phantom stock" plans or agreements or any similar plan or agreement; and
      (ix) the Company and its Subsidiaries have no liabilities or obligations
      required to be disclosed in the SEC Documents but not so disclosed in the SEC
      Documents, other than those incurred in the ordinary course of the Company's
      or
      its Subsidiaries' respective businesses and which, individually or in the
      aggregate, do not or would not have a Material Adverse Effect. The Company
      has
      furnished to Buyer true, correct and complete copies of the Company's
      Certificate of Incorporation, as amended and as in effect on the date hereof
      (the "Certificate
      of Incorporation"),
      and
      the Company's Bylaws, as amended and as in effect on the date hereof (the
      "Bylaws"),
      and
      the terms of all securities convertible into, or exercisable or exchangeable
      for, shares of Common Stock and the material rights of the holders thereof
      in
      respect thereto.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    (s) Indebtedness
      and Other Contracts.
      Except
      as disclosed in Schedule
      3(s),
      neither
      the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness
      (as
      defined below), (ii) is a party to any contract, agreement or instrument, the
      violation of which, or default under which, by the other party(ies) to such
      contract, agreement or instrument could reasonably be expected to result in
      a
      Material Adverse Effect, (iii) is in violation of any term of or in default
      under any contract, agreement or instrument relating to any Indebtedness, except
      where such violations and defaults would not result, individually or in the
      aggregate, in a Material Adverse Effect, or (iv) is a party to any contract,
      agreement or instrument relating to any Indebtedness, the performance of which,
      in the judgment of the Company's officers, has or is expected to have a Material
      Adverse Effect. Schedule
      3(s)
      provides
      a detailed description of the material terms of any such outstanding
      Indebtedness. For purposes of this Agreement: (x) "Indebtedness"
      of any
      Person means, without duplication (A) all indebtedness for borrowed money,
      (B)
      all obligations issued, undertaken or assumed as the deferred purchase price
      of
      property or services, including (without limitation) "capital leases" in
      accordance with generally accepted accounting principles (other than trade
      payables entered into in the ordinary course of business), (C) all reimbursement
      or payment obligations with respect to letters of credit, surety bonds and
      other
      similar instruments, (D) all obligations evidenced by notes, bonds, debentures
      or similar instruments, including obligations so evidenced incurred in
      connection with the acquisition of property, assets or businesses, (E) all
      indebtedness created or arising under any conditional sale or other title
      retention agreement, or incurred as financing, in either case with respect
      to
      any property or assets acquired with the proceeds of such indebtedness (even
      though the rights and remedies of the seller or bank under such agreement in
      the
      event of default are limited to repossession or sale of such property), (F)
      all
      monetary obligations under any leasing or similar arrangement which, in
      connection with generally accepted accounting principles, consistently applied
      for the periods covered thereby, is classified as a capital lease, (G) all
      indebtedness referred to in clauses (A) through (F) above secured by (or for
      which the holder of such Indebtedness has an existing right, contingent or
      otherwise, to be secured by) any mortgage, lien, pledge, charge, security
      interest or other encumbrance upon or in any property or assets (including
      accounts and contract rights) owned by any Person, even though the Person which
      owns such assets or property has not assumed or become liable for the payment
      of
      such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
      or obligations of others of the kinds referred to in clauses (A) through (G)
      above; (y) "Contingent
      Obligation"
      means,
      as to any Person, any direct or indirect liability, contingent or otherwise,
      of
      that Person with respect to any indebtedness, lease, dividend or other
      obligation of another Person if the primary purpose or intent of the Person
      incurring such liability, or the primary effect thereof, is to provide assurance
      to the obligee of such liability that such liability will be paid or discharged,
      or that any agreements relating thereto will be complied with, or that the
      holders of such liability will be protected (in whole or in part) against loss
      with respect thereto; and (z) "Person"
      means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    (t) Absence
      of Litigation.
      Except
      as set forth in Schedule
      3(t),
      there
      is no action, suit, proceeding, inquiry or investigation before or by the
      Principal Market, any court, public board, government agency, self-regulatory
      organization or body pending or, to the knowledge of the Company, threatened
      against or affecting the Company or any of its Subsidiaries, the Common Stock
      or
      any of the Company's Subsidiaries or any of the Company's or its Subsidiaries'
      officers or directors. 

     

    (u) Insurance.
      The
      Company and each of its Subsidiaries are insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      management of the Company believes to be prudent and customary in the businesses
      in which the Company and its Subsidiaries are engaged. Neither the Company
      nor
      any such Subsidiary has been refused any insurance coverage sought or applied
      for and neither the Company nor any such Subsidiary has any reason to believe
      that it will not be able to renew its existing insurance coverage as and when
      such coverage expires or to obtain similar coverage from similar insurers as
      may
      be necessary to continue its business at a cost that would not have a Material
      Adverse Effect.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    (v) Employee
      Relations.
      

     

    (i) Neither
      the Company nor any of its Subsidiaries is a party to any collective bargaining
      agreement or employs any member of a union. The Company and its Subsidiaries
      believe that their relations with their employees are good. No executive officer
      of the Company or any of its Subsidiaries (as defined in Rule 501(f) of the
      1933
      Act) has notified the Company or any such Subsidiary that such officer intends
      to leave the Company or any such Subsidiary or otherwise terminate such
      officer's employment with the Company or any such Subsidiary. No executive
      officer of the Company or any of its Subsidiaries, is, or is now expected to
      be,
      in violation of any material term of any employment contract, confidentiality,
      disclosure or proprietary information agreement, non-competition agreement,
      or
      any other contract or agreement or any restrictive covenant, and the continued
      employment of each such executive officer does not subject the Company or any
      of
      its Subsidiaries to any liability with respect to any of the foregoing
      matters.

     

    (ii) The
      Company and its Subsidiaries, to their knowledge, are in compliance with all
      federal, state, local and foreign laws and regulations respecting labor,
      employment and employment practices and benefits, terms and conditions of
      employment and wages and hours, except where failure to be in compliance would
      not, either individually or in the aggregate, reasonably be expected to result
      in a Material Adverse Effect.

     

    (w) Title.
      The
      Company and its Subsidiaries have good and marketable title in fee simple to
      all
      real property and good and marketable title to all personal property owned
      by
      them which is material to the business of the Company and its Subsidiaries,
      in
      each case free and clear of all liens, encumbrances and defects except such
      as
      are described in Schedule
      3(w)
      or such
      as do not materially affect the value of such property and do not interfere
      with
      the use made and proposed to be made of such property by the Company and any
      of
      its Subsidiaries. Any real property and facilities held under lease by the
      Company and any of its Subsidiaries are held by them under valid, subsisting
      and
      enforceable leases with such exceptions as are not material and do not interfere
      with the use made and proposed to be made of such property and buildings by
      the
      Company and its Subsidiaries.

     

    (x) Intellectual
      Property Rights.
      The
      Company and its Subsidiaries own or possess adequate rights or licenses to
      use
      all trademarks, service marks and all applications and registrations therefor,
      trade names, patents, patent rights, copyrights, original works of authorship,
      inventions, trade secrets and other intellectual property rights ("Intellectual
      Property Rights")
      necessary to conduct their respective businesses as now conducted. None of
      the
      Company's registered, or applied for, Intellectual Property Rights have expired
      or terminated or have been abandoned, or are expected to expire or terminate
      or
      expected to be abandoned, within three years from the date of this Agreement.
      The Company does not have any knowledge of any infringement by the Company
      or
      its Subsidiaries of Intellectual Property Rights of others. There is no claim,
      action or proceeding being made or brought, or to the knowledge of the Company,
      being threatened, against the Company or its Subsidiaries regarding its
      Intellectual Property Rights. Neither the Company nor any of its Subsidiaries
      is
      aware of any facts or circumstances which might give rise to any of the
      foregoing infringements or claims, actions or proceedings. The Company and
      its
      Subsidiaries have taken reasonable security measures to protect the secrecy,
      confidentiality and value of all of their Intellectual Property
      Rights.

     

    
      
        
        

      

      
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    (y) Environmental
      Laws.
      The
      Company and its Subsidiaries, to their knowledge, (i) are in compliance with
      any
      and all Environmental Laws (as hereinafter defined), (ii) have received all
      permits, licenses or other approvals required of them under applicable
      Environmental Laws to conduct their respective businesses and (iii) are in
      compliance with all terms and conditions of any such permit, license or approval
      where, in each of the foregoing clauses (i), (ii) and (iii), the failure to
      so
      comply could be reasonably expected to have, individually or in the aggregate,
      a
      Material Adverse Effect. The term "Environmental
      Laws"
      means
      all federal, state, local or foreign laws relating to pollution or protection
      of
      human health or the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata), including,
      without limitation, laws relating to emissions, discharges, releases or
      threatened releases of chemicals, pollutants, contaminants, or toxic or
      hazardous substances or wastes (collectively, "Hazardous
      Materials") into
      the
      environment, or otherwise relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of Hazardous Materials,
      as well as all authorizations, codes, decrees, demands or demand letters,
      injunctions, judgments, licenses, notices or notice letters, orders, permits,
      plans or regulations issued, entered, promulgated or approved
      thereunder.

     

    (z) Subsidiary
      Rights.
      The
      Company or one of its Subsidiaries has the unrestricted right to vote, and
      (subject to limitations imposed by applicable law) to receive dividends and
      distributions on, all capital securities of its Subsidiaries as owned by the
      Company or such Subsidiary.

     

    (aa) Tax
      Status.
      The
      Company and each of its Subsidiaries (i) has made or filed all foreign, federal
      and state income and all other tax returns, reports and declarations required
      by
      any jurisdiction to which it is subject, (ii) has paid all taxes and other
      governmental assessments and charges that are material in amount, shown or
      determined to be due on such returns, reports and declarations, except those
      being contested in good faith and (iii) has set aside on its books provision
      reasonably adequate for the payment of all taxes for periods subsequent to
      the
      periods to which such returns, reports or declarations apply. There are no
      unpaid taxes in any material amount claimed to be due by the taxing authority
      of
      any jurisdiction, and the officers of the Company know of no basis for any
      such
      claim.

     

    (bb) Internal
      Accounting and Disclosure Controls.
      The
      Company and each of its Subsidiaries maintain a system of internal accounting
      controls sufficient 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 generally accepted accounting principles and
      to
      maintain asset and liability accountability, (iii) access to assets or
      incurrence of liabilities is permitted only in accordance with management's
      general or specific authorization and (iv) the recorded accountability for
      assets and liabilities is compared with the existing assets and liabilities
      at
      reasonable intervals and appropriate action is taken with respect to any
      difference. The Company maintains disclosure controls and procedures (as such
      term is defined in Rule 13a-14 under the 1934 Act) that are effective in
      ensuring that information required to be disclosed by the Company in the reports
      that it files or submits under the 1934 Act is recorded, processed, summarized
      and reported, within the time periods specified in the rules and forms of the
      SEC, including, without limitation, controls and procedures designed in to
      ensure that information required to be disclosed by the Company in the reports
      that it files or submits under the 1934 Act is accumulated and communicated
      to
      the Company's management, including its principal executive officer or officers
      and its principal financial officer or officers, as appropriate, to allow timely
      decisions regarding required disclosure. During the twelve months prior to
      the
      date hereof neither the Company nor any of its Subsidiaries have received any
      notice or correspondence from any accountant relating to any potential material
      weakness in any part of the system of internal accounting controls of the
      Company or any of its Subsidiaries.

     

    
      
        
        

      

      
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    (cc) Off
      Balance Sheet Arrangements.
      There
      is no transaction, arrangement, or other relationship between the Company and
      an
      unconsolidated or other off balance sheet entity that is required to be
      disclosed by the Company in its 1934 Act filings and is not so disclosed or
      that
      otherwise would be reasonably likely to have a Material Adverse
      Effect.

     

    (dd) Investment
      Company Status.
      The
      Company is not, and upon consummation of the sale of the Securities will not
      be,
      an "investment company," a company controlled by an "investment company" or
      an
      "affiliated person" of, or "promoter" or "principal underwriter" for, an
      "investment company" as such terms are defined in the Investment Company Act
      of
      1940, as amended.

     

    (ee) Transfer
      Taxes.
      On the
      Closing Date, all stock transfer or other taxes (other than income or similar
      taxes) which are required to be paid in connection with the sale and transfer
      of
      the Securities to be sold to Buyer hereunder will be, or will have been, fully
      paid or provided for by the Company, and all laws imposing such taxes will
      be or
      will have been complied with.

     

    (ff) Manipulation
      of Price.
      The
      Company has not, and to its knowledge no one acting on its behalf has, (i)
      taken, directly or indirectly, any action designed to cause or to result in
      the
      stabilization or manipulation of the price of any security of the Company to
      facilitate the sale or resale of any of the Securities, (ii) other than the
      Placement Agent sold, bid for, purchased, or paid any compensation for
      soliciting purchases of, any of the Securities, or (iii) other than the
      Placement Agent paid or agreed to pay to any person any compensation for
      soliciting another to purchase any other securities of the Company.

     

    (gg) Disclosure.
      The
      Company confirms that neither it nor any other Person acting on its behalf
      has
      provided Buyer or its agents or counsel with any information that constitutes
      or
      could reasonably be expected to constitute material, nonpublic information.
      The
      Company understands and confirms that Buyer will rely on the foregoing
      representations in effecting transactions in securities of the Company. All
      disclosure provided to Buyer regarding the Company or any of its Subsidiaries,
      their business and the transactions contemplated hereby, including the Schedules
      to this Agreement, furnished by or on behalf of the Company is true and correct
      and does not contain any untrue statement of a material fact or omit to state
      any material fact necessary in order to make the statements made therein, in
      the
      light of the circumstances under which they were made, not misleading. Each
      press release issued by the Company or any of its Subsidiaries during the twelve
      (12) months preceding the date of this Agreement did not at the time of release
      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 the light of the circumstances under which they were made, not
      misleading. No event or circumstance has occurred or information exists with
      respect to the Company or any of its Subsidiaries or its or their business,
      properties, prospects, operations or financial conditions, 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.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    (hh) Acknowledgement
      Regarding Buyer's Trading Activity.
      Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
      but subject to compliance by Buyer with applicable law and the provisions of
      Section 2(k) hereto, it is understood and acknowledged by the Company (i) that
      Buyer has not been asked by the Company or its Subsidiaries to agree, nor has
      Buyer agreed with the Company or its Subsidiaries, to desist from purchasing
      or
      selling, long and/or short, securities of the Company, or "derivative"
      securities based on securities issued by the Company or to hold the Securities
      for any specified term; (ii) that past or future open market or other
      transactions by Buyer, including, without limitation, short sales or
      "derivative" transactions, before or after the closing of this or future private
      placement transactions, may negatively impact the market price of the Company's
      publicly-traded securities; (iii) that Buyer, and counter parties in
      "derivative" transactions to which Buyer is a party, directly or indirectly,
      presently may have a "short" position in the Common Stock, and (iv) that Buyer
      shall not be deemed to have any affiliation with or control over any arm's
      length counter-party in any "derivative" transaction. The Company further
      understands and acknowledges that (a) Buyer may engage in hedging and/or trading
      activities at various times during the period that the Securities are
      outstanding, including, without limitation, during the periods that the value
      of
      the Note Shares and/or Warrant Shares deliverable with respect to Securities
      are
      being determined and (b) such hedging and/or trading activities (if any) could
      reduce the value of the existing stockholders' equity interests in the Company
      at and after the time that the hedging and/or trading activities are being
      conducted.

     

    (ii) U.S.
      Real Property Holding Corporation.
      The
      Company is not, nor has it ever been, a U.S. real property holding corporation
      within the meaning of Section 897 of the Internal Revenue Code of 1986, as
      amended, and the Company shall so certify upon any Buyer's request.

     

    (jj) Sibiono
      Acquisition Matters.
      

     

    (i) Tongji
      Benda has the requisite corporate power and authority to enter into and perform
      its obligations under the Sibiono Acquisition Agreements and to consummate
      the
      Sibiono Acquisition in accordance with the terms thereof. The execution and
      delivery of the Sibiono Acquisition Agreements by Tongji Benda and the
      consummation by Tongji Benda of the transactions contemplated thereby,
      including, without limitation, the issuance of any shares of Common Stock to
      certain Sibiono Shareholders, have been duly authorized by the Boards of
      Directors of the Company and Tongji Benda, and other than as set forth in
      Section 3(e), no further filing, consent, or authorization is required by the
      Company, Tongji Benda, the Boards of Directors or stockholders of the Company
      or
      Tongji Benda, or any other Person or entity. The Sibiono Acquisition Agreements
      and all other documents delivered in connection with the Sibiono Acquisition
      have been duly executed and delivered by the Company and/or Tongji Benda, as
      the
      case may be, and constitute the legal, valid and binding obligations of the
      Company, Tongji Benda and the Sibiono Shareholders, enforceable in accordance
      with their respective terms, except as such enforceability may be limited by
      general principles of equity or applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally, the enforcement of applicable creditors' rights and
      remedies.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    (ii) The
      execution, delivery and performance of the Sibiono Acquisition Agreements by
      Tongji Benda and the consummation of the transactions contemplated thereby
      (including, without limitation, the issuance of shares of Common Stock to
      certain of the Sibiono Shareholders) will not (i) result in a violation of
      any
      certificate of incorporation, certificate of formation, any certificate of
      designations or other constituent documents of the Company or Tongji Benda,
      any
      capital stock of the Company or Tongji Benda or bylaws of the Company or Tongji
      Benda or (ii) conflict with, or constitute a default or breach (or an event
      which with notice or lapse of time or both would become a default or breach)
      in
      any respect under, or give to others any rights of termination, amendment,
      acceleration or cancellation of, any agreement, indenture or instrument to
      which
      the Company or any of its Subsidiaries is a party, or (iii) result in a
      violation of any law, rule, regulation, order, judgment or decree (including
      foreign, federal and state securities laws and regulations and the rules and
      regulations of the National Association of Securities Dealer's OTC Bulletin
      Board (the "Principal
      Market"))
      applicable to the Company or any of its Subsidiaries or by which any property
      or
      asset of the Company or any of its Subsidiaries is bound or affected, except
      in
      the case of clauses (ii) and (iii) above, to the extent that such violations
      conflict, default or right would not reasonably be expected to have a Material
      Adverse Effect.

     

    (iii) Neither
      the Company, Tongji Benda nor any other Subsidiary is required to obtain any
      consent, authorization or order of, or make any filing or registration with,
      any
      court, governmental agency or any regulatory or self-regulatory agency or any
      other Person in order for it to execute, deliver or perform any of its
      obligations under or contemplated by the Sibiono Acquisition Agreements in
      each
      case in accordance with the terms thereof.

     

    (iv) The
      Company is not aware of any facts which would reasonably lead it to believe
      that
      the Sibiono Acquisition Transaction will or may not be closed in accordance
      with
      the terms of the Sibiono Acquisition Agreements. 

     

    4. COVENANTS.

     

    (a) Best
      Efforts.
      Each
      party shall use its best efforts timely to satisfy each of the conditions to
      be
      satisfied by it as provided in Sections 6 and 7 of this Agreement.

     

    (b) Form
      D
      and Blue Sky.
      The
      Company agrees to file a Form D (if required due to the fact that an applicable
      exemption under the Securities Act or 1934 is nor available) with respect to
      the
      Securities as required under Regulation D and to provide a copy thereof to
      Buyer
      promptly after such filing. The Company shall, on or before the Closing Date,
      take such action as the Company shall reasonably determine is necessary in
      order
      to obtain an exemption for or to qualify the Securities for sale to Buyer at
      the
      Closing pursuant to this Agreement under applicable securities or "Blue Sky"
      laws of the states of the United States (or to obtain an exemption from such
      qualification), and shall provide evidence of any such action so taken to Buyer
      on or prior to the Closing Date. The Company shall make all filings and reports
      relating to the offer and sale of the Securities required under applicable
      securities or "Blue Sky" laws of the states of the United States following
      the
      Closing Date. 

     

    (c) Reporting
      Status.
      Until
      the date on which Buyer shall have sold all of the Note Shares and Warrant
      Shares outstanding,
      (the "Reporting
      Period"),
      the
      Company shall timely file all reports required to be filed with the SEC pursuant
      to the 1934 Act, and the Company shall not terminate its status as an issuer
      required to file reports under the 1934 Act even if the 1934 Act or the rules
      and regulations thereunder would permit such termination.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    (d) Use
      of
      Proceeds.
      The
      Company will use the proceeds from the sale of the Securities in connection
      with
      the closing of the Sibiono Acquisition Transaction, and for working capital
      purposes. If the Sibiono Acquisition Transaction does not close by April 15,
      2007, this Agreement shall be deemed null and void. The Note shall be
      accelerated and the Warrant shall be cancelled. 

     

    (e) Financial
      Information.
      The
      Company agrees to send the following to Buyer during the Reporting Period (i)
      unless the following are filed with the SEC through EDGAR and are available
      to
      the public through the EDGAR system, within one (1) Business Day after the
      filing thereof with the SEC, a copy of its Annual Reports and Quarterly Reports
      on Form 10-K, 10-KSB, 10-Q or 10-QSB, any interim reports or any consolidated
      balance sheets, income statements, stockholders' equity statements and/or cash
      flow statements for any period other than annual, any Current Reports on Form
      8-K and any registration statements (other than on Form S-8) or amendments
      filed
      pursuant to the 1933 Act, (ii) on the same day as the release thereof, facsimile
      or e-mailed copies of all press releases issued by the Company or any of its
      Subsidiaries, and (iii) copies of any notices and other information made
      available or given to the stockholders of the Company generally,
      contemporaneously with the making available or giving thereof to the
      stockholders. As used herein, "Business
      Day"
      means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      The City of New York are authorized or required by law to remain
      closed.

     

    (f) Listing.
      The
      Company shall promptly secure the listing of all of the Registrable Securities
      (as defined in the Registration Rights Agreement), except for the Warrants,
      upon
      each national securities exchange and automated quotation system, if any, upon
      which the Common Stock is then listed (subject to official notice of issuance)
      and shall maintain, in accordance with the Note and Warrant, such listing of
      all
      Registrable Securities from time to time issuable under the terms of the
      Transaction Documents. The Company shall maintain the Common Stocks'
      authorization for quotation on the Principal Market. Neither the Company nor
      any
      of its Subsidiaries shall take any action which would be reasonably expected
      to
      result in the delisting or suspension of the Common Stock on the Principal
      Market. The Company shall pay all fees and expenses in connection with
      satisfying its obligations under this Section 4(f).

     

    (g) Fees.
      The
      Company shall be responsible for the payment of any placement agent's fees,
      if
      any, financial advisory fees, or broker's commissions relating to or arising
      out
      of the transactions contemplated hereby, including, without limitation, any
      fees
      payable to the Placement Agent. The Company shall pay, and hold Buyer harmless
      against, any liability, loss or expense (including, without limitation,
      reasonable attorney's fees and out-of-pocket expenses) arising in connection
      with any claim relating to any such payment. The Company shall reimburse Buyer
      for its legal fees and expenses incurred in connection with this transaction
      promptly upon demand therefore, provided this reimbursement obligation shall
      not
      exceed $20,000.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    (h) Pledge
      of Securities.
      The
      Company acknowledges and agrees that the Securities may be pledged by Buyer
      in
      connection with a bona fide margin agreement or other loan or financing
      arrangement that is secured by the Securities. The pledge of Securities shall
      not be deemed to be a transfer, sale or assignment of the Securities hereunder,
      and should Buyer effect a pledge of Securities, it shall not be required to
      provide the Company with any notice thereof or otherwise make any delivery
      to
      the Company pursuant to this Agreement or any other Transaction Document,
      including, without limitation, Section 2(f) hereof; provided that Buyer and
      its
      pledgee shall be required to comply with the provisions of Section 2(f) hereof
      in order to effect a sale, transfer or assignment of Securities to such pledgee.
      The Company hereby agrees to execute and deliver such documentation as a pledgee
      of the Securities may reasonably request in connection with a pledge of the
      Securities to such pledgee by Buyer.

     

    (i) Disclosure
      of Transactions and Other Material Information.
      On or
      before 8:30 a.m., New York City time, within four (4) Business Days following
      the Closing Date, the Company shall issue a press release and file a Current
      Report on Form 8-K describing the terms of the transactions contemplated by
      the
      Transaction Documents in the form required by the 1934 Act and attaching the
      material Transaction Documents (including, without limitation, this Agreement,
      the form of Note, the form of Warrant, the form of Make Good Agreement, the
      form
      of Make Good Escrow Agreement and the form of the Registration Rights Agreement
      and such financial statements and other information as required in connection
      with the Exchange Agreement) as exhibits to such filing (including all
      attachments, the "8-K
      Filing").
      From
      and after the filing of the 8-K Filing with the SEC, Buyer shall not be in
      possession of any material, nonpublic information received from the Company,
      any
      of its Subsidiaries or any of their respective officers, directors, employees
      or
      agents that is not disclosed in 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 Buyer 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 SEC without the express written
      consent of Buyer. If Buyer has, or believes it has, received any such material,
      nonpublic information regarding the Company or any of its Subsidiaries, it
      shall
      provide the Company with written notice thereof. The Company shall, within
      five
      (5) Trading Days (as defined in the Warrants) of receipt of such notice, make
      public disclosure of such material, nonpublic information. In the event of
      a
      breach of the foregoing covenant by the Company, any of its Subsidiaries, or
      any
      of its or their respective officers, directors, employees and agents, in
      addition to any other remedy provided herein or in the Transaction Documents,
      Buyer shall have the right to make a public disclosure, in the form of a press
      release, public advertisement or otherwise, of such material, nonpublic
      information without the prior approval by the Company, its Subsidiaries, or
      any
      of its or their respective officers, directors, employees or agents. Buyer
      shall
      not have any liability to the Company, its Subsidiaries, or any of its or their
      respective officers, directors, employees, stockholders or agents for any such
      disclosure. Subject to the foregoing, neither the Company, its Subsidiaries
      nor
      Buyer 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 Buyer, 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) Buyer shall be consulted by the Company in connection with any
      such press release or other public disclosure prior to its release). Without
      the
      prior written consent of Buyer, neither the Company nor any of its Subsidiaries
      or affiliates shall disclose the name of Buyer in any filing, announcement,
      release or otherwise, unless required by law.

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    (j) Variable
      Securities; Dilutive Issuances.
      So long
      as the Note or Warrant is outstanding, the Company will not issue any other
      securities that would cause a breach or default under the Note or Warrant.
      For
      so long as any Note or Warrant remain outstanding, the Company shall not, in
      any
      manner, issue or sell any rights, warrants or options to subscribe for or
      purchase Common Stock or directly or indirectly convertible into or exchangeable
      or exercisable for Common Stock at a price which varies or may vary with the
      market price of the Common Stock, including by way of one or more reset(s),
      to
      any fixed price unless the conversion, exchange or exercise price of any such
      security cannot be less than the then applicable Conversion Price (as defined
      in
      the Note) and Exercise Price (as defined in the Warrant) with respect to the
      Common Stock into which any Note is convertible or Warrant is exercisable.
      For
      so long as any Note or Warrant remain outstanding, the Company shall not, in
      any
      manner, enter into or affect any Dilutive Issuances (as defined in the Warrant)
      if the effect of such Dilutive Issuance is to cause the Company to be required
      to issue upon conversion of any Note or exercise of any Warrant any shares
      of
      Common Stock in excess of that number of shares of Common Stock which the
      Company may issue upon conversion of the Note and exercise of the Warrant
      without breaching the Company's obligations under the rules or regulations
      of
      the Principal Market.

     

    (k) Corporate
      Existence.
      So long
      as Buyer beneficially owns any Securities, the Company shall not be party to
      any
      Fundamental Transaction (as defined in the Warrants) unless the Company is
      in
      compliance with the applicable provisions governing Fundamental Transactions
      set
      forth in the Note and Warrant.

     

    (l) Reservation
      of Shares.
      The
      Company shall take all action necessary to at all times have authorized, and
      reserved for the purpose of issuance, no less than 150% of the maximum number
      of
      shares of Common Stock issuable upon conversion of the Note and exercise of
      the
      Warrant issued at the Closing.

     

    (m) Conduct
      of Business.
      The
      business of the Company and its Subsidiaries shall not be conducted in violation
      of any law, ordinance or regulation of any governmental entity, except where
      such violations would not result, either individually or in the aggregate,
      in a
      Material Adverse Effect. 

     

    (n) Additional
      Issuances of Securities.

     

    (i) For
      purposes of this Section 4(n), the following definitions shall
      apply.

     

    (1) "Convertible
      Securities"
      means
      any stock or securities (other than Options) convertible into or exercisable
      or
      exchangeable for shares of Common
      Stock.

     

    (2) "Options"
      means
      any rights, warrants or options to subscribe for or purchase shares of
Common
      Stock or
      Convertible Securities.

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    (3) "Common
      Stock Equivalents"
      means,
      collectively, Options and Convertible Securities.

     

    (4) “SPA
      Registrable Shares”
means
      the shares of Common Stock subject to the SPA Registration Rights
      Agreement.

     

    (ii) For
      so
      long as the Note is outstanding, in whole or in part, or any Warrant is
      outstanding, the Company will not, directly or indirectly, file any registration
      statement with the SEC other than the Registration Statement (as defined in
      the
      Registration Rights Agreement) and pursuant to the SPA Registration Rights
      Agreement; and in addition, the Company will not, directly or indirectly, offer,
      sell, grant any option to purchase, or otherwise dispose of (or announce any
      offer, sale, grant or any option to purchase or other disposition of) any of
      its
      or its Subsidiaries' equity or equity equivalent securities, including without
      limitation any debt, preferred stock or other instrument or security that is,
      at
      any time during its life and under any circumstances, convertible into or
      exchangeable or exercisable for shares of Common Stock or Common Stock
      Equivalents of the Company or any Subsidiary, including Sibiono (any such offer,
      sale, grant, disposition or announcement being referred to as a "Subsequent
      Placement").
      Notwithstanding the foregoing, the term Subsequent Placement shall not apply
      to
      shares of Common Stock issued in the Sibiono Acquisition Transaction or shares
      of Common Stock issued in connection with a stock option agreement adopted
      by
      the Company. 

     

    (iii) For
      so
      long as the Note or Warrant remain outstanding, in whole or in part, the Company
      will not, directly or indirectly, effect any Subsequent Placement unless the
      Company shall have first complied with this Section 4(n)(iii). 

     

    (1) The
      Company shall deliver to Buyer an irrevocable written notice
      (the "Offer
      Notice")
      of any
      proposed or intended issuance or sale or exchange (the "Offer")
      of the
      securities being offered (the "Offered
      Securities")
      in a
      Subsequent Placement, which Offer Notice shall (w) identify and describe the
      Offered Securities, (x) describe the price and other terms upon which they
      are to be issued, sold or exchanged, and the number or amount of the Offered
      Securities to be issued, sold or exchanged, (y) identify the persons or
      entities (if known) to which or with which the Offered Securities are to be
      offered, issued, sold or exchanged and (z) offer to issue and sell to or
      exchange with Buyer the Offered Securities, allocated among Buyer and the Buyers
      under the SPA (a) based on Buyer's pro rata portion that the (x) the aggregate
      number of (i) Note Shares issued upon one or more conversions of the Note,
      plus
      (ii) the aggregate number of Note Shares that would be issued upon conversion
      of
      the entire Note then outstanding (such number referred to herein as the
“Total
      Note Shares”)
      bears
      to (y) the aggregate of the number of Total Note Shares plus the total number
      of
      shares of Common Stock purchased pursuant to the SPA (Buyer’s portion being
      referred to as the "Buyer
      Basic Amount"),
      and
      (b) if Buyer elects to purchase its Buyer Basic Amount, any additional portion
      of the Offered Securities offered to the Buyers under the SPA as Buyer shall
      indicate it will purchase or acquire should any such Buyer subscribe for less
      than their respective share of Offered Securities (the "Undersubscription
      Amount"),
      which
      process shall be repeated until Buyer shall have an opportunity to subscribe
      for
      any remaining Undersubscription Amount.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    (2) To
      accept
      an Offer, in whole or in part, Buyer must deliver a written notice to the
      Company prior to the end of the tenth (10th)
      Business Day after Buyer's receipt of the Offer Notice (the "Offer
      Period"),
      setting forth the portion of Buyer's Basic Amount that Buyer elects to purchase
      and, if Buyer shall elect to purchase all of its Buyer Basic Amount, the
      Undersubscription Amount, if any, that Buyer elects to purchase (in either
      case,
      the "Notice
      of Acceptance”).
      If
      the aggregate of (i) the Buyer Basic Amount subscribed for by Buyer pursuant
      hereto, plus (ii) the aggregate amount of Offered Securities subscribed for
      by
      the Buyers pursuant to the SPA, be less than the total amount of Offered
      Securities, then if Buyer has set forth an Undersubscription Amount in its
      Notice of Acceptance, it shall be entitled to purchase, in addition to the
      Buyer
      Basic Amount subscribed for, the Undersubscription Amount it has subscribed
      for;
provided,
      however,
      that if
      the aggregate Undersubscription Amounts subscribed for by Buyer and all Buyers
      under the SPA exceed the difference between the total amount of Offered
      Securities and the aggregate of the Buyer Basic Amount and amounts subscribed
      for by the Buyers under the SPA (the "Available
      Undersubscription Amount"),
      Buyer
      shall be entitled to purchase only the portion of the Available
      Undersubscription Amount used to determine the Buyer Basic Amount, subject
      to
      rounding by the Company to the extent its deems reasonably
      necessary.

     

    (3) The
      Company shall have fifteen (15) Business Days from the expiration of the Offer
      Period above to offer, issue, sell or exchange all or any part of such Offered
      Securities as to which a Notice of Acceptance has not been given by Buyer and
      notices of acceptance have been given by the Buyers pursuant to the SPA (the
      "Refused
      Securities"),
      but
      only to the offerees described in the Offer Notice (if so described therein)
      and
      only upon terms and conditions (including, without limitation, unit prices
      and
      interest rates) that are not more favorable to the acquiring person or persons
      or less favorable to the Company than those set forth in the Offer Notice and
      (ii) to publicly announce (a) the execution of such Subsequent Placement
      Agreement, and (b) either (x) the consummation of the transactions contemplated
      by such Subsequent Placement Agreement or (y) the termination of such Subsequent
      Placement Agreement, which shall be filed with the SEC on a Current Report
      on
      Form 8-K with such Subsequent Placement Agreement and any documents contemplated
      therein filed as exhibits thereto.

     

    (4) In
      the
      event the Company shall propose to sell less than all the Refused Securities
      (any such sale to be in the manner and on the terms specified in Section
      4(n)(iii)(3) above), then Buyer may, at its sole option and in its sole
      discretion, reduce the number or amount of the Offered Securities specified
      in
      its Notice of Acceptance to an amount that shall be not less than the number
      or
      amount of the Offered Securities that Buyer elected to purchase pursuant to
      Section 4(n)(iii)(2) above multiplied by a fraction, (i) the numerator of which
      shall be the number or amount of Offered Securities the Company actually
      proposes to issue, sell or exchange (including Offered Securities to be issued
      or sold to Buyer pursuant to Section 4(n)(iii)(3) above prior to such reduction)
      and (ii) the denominator of which shall be the original amount of the Offered
      Securities. In the event that Buyer so elects to reduce the number or amount
      of
      Offered Securities specified in its Notice of Acceptance, the Company may not
      issue, sell or exchange more than the reduced number or amount of the Offered
      Securities unless and until such securities have again been offered to Buyer
      in
      accordance with Section 4(n)(iii)(1) above.

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

    (5) Upon
      the
      closing of the issuance, sale or exchange of all or less than all of the Refused
      Securities, Buyer shall acquire from the Company, and the Company shall issue
      to
      Buyer, the number or amount of Offered Securities specified in the Notices
      of
      Acceptance, as reduced pursuant to Section 4(p)(iii)(3) above if Buyer has
      so
      elected, upon the terms and conditions specified in the Offer. Notwithstanding
      anything to the contrary contained in this Agreement, if the Company does not
      consummate the closing of the issuance, sale or exchange of all or less than
      all
      of the Refused Securities within fifteen (15) Business Days of the expiration
      of
      the Offer Period, the Company shall issue to Buyer the number or amount of
      Offered Securities specified in the Notices of Acceptance, as reduced pursuant
      to Section 4(n)(iii)(4) above if Buyer has so elected, upon the terms and
      conditions specified in the Offer. The purchase by Buyer of any Offered
      Securities is subject in all cases to the preparation, execution and delivery
      by
      the Company and Buyer of a purchase agreement relating to such Offered
      Securities reasonably satisfactory in form and substance to Buyer and its
      counsel.

     

    (6) Any
      Offered Securities not acquired by Buyer or other persons in accordance with
      Section 4(o)(iii)(3) above or the SPA may not be issued, sold or exchanged
      until
      they are again offered to Buyer under the procedures specified in this
      Agreement.

     

    (7) The
      Company and Buyer agree that if Buyer elects to participate in the Offer, (x)
      neither the Subsequent Placement Agreement with respect to such Offer nor any
      other transaction documents related thereto (collectively, the "Subsequent
      Placement Documents")
      shall
      include any term or provisions whereby Buyer shall be required to agree to
      any
      restrictions in trading as to any securities of the Company owned by Buyer
      prior
      to such Subsequent Placement, and (y) any registration rights set forth in
      such
      Subsequent Placement Documents shall be similar in all material respects to
      the
      registration rights contained in the Registration Rights Agreement.

     

    (8) Notwithstanding
      anything to the contrary in this Section 4(o) and unless otherwise agreed to
      by
      Buyer, the Company shall either confirm in writing to Buyer that the transaction
      with respect to the Subsequent Placement has been abandoned or shall publicly
      disclose its intention to issue the Offered Securities, in either case in such
      a
      manner such that Buyer will not be in possession of material non-public
      information, by the fifteen (15th)
      Business Day following delivery of the Offer Notice. If by the fifteen
      (15th)
      following delivery of the Offer Notice no public disclosure regarding a
      transaction with respect to the Offered Securities has been made, and no notice
      regarding the abandonment of such transaction has been received by Buyer, such
      transaction shall be deemed to have been abandoned and Buyer shall not be deemed
      to be in possession of any material, non-public information with respect to
      the
      Company. Should the Company decide to pursue such transaction with respect
      to
      the Offered Securities, the Company shall provide Buyer with another Offer
      Notice and Buyer will again have the right of participation set forth in this
      Section 4(n)(iii). The Company shall not be permitted to deliver more than
      one
      such Offer Notice to Buyer in any 60 day period.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

     

    (iv) The
      restrictions contained in subsections (ii) and (iii) of this Section 4(n) shall
      not apply in connection with the issuance of any Excluded Securities (as defined
      in the Warrants).

     

    (o) Sibiono
      Acquisition Agreement.
      The
      Company may not amend or waive any provision of the Sibiono Acquisition
      Agreements without the consent of the holders of at least a majority of the
      aggregate number of Registrable Securities issued and issuable hereunder and
      “Registrable Securities” issued and issuable under the SPA Registration Rights
      Agreement.

     

    (p) D&O
      Insurance; Corporate Governance.
      As soon
      as practicable, the Company shall (i) use reasonable commercial efforts to
      retain directors and officers insurance coverage for its directors and officers
      in coverage and amounts presently in force; and (ii) institute and diligently
      pursue corporate governance procedures necessary to effect the listing of the
      Company's Common Stock on The NASDAQ Capital Market. 

     

    (q) Listing
      on The NASDAQ Capital Market.
      As soon
      as practicable, the Company shall file a listing application with The NASDAQ
      Capital Market with respect to the Company's Common Stock and all of the
      Registrable Securities, and the Company shall use its best efforts to cause
      such
      securities to be listed on The NASDAQ Capital Market as soon as practicable
      thereafter.

     

    (r) Audited
      Financial Statements.
      On or
      prior to the date which is forty five (45) days after the Closing Date (the
      "Audited
      Financial Statement Delivery Deadline"),
      the
      Company shall deliver to Buyer its financial statements for the years ended
      December 31, 2006 and December 31, 2005, audited by Kempisty & Company
      Certified Public Accountants, P.C. In addition, the Company shall deliver to
      Buyer audited financial statements for Sibiono for the required time periods
      for
      the Form 8-K filing required by the SEC within the prescribed time period (a
      maximum of 75 days from closing of the Sibiono transaction). In each case,
      the
      financial statements referred to above shall be prepared in accordance with
      generally accepted accounting principles, consistently applied, during each
      years involved (except as may be otherwise indicated in such financial
      statements or the notes thereto) and fairly presenting in all material respects
      the financial position of the Company and Sibiono, as the case may be, as of
      the
      dates thereof and the results of its operations and cash flows for each such
      year then ended (subject, in the case of unaudited statements, to normal
      year-end audit adjustments). 

     

    (s) Performance
      and New Audit Adjustments. The
      Make-Good Agreement contains certain provisions relative to a targeted net
      income of the Company for fiscal year end 2007 (referred to therein as
“FY07
      Net Income”)
      as
      well as “New Audited Revenue” and “New Audited Cash Flow from Operations”, as
      those terms are defined in the Make-Good Agreement. The parties hereto intend
      that adjustments similar to those in the Make-Good Agreement would be applied
      in
      this Agreement, except as set forth herein. As such, the Company covenants
      to
      Holder that “FY07 Net Income” will be greater than or equal to $10.0 million
      (adjusted for any non-cash charges associated with this Agreement and the SPA)
      (the "Performance
      Threshold").
      In
      the event the Performance Threshold is not attained, then the Company shall
      promptly issue, or cause to be issued to Buyer or its designee, a pro rata
      portion of One Million (1,000,000) shares of Common Stock for every one (1)
      cent
      by which the Company’s earnings per share, determined on a fully diluted basis
      (“Earnings
      Per Share”)
      is
      less than $0.065 (For
      purposes of clarity, should Earnings Per Share be $0.060 cent,
      then
      the Company would issue to Buyer 500,000 shares). In addition, the Company
      shall
      promptly issue or cause to be issued to Buyer or its designee Two Thousand
      (2,000) shares of Common Stock per Unit held for every percentage point in
      excess of 10% in which (A) the Old Audited Revenues exceeds the New Audited
      Revenues and (B) the Old Audited Cash Flow from Operations exceeds the New
      Cash
      Flow From Operations, as those terms are defined in the Make-Good
      Agreement. The
      maximum amount of shares of Common Stock that can be issued to Buyer shall
      be
      capped based on a maximum excess of fifteen (15) percentage points. The shares
      issued by the Company pursuant to this Section 4(t) shall be in addition to
      any
      shares of Common Stock issued to the Buyers under the Make-Good Agreement.
      The
      shares issued by the Company pursuant to this Section 4(t) shall be referred
      to
      as the “Make
      Good Shares.”

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

     

    5. REGISTER;
      TRANSFER AGENT INSTRUCTIONS.

     

    (a) Register.
      The
      Company shall maintain at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to each holder of
      Securities), a register for the Unit, the Note and the Warrant that comprise
      the
      Unit in which the Company shall record the name and address of the Person in
      whose name the Unit, Note and Warrant
      have been issued (including the name and address of each transferee) and the
      number of Note Shares and Warrant Shares issuable upon conversion of the Note
      and exercise of the Warrant held by such Person. The Company shall keep the
      register open and available at all times during business hours for inspection
      of
      Buyer or its legal representatives.

     

    (b) Transfer
      Agent Instructions.
      The
      Company shall issue irrevocable instructions to its transfer agent, and any
      subsequent transfer agent, to issue certificates or credit shares to the
      applicable balance accounts at The Depository Trust Company ("DTC"),
      registered in the name of Buyer or its respective nominee(s), for the Conversion
      Shares issued upon conversion of the Note and Warrant Shares issued upon
      exercise of the Warrant in such amounts as specified from time to time by Buyer
      to the Company upon conversion of the Note and/or exercise of the Warrant in
      the
      form of Exhibit
      D
      attached
      hereto (the "Irrevocable
      Transfer Agent Instructions").
      The
      Company warrants that no instruction other than the Irrevocable Transfer Agent
      Instructions referred to in this Section 5(b), and stop transfer instructions
      to
      give effect to Section 2(g) hereof, will be given by the Company to its transfer
      agent, and that the Securities shall otherwise be freely transferable on the
      books and records of the Company as and to the extent provided in this Agreement
      and the other Transaction Documents. If Buyer effects a sale, assignment or
      transfer of the Securities in accordance with Section 2(f), the Company shall
      permit the transfer and shall promptly instruct its transfer agent to issue
      one
      or more certificates or credit shares to the applicable balance accounts at
      DTC
      in such name and in such denominations as specified by Buyer to effect such
      sale, transfer or assignment. In the event that such sale, assignment or
      transfer involves Conversion Shares or Warrant Shares sold, assigned or
      transferred pursuant to an effective registration statement or pursuant to
      Rule
      144, the transfer agent shall issue such Securities to Buyer, assignee or
      transferee, as the case may be, without any restrictive legend. 

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    (c) Breach.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to Buyer. Accordingly, the Company acknowledges that the remedy
      at law for a breach of its obligations under this Section 5 will be inadequate
      and agrees, in the event of a breach or threatened breach by the Company of
      the
      provisions of this Section 5, that Buyer shall be entitled, in addition to
      all
      other available remedies, to an order and/or injunction restraining any breach
      and requiring immediate issuance and transfer, without the necessity of showing
      economic loss and without any bond or other security being
      required.

     

    (d) Additional
      Relief.
      If the
      Company shall fail for any reason or for no reason to issue to such holder
      unlegended certificates within three (3) Business Days of receipt of documents
      necessary for the removal of legend set forth above (the "Deadline
      Date"),
      then,
      in addition to all other remedies available to the holder, if on or after the
      Trading Day (as defined in the Warrant) immediately following such three
      Business Day period, the holder purchases (in an open market transaction or
      otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
      holder of shares of Common Stock that the holder anticipated receiving from
      the
      Company (a "Buy-In"),
      then
      the Company shall, within three Business Days after the holder's request and
      in
      the holder's discretion, either (i) pay cash to the holder in an amount equal
      to
      the holder's total purchase price (including brokerage commissions, if any)
      for
      the shares of Common Stock so purchased (the "Buy-In
      Price"),
      at
      which point the Company's obligation to deliver such certificate (and to issue
      such shares of Common Stock) shall terminate, or (ii) promptly honor its
      obligation to deliver to the holder a certificate or certificates representing
      such shares of Common Stock and pay cash to the holder in an amount equal to
      the
      excess (if any) of the Buy-In Price over the product of (A) such number of
      shares of Common Stock, times (B) the Closing Bid Price on the Deadline Date.
      "Closing
      Bid Price"
      means,
      for any security as of any date, the last closing price for such security on
      the
      Principal Market, as reported by Bloomberg, or, if the Principal Market begins
      to operate on an extended hours basis and does not designate the closing bid
      price then the last bid price of such security prior to 4:00:00 p.m., New York
      Time, as reported by Bloomberg, or, if the Principal Market is not the principal
      securities exchange or trading market for such security, the last closing price
      of such security on the principal securities exchange or trading market where
      such security is listed or traded as reported by Bloomberg, or if the foregoing
      do not apply, the last closing price of such security in the over-the-counter
      market on the electronic bulletin board for such security as reported by
      Bloomberg, or, if no closing bid price is reported for such security by
      Bloomberg, the average of the bid prices of any market makers for such security
      as reported in the "pink sheets" by Pink Sheets LLC (formerly the National
      Quotation Bureau, Inc.). If the Closing Bid Price cannot be calculated for
      a
      security on a particular date on any of the foregoing bases, the Closing Bid
      Price of such security on such date shall be the fair market value as mutually
      determined by the Company and the holder. If the Company and the holder are
      unable to agree upon the fair market value of such security, then such dispute
      shall be resolved pursuant to Section 12 of the Warrant. All such determinations
      to be appropriately adjusted for any stock dividend, stock split, stock
      combination or other similar transaction during the applicable calculation
      period.

     

    6. CONDITIONS
      TO THE COMPANY'S OBLIGATION TO SELL.

     

    The
      obligation of the Company hereunder to issue and sell the Units to Buyer at
      the
      Closing is subject to the satisfaction, at or before the Closing Date, of each
      of the following conditions, provided that these conditions are for the
      Company's sole benefit and may be waived by the Company at any time in its
      sole
      discretion by providing Buyer with prior written notice thereof:

     

    (i) Buyer
      shall have executed each of the Transaction Documents to which it is a party
      and
      delivered the same to the Company.

    
       

      
        
          
          

        

        
          -27-

          
            

          

        

        
          
          

        

         

      

    

    (ii) The
      representations and warranties of Buyer shall be true and correct in all
      material respects (except for those representations and warranties that are
      qualified by materiality or Material Adverse Effect, which shall be true and
      correct in all 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 speak
      as of a specific date, which shall be true and correct as of such specified
      date), and Buyer shall have performed, satisfied and complied in all material
      respects with the covenants, agreements and conditions required by this
      Agreement to be performed, satisfied or complied with by Buyer at or prior
      to
      the Closing Date.

     

    7. CONDITIONS
      TO BUYER'S OBLIGATION TO PURCHASE.

     

    The
      obligation of Buyer hereunder to purchase the Units at the Closing is subject
      to
      the satisfaction, at or before the Closing Date, of each of the following
      conditions, provided that these conditions are for Buyer's sole benefit and
      may
      be waived by Buyer at any time in its sole discretion by providing the Company
      with prior written notice thereof:

     

    (i) The
      Company shall have duly executed and delivered to Buyer (i) each of the
      Transaction Documents and (ii) the Note, and (iii) the Warrant being purchased
      by Buyer at the Closing pursuant to this Agreement.

     

    (ii) Buyer
      shall have received the opinion of Anslow & Jaclin, LLP, the Company’s
      outside counsel, dated as of the Closing Date, in substantially the form of
      Exhibit E
      attached
      hereto.

     

    (iii) The
      Company shall have delivered to Buyer a certificate evidencing the formation
      and
      good standing of the Company and each of its Subsidiaries in such entity's
      jurisdiction of formation issued by the Secretary of State (or comparable
      office) of such jurisdiction, as of a date within 10 days of the Closing Date.
      

     

    (iv) The
      Company shall have delivered to Buyer a certificate evidencing the Company's
      qualification as a foreign corporation and good standing issued by the Secretary
      of State (or comparable office) of each jurisdiction in which the Company
      conducts business, as of a date within 10 days of the Closing Date.

     

    (v) The
      Company shall have delivered to Buyer a certified copy of the Certificate of
      Incorporation as certified by the Secretary of State of the State of Delaware
      within ten (10) days of the Closing Date. 

     

    (vi) The
      Company shall have delivered to Buyer a certificate, executed by the Secretary
      of the Company and dated as of the Closing Date, as to (i) the resolutions
      consistent with Section 3(b) as adopted by the Company's Board of Directors
      in a
      form reasonably acceptable to Buyer, (ii) the Certificate of Incorporation
      and
      (iii) the Bylaws, each as in effect at the Closing, in the form attached hereto
      as Exhibit F

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

     

    (vii) The
      representations and warranties of the Company shall be true and correct in
      all
      material respects (except for those representations and warranties that are
      qualified by materiality or Material Adverse Effect, which shall be true and
      correct in all 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 speak
      as of a specific date, which shall be true and correct as of such specified
      date) and the Company shall have performed, satisfied and complied in all
      material respects with the covenants, agreements and conditions required by
      the
      Transaction Documents to be performed, satisfied or complied with by the Company
      at or prior to the Closing Date. Buyer shall have received a certificate,
      executed by the Chief Executive Officer of the Company, dated as of the Closing
      Date, to the foregoing effect and as to such other matters as may be reasonably
      requested by Buyer in the form attached hereto as Exhibit
      G.

     

    (viii) The
      Company shall have delivered to Buyer a letter from the Company's transfer
      agent
      certifying the number of shares of Common Stock outstanding as of a date within
      five days of the Closing Date.

     

    (ix) The
      Common Stock (I) shall be designated for quotation or listed on the Principal
      Market and (II) shall not have been suspended, as of the Closing Date, by the
      SEC or the Principal Market from trading on the Principal Market nor shall
      suspension by the SEC or the Principal Market have been threatened, as of the
      Closing Date, either (A) in writing by the SEC or the Principal Market or (B)
      by
      falling below the minimum listing maintenance requirements of the Principal
      Market, if any.

     

    (x) The
      Company shall have obtained all governmental, regulatory or third party consents
      and approvals, if any, necessary for the sale of the Securities and the
      consummation of the Sibiono Acquisition transaction.

     

    (xi) There
      shall be no litigation pending or, to the knowledge of the Company or any of
      its
      Subsidiaries, threatened arising out of or related to the Sibiono Acquisition
      Transaction. 

     

    (xii) Contemporaneously
      with the Closing (or no later than four business days after Closing), the
      Company shall file with the SEC a Current Report on Form 8-K disclosing the
      Sibiono Acquisition Transaction. Thereafter, within 71 days of filing such
      Form
      8-K, the Company shall file an amended Form 8-K to such original Form 8-K filing
      which shall include financial statements Sibiono (including pro-forma financial
      statements) for the required financial statement period, which financial
      statements have been prepared in accordance with generally accepted accounting
      principles, consistently applied, during the periods involved (except in the
      case of unaudited interim statements, to the extent they may exclude footnotes
      or may be condensed or summary statements) and which fairly present in all
      material respects the financial position of Sibiono.

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

     

    (xiii) The
      Company shall have delivered to Buyer such other documents relating to the
      transactions contemplated by this Agreement as Buyer or its counsel may
      reasonably request.

     

    8. TERMINATION.
      In
      the
      event that the Closing shall not have occurred on or before ten (10) Business
      Days from the date hereof due to the Company's or Buyer's failure to satisfy
      the
      conditions set forth in Sections 6 and 7 above (and the nonbreaching party's
      failure to waive such unsatisfied condition(s)), the nonbreaching party shall
      have the option to terminate this Agreement with respect to such breaching
      party
      at the close of business on such date without liability of any party to any
      other party; provided,
      however,
      that if
      this Agreement is terminated pursuant to this Section 8, the Company shall
      remain obligated to reimburse for the expenses described in Section 4(g)
      above.

     

    9. MISCELLANEOUS.

     

    (a) Governing
      Law; Jurisdiction; Jury Trial.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by the internal laws of the State of New
      York, without giving effect to any choice of law or conflict of law provision
      or
      rule (whether of the State of New York or any other jurisdictions) that would
      cause the application of the laws of any jurisdictions other than the State
      of
      New York. Each party hereby irrevocably submits to the exclusive jurisdiction
      of
      the state and federal courts sitting in The City of New York, Borough of
      Manhattan, for the adjudication of any dispute hereunder or in connection
      herewith or with any transaction contemplated hereby or discussed herein, and
      hereby irrevocably waives, and agrees not to assert in any suit, action or
      proceeding, any claim that it is not personally subject to the jurisdiction
      of
      any such court, that such suit, action or proceeding is brought in an
      inconvenient forum or that the venue of such suit, action or proceeding is
      improper. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof to such party at the address for such notices to it
      under
      this Agreement and agrees that such service shall constitute good and sufficient
      service of process and notice thereof. Nothing contained herein shall be deemed
      to limit in any way any right to serve process in any manner permitted by law.
      EACH
      PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
      HEREBY. 

     

    (b) Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party;
      provided that a facsimile signature shall be considered due execution and shall
      be binding upon the signatory thereto with the same force and effect as if
      the
      signature were an original, not a facsimile signature.

     

    (c) Headings.
      The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

     

    (d) Severability.
      If any
      provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction.

     

    (e) Entire
      Agreement; Amendments.
      This
      Agreement and the other Transaction Documents supersede all other prior oral
      or
      written agreements between Buyer, the Company, their affiliates and Persons
      acting on their behalf with respect to this transaction (by way of
      clarification, specifically not including any agreements or documents executed
      in connection with the SPA), and this Agreement, the other Transaction Documents
      and the instruments referenced herein and therein contain the entire
      understanding of the parties with respect to the matters covered herein and
      therein and, except as specifically set forth herein or therein, neither the
      Company nor Buyer makes any representation, warranty, covenant or undertaking
      with respect to such matters. No provision of this Agreement may be amended
      other than by an instrument in writing signed by the Company and the holders
      of
      at least a majority of the aggregate number of Registrable Securities issued
      and
      issuable hereunder, and any amendment to this Agreement made in conformity
      with
      the provisions of this Section 9(e) shall be binding on Buyer and holders of
      Securities as applicable. No provision hereof may be waived other than by an
      instrument in writing signed by the party against whom enforcement is sought.
      No
      such amendment shall be effective to the extent that it applies to less than
      all
      of the holders of the applicable Securities then outstanding. 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 also is offered to all of the parties to the Transaction
      Documents, and the holders of the Warrants. The Company has not, directly or
      indirectly, made any agreements with Buyer relating to the terms or conditions
      of the transactions contemplated by the Transaction Documents except as set
      forth in the Transaction Documents. Without limiting the foregoing, the Company
      confirms that, except as set forth in this Agreement or pursuant to the SPA,
      Buyer has not made any commitment or promise or has any other obligation to
      provide any financing to the Company or otherwise. 

     

    (f) Notices.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one Business Day after deposit with an overnight courier service,
      in
      each case properly addressed to the party to receive the same. The addresses
      and
      facsimile numbers for such communications shall be:

    


    If
      to
      Company:

     

    23/F,
      Changjiang Plaza, 1 Mingquan Lu

    Wuhan
      430021, P.R. China

    Telephone: +1
      (86
      27) 8537-5532

    Facsimile: +1
      (86
      27) 8537-5851

    Attention:
       Yiqing
      Wan

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

     

    with
      a
      copy to:

    


    Anslow
      & Jaclin, LLP

    195
      Route
      9 South, Suite 204

    Manalapan,
      New Jersey 07726

    Telephone: 
      (732)
      409-1212 

    Facsimile: 
      (732)
      577-1188

    Attention:
       Richard
      I. Anslow, Esq.

     

    If
      to a
      Buyer, to its address and facsimile number set forth on the Schedule of Buyers
      attached hereto, with copies to such Buyer's representatives as set forth on
      the
      Schedule of Buyers, or to such other address and/or facsimile number and/or
      to
      the attention of such other Person as the recipient party has specified by
      written notice given to each other party five (5) days prior to the
      effectiveness of such change. Written confirmation of receipt (A) given by
      the
      recipient of such notice, consent, waiver or other communication, (B)
      mechanically or electronically generated by the sender's facsimile machine
      containing the time, date, recipient facsimile number and an image of the first
      page of such transmission or (C) provided by a courier or overnight courier
      service shall be rebuttable evidence of personal service, receipt by facsimile
      or receipt from a nationally recognized overnight delivery service in accordance
      with clause (i), (ii) or (iii) above, respectively.

     

    (g) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and assigns, including any purchasers of Note or
      Warrant. The Company shall not assign this Agreement or any rights or
      obligations hereunder without the prior written consent of the holders of at
      least a majority of the aggregate number of Registrable Securities issued and
      issuable hereunder, including by way of a Fundamental Transaction (unless the
      Company is in compliance with the applicable provisions governing Fundamental
      Transactions set forth in the Warrants). Buyer may assign some or all of its
      rights hereunder without the consent of the Company, in which event such
      assignee shall be deemed to be Buyer hereunder with respect to such assigned
      rights.

     

    (h) 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.

     

    (i) Survival.
      Unless
      this Agreement is terminated under Section 8, the representations and warranties
      of the Company and Buyer contained in Sections 2 and 3, and the agreements
      and
      covenants set forth in Sections 4, 5 and 9 shall survive the Closing.


     

    (j) Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as any other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

     

    (k) Indemnification.
      In
      consideration of Buyer's execution and delivery of the Transaction Documents
      and
      acquiring the Securities thereunder and in addition to all of the Company's
      other obligations under the Transaction Documents, the Company shall defend,
      protect, indemnify and hold harmless Buyer and each other holder of the
      Securities and all of their stockholders, partners, members, officers,
      directors, employees and direct or indirect investors and any of the foregoing
      Persons' agents or other representatives (including, without limitation, those
      retained in connection with the transactions contemplated by this Agreement)
      (collectively, the "Indemnitees")
      from
      and against any and all actions, causes of action, suits, claims, losses, costs,
      penalties, fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Indemnitee is a party to the action for which
      indemnification hereunder is sought), and including reasonable attorneys' fees
      and disbursements (the "Indemnified
      Liabilities"),
      incurred by any Indemnitee as a result of, or arising out of, or relating to
      (a)
      any misrepresentation or breach of any representation or warranty made by the
      Company in the Transaction Documents or any other certificate, instrument or
      document contemplated hereby or thereby, (b) any breach of any covenant,
      agreement or obligation of the Company contained in the Transaction Documents
      or
      any other certificate, instrument or document contemplated hereby or thereby
      or
      (c) any cause of action, suit or claim brought or made against such Indemnitee
      by a third party (including for these purposes a derivative action brought
      on
      behalf of the Company) and arising out of or resulting from (i) the execution,
      delivery, performance or enforcement of the Transaction Documents or any other
      certificate, instrument or document contemplated hereby or thereby, (ii) any
      transaction financed or to be financed in whole or in part, directly or
      indirectly, with the proceeds of the issuance of the Securities, (iii) any
      disclosure made by Buyer pursuant to Section 4(i), or (iv) the status of Buyer
      or a holder of the Securities as an investor in the Company pursuant to the
      transactions contemplated by the Transaction Documents. To the extent that
      the
      foregoing undertaking by the Company may be unenforceable for any reason, the
      Company shall make the maximum contribution to the payment and satisfaction
      of
      each of the Indemnified Liabilities that is permissible under applicable law.
      Except
      as otherwise set forth herein, the mechanics and procedures with respect to
      the
      rights and obligations under this Section 9(k) shall be the same as those set
      forth in Section 6 of the Registration Rights Agreement.

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

     

    (l) No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

    (m) Remedies.
      Buyer
      and each holder of the Securities shall have all rights and remedies set forth
      in the Transaction Documents and all rights and remedies which such holders
      have
      been granted at any time under any other agreement or contract and all of the
      rights which such holders have under any law. Any Person having any rights
      under
      any provision of this Agreement shall be entitled to enforce such rights
      specifically (without posting a bond or other security), to recover damages
      by
      reason of any breach of any provision of this Agreement and to exercise all
      other rights granted by law. Furthermore, the Company recognizes that in the
      event that it fails to perform, observe, or discharge any or all of its
      obligations under the Transaction Documents, any remedy at law may prove to
      be
      inadequate relief to Buyer. The Company therefore agrees that Buyer shall be
      entitled to seek temporary and permanent injunctive relief in any such case
      without the necessity of proving actual damages and without posting a bond
      or
      other security.

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

     

    (n) Rescission
      and
      Withdrawal Right.
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) the Transaction Documents, whenever Buyer exercises
      a
      right, election, demand or option under a Transaction Document and the Company
      does not timely perform its related obligations within the periods therein
      provided, then Buyer may rescind or withdraw, in its sole discretion from time
      to time upon written notice to the Company, any relevant notice, demand or
      election in whole or in part without prejudice to its future actions and
      rights.

     

    (o) Payment
      Set Aside.
      To the
      extent that the Company makes a payment or payments to Buyer hereunder or
      pursuant to any of the other Transaction Documents or Buyer enforces or
      exercises its rights hereunder or thereunder, and such payment or payments
      or
      the proceeds of such enforcement or exercise or any part thereof are
      subsequently invalidated, declared to be fraudulent or preferential, set aside,
      recovered from, disgorged by or are required to be refunded, repaid or otherwise
      restored to the Company, a trustee, receiver or any other Person under any
      law
      (including, without limitation, any bankruptcy law, foreign, state or federal
      law, common law or equitable cause of action), then to the extent of any such
      restoration the obligation or part thereof originally intended to be satisfied
      shall be revived and continued in full force and effect as if such payment
      had
      not been made or such enforcement or setoff had not occurred.

     

    (p) Independent
      Nature of Buyer's Obligations and Rights.
      Nothing
      contained herein or in any other Transaction Document, and no action taken
      by
      any Buyer pursuant hereto or thereto, shall be deemed to constitute Buyer as,
      and the Company acknowledges that Buyer does not so constitute, a partnership,
      an association, a joint venture or any other kind of entity, or create a
      presumption that Buyer is in any way acting in concert or as a group, and the
      Company will not assert any such claim with respect to such obligations or
      the
      transactions contemplated by the Transaction Documents and the Company
      acknowledges that Buyer is not acting in concert or as a group with any of
      the
      Buyers under the SPA (other than Buyer itself) with respect to such obligations
      or the transactions contemplated by the Transaction Documents. The Company
      acknowledges and Buyer confirms that it has independently participated in the
      negotiation of the transaction contemplated hereby with the advice of its own
      counsel and advisors. Buyer shall be entitled to independently protect and
      enforce its rights, including, without limitation, the rights arising out of
      this Agreement or out of any other Transaction Documents, and it shall not
      be
      necessary for any Buyer under the SPA to be joined as an additional party in
      any
      proceeding for such purpose.

     

    (q) Agent
      for Service of Process (i)
      The
      Company hereby irrevocably appoints National Corporate Research, Ltd.,
      of 225
      West
      34th
      Street,
      Suite 910, New York, N.Y. 10112, U.S.A. ("NCR")
      as its
      agent for the receipt of service of process in the United States. The Company
      agrees that any document may be effectively served on it in connection with
      any
      action, suit or proceeding in the United States by service on its agents. Buyer
      consents and agrees that the Company may, in its reasonable discretion,
      irrevocably appoint a substitute agent for the receipt of service of process
      located within the Untied States, and that upon such appointment, the
      appointment of NCR may be revoked.

     

    (ii)
      Any
      document shall be deemed to have been duly served if marked for the attention
      of
      the agent at its address as set forth in this Section 9(q) or such other address
      in the United States as may be notified to the party wishing to serve the
      document and (a) left at the specified address if its receipt is acknowledged
      in
      writing; or (b) sent to the specified address by post, registered mail return
      receipt requested. In the case of (a), the document will be deemed to have
      been
      duly served when it is left and signed for. In the case of (b), the document
      shall be deemed to have been duly served when received and
      acknowledged.

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

     

    (iii)
      If
      the Company’s agent at any time ceases for any reason to act as such, the
      Company shall promptly appoint a replacement agent having an address for service
      in the United States and shall promptly notify Buyer at such time of the name
      and address of the replacement agent. Failing such appointment and notification,
      the holders of a majority of the Securities at such time shall be entitled
      by
      notice to the Company to appoint a replacement agent to act on the Company’s
      behalf. The provisions of this Section 9(q) applying to service on an agent
      apply equally to service on a replacement agent.

     

    (r) Currency.
      As used
      herein, "Dollar", "US Dollar" and "$" each mean the lawful money of the United
      States.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF,
      Buyer
      and the Company have caused their respective signature page to this Investment
      Agreement to be duly executed as of the date first written above.

    
      	 	 	 
	 	
              COMPANY:

              BENDA
                PHARMACEUTICAL, INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:
                Yiqing Wan

              Title:
                Chief Executive Officer

            


    

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF,
      Buyer
      and the Company have caused their respective signature page to this Investment
      Agreement to be duly executed as of the date first written above.

    
      
        	 	 	 
	 	
                
                  BUYER:

                

              
	 
 	 
 	 
 
	 	By:  	 
	 	
                

                
                  Name:
                    

                  Title:
                    

                

              


      

       

      
        
          
          

        

        
          -37-

          
            

          

        

        
          
          

        

      

    

    


    EXHIBITS

     

    Exhibit
      A Form
      of
      Note

    Exhibit
      B Form
      of
      Warrant

    Exhibit
      C Form
      of
      Registration Rights Agreement

    Exhibit
      D Form
      of
      Irrevocable Transfer Agent Instructions

    Exhibit
      E Form
      of
      Opinion of Company’s Counsel

    Exhibit
      F Form
      of
      Secretary's Certificate

    Exhibit
      G Form
      of
      Officers Certificate

    Exhibit
      H Form
      of
      Lock-Up Agreement

     

    SCHEDULES
      

     

    Schedule
      3(a) Subsidiaries

    Schedule
      3(g) Agents

    Schedule
      3(l) Absence
      of Certain Changes

    Schedule
      3(r)  Equity
      Capitalization

    Schedule
      3(s) Indebtedness
      and Other Contracts

    Schedule
      3(t) Absence
      of Litigation

    Schedule
      3(w)  Title

    Schedule
      4(d) Use
      of
      Proceeds