Document:

Unassociated Document

    EXHIBIT
      10.1

    
      

      

      

      

      SHARE
        EXCHANGE AGREEMENT

      

      

      by
        and among

      

      Skystar
        Bio-Pharmaceutical Company

      a
        Cayman
        Island company

      

      and

      

      the
        Shareholders of

      Skystar
        Bio-Pharmaceutical Company,

      

      on
        the one hand;

      

      and

      

      The
        Cyber
        Group Network Corporation,

      a
        Nevada
        corporation,

      

      and

      

      the
        Majority Stockholders of The Cyber Group Network Corporation,

      

      on
        the other hand 

      

      

      September
        20, 2005

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SHARE
        EXCHANGE AGREEMENT

       

      

      This
        Share Exchange Agreement, dated as of September 20, 2005 (this “Agreement”), is
        made and entered into by and among the shareholders of Skystar
        Bio-Pharmaceutical Company, a Cayman Island Company (“Skystar”), listed on
        Schedule I attached (each, a “Skystar Shareholder,” collectively, the “Skystar
        Shareholders”), on the one hand; and The Cyber Group Network Corporation, a
        publicly traded Nevada corporation (OTCBB: CGPN.OB) (“CGPN”), R. Scott Cramer,
        an individual, Steve Lowe, an individual, David Wassung, an individual (all
        hereinafter referred to collectively as the “CGPN Shareholders”) on the other
        hand. Skystar is a party to this agreement solely to make representations
        and
        warranties as set forth herein.

      

      R
        E C I T A L S

      

      WHEREAS,
        the Board of Directors of CGPN has adopted resolutions approving CGPN’s
        acquisition of shares of Skystar (the “Acquisition”) upon the terms and
        conditions hereinafter set forth in this Agreement;

      

      WHEREAS,
        each Skystar Shareholder owns the number of shares of common stock of Skystar
        set forth opposite such Skystar Shareholder’s name in Column I on Schedule I
        attached hereto (collectively, the “Skystar Shares”);

      

      WHEREAS,
        the Skystar Shareholders own, collectively, an amount of shares of common
        stock
        of Skystar, constituting 100% of the issued and outstanding capital stock
        of
        Skystar, and the Skystar Shareholders desire to sell their respective portion
        of
        the Skystar Shares pursuant to the terms and conditions of this
        Agreement;

      

      WHEREAS,
        the CGPN Stockholders hold an amount of shares of CGPN common stock which
        represents at least a majority of the issued and outstanding capital stock
        of
        CGPN;

      

      WHEREAS,
        the
        CGPN
        Stockholders will enter into this Agreement for the purpose of making certain
        representations, warranties, covenants, indemnifications and
        agreements;

      

      WHEREAS,
        it
        is
        intended that the terms and conditions of this Agreement comply in all respects
        with Section 368(a)(1)(B) of the Code and the regulations corresponding thereto,
        so that the Acquisition shall qualify as a tax free reorganization under
        the
        Code;

      

      NOW,
        THEREFORE, the parties hereto, intending to be legally bound, agree as
        follows:

      

      ARTICLE
        1

      THE
        ACQUISITION

      

      1.1  
        The
        Acquisition.
        Upon
        the terms and subject to the conditions hereof, at the Closing (as hereinafter
        defined) the Skystar Shareholders will sell, convey, assign, transfer and
        deliver to CGPN one or more stock certificates representing the Skystar Shares,
        and as consideration for the acquisition of the Skystar Shares, CGPN will
        issue
        to each Skystar Shareholder, in exchange for such Skystar Shareholder’s pro rata
        portion of the Skystar Shares, one or more stock certificates representing
        the
        number of shares of CGPN Series B Preferred Stock set forth opposite such
        Skystar Shareholder’s name in Column II on Schedule 1.1(a) attached hereto
        (collectively, the “CGPN Shares”). The CGPN Shares issued shall be convertible,
        in the aggregate, into a number of shares of CGPN common stock that would
        equal
        89.5% of the outstanding shares of CGPN common stock, if the CGPN Shares
        were to
        be full converted at the time of Closing. In addition, at Closing, Skystar
        shall
        pay to CGPN an amount equal to $120,000, which shall be used to pay liabilities
        of CGPN in the amounts owed to each person as set forth in Schedule 1.1(b).
        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      1.2  
        Closing.
        The
        closing of the Acquisition (the “Closing”) shall take place on or before October
        15, 2005, or on such other date as may be mutually agreed upon by the parties.
        Such date is referred to herein as the “Closing Date.”

      

      

      ARTICLE
        2

      REPRESENTATIONS
        AND WARRANTIES OF SKYSTAR

      

      Skystar
        hereby represents and warrants to CGPN as follows:

      

      2.1
          Organization.
        Skystar
        has been duly incorporated, is validly existing as a corporation and is in
        good
        standing under the laws of its jurisdiction of incorporation, and has the
        requisite power to carry on its business as now conducted.

      

      2.2 
         Capitalization.
        The
        authorized capital stock of Skystar consists of 10,000 shares of common stock,
        no par value, of which at the Closing, no more than 10,000 shares shall be
        issued and outstanding. All of the issued and outstanding shares of capital
        stock of Skystar, as of the Closing, are duly authorized, validly issued,
        fully
        paid, non-assessable and free of preemptive rights. There are no voting trusts
        or any other agreements or understandings with respect to the voting of
        Skystar’s capital stock. 

      

      2.3 
         Certain
        Corporate Matters.
        Skystar
        is duly qualified to do business as a corporation and is in good standing
        in
        each jurisdiction in which the ownership of its properties, the employment
        of
        its personnel or the conduct of its business requires it to be so qualified,
        except where the failure to be so qualified would not have a material adverse
        effect on Skystar’s financial condition, results of operations or business.
        Skystar has full corporate power and authority and all authorizations, licenses
        and permits necessary to carry on the business in which it is engaged and
        to own
        and use the properties owned and used by it.

      

      2.4 
         Authority
        Relative to this Agreement.
        Skystar
        has the requisite power and authority to enter into this Agreement and to
        carry
        out its obligations hereunder. The execution, delivery and performance of
        this
        Agreement by Skystar and the consummation by Skystar of the transactions
        contemplated hereby have been duly authorized by the Board of Directors of
        Skystar and no other actions on the part of Skystar are necessary to authorize
        this Agreement or the transactions contemplated hereby. This Agreement has
        been
        duly and validly executed and delivered by Skystar and constitutes a valid
        and
        binding agreement of Skystar, enforceable against Skystar in accordance with
        its
        terms, except as such enforcement may be limited by bankruptcy, insolvency
        or
        other similar laws affecting the enforcement of creditors’ rights generally or
        by general principles of equity.

      

      2.5
          Consents
        and Approvals; No Violations.
        Except
        for applicable requirements of federal securities laws and state securities
        or
        blue-sky laws, no filing with, and no permit, authorization, consent or approval
        of, any third party, public body or authority is necessary for the consummation
        by Skystar of the transactions contemplated by this Agreement. Neither the
        execution and delivery of this Agreement by Skystar nor the consummation
        by
        Skystar of the transactions contemplated hereby, nor compliance by Skystar
        with
        any of the provisions hereof, will (a) conflict with or result in any breach
        of
        any provisions of the charter or Bylaws of Skystar, (b) result in a violation
        or
        breach of, or constitute (with or without due notice or lapse of time or
        both) a
        default (or give rise to any right of termination, cancellation or acceleration)
        under, any of the terms, conditions or provisions of any note, bond, mortgage,
        indenture, license, contract, agreement or other instrument or obligation
        to
        which Skystar or any Subsidiary (as hereinafter defined) is a party or by
        which
        they any of their respective properties or assets may be bound or (c) violate
        any order, writ, injunction, decree, statute, rule or regulation applicable
        to
        Skystar or any Subsidiary, or any of their respective properties or assets,
        except in the case of clauses (b) and (c) for violations, breaches or defaults
        which are not in the aggregate material to CGPN or any Subsidiary taken as
        a
        whole.

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      2.6 
         Books
        and Records.
        The
        books and records of Skystar delivered to the CGPN Shareholders prior to
        the
        Closing fully and fairly reflect the transactions to which Skystar is a party
        or
        by which they or their properties are bound and there shall be no material
        difference between the unaudited financials of Skystar given to CGPN and
        the
        actual reviewed US GAAP results of Skystar for the six month period ended
        June
        30, 2005.

      

      2.7 
         Intellectual
        Property.
        Skystar
        has no knowledge of any claim that, or inquiry as to whether, any product,
        activity or operation of Skystar infringes upon or involves, or has resulted
        in
        the infringement of, any trademarks, trade-names, service marks, patents,
        copyrights or other proprietary rights of any other person, corporation or
        other
        entity; and no proceedings have been instituted, are pending or are threatened.
        

      

      2.8 
         Litigation.
        Skystar
        is not subject to any judgment or order of any court or quasijudicial or
        administrative agency of any jurisdiction, domestic or foreign, nor is there
        any
        charge, complaint, lawsuit or governmental investigation pending against
        Skystar. Skystar is not a plaintiff in any action, domestic or foreign, judicial
        or administrative. There are no existing actions, suits, proceedings against
        or
        investigations of Skystar, and Skystar knows of no basis for such actions,
        suits, proceedings or investigations. There are no unsatisfied judgments,
        orders, decrees or stipulations affecting Skystar or to which Skystar is
        a
        party.

      

      2.9 
         Legal
        Compliance.
        To the
        best knowledge of Skystar, after due investigation, no claim has been filed
        against Skystar alleging a violation of any applicable laws and regulations
        of
        foreign, federal, state and local governments and all agencies thereof. Skystar
        hold all of the material permits, licenses, certificates or other authorizations
        of foreign, federal, state or local governmental agencies required for the
        conduct of their respective businesses as presently conducted.

      

      2.10
         Contracts.
        Skystar
        has delivered to CGPN copies of each and every:

      

      
        	 	
                (a)

              	
                Contract
                  or series of related contracts with Xian Tianxing Bio-Pharmaceutical
                  Co.,
                  Ltd., a Chinese company; and

              

      

      

      
        	 	
                (b)

              	
                material
                  agreement of Skystar not made in the ordinary course of
                  business.

              

      

       

      All
        of
        the foregoing are referred to as the “Contracts.” The copies of each of the
        Contracts delivered are accurate and complete. Each Contract is in full force
        and effect and constitutes a legal, valid and binding obligation of, and
        is
        legally enforceable against, the respective parties thereto. There is no
        material default with respect to any such contract which will give rise to
        liability in respect thereof on the part of Skystar or the other parties
        thereto. No notice of default or similar notice has been given or received
        by
        Skystar under any of such contracts. 

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      2.11
         Disclosure.
        The
        representations and warranties and statements of fact made by Skystar in
        this
        Agreement are, as applicable, accurate, correct and complete and do not contain
        any untrue statement of a material fact or omit to state any material fact
        necessary in order to make the statements and information contained herein
        not
        false or misleading.

      

      

      ARTICLE
        3

      REPRESENTATIONS
        AND WARRANTIES 

      OF
        THE SKYSTAR SHAREHOLDERS

      

      The
        Skystar Shareholders hereby represent and warrant to CGPN as
        follows:

      

      3.1  
        Ownership
        of the Skystar Shares.
        Each
        Skystar Shareholder owns, beneficially and of record, good and marketable
        title
        to the Skystar Shares set forth opposite such Skystar Shareholder’s name in
        Column I on Schedule I attached hereto, free and clear of all security
        interests, liens, adverse claims, encumbrances, equities, proxies, options
        or
        stockholders’ agreements. Each Skystar Shareholder represents that such person
        has no right or claims whatsoever to any shares of Skystar capital stock,
        other
        than shares listed across such Skystar Shareholder on Schedule I and does
        not
        have any options, warrants or any other instruments entitling such Skystar
        Shareholder to exercise to purchase or convert into shares of Skystar capital
        stock. At the Closing, the Skystar Shareholders will convey to CGPN good
        and
        marketable title to the Skystar Shares, free and clear of any security
        interests, liens, adverse claims, encumbrances, equities, proxies, options,
        stockholders’ agreements or restrictions.

      

      3.2  
        Authority
        Relative to this Agreement.
        This
        Agreement has been duly and validly executed and delivered by each Skystar
        Shareholder and constitutes a valid and binding agreement of each Skystar
        Shareholder, enforceable against each Skystar Shareholder in accordance with
        its
        terms, except as such enforcement may be limited by bankruptcy, insolvency
        or
        other similar laws affecting the enforcement of creditors’ rights generally or
        by general principles of equity.

       

      3.3  
        Restricted
        Securities.
        Each
        Skystar Shareholder acknowledges that the CGPN Shares will not be registered
        pursuant to the Securities Act of 1933, as amended (the “Securities Act”) or any
        applicable state securities laws, that the CGPN Shares will be characterized
        as
“restricted securities” under federal securities laws, and that under such laws
        and applicable regulations the CGPN Shares cannot be sold or otherwise disposed
        of without registration under the Securities Act or an exemption therefrom.
        In
        this regard, each Skystar Shareholder is familiar with Rule 144 promulgated
        under the Securities Act, as currently in effect, and understands the resale
        limitations imposed thereby and by the Securities Act. 

      

      3.4  
        Accredited
        Investor.
        Each
        Skystar Shareholder is an “Accredited Investor” as that term is defined in rule
        501 of Regulation D promulgated under the Securities Act. Each Skystar
        Shareholder is able to bear the economic risk of acquiring the CGPN Shares
        pursuant to the terms of this Agreement, including a complete loss of such
        Skystar Shareholder’s investment in the CGPN Shares.

      

      
        
          
          

        

        
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      3.5  
        Legend.
        Each
        Skystar Shareholder acknowledges that the certificate(s) representing such
        Skystar Shareholder’s pro rata portion of the CGPN Shares shall each
        conspicuously set forth on the face or back thereof a legend in substantially
        the following form:

      

      THESE
        SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
        AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
        IN THE
        ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
        SAID
        ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
        SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

       

      

      ARTICLE
        4

      REPRESENTATIONS
        AND WARRANTIES OF 

      CGPN
        AND THE CGPN STOCKHOLDERS

      

      CGPN
        and
        the CGPN Stockholders hereby represent and warrant, jointly and severally,
        to
        Skystar and the Skystar Shareholders as follows:

      

      4.1
          Organization.
        CGPN is
        a corporation duly organized, validly existing and in good standing under
        the
        laws of the state of its incorporation, and has the requisite corporate power
        to
        carry on its business as now conducted.

      

      4.2 
         Capitalization.
        CGPN’s
        authorized capital stock consists of 550,000,000 shares of capital stock,
        of
        which 500,000,000 shares are designated as Common Stock, of which 500,000,000
        shares are issued and outstanding and of which 50,000,000 shares are designated
        as Preferred Stock, of which 2,000,000 shares of Preferred Stock are issued
        and
        outstanding. When issued, the CGPN Shares and the securities into which the
        CGPN
        Shares can be converted into will be duly authorized, validly issued, fully
        paid, non-assessable and free of preemptive rights. There are no outstanding
        or
        authorized options, rights, warrants, calls, convertible securities, rights
        to
        subscribe, conversion rights or other agreements or commitments to which
        CGPN is
        a party or which are binding upon CGPN providing for the issuance by CGPN
        or
        transfer by CGPN of additional shares of CGPN’s capital stock and CGPN has not
        reserved any shares of its capital stock for issuance, nor are there any
        outstanding stock option rights, phantom equity or similar rights, contracts,
        arrangements or commitments to issue capital stock of CGPN. There are no
        voting
        trusts or any other agreements or understandings with respect to the voting
        of
        CGPN’s capital stock. There are no obligations of CGPN to repurchase, redeem or
        otherwise require any shares of its capital stock as of the Closing. At the
        time
        of closing, no shares of Preferred Stock will be issued and outstanding other
        than the Preferred Stock to be issued pursuant to Section 1.1 of this
        Agreement.

      

      4.3  
        Certain
        Corporate Matters.
        CGPN is
        duly licensed or qualified to do business and is in good standing as a foreign
        corporation in every jurisdiction in which the character of CGPN’s properties or
        nature of CGPN’s business requires it to be so licensed or qualified other than
        such jurisdictions in which the failure to be so licensed or qualified does
        not,
        or insofar as can reasonably be foreseen, in the future will not, have a
        material adverse effect on its financial condition, results of operations
        or
        business. CGPN has full corporate power and authority and all authorizations,
        licenses and permits necessary to carry on the business in which it is engaged
        or in which it proposes presently to engage and to own and use the properties
        owned and used by it. CGPN has delivered to Skystar true, accurate and complete
        copies of its certificate or articles of incorporation and bylaws, which
        reflect
        all restatements of and amendments made thereto at any time prior to the
        date of
        this Agreement. The records of meetings of the stockholders and Board of
        Directors of CGPN are complete and correct in all material respects. The
        stock
        records of CGPN and the stockholder lists of CGPN that CGPN has previously
        furnished to Skystar are complete and correct in all material respects and
        accurately reflect the record ownership and the beneficial ownership of all
        the
        outstanding shares of CGPN’s capital stock and any other outstanding securities
        issued by CGPN. CGPN is not in default under or in violation of any provision
        of
        its certificate or articles of incorporation or bylaws in any material respect.
        CGPN is not in any material default or in violation of any restriction, lien,
        encumbrance, indenture, contract, lease, sublease, loan agreement, note or
        other
        obligation or liability by which it is bound or to which any of its assets
        is
        subject.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      4.4  
        Authority
        Relative to this Agreement.
        Each of
        CGPN and the CGPN Stockholders has the requisite power and authority to enter
        into this Agreement and carry out its or his obligations hereunder. The
        execution, delivery and performance of this Agreement by CGPN and the
        consummation of the transactions contemplated hereby have been duly authorized
        by the Board of Directors of CGPN and no other actions on the part of CGPN
        are
        necessary to authorize this Agreement or the transactions contemplated hereby.
        This Agreement has been duly and validly executed and delivered by CGPN and
        the
        CGPN Stockholders and constitutes a valid and binding obligation of CGPN
        and
        each CGPN Stockholder, enforceable in accordance with its terms, except as
        such
        enforcement may be limited by bankruptcy, insolvency or other similar laws
        affecting the enforcement of creditors’ rights generally or by general
        principles of equity.

      

      4.5  
        Consents
        and Approvals; No Violations.
        Except
        for applicable requirements of federal securities laws and state securities
        or
        blue-sky laws, no filing with, and no permit, authorization, consent or approval
        of, any third party, public body or authority is necessary for the consummation
        by CGPN of the transactions contemplated by this Agreement. Neither the
        execution and delivery of this Agreement by CGPN nor the consummation by
        CGPN of
        the transactions contemplated hereby, nor compliance by CGPN with any of
        the
        provisions hereof, will (a) conflict with or result in any breach of any
        provisions of the charter or Bylaws of CGPN, (b) result in a violation or
        breach
        of, or constitute (with or without due notice or lapse of time or both) a
        default (or give rise to any right of termination, cancellation or acceleration)
        under, any of the terms, conditions or provisions of any note, bond, mortgage,
        indenture, license, contract, agreement or other instrument or obligation
        to
        which CGPN or any Subsidiary (as hereinafter defined) is a party or by which
        they any of their respective properties or assets may be bound or (c) violate
        any order, writ, injunction, decree, statute, rule or regulation applicable
        to
        CGPN or any Subsidiary, or any of their respective properties or assets,
        except
        in the case of clauses (b) and (c) for violations, breaches or defaults which
        are not in the aggregate material to CGPN or any Subsidiary taken as a
        whole.

      

      4.6  
        SEC
        Documents.
        CGPN
        hereby makes reference to the following documents filed with the United States
        Securities and Exchange Commission (the “SEC”), as posted on the SEC’s website,
www.sec.gov:
        (collectively, the “SEC Documents”): (a) Registration Statement on Form 10SB as
        filed on November 11, 1999, and all amendments thereto; (b) Annual Report
        on
        Form 10-KSB for the fiscal year ended December 31, 2004, 2003, 2002, and
        2001
        and any amendments thereto; (c) Quarterly Reports on Form 10-QSB for the
        periods
        ended March 31, 2005, 2004, 2003, 2002, 2001, June 30, 2004, 2003, 2002,
        2001,
        September 30, 2004, 2003, 2002, 2001, and any amendments thereto; and (d)
        Current Reports on Form 8K filed in 2001 through the date of Closing. The
        SEC
        Documents constitute all of the documents and reports that CGPN was required
        to
        file with the SEC pursuant to the Securities Exchange Act of 1934 (“Exchange
        Act”) and the rules and regulations promulgated thereunder by the SEC since the
        effectiveness of CGPN’s Form 10SB. As of their respective dates, the SEC
        Documents complied in all material respects with the requirements of the
        Securities Act and/or the Exchange Act, as the case may require, and the
        rules
        and regulations promulgated thereunder and none of the SEC Documents contained
        an untrue statement of a material fact or omitted to state a material fact
        required to be stated therein or necessary to make the statements therein,
        in
        light of the circumstances under which they were made, not misleading. The
        consolidated financial statements of CGPN included in the SEC Documents comply
        as to form in all material respects with applicable accounting requirements
        and
        the published rules and regulations of the SEC with respect thereto, have
        been
        prepared in accordance with generally accepted accounting principles in the
        United States (except, in the case of unaudited statements, as permitted
        by the
        applicable form under the Securities Act and/or the Exchange Act) applied
        on a
        consistent basis during the periods involved (except as may be indicated
        in the
        notes thereto) and fairly present the financial position of CGPN as of the
        dates
        thereof and its consolidated statements of operations, stockholders’ equity and
        cash flows for the periods then ended (subject, in the case of unaudited
        statements, to normal and recurring year-end audit adjustments which were
        and
        are not expected to have a material adverse effect on CGPN, its business,
        financial condition or results of operations). Except as and to the extent
        set
        forth on the consolidated balance sheet of CGPN as of December 31, 2004,
        including the notes thereto, CGPN has no liability or obligation of any nature
        (whether accrued, absolute, contingent or otherwise and whether required
        to be
        reflected on a balance sheet or not). 

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      4.7  
        Financial
        Statements.

       

      (a) Included
        in the SEC Documents are the audited consolidated balance sheet of CGPN as
        at
        December 31, 2004 and 2003, and the related statement of operations,
        stockholders’ equity and cash flows for the two years then ended, together with
        the unqualified report thereon (except with respect to continuation as a
        going
        concern) of Weinberg & Company (“Weinberg”), independent auditors
        (collectively, “CGPN’s Audited Financials”).

       

      (b) Included
        in the SEC Documents are the unaudited consolidated balance sheet of CGPN
        as at
        March 31, 2005, and the related statement of operations, stockholders’ equity
        and cash flows for the three months then ended, as reviewed by Gately (“CGPN’s
        Interim Financials”). 

       

      (c) CGPN’s
        Audited Financials and CGPN’s Interim Financials (collectively “CGPN’s Financial
        Statements”) are (i) in accordance with the books and records of CGPN, (ii)
        correct and complete, (iii) fairly present the financial position and results
        of
        operations of CGPN and each Subsidiary as of the dates indicated, and (iv)
        prepared in accordance with U.S. GAAP (except that (x) unaudited financial
        statements may not be in accordance with GAAP because of the absence of
        footnotes normally contained therein, and (y) interim (unaudited) financials
        are
        subject to normal year-end audit adjustments that in the aggregate will not
        have
        a material adverse effect on CGPN or any Subsidiary, their respective
        businesses, financial conditions or results of operations. 

      

      4.8  
        Events
        Subsequent to Financial Statements.
        Except
        as disclosed in Schedule 4.8, since December 31, 2004, there has not
        been:

       

      (a) Any
        sale,
        lease, transfer, license or assignment of any assets, tangible or intangible,
        of
        CGPN or any Subsidiary;

      

      (b)
         Any
        damage, destruction or property loss, whether or not covered by insurance,
        affecting adversely the properties or business of CGPN or any
        Subsidiary;

      

      (c)
         Any
        declaration or setting aside or payment of any dividend or distribution with
        respect to the shares of capital stock of CGPN or any Subsidiary or any
        redemption, purchase or other acquisition of any such shares;

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      (d)
         Any
        subjection to any lien on any of the assets, tangible or intangible, of CGPN
        or
        any Subsidiary;

      

      (e)
         Any
        incurrence of indebtedness or liability or assumption of obligations by CGPN
        or
        any Subsidiary;

      

      (f)
         Any
        waiver or release by CGPN or any Subsidiary of any right of any material
        value;

      

      (g)
         Any
        compensation or benefits paid to officers or directors of CGPN or any
        Subsidiary;

      

      (h)
         Any
        change made or authorized in the Certificate of Incorporation or Bylaws of
        CGPN
        or any Subsidiary; 

      

      (i)
         Any
        loan
        to or other transaction with any officer, director or stockholder of CGPN
        or any
        Subsidiary giving rise to any claim or right of CGPN or any Subsidiary against
        any such person or of such person against CGPN or any Subsidiary;
        or

       

      (j)
         Any
        material adverse change in the condition (financial or otherwise) of the
        respective properties, assets, liabilities or business of CGPN or any
        Subsidiary.

      

      4.9  
        Liabilities.
        Except
        as otherwise disclosed in CGPN’s Financial Statements, neither CGPN nor any
        Subsidiary has any liability or obligation whatsoever, either direct or
        indirect, matured or unmatured, accrued, absolute, contingent or otherwise.
        In
        addition, CGPN and the CGPN Stockholders represent that upon Closing, neither
        CGPN nor any Subsidiary will have any liability or obligation whatsoever,
        either
        direct or indirect, matured or unmatured, accrued, absolute, contingent or
        otherwise.

      

      4.10
         Tax
        Matters.
        Except
        as disclosed in Schedule 4.10:

       

      (a)
         CGPN
        and
        each Subsidiary have duly filed all material federal, state, local and foreign
        tax returns required to be filed by or with respect to them with the Internal
        Revenue Service or other applicable taxing authority, and no extensions with
        respect to such tax returns have been requested or granted; 

       

      (b)
         CGPN
        and
        each Subsidiary have paid, or adequately reserved against in CGPN’s Financial
        Statements, all material taxes due, or claimed by any taxing authority to
        be
        due, from or with respect to them; 

       

      (c)
         To
        the
        best knowledge of CGPN, there has been no material issue raised or material
        adjustment proposed (and none is pending) by the Internal Revenue Service
        or any
        other taxing authority in connection with any of CGPN’s or any Subsidiary’s tax
        returns;

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (d)
         No
        waiver
        or extension of any statute of limitations as to any material federal, state,
        local or foreign tax matter has been given by or requested from CGPN or any
        Subsidiary; and

       

      For
        the
        purposes of this Section
        4.10,
        a tax
        is due (and must therefore either be paid or adequately reserved against
        in
        CGPN’s Financial Statements) only on the last date payment of such tax can be
        made without interest or penalties, whether such payment is due in respect
        of
        estimated taxes, withholding taxes, required tax credits or any other
        tax.

      

      4.11
         Real
        Property.
        Neither
        CGPN nor any Subsidiary owns or leases any real property. 

      

      4.12
         Books
        and Records.
        The
        books and records of CGPN and each Subsidiary delivered to the Skystar
        Shareholders prior to the Closing fully and fairly reflect the transactions
        to
        which CGPN each Subsidiary is a party or by which they or their properties
        are
        bound.

      

      4.13
         Questionable
        Payments.
        Neither
        CGPN or any Subsidiary, nor any employee, agent or representative of CGPN
        or any
        Subsidiary has, directly or indirectly, made any bribes, kickbacks, illegal
        payments or illegal political contributions using Company funds or made any
        payments from CGPN’s or any Subsidiary’s funds to governmental officials for
        improper purposes or made any illegal payments from CGPN’s or any Subsidiary’s
        funds to obtain or retain business.

      

      4.14  
        RESERVED

      

      4.15
         Intellectual
        Property.
        Neither
        CGPN nor any Subsidiary owns or uses any trademarks, trade names, service
        marks,
        patents, copyrights or any applications with respect thereto. CGPN and the
        CGPN
        Stockholders have no knowledge of any claim that, or inquiry as to whether,
        any
        product, activity or operation of CGPN or any Subsidiary infringes upon or
        involves, or has resulted in the infringement of, any trademarks, trade-names,
        service marks, patents, copyrights or other proprietary rights of any other
        person, corporation or other entity; and no proceedings have been instituted,
        are pending or are threatened. 

      

      4.16
         Insurance.
        Neither
        CGPN nor any Subsidiary has any insurance policies in effect.

      

      4.17
         Contracts.
        Except
        as set forth on Schedule
        4.17,
        neither
        CGPN nor any Subsidiary has any material contracts, leases, arrangements
        or
        commitments (whether oral or written). Neither CGPN nor any Subsidiary is
        a
        party to or bound by or affected by any contract, lease, arrangement or
        commitment (whether oral or written) relating to: (a) the employment of any
        person; (b) collective bargaining with, or any representation of any employees
        by, any labor union or association; (c) the acquisition of services, supplies,
        equipment or other personal property; (d) the purchase or sale of real property;
        (e) distribution, agency or construction; (f) lease of real or personal property
        as lessor or lessee or sublessor or sublessee; (g) lending or advancing of
        funds; (h) borrowing of funds or receipt of credit; (i) incurring any obligation
        or liability; or (j) the sale of personal property.

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      4.18
         Litigation.
        Neither
        CGPN nor any Subsidiary is subject to any judgment or order of any court
        or
        quasijudicial or administrative agency of any jurisdiction, domestic or foreign,
        nor is there any charge, complaint, lawsuit or governmental investigation
        pending against CGPN or any Subsidiary. Neither CGPN nor any Subsidiary is
        a
        plaintiff in any action, domestic or foreign, judicial or administrative.
        There
        are no existing actions, suits, proceedings against or investigations of
        CGPN or
        any Subsidiary, and CGPN knows of no basis for such actions, suits, proceedings
        or investigations. There are no unsatisfied judgments, orders, decrees or
        stipulations affecting CGPN or any Subsidiary or to which CGPN or any Subsidiary
        is a party.

      

      4.19
         Employees.
        Neither
        CGPN nor any Subsidiary has any employees. Neither CGPN nor any Subsidiary
        owes
        any compensation of any kind, deferred or otherwise, to any current or previous
        employees. Neither CGPN nor any Subsidiary has a written or oral employment
        agreement with any officer or director of CGPN or any Subsidiary. Neither
        CGPN
        nor any Subsidiary is a party to or bound by any collective bargaining
        agreement. Except as set forth on Schedule
        4.19,
        there
        are no loans or other obligations payable or owing by CGPN or any Subsidiary
        to
        any stockholder, officer, director or employee of CGPN or any Subsidiary,
        nor
        are there any loans or debts payable or owing by any of such persons to CGPN
        or
        any Subsidiary or any guarantees by CGPN or any Subsidiary of any loan or
        obligation of any nature to which any such person is a party.

      

      4.20
         Employee
        Benefit Plans.
        Neither
        CGPN nor any Subsidiary has any (a) non-qualified deferred or incentive
        compensation or retirement plans or arrangements, (b) qualified retirement
        plans
        or arrangements, (c) other employee compensation, severance or termination
        pay
        or welfare benefit plans, programs or arrangements or (d) any related trusts,
        insurance contracts or other funding arrangements maintained, established
        or
        contributed to by CGPN or any Subsidiary.

       

      4.21
         Legal
        Compliance.
        To the
        best knowledge of CGPN, after due investigation, no claim has been filed
        against
        CGPN or any Subsidiary alleging a violation of any applicable laws and
        regulations of foreign, federal, state and local governments and all agencies
        thereof. CGPN and each Subsidiary hold all of the material permits, licenses,
        certificates or other authorizations of foreign, federal, state or local
        governmental agencies required for the conduct of their respective businesses
        as
        presently conducted.

      

      4.22  Subsidiaries
        and Investments.
        

       

      (a) Except
        as
        set forth in Schedule 4.22(a), CGPN does not own any capital stock or have
        any
        interest of any kind whatsoever in any corporation, partnership, or other
        form
        of business organization (any such organization is referred to as a
“Subsidiary”).

       

      (b) Schedule
        4.22(b) sets forth true and complete copies of the charter of each Subsidiary,
        as well as any limited liability company agreement, operating agreement or
        shareholder agreement relating to such Subsidiary, and any acquisition agreement
        relating to any Subsidiary. All corporate or other action that has been taken
        by
        any Subsidiary has been duly authorized and does not conflict with or violate
        any provision of its charter, bylaws or other organizational
        documents.

       

      (c) Each
        Subsidiary (i) is duly organized and validly existing under the laws of its
        jurisdiction of organization, (ii) has all requisite and necessary power
        and
        authority to own, operate or lease those assets or properties which are owned,
        operated or leased by it and to conduct its business as it has been and
        currently is being conducted, (iii) is qualified to do business in all
        jurisdictions where the failure to be so qualified would have a material
        adverse
        effect on its business.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (d) Except
        as
        set forth in Schedule 4.22(d), all outstanding shares of capital stock or
        other
        ownership interests of each Subsidiary are validly issued, fully paid,
        nonassessable and free of preemptive rights and are owned (either directly
        or
        indirectly) by CGPN without any encumbrances.

       

      (e) Except
        as
        set forth in Schedule 4.22(e), there are no outstanding securities convertible
        into or exchangeable for the capital stock of or other equity interests in
        any
        Subsidiary and no outstanding options, rights, subscriptions, calls commitments,
        warrants or rights of any character for CGPN, any Subsidiary or any other
        person
        or entity to purchase, subscribe for or to otherwise acquire any shares of
        such
        stock or other securities of any Subsidiary. 

       

      (f) Except
        as
        set forth in Schedule 4.22(f), there are no outstanding agreements affecting
        or
        relating to the voting, issuance, purchase, redemption, repurchase or transfer
        of any capital stock of or other equity interests in any
        Subsidiary.

       

      (g) Each
        Subsidiary’s stock register or similar register of ownership has complete and
        accurate records indicating the following: (i) the name and address of each
        person or entity owning shares of capital stock or other equity interest
        of the
        Subsidiary and (ii) the certificate number of each certificate evidencing
        shares
        of capital stock or other equity interest issued by the Subsidiary, the number
        of shares or other equity interests evidenced by each such certificate, the
        date
        of issuance of such certificate, and, if applicable, the date of cancellation.
        Copies of same have been made available to Skystar.

      

      4.23  
        Broker’s
        Fees.
        Neither
        CGPN, nor anyone on its behalf has any liability to any broker, finder,
        investment banker or agent, or has agreed to pay any brokerage fees, finder’s
        fees or commissions, or to reimburse any expenses of any broker, finder,
        investment banker or agent in connection with this Agreement.

      

      4.24  
        Internal
        Accounting Controls.
        CGPN
        maintains 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
        GAAP and to maintain asset accountability, (iii) access to assets is permitted
        only in accordance with management’s general or specific authorization, and (iv)
        the recorded accountability for assets is compared with the existing assets
        at
        reasonable intervals and appropriate action is taken with respect to any
        differences.
        CGPN has
        established disclosure controls and procedures (as defined in Exchange Act
        Rules
        13a-15(e) and 15d-15(e)) for CGPN and designed such disclosure controls and
        procedures to ensure that material information relating to CGPN is made known
        to
        the certifying officers by others within those entities, particularly during
        the
        period in which the CGPN’s Form 10-KSB or 10-QSB, as the case may be, is being
        prepared. CGPN’s certifying officers have evaluated the effectiveness of CGPN’s
        controls and procedures as of end of the filing period prior to the filing
        date
        of the Form 10-QSB for the quarter ended March 31, 2004 (such date, the
“Evaluation
        Date”).
        CGPN
        presented in its most recently filed Form 10-KSB or Form 10-QSB the conclusions
        of the certifying officers about the effectiveness of the disclosure controls
        and procedures based on their evaluations as of the Evaluation Date. Since
        the
        Evaluation Date, there have been no significant changes in CGPN’s internal
        controls (as such term is defined in Item 307(b) of Regulation S-K under
        the
        Exchange Act) or, to the Company’s knowledge, in other factors that could
        significantly affect the Company’s internal controls.

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      4.25  
        Listing
        and Maintenance Requirements. CGPN is currently quoted on the OTC Bulletin
        Board
        and CGPN has not, in the 12 months preceding the date hereof, received any
        notice from the OTC Bulletin Board or the NASD or any trading market on which
        CGPN’s common stock is or has been listed or quoted to the effect that CGPN is
        not in compliance with the quoting, listing or maintenance requirements of
        the
        OTCBB or such other trading market. CGPN is, and has no reason to believe
        that
        it will not, in the foreseeable future continue to be, in compliance with
        all
        such quoting, listing and maintenance requirements.

       

      4.26  
        Application
        of Takeover Protections.
        CGPN
        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 CGPN’s certificate or articles of incorporation
        (or similar charter documents) or the laws of its state of incorporation
        that is
        or could become applicable to Skystar or the Skystar Shareholders as a result
        of
        the Acquisition or the exercise of any rights by Skystar or the Skystar
        Shareholders pursuant to this Agreement. 

      

      4.27  
        No
        SEC
        or NASD Inquiries.
        Neither
        CGPN nor any of its past or present officers or directors is, or has ever
        been,
        the subject of any formal or informal inquiry or investigation by the SEC
        or
        NASD. 

      

      4.28  
        Disclosure.
        The
        representations and warranties and statements of fact made by CGPN in this
        Agreement are, as applicable, accurate, correct and complete and do not contain
        any untrue statement of a material fact or omit to state any material fact
        necessary in order to make the statements and information contained herein
        not
        false or misleading.

       

       

      ARTICLE
        5

      INDEMNIFICATION

      

      5.1  
        CGPN
        Stockholders Indemnification.
        For a
        period of two years after the Closing, the CGPN Stockholders (each an
“Indemnifying Party”) jointly and severally agree to indemnify Skystar, the
        Skystar Shareholders and each of the officers, agents and directors of Skystar
        or the Skystar Shareholders against any loss, liability, claim, damage or
        expense (including, but not limited to, any and all expenses whatsoever
        reasonably incurred in investigating, preparing or defending against any
        litigation, commenced or threatened, or any claim whatsoever) (each an
“Indemnified Party”) to which it or they may become subject arising out of or
        based on either (i) any breach of or inaccuracy in any of the representations
        and warranties or covenants or conditions made by CGPN and/or the CGPN
        Stockholders herein in this Agreement; or (ii) any and all liabilities arising
        out of or in connection with: (A) any of the assets of CGPN or any Subsidiary
        prior to the Closing; or (B) the operations of CGPN prior to the Closing
        (the
“CGPN Stockholders Indemnification”). 

      

      5.2  
        Indemnification
        Procedures.
        If any
        action shall be brought against any Indemnified Party in respect of which
        indemnity may be sought pursuant to this Agreement, such Indemnified Party
        shall
        promptly notify the Indemnifying Party in writing, and the Indemnifying Party
        shall have the right to assume the defense thereof with counsel of its own
        choosing. Any Indemnified Party shall have the right to employ separate counsel
        in any such action and participate in the defense thereof, but the fees and
        expenses of such counsel shall be at the expense of such Indemnified Party
        except to the extent that the employment thereof has been specifically
        authorized by the Indemnifying Party in writing, the Indemnifying Party has
        failed after a reasonable period of time to assume such defense and to employ
        counsel or in such action there is, in the reasonable opinion of such separate
        counsel, a material conflict on any material issue between the position of
        the
        Indemnifying Party and the position of such Indemnified Party. The Indemnifying
        Party will not be liable to any Indemnified Party under this Article 5 for
        any
        settlement by an Indemnified Party effected without the Indemnifying Party’s
        prior written consent, which shall not be unreasonably withheld or delayed;
        or
        to the extent, but only to the extent that a loss, claim, damage or liability
        is
        attributable to any Indemnified Party’s indemnification pursuant to this Article
        5. 

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

      ARTICLE
        6

      COVENANTS
        AND AGREEMENTS OF THE PARTIES 

      EFFECTIVE
        PRIOR TO CLOSING

       

      6.1  
        Corporate
        Examinations and Investigations.
        Prior
        to the Closing, each party shall be entitled, through its employees and
        representatives, to make such investigations and examinations of the books,
        records and financial condition of Skystar and CGPN (and any Subsidiary)
        as each
        party may request. In order that each party may have the full opportunity
        to do
        so, Skystar and CGPN, the Skystar Shareholders and the CGPN Stockholders
        shall
        furnish each party and its representatives during such period with all such
        information concerning the affairs of Skystar or CGPN or any Subsidiary as
        each
        party or its representatives may reasonably request and cause Skystar or
        CGPN
        and their respective officers, employees, consultants, agents, accountants
        and
        attorneys to cooperate fully with each party’s representatives in connection
        with such review and examination and to make full disclosure of all information
        and documents requested by each party and/or its representatives. Any such
        investigations and examinations shall be conducted at reasonable times and
        under
        reasonable circumstances, it being agreed that any examination of original
        documents will be at each party’s premises, with copies thereof to be provided
        to each party and/or its representatives upon request.

      

      6.2  
        Cooperation;
        Consents.
        Prior
        to the Closing, each party shall cooperate with the other parties to the
        end
        that the parties shall (i) in a timely manner make all necessary filings
        with,
        and conduct negotiations with, all authorities and other persons the consent
        or
        approval of which, or the license or permit from which is required for the
        consummation of the Acquisition and (ii) provide to each other party such
        information as the other party may reasonably request in order to enable
        it to
        prepare such filings and to conduct such negotiations.

      

      6.3  
        Conduct
        of Business.
        Subject
        to the provisions hereof, from the date hereof through the Closing, each
        party
        hereto shall (i) conduct its business in the ordinary course and in such
        a
        manner so that the representations and warranties contained herein shall
        continue to be true and correct in all material respects as of the Closing
        as if
        made at and as of the Closing and (ii) not enter into any material transactions
        or incur any material liability not required or specifically contemplated
        hereby, without first obtaining the written consent of Skystar and the Skystar
        Shareholders on the one hand and CGPN and the CGPN Stockholders on the other
        hand. Without the prior written consent of Skystar, the Skystar Stockholders,
        CGPN or the CGPN Stockholders, except as required or specifically contemplated
        hereby, each party shall not undertake or fail to undertake any action if
        such
        action or failure would render any of said warranties and representations
        untrue
        in any material respect as of the Closing.

      

      6.4  
        Litigation.
        From
        the date hereof through the Closing, each party hereto shall promptly notify
        the
        representative of the other parties of any lawsuits, claims, proceedings
        or
        investigations which after the date hereof are threatened or commenced against
        such party or any of its affiliates or any officer, director, employee,
        consultant, agent or shareholder thereof, in their capacities as such, which,
        if
        decided adversely, could reasonably be expected to have a material adverse
        effect upon the condition (financial or otherwise), assets, liabilities,
        business, operations or prospects of such party or any of its
        subsidiaries.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      6.5  
        Notice
        of Default.
        From
        the date hereof through the Closing, each party hereto shall give to the
        representative of the other parties prompt written notice of the occurrence
        or
        existence of any event, condition or circumstance occurring which would
        constitute a violation or breach of this Agreement by such party or which
        would
        render inaccurate in any material respect any of such party’s representations or
        warranties herein.

      

      6.6  
        Certificate
        of Designation.
        CGPN
        shall cause the Certificate of Designation (hereinafter defined) to be duly
        filed with the Secretary of State of the State of Delaware prior to the Closing
        of the Acquisition. 

      

      6.7  
        Retention
        of 2 Former Board of Directors.
        From
        the Closing Date until 1 year anniversary of the Closing Date, Skystar and
        the
        Skystar Shareholders hereby agree to vote any and all of its shares to elect
        and
        retain R. Scott Cramer and Steve Lowe as members of the board of directors
        of
        CGPN. 

       

       

      ARTICLE
        7

      CONDITIONS
        TO CLOSING

      

      7.1  
        Conditions
        to Obligations of Skystar and the Skystar Shareholders.
        The
        obligations of Skystar and the Skystar Shareholders under this Agreement
        shall
        be subject to each of the following conditions:

       

      (a)  
        Closing
        Deliveries.
        At the
        Closing, CGPN and/or the CGPN Stockholders shall have delivered or caused
        to be
        delivered to Skystar and the Skystar Stockholders the following:

       

      (i)
         resolutions
        duly adopted by the Board of Directors of CGPN authorizing and approving
        the
        Acquisition and the execution, delivery and performance of this
        Agreement;

       

      (ii)
         a
        certificate of good standing for CGPN and each Subsidiary from their respective
        jurisdictions of incorporation, dated not earlier than five days prior to
        the
        Closing Date;

       

      (iii)
         written
        resignations of all officers and directors of CGPN (other than R. Scott Cramer
        and Steve Lowe as directors of CGPN) and each Subsidiary in office immediately
        prior to the Closing, and board resolutions electing the following individuals
        to the positions with CGPN and each Subsidiary listed opposite their names
        below:

      

      
        	Mr. Weibing LU	 	Director & CEO
	Mr. Wei WEN	 	Director
	Mr. Xinya ZHANG	 	Director
	Ms. Erna GAO	 	Director &
                CFO

      

       

      (iv) stock
        certificates representing the CPGN Shares to be delivered pursuant to this
        Agreement registered with the names set forth in Schedule I; 

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (v)
         this
        Agreement and the Escrow Agreement duly executed by CGPN and the CGPN
        Stockholders; 

       

      (vi) all
        corporate records, agreements, seals and any other information reasonably
        requested by Skystar’s representatives with respect to CGPN; 

       

      (vii) such
        other documents as Skystar and/or the Skystar Shareholders may reasonably
        request in connection with the transactions contemplated hereby;
        and

       

      (viii)
         a
        release
        without prejudice with respect to any and all claims against CGPN whether
        actual
        or contingent that is satisfactory to Skystar legal counsel, at his sole
        discretion. 

       

      (b)  
        Representations
        and Warranties to be True.
        The
        representations and warranties of CGPN and the CGPN Stockholders herein
        contained shall be true in all material respects at the Closing with the
        same
        effect as though made at such time. CGPN and the CGPN Stockholders shall
        have
        performed in all material respects all obligations and complied in all material
        respects with all covenants and conditions required by this Agreement to
        be
        performed or complied with by them at or prior to the Closing. 

      

      (c)  
        Assets
        and Liabilities. At
        the
        Closing, neither CGPN nor any Subsidiary shall have any material assets or
        liabilities, contingent or otherwise, or any tax obligations or any material
        changes to its business or financial condition.

      

      (c)  
        SEC
        Filings.
        At the
        Closing, CGPN will be current in all SEC filings required by it to be filed,
        and
        will have filed its Quarterly Report on Form 10-QSB for the period ended
        June
        30, 2005. 

      

      (e)  
        Filing
        of Certificate of Designation.
        CGPN or
        its officers shall have cause the certificate of designation in the form
        attached as Exhibit
        A
        hereto
        (“Certificate of Designation”), setting forth the rights, preferences and
        privileges of the Series B Preferred Stock of CGPN, to be effective and filed
        with the Secretary of State of the State of Delaware. 

      

      (f)  
        Due
        Diligence.
        Skystar
        shall have delivered a written notice prior to or at Closing stating that
        it is
        fully satisfied with its due diligence of CGPN.

      

      (g)  
        Preferred
        Shares.
        All
        2,000,000 shares of Preferred Shares issued and outstanding shall either:
        (i)
        have been converted to common stock; or (ii) redeemed, rescinded or
        cancelled.

       

      7.2  
        Conditions
        to Obligations of CGPN and the CGPN Stockholders.
        The
        obligations of CGPN and the CGPN Stockholders under this Agreement shall
        be
        subject to each of the following conditions: 

       

      (a)  
        Closing
        Deliveries.
        On the
        Closing Date, Skystar and/or the Skystar Shareholders shall have delivered
        to
        CGPN the following:

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

         

      

      
        	 	
                (i)

              	
                this
                  Agreement duly executed by Skystar and the Skystar Shareholders;
                  

              

      

      

      
        	 	
                (ii)

              	
                stock
                  certificates representing the Skystar Shares to be delivered pursuant
                  to
                  this Agreement duly endorsed or accompanied by duly executed stock
                  powers;
                  and

              

      

      

      
        	
              	(ii)	
                such
                  other documents as CGPN may reasonably request in connection with
                  the
                  transactions contemplated hereby.

              

      

       

      (b)  
        Representations
        and Warranties to be True.
        The
        representations and warranties of Skystar and the Skystar Shareholders herein
        contained shall be true in all material respects at the Closing with the
        same
        effect as though made at such time. Skystar and the Skystar Shareholders
        shall
        have performed in all material respects all obligations and complied in all
        material respects with all covenants and conditions required by this Agreement
        to be performed or complied with by them at or prior to the
        Closing.

      

      (c)  
        Due
        Diligence.
        CGPN
        shall have delivered a written notice prior to or at Closing stating that
        it is
        fully satisfied with its due diligence of Skystar.

      

       

      ARTICLE
        8

      OTHER
        COVENANTS AND AGREEMENTS

       

      8.1  
        Intentionally
        omitted.

      

      8.2  
        Annual
        Meeting of Stockholders.
        CGPN
        shall use its reasonable best efforts to (a) hold its annual meeting of
        stockholders as soon as practicable following the Closing of the Acquisition,
        and (b) put forth, and have its board of directors recommend, a proposal
        to the
        stockholders to amend CGPN’s charter in order to increase the authorized number
        of shares of CGPN common stock to a number sufficient to allow conversion
        of all
        CGPN Shares into shares of common stock of CGPN. 

      

      8.3  
        Conversion
        of CGPN Shares.
        CGPN
        shall take any and all actions reasonably necessary to facilitate and permit
        the
        conversion of CGPN Shares into shares of CGPN common stock in accordance
        with
        this Agreement and the Certificate of Designation, as soon as practicable
        after
        the Closing of the Acquisition. 

      

      8.4  
        Subsequent
        Equity Issuances.
        From
        the date of the Closing until 12 months after the Closing, CGPN shall not,
        without the prior written consent from one of the CGPN Shareholders, issue
        an
        amount of shares of CGPN’s common stock in excess of 5% of the issued and
        outstanding common stock of CGPN as of the date of the Closing to any person;
        provided,
        however,
        this
        provision shall not apply to the following issuances: (i) common stock issued
        in
        connection with a public or private offering of CGPN’s common stock for the
        purpose of raising capital; (ii) common stock issued in connection with a
        merger
        or acquisition consistent with its plan of operations; (iii) common stock
        issued
        in connection with any recapitalization of CGPN’s common stock; or (iv) of up to
        5% of the issued and outstanding common stock of CGPN as of the date of the
        Closing to CGPN’s consultants and advisors.

      

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      

      ARTICLE
        9

      GENERAL
        PROVISIONS

      

      9.1  
        Notices.
        All
        notices and other communications hereunder shall be in writing and shall
        be
        deemed to have been duly given if delivered personally, sent by overnight
        courier or mailed by registered or certified mail (postage prepaid and return
        receipt requested) to the party to whom the same is so delivered, sent or
        mailed
        at addresses set forth on the signature page hereof (or at such other address
        for a party as shall be specified by like notice).

      

      9.2  
        Interpretation.
        The
        headings contained in this Agreement are for reference purposes only and
        shall
        not affect in any way the meaning or interpretation of this Agreement.
        References to Sections and Articles refer to sections and articles of this
        Agreement unless otherwise stated.

      

      9.3  
        Severability.
        If any
        term, provision, covenant or restriction of this Agreement is held by a court
        of
        competent jurisdiction to be invalid, void or unenforceable, the remainder
        of
        the terms, provisions, covenants and restrictions of this Agreement shall
        remain
        in full force and effect and shall in no way be affected, impaired or
        invalidated and the parties shall negotiate in good faith to modify this
        Agreement to preserve each party’s anticipated benefits under this
        Agreement.

      

      9.4  
        Miscellaneous.
        This
        Agreement (together with all other documents and instruments referred to
        herein): (a) constitutes the entire agreement and supersedes all other prior
        agreements and undertakings, both written and oral, among the parties with
        respect to the subject matter hereof; (b) except as expressly set forth herein,
        is not intended to confer upon any other person any rights or remedies hereunder
        and (c) shall not be assigned by operation of law or otherwise, except as
        may be
        mutually agreed upon by the parties hereto.

      

      9.5  
        Separate
        Counsel.
        Each
        party hereby expressly acknowledges that it has been advised to seek its
        own
        separate legal counsel for advice with respect to this Agreement, and that
        no
        counsel to any party hereto has acted or is acting as counsel to any other
        party
        hereto in connection with this Agreement.

      

      9.6  
        Governing
        Law; Venue.
        This
        Agreement shall be governed by, and construed and enforced in accordance
        with,
        the laws of the State of Delaware, U.S.A. Any and all actions brought under
        this
        Agreement shall be brought in the state and/or federal courts of the United
        States sitting in the City of Orlando, Florida and each party hereby waives
        any
        right to object to the convenience of such venue.

      

      9.7  
        Counterparts
        and Facsimile Signatures.
        This
        Agreement may be executed in two or more counterparts, which together shall
        constitute a single agreement. This Agreement and any documents relating
        to it
        may be executed and transmitted to any other party by facsimile, which facsimile
        shall be deemed to be, and utilized in all respects as, an original, wet-inked
        document. 

      

      9.8  
        Amendment.
        This
        Agreement may be amended, modified or supplemented only by an instrument
        in
        writing executed by all parties hereto.

      

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      9.9  
        Parties
        In Interest: No Third Party Beneficiaries.
        Except
        as otherwise provided herein, the terms and conditions of this Agreement
        shall
        inure to the benefit of and be binding upon the respective heirs, legal
        representatives, successors and assigns of the parties hereto. This Agreement
        shall not be deemed to confer upon any person not a party hereto any rights
        or
        remedies hereunder.

      

      9.10  
        Waiver.
        No
        waiver by any party of any default or breach by another party of any
        representation, warranty, covenant or condition contained in this Agreement
        shall be deemed to be a waiver of any subsequent default or breach by such
        party
        of the same or any other representation, warranty, covenant or condition.
        No
        act, delay, omission or course of dealing on the part of any party in exercising
        any right, power or remedy under this Agreement or at law or in equity shall
        operate as a waiver thereof or otherwise prejudice any of such party’s rights,
        powers and remedies. All remedies, whether at law or in equity, shall be
        cumulative and the election of any one or more shall not constitute a waiver
        of
        the right to pursue other available remedies.

      

      9.11  
        Expenses.
        At or
        prior to the Closing, the parties hereto shall pay all of their own expenses
        relating to the transactions contemplated by this Agreement, including, without
        limitation, the fees and expenses of their respective counsel and financial
        advisers.

      

      

      

      [SIGNATURES
        FOLLOW]

      

      

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

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

       

      
        
          	 	 	 
	 	Skystar
                  Bio-Pharmaceutical Company
	 
 	
                   

                	 
 
	 	By:  	/s/ 
                  Lu Wei Bing
	 	 	
                  

                
	 	
                  Name: Weibing
                    Lu

                  Title:  
                    Chairman

                  Address:   
                    Scotia Centre. 4/F. P.O.B. 2806

                  George
                    Town. Grand Caymans

                  Cayman
                    Islands

                
	
                   

                	 

        

       

      [SIGNATURE
        PAGES OF SKYSTAR SHAREHOLDERS, 

      CGPN
        AND
        CGPN STOCKHOLDERS FOLLOW]

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE OF SKYSTAR SHAREHOLDERS]

      

       

      
        
          	 	 	 	Skystar
                  Shareholders
	 	 	 	 
	 	 	 	 
	 	 	 	/s/ Lu
                  Wei Bing
	
                	 	 	
                  

                
	 	 	 	
                  Upform
                    Group Limited

                  By:
                     Chairman

                  Name: Weibing
                    Lu

                  Address:   Sea
                    Meadow House, Blackburne Highway

                  P.O.
                    Box 116, Road Town, Tortola,

                  British
                    Virgin Islands

                

        

         

         

        
          
            	 	 	 	/s/ Wen
                    Wei
	
                  	 	 	
                    

                  
	 	 	 	
                    
                      Clever
                        Mind International Limited

                      By:
                         Chairman

                      Name: Wei
                        Wen

                      Address:   Sea
                        Meadow House, Blackburne Highway

                      P.O.
                        Box 116, Road Town, Tortola,

                      British
                        Virgin Islands

                    

                  

          

           

           

          
            
              	 	 	 	/s/
                      Wang Yuan Tai
	
                    	 	 	
                      

                    
	 	 	 	
                      
                        Yuantai
                          Wang

                        Room
                          801, Jianhang Jiashu Building

                        Jianjia
                          Xiang Community, Tangfang Street

                        Xian,
                          China

                      

                    

            

             

            
              	 	 	 	/s/
                      Xuejian Yuan
	
                    	 	 	
                      

                    
	 	 	 	
                      
                        
                          Xuejian
                            Yuan

                          Room
                            101, No. 59, Lane 380, Xingzhi Road,

                          Shanghai,
                            China

                        

                      

                    

            

          

        

      

       

      
         

        
          	 	 	 	/s/
                  Sidong Zhu
	
                	 	 	
                  

                
	 	 	 	
                  
                    Sidong
                      Zhu

                    12/F,
                      No. 700, Yan An Road East,

                    Shanghai,
                      China

                  

                

        

      

       

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      [SIGNATURE
        PAGE OF CGPN AND CGPN STOCKHOLDERS]

      
        
 

      

       

      
        
          
            	 	 	 
	 	
                    The
                      Cyber Group Network Corporation

                  
	 
 	
                     

                  	 
 
	 	By:  	/s/ 
                    R. Scott Cramer
	 	 	
                    

                  
	 	
                    Name: R.
                      Scott Cramer

                    Title:
                      Chief Executive Officer

                    Address:  

                    

                  
	
                     

                  	 

          

           

          
            
              
                	 	 	 
	 	
                        
                          CGPN
                            Stockholders:

                        

                      
	 	 
	 	/s/ Steve Lowe
	 	
                        

                      
	 	 
	 	 
	 	/s/ David Wassung
                        B.O.D.
	 	
                        
                          

                        

                      
	
                         

                      	 

              

            
              
                
                

              

              
                21EXHIBIT 10.1

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: [________________________
Original Conversion Price (subject to adjustment herein): $1.20

                                                                $_______________

                           2.5% CONVERTIBLE DEBENTURE
                      DUE [two years from date of Issuance]

     THIS DEBENTURE is one of a series of duly authorized and issued 2.5%
Convertible Debentures of New Frontier Energy, Inc., a Colorado corporation,
having a principal place of business at PO Box 298, Littleton, CO 80120 (the
"Company"), designated as its 2.5% Convertible Debenture, due [two years from
date of Issuance] (the "Debenture(s)").

     FOR VALUE RECEIVED, the Company promises to pay to ________________________
or its registered assigns (the "Holder"), or shall have paid pursuant to the
terms hereunder, the principal sum of $_______________ by [____________ , or
such earlier date as the Debentures are required or permitted to be repaid as
provided hereunder (the "Maturity Date"), and to pay interest to the Holder on
the aggregate unconverted and then outstanding principal amount of this
Debenture in accordance with the provisions hereof. This Debenture is subject to
the following additional provisions:

     Section 1. Definitions. For the purposes hereof, in addition to the terms
defined elsewhere in this Debenture: (a) capitalized terms not otherwise defined
herein have the meanings given to such terms in the Subscription Agreement, and
(b) the following terms shall have the following meanings:

          "Alternate Consideration" shall have the meaning set forth in Section
     5(d).

          "Base Conversion Price" shall have the meaning set forth in Section
     5(b).

          "Business Day" means any day except Saturday, Sunday and any day which
     shall be a federal legal holiday in the United States or a day on which
     banking institutions in the State of New York are authorized or required by
     law or other government action to close.

          "Buy-In" shall have the meaning set forth in Section 4(d)(v).

          "Change of Control Transaction" means the occurrence after the date
     hereof of any of (i) an acquisition after the date hereof by an individual
     or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated
     under the Exchange Act) of effective control (whether through legal or
     beneficial ownership of capital stock of the Company, by contract or

<PAGE>
     otherwise) of in excess of 33% of the voting securities of the Company, or
     (ii) the Company merges into or consolidates with any other Person, or any
     Person merges into or consolidates with the Company and, after giving
     effect to such transaction, the stockholders of the Company immediately
     prior to such transaction own less than 33% of the aggregate voting power
     of the Company or the successor entity of such transaction, or (iii) the
     Company sells or transfers its assets, as an entirety or substantially as
     an entirety, to another Person and the stockholders of the Company
     immediately prior to such transaction own less than 33% of the aggregate
     voting power of the acquiring entity immediately after the transaction,
     (iv) a replacement at one time or within a three year period of more than
     one-half of the members of the Company's board of directors which is not
     approved by a majority of those individuals who are members of the board of
     directors on the date hereof (or by those individuals who are serving as
     members of the board of directors on any date whose nomination to the board
     of directors was approved by a majority of the members of the board of
     directors who are members on the date hereof), or (v) the execution by the
     Company of an agreement to which the Company is a party or by which it is
     bound, providing for any of the events set forth above in (i) or (iv).

          "Common Stock" means the common stock, par value $0.001 per share, of
     the Company and stock of any other class into which such shares may
     hereafter have been reclassified or changed.

          "Conversion Date" shall have the meaning set forth in Section 4(a).

          "Conversion Price" shall have the meaning set forth in Section 4(b).

          "Conversion Shares" means the shares of Common Stock issuable upon
     conversion of Debentures.

          "Debenture Register" shall have the meaning set forth in Section 2(c).

          "Dilutive Issuance" shall have the meaning set forth in Section 5(b).

          "Dilutive Issuance Notice" shall have the meaning set forth in Section
     5(b).

          "Effectiveness Period" shall have the meaning given to such term in
     the Registration Rights Agreement.

          "Equity Conditions" shall mean, during the period in question, (i) the
     Company shall have duly honored all conversions and redemptions scheduled
     to occur or occurring by virtue of one or more Notice of Conversions, if
     any, (ii) all liquidated damages and other amounts owing in respect of the
     Debentures shall have been paid; (iii) there is an effective Registration
     Statement pursuant to which the Holder is permitted to utilize the
     prospectus thereunder to resell all of the shares issuable pursuant to the
     Transaction Documents (and the Company believes, in good faith, that such
     effectiveness will continue uninterrupted for the foreseeable future), (iv)
     the Common Stock is trading on the Trading Market and all of the shares
     issuable pursuant to the Transaction Documents are listed (if applicable)
     for trading on a Trading Market (and the Company believes, in good faith,
     that trading of the Common Stock on a Trading Market will continue
     uninterrupted for the foreseeable future), (v) there is a sufficient number
     of authorized but unissued and otherwise unreserved shares of Common Stock
     for the issuance of all of the shares issuable pursuant to the Transaction
     Documents, (vi) there is then existing no Event of Default or event which,
     with the passage of time or the giving of notice, would constitute an Event
     of Default, (vii) no public announcement of a pending or proposed
     Fundamental Transaction, Change of Control Transaction or acquisition
     transaction has occurred that has not been consummated.

          "Event of Default" shall have the meaning set forth in Section 8.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

                                       2
<PAGE>
          "Exempt Issuance" means the issuance of (a) shares of Common Stock or
     options to employees, officers or directors of the Corporation pursuant to
     any stock or option plan duly adopted by a majority of the non-employee
     members of the Board of Directors of the Corporation or a majority of the
     members of a committee of non-employee directors established for such
     purpose, (b) securities upon the exercise of or conversion of any
     securities issued hereunder, convertible securities, options or warrants
     issued and outstanding on the date of this Agreement, provided that such
     securities have not been amended since the date of this Agreement to
     increase the number of such securities, and (c) securities issued pursuant
     to acquisitions or strategic transactions, provided any such issuance shall
     only be to a Person which is, itself or through its subsidiaries, an
     operating company in a business synergistic with the business of the
     Corporation and in which the Corporation receives benefits in addition to
     the investment of funds, but shall not include a transaction in which the
     Corporation is issuing securities primarily for the purpose of raising
     capital or to an entity whose primary business is investing in securities.

          "Fundamental Transaction" shall have the meaning set forth in Section
     5(d).

          "Interest Conversion Rate" means one share of Common Stock (as
     adjusted for splits, recapitalizations and the like) for each one and
     20/100 dollars ($1.20) in interest due.

          "Interest Payment Date" shall have the meaning set forth in Section
     2(a).

          "Late Fees" shall have the meaning set forth in Section 2(c).

          "Mandatory Prepayment Amount" for any Debentures shall equal the sum
     of 110% of the principal amount of Debentures to be prepaid, plus all
     accrued and unpaid interest thereon.

          "New York Courts" shall have the meaning set forth in Section 9(d).

          "Notice of Conversion" shall have the meaning set forth in Section
     4(a).

          "Original Issue Date" shall mean the date of the first issuance of the
     Debentures regardless of the number of transfers of any Debenture and
     regardless of the number of instruments which may be issued to evidence
     such Debenture.

          "Person" means a corporation, an association, a partnership,
     organization, a business, an individual, a government or political
     subdivision thereof or a governmental agency.

          "Registration Rights Agreement" means Section 5(B) of the Subscription
     Agreement, entitled "Registration Rights".

          "Registration Statement" means a registration statement meeting the
     requirements set forth in the Registration Rights Agreement, covering among
     other things the resale of the Conversion Shares and naming the Holder as a
     "selling stockholder" thereunder.

          "Securities Act" means the Securities Act of 1933, as amended, and the
     rules and regulations promulgated thereunder.

          "Subscription Agreement" means the subscription agreement to which the
     Company and each original Holder is a party, with respect to the private
     placement which commenced on June 28, 2005.

          "Trading Day" means a day on which the Common Stock is traded on a
     Trading Market.

          "Trading Market" means the following markets or exchanges on which the
     Common Stock is listed or quoted for trading on each date in question: the
     Nasdaq Over-the-Counter Bulletin Board, the Nasdaq SmallCap Market, the
     American Stock Exchange, the New York Stock Exchange or the Nasdaq National
     Market.

          "Transaction Documents" shall mean this Debenture, the Subscription
     Agreement, the Warrants and any other documents or agreements executed in
     connection with the transactions contemplated under the Subscription
     Agreement.

                                       3
<PAGE>
          "VWAP" means, for any date, the price determined by the first of the
     following clauses that applies: (a) if the Common Stock is then listed or
     quoted on a Trading Market, the daily volume weighted average price of the
     Common Stock for such date (or the nearest preceding date) on the Trading
     Market on which the Common Stock is then listed or quoted as reported by
     Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern
     Time to 4:02 p.m. Eastern Time); (b) if the Common Stock is not then listed
     or quoted on a Trading Market and if prices for the Common Stock are then
     reported in the "Pink Sheets" published by the Pink Sheets, LLC (or a
     similar organization or agency succeeding to its functions of reporting
     prices), the most recent bid price per share of the Common Stock so
     reported; or (c) in all other cases, the fair market value of a share of
     Common Stock as determined by an independent appraiser selected in good
     faith by the Holders and reasonably acceptable to the Company.

Section 2.      Interest.
                ---------

     a) Payment of Interest in Cash or Kind. The Company shall pay interest to
the Holder on the aggregate unconverted and then outstanding principal amount of
this Debenture at the rate of 2.5% per annum, payable on the earlier of the
Conversion Date or the Maturity Date with respect to the principal amount
converted or maturing on such date, as applicable (each such date, an "Interest
Payment Date"), in cash or shares of Common Stock at the Interest Conversion
Rate, or a combination thereof, at the Company's option, provided, however, that
payment in shares of Common Stock may only occur if the Equity Conditions have
been met as of the Interest Payment Date.

     b) Interest Calculations. Interest shall be calculated on the basis of a
365-day year and shall accrue daily and be compounded quarterly commencing on
the Original Issue Date, until payment in full of the principal sum, together
with all accrued and unpaid interest and other amounts which may become due
hereunder, has been made. Interest shall cease to accrue with respect to any
principal amount converted, provided that the Company in fact delivers the
Conversion Shares within the time period required by Section 4(d)(ii). Interest
hereunder will be paid to the Person in whose name this Debenture is registered
on the records of the Company regarding registration and transfers of Debentures
(the "Debenture Register"). Except as otherwise provided herein, if at any time
the Company pays interest partially in cash and partially in shares of Common
Stock, then such payment shall be distributed ratably among the Holders based
upon the principal amount of Debentures held by each Holder, unless otherwise
agreed to in writing by all of the Holders.

     c) Late Fee. All overdue accrued and unpaid interest to be paid hereunder
shall entail a late fee at the rate of 12% per annum (or such lower maximum
amount of interest permitted to be charged under applicable law) ("Late Fees")
which will accrue daily, from the date such interest is due hereunder through
and including the date of payment.

     d) Prepayment. Except as otherwise set forth in this Debenture, the Company
may not prepay any portion of the principal amount of this Debenture without the
prior written consent of the Holder.

Section 3.     Registration of Transfers and Exchanges.
               ----------------------------------------

     a) Different Denominations. This Debenture is exchangeable for an equal
aggregate principal amount of Debentures of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be made
for such registration of transfer or exchange.

     b) Investment Representations. This Debenture has been issued subject to
certain investment representations of the original Holder set forth in the
Subscription Agreement and may be transferred or exchanged only in compliance
with the Subscription Agreement and applicable federal and state securities laws
and regulations.

                                       4
<PAGE>
     c) Reliance on Debenture Register. Prior to due presentment to the Company
for transfer of this Debenture, the Company and any agent of the Company may
treat the Person in whose name this Debenture is duly registered on the
Debenture Register as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Debenture is
overdue, and neither the Company nor any such agent shall be affected by notice
to the contrary.

Section 4.          Conversion.
                    -----------

     a) Voluntary Conversion. At any time after the Original Issue Date until
this Debenture is no longer outstanding, this Debenture shall be convertible
into shares of Common Stock, at the option of the Holder, in whole or in part at
any time and from time to time. The Holder shall effect conversions by
delivering to the Company the form of Notice of Conversion attached hereto as
Annex A (a "Notice of Conversion"), specifying therein the principal amount of
Debentures to be converted and the date on which such conversion is to be
effected (a "Conversion Date"). If no Conversion Date is specified in a Notice
of Conversion, the Conversion Date shall be the date that such Notice of
Conversion is provided hereunder. However, the Conversion Date shall not be a
date that is earlier than the date of receipt of the Notice of Conversion by the
Company. To effect conversions hereunder, the Holder shall not be required to
physically surrender Debentures to the Company unless the entire principal
amount of this Debenture plus all accrued and unpaid interest thereon has been
so converted. Conversions hereunder shall have the effect of lowering the
outstanding principal amount of this Debenture in an amount equal to the
applicable conversion. The Holder and the Company shall maintain records showing
the principal and/or accrued interest amounts converted and the date of such
conversions. The Company shall deliver any objection to any Notice of Conversion
within 1 Business Day of receipt of such notice. In the event of any dispute or
discrepancy, the records of the Company shall be controlling and determinative
in the absence of manifest error. The Holder and any assignee, by acceptance of
this Debenture, acknowledge and agree that, by reason of the provisions of this
paragraph, following conversion of a portion of this Debenture, the unpaid and
unconverted principal amount of this Debenture may be less than the amount
stated on the face hereof.

     b) Conversion Price. The conversion price in effect on any Conversion Date
shall be equal to $1.20 (subject to adjustment herein)(the "Conversion Price").

     c) Intentionally omitted.

     d) Mechanics of Conversion

          i. Conversion Shares Issuable Upon Conversion. The number of shares of
     Common Stock issuable upon a conversion hereunder shall be determined by
     the quotient obtained by dividing (x) the outstanding principal amount of
     this Debenture to be converted by (y) the Conversion Price. i.

          ii. Delivery of Certificate Upon Conversion. Not later than five (5)
     Trading Days after any Conversion Date (the "Share Delivery Date"), the
     Company will deliver to the Holder (A) a certificate or certificates
     representing the Conversion Shares which shall be free of restrictive
     legends and trading restrictions (other than those required by the
     Subscription Agreement) representing the number of shares of Common Stock
     being acquired upon the conversion of Debentures (including, if so elected
     by the Company, shares of Common Stock representing payment of accrued
     interest) and (B) a check in the amount of accrued and unpaid interest (if
     the Company has elected to pay accrued interest in cash). The Company
     shall, if available and if allowed under applicable securities laws, use
     its best efforts to deliver any certificate or certificates required to be
     delivered by the Company under this Section electronically through the
     Depository Trust Corporation or another established clearing corporation
     performing similar functions.

                                       5
<PAGE>
          iii. Failure to Deliver Certificates. If in the case of any Notice of
     Conversion such certificate or certificates are not delivered to or as
     directed by the applicable Holder by the third Trading Day after a
     Conversion Date, the Holder shall be entitled by written notice to the
     Company at any time on or before its receipt of such certificate or
     certificates thereafter, to rescind such conversion, in which event the
     Company shall immediately return the certificates representing the
     principal amount of Debentures tendered for conversion. In the event that
     the Company has sent the certificate or certificates to the Holder prior to
     receipt of the notice of rescission by the Holder, the Holder shall
     immediately return the certificate or certificates.

          iv. Obligation Absolute; Partial Liquidated Damages. If the Company
     fails for any reason to deliver to the Holder such certificate or
     certificates pursuant to Section 4(d)(ii) by the fifth Trading Day after
     the Conversion Date, the Company shall pay to such Holder, in cash, as
     liquidated damages and not as a penalty, for each $1000 of principal amount
     being converted, $10 per Trading Day (increasing to $20 per Trading Day
     after 5 Trading Days after the Conversion Date after such damages begin to
     accrue (10 Trading Days total after the Conversion Date)) for each Trading
     Day after such fifth Trading Day after the Conversion Date until such
     certificates are delivered. Unless this Debenture has previously been
     converted, the Company's obligations to issue and deliver the Conversion
     Shares upon conversion of this Debenture in accordance with the terms
     hereof are absolute and unconditional, irrespective of any action or
     inaction by the Holder to enforce the same, any waiver or consent with
     respect to any provision hereof, the recovery of any judgment against any
     Person or any action to enforce the same, or any setoff, counterclaim,
     recoupment, limitation or termination, or any breach or alleged breach by
     the Holder or any other Person of any obligation to the Company or any
     violation or alleged violation of law by the Holder or any other person,
     and irrespective of any other circumstance which might otherwise limit such
     obligation of the Company to the Holder in connection with the issuance of
     such Conversion Shares; provided, however, such delivery shall not operate
     as a waiver by the -------- ------- Company of any such action the Company
     may have against the Holder. In the event a Holder of this Debenture shall
     elect to convert any or all of the outstanding principal amount hereof, the
     Company may not refuse conversion based on any claim that the Holder or any
     one associated or affiliated with the Holder of has been engaged in any
     violation of law, agreement or for any other reason, unless, an injunction
     from a court, on notice, restraining and or enjoining conversion of all or
     part of this Debenture shall have been sought and obtained and the Company
     posts a surety bond for the benefit of the Holder in the amount of 150% of
     the principal amount of this Debenture outstanding, which is subject to the
     injunction, which bond shall remain in effect until the completion of
     arbitration/litigation of the dispute and the proceeds of which shall be
     payable to such Holder to the extent it obtains judgment. In the absence of
     an injunction precluding the same, the Company shall issue Conversion
     Shares or, if applicable, cash, upon a properly noticed conversion. Nothing
     herein shall limit a Holder's right to pursue actual damages or declare an
     Event of Default pursuant to Section 8 herein for the Company's failure to
     deliver Conversion Shares within the period specified herein and such
     Holder shall have the right to pursue all remedies available to it at law
     or in equity including, without limitation, a decree of specific
     performance and/or injunctive relief. The exercise of any such rights shall
     not prohibit the Holders from seeking to enforce damages pursuant to any
     other Section hereof or under applicable law.

                                       6
<PAGE>
          v. Compensation for Buy-In on Failure to Timely Deliver Certificates
     Upon Conversion. In addition to any other rights available to the Holder,
     if the Company fails for any reason to deliver to the Holder such
     certificate or certificates pursuant to Section 4(d)(ii) by the third
     Trading Day after the Conversion Date, and if after such third Trading Day
     the Holder is required by its brokerage firm to purchase (in an open market
     transaction or otherwise) Common Stock to deliver in satisfaction of a sale
     by such Holder of the Conversion Shares which the Holder anticipated
     receiving upon such conversion (a "Buy-In"), then the Company shall (A) pay
     in cash to the Holder (in addition to any remedies available to or elected
     by the Holder) the amount by which (x) the Holder's total purchase price
     (including brokerage commissions, if any) for the Common Stock so purchased
     exceeds (y) the product of (1) the aggregate number of shares of Common
     Stock that such Holder anticipated receiving from the conversion at issue
     multiplied by (2) the actual sale price of the Common Stock at the time of
     the sale (including brokerage commissions, if any) giving rise to such
     purchase obligation and (B) at the option of the Holder, either reissue
     Debentures in principal amount equal to the principal amount of the
     attempted conversion or deliver to the Holder the number of shares of
     Common Stock that would have been issued had the Company timely complied
     with its delivery requirements under Section 4(d)(ii). For example, if the
     Holder purchases Common Stock having a total purchase price of $11,000 to
     cover a Buy-In with respect to an attempted conversion of Debentures with
     respect to which the actual sale price of the Conversion Shares at the time
     of the sale (including brokerage commissions, if any) giving rise to such
     purchase obligation was a total of $10,000 under clause (A) of the
     immediately preceding sentence, the Company shall be required to pay the
     Holder $1,000. The Holder shall provide the Company written notice
     indicating the amounts payable to the Holder in respect of the Buy-In.
     Notwithstanding anything contained herein to the contrary, if a Holder
     requires the Company to make payment in respect of a Buy-In for the failure
     to timely deliver certificates hereunder and the Company timely pays in
     full such payment, the Company shall not be required to pay such Holder
     liquidated damages under Section 4(d)(iv) in respect of the certificates
     resulting in such Buy-In.

          vi. Reservation of Shares Issuable Upon Conversion. The Company
     covenants that it will at all times reserve and keep available out of its
     authorized and unissued shares of Common Stock solely for the purpose of
     issuance upon conversion of the Debentures and payment of interest on the
     Debenture, each as herein provided, free from preemptive rights or any
     other actual contingent purchase rights of persons other than the Holders,
     not less than such number of shares of the Common Stock as shall (subject
     to any additional requirements of the Company as to reservation of such
     shares set forth in the Subscription Agreement) be issuable (taking into
     account the adjustments and restrictions of Section 5) upon the conversion
     of the outstanding principal amount of the Debentures and payment of
     interest hereunder. The Company covenants that all shares of Common Stock
     that shall be so issuable shall, upon issue, be duly and validly
     authorized, issued and fully paid, nonassessable and, if the Registration
     Statement is then effective under the Securities Act, registered for public
     sale in accordance with such Registration Statement.

          vii. Fractional Shares. Upon a conversion hereunder, in the event the
     conversion yields a fractional share, the Holder shall be entitled to
     receive, in lieu of the final fraction of a share, one whole share of
     Common Stock.

          viii. Transfer Taxes. The issuance of certificates for shares of the
     Common Stock on conversion of the Debentures shall be made without charge
     to the Holders thereof for any documentary stamp or similar taxes that may
     be payable in respect of the issue or delivery of such certificate,
     provided that the Company shall not be required to pay any tax that may be
     payable in respect of any transfer involved in the issuance and delivery of
     any such certificate upon conversion in a name other than that of the
     Holder of such Debentures so converted and the Company shall not be
     required to issue or deliver such certificates unless or until the person
     or persons requesting the issuance thereof shall have paid to the Company
     the amount of such tax or shall have established to the satisfaction of the
     Company that such tax has been paid.

Section 5.        Certain Adjustments.
                  --------------------

     a) Stock Dividends and Stock Splits. If the Company, at any time while the
Debentures are outstanding: (A) shall pay a stock dividend or otherwise make a
distribution or distributions on shares of its Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the

                                       7
<PAGE>
Company pursuant to this Debenture, the Company's Series A 18% Cumulative
Convertible Preferred Stock or the Company's Series B 12% Cumulative Convertible
Preferred Stock, including as interest thereon), (B) subdivide outstanding
shares of Common Stock into a larger number of shares, (C) combine (including by
way of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares, or (D) issue by reclassification of shares of the Common Stock
any shares of capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding after such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

     b) Subsequent Equity Sales. If the Company at any time while Debentures are
outstanding, shall offer, sell, grant any option to purchase or offer, sell or
grant any right to reprice its securities, or otherwise dispose of or issue (or
announce any offer, sale, grant or any option to purchase or other disposition)
any Common Stock or Common Stock Equivalents entitling any Person to acquire
shares of Common Stock, at an effective price per share less than the then
Conversion Price (such lower price, the "Base Conversion Price" and such
issuances collectively, a "Dilutive Issuance"), as adjusted hereunder (if the
holder of the Common Stock or Common Stock Equivalents so issued shall at any
time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights per share which is issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective price
per share which is less than the Conversion Price, such issuance shall be deemed
to have occurred for less than the Conversion Price), then the Conversion Price
shall immediately (except in the case of an Exempt Issuance) be reduced to the
price determined by dividing (1) an amount equal to the sum of (A) the number of
shares of Common Stock outstanding immediately prior to such issuance multiplied
by the Conversion Price in effect immediately prior to such issuance and (B) the
consideration, if any, received by the Corporation upon such issuance, by (2)
the total number of shares of Common Stock outstanding immediately after such
issuance. Such adjustment shall be made whenever such Common Stock or Common
Stock Equivalents are issued. The Company shall notify the Holder in writing, no
later than the Business Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this section, indicating therein the applicable
issuance price, or of applicable reset price, exchange price, conversion price
and other pricing terms (such notice the "Dilutive Issuance Notice"). For
purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 5(b), upon the occurrence of any
Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
entitled to receive a number of Conversion Shares based upon the Base Conversion
Price regardless of whether the Holder accurately refers to the Base Conversion
Price in the Notice of Conversion.

     c) Pro Rata Distributions. If the Company, at any time while Debentures are
outstanding, shall distribute to all holders of Common Stock (and not to
Holders) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security, then in each such case the Conversion
Price shall be determined by multiplying such Conversion Price in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution by a fraction of which the denominator
shall be the VWAP determined as of the record date mentioned above, and of which
the numerator shall be such VWAP on such record date less the then fair market
value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith. In either case the
adjustments shall be described in a statement provided to the Holders of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.

                                       8
<PAGE>
     d) Fundamental Transaction. If, at any time while this Debenture is
outstanding, (A) the Company effects any merger or consolidation of the Company
with or into another Person, (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the Company
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
"Fundamental Transaction"), then upon any subsequent conversion of this
Debenture, the Holder shall have the right to receive, for each Conversion Share
that would have been issuable upon such conversion absent such Fundamental
Transaction, the same kind and amount of securities, cash or property as it
would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of one share of Common Stock (the "Alternate Consideration"). For
purposes of any such conversion, the determination of the Conversion Price shall
be appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Conversion Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any conversion of this Debenture following such Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new debenture consistent with the foregoing
provisions and evidencing the Holder's right to convert such debenture into
Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph
(c) and insuring that this Debenture (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

     e) Calculations. All calculations under this Section 5 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 5, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding treasury shares, if any) issued and outstanding.

     f) Exempt Issuance. Notwithstanding the foregoing, no adjustment will be
made under this Section 5 in respect of an Exempt Issuance.

     g) Notice to Holders.

          i. Adjustment to Conversion Price. Whenever the Conversion Price is
     adjusted pursuant to any of this Section 5, the Company shall promptly mail
     to each Holder a notice setting forth the Conversion Price after such
     adjustment and setting forth a brief statement of the facts requiring such
     adjustment. If the Company issues a variable rate security in a Variable
     Rate Transaction (as defined in the Subscription Agreement), despite the
     prohibition thereon in the Subscription Agreement, the Company shall be
     deemed to have issued Common Stock or Common Stock Equivalents at the
     lowest possible conversion or exercise price at which such securities may
     be converted or exercised.

                                       9
<PAGE>
          ii. Notice to Allow Conversion by Holder. If (A) the Company shall
     declare a dividend (or any other distribution) on the Common Stock; (B) the
     Company shall declare a special nonrecurring cash dividend on or a
     redemption of the Common Stock; (C) the Company shall authorize the
     granting to all holders of the Common Stock rights or warrants to subscribe
     for or purchase any shares of capital stock of any class or of any rights;
     (D) the approval of any stockholders of the Company shall be required in
     connection with any reclassification of the Common Stock, any consolidation
     or merger to which the Company is a party, any sale or transfer of all or
     substantially all of the assets of the Company, of any compulsory share
     exchange whereby the Common Stock is converted into other securities, cash
     or property; (E) the Company shall authorize the voluntary or involuntary
     dissolution, liquidation or winding up of the affairs of the Company; then,
     in each case, the Company shall cause to be filed at each office or agency
     maintained for the purpose of conversion of the Debentures, and shall cause
     to be mailed to the Holders at their last addresses as they shall appear
     upon the stock books of the Company, at least 20 calendar days prior to the
     applicable record or effective date hereinafter specified, a notice stating
     (x) the date on which a record is to be taken for the purpose of such
     dividend, distribution, redemption, rights or warrants, or if a record is
     not to be taken, the date as of which the holders of the Common Stock of
     record to be entitled to such dividend, distributions, redemption, rights
     or warrants are to be determined or (y) the date on which such
     reclassification, consolidation, merger, sale, transfer or share exchange
     is expected to become effective or close, and the date as of which it is
     expected that holders of the Common Stock of record shall be entitled to
     exchange their shares of the Common Stock for securities, cash or other
     property deliverable upon such reclassification, consolidation, merger,
     sale, transfer or share exchange; provided, that the failure to mail such
     notice or any defect therein or in the mailing thereof shall not affect the
     validity of the corporate action required to be specified in such notice.
     Holders are entitled to convert Debentures during the 20-day period
     commencing the date of such notice to the effective date of the event
     triggering such notice.

Section 6.        Voting Rights.   Holder shall have no voting rights.
                  --------------

     Section 7. Negative Covenants. So long as any portion of this Debenture is
outstanding, the Company will not directly or indirectly, unless it receives the
express written consent of the Holders of at least 51% of the then-outstanding
principal of all the Debentures:

     a) enter into, create, incur, or assume any indebtedness or liens of any
kind, on or with respect to any of its property or assets now owned or herafter
acquired or any interest therein or any income or profits therefrom that is
senior to, or pari passu with, in any respect, the Company's obligations under
the Debentures;

     b) amend its certificate of incorporation, bylaws or other charter
documents so as to adversely affect any rights of the Holder;

     c) repay, repurchase or offer to repay, repurchase or otherwise acquire
more than a de minimis number of shares of its Common Stock or other equity
securities other than as to (i) the existing Series A 18% Convertible Preferred
Stock, (ii) the existing Series B 12% Convertible Preferred Stock, (iii)
warrants outstanding as of the Original Issue Date and (iii) the Conversion
Shares to the extent permitted or required under the Transaction Documents or as
otherwise permitted by the Transaction Documents; or

     d) enter into any agreement with respect to any of the foregoing.

Section 8.        Events of Default.
                   -----------------

     a) "Event of Default", wherever used herein, means any one of the following
events (whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):

          i. any default in the payment of (A) the principal amount of any
     Debenture, or (B) interest (including Late Fees) on, or liquidated damages
     in respect of, any Debenture, in each case free of any claim of
     subordination, as and when the same shall become due and payable (whether
     on a Conversion Date or the Maturity Date or by acceleration or otherwise)
     which default, solely in the case of an interest payment or other default
     under clause (B) above, is not cured, within 3 Trading Days;

                                       10
<PAGE>
          ii. the Company shall fail to observe or perform any other covenant or
     agreement contained in this Debenture (other than a breach by the Company
     of its obligations to deliver shares of Common Stock to the Holder upon
     conversion which breach is addressed in clause (xii) below) which failure
     is not cured, if possible to cure, within the earlier to occur of (A) 5
     Trading Days after notice of such default sent by the Holder or by any
     other Holder and (B)10 Trading Days after the Company shall become aware of
     such failure;

          iii. a default or event of default (subject to any grace or cure
     period provided for in the applicable agreement, document or instrument)
     shall occur under (A) any of the Transaction Documents other than the
     Debentures, or (B) any other material agreement, lease, document or
     instrument to which the Company is bound, except where such event of
     default will not have a material adverse effect upon the Company;

          iv. any representation or warranty made herein, in any other
     Transaction Documents, in any written statement pursuant hereto or thereto,
     or in any other report, financial statement or certificate made or
     delivered to the Holder or any other holder of Debentures shall be untrue
     or incorrect in any material respect as of the date when made or deemed
     made, except where such event of default will not have a material adverse
     effect upon the Company;

          v. (i) the Company shall commence, or there shall be commenced against
     the Company, a case under any applicable bankruptcy or insolvency laws as
     now or hereafter in effect or any successor thereto, or the Company
     commences any other proceeding under any reorganization, arrangement,
     adjustment of debt, relief of debtors, dissolution, insolvency or
     liquidation or similar law of any jurisdiction whether now or hereafter in
     effect relating to the Company thereof or (ii) there is commenced against
     the Company thereof any such bankruptcy, insolvency or other proceeding
     which remains undismissed for a period of 60 days; or (iii) the Company
     thereof is adjudicated by a court of competent jurisdiction insolvent or
     bankrupt; or any order of relief or other order approving any such case or
     proceeding is entered; or (iv) the Company thereof suffers any appointment
     of any custodian or the like for it or any substantial part of its property
     which continues undischarged or unstayed for a period of 60 days; or (v)
     the Company thereof makes a general assignment for the benefit of
     creditors; or (vi) the Company shall fail to pay, or shall state in writing
     that it is unable to pay, or shall be unable to pay, its debts generally as
     they become due; or (vii) the Company thereof shall call a meeting of its
     creditors with a view to arranging a composition, adjustment or
     restructuring of its debts; or (viii) the Company thereof shall by any act
     or failure to act expressly indicate its consent to, approval of or
     acquiescence in any of the foregoing; or (ix) any corporate or other action
     is taken by the Company thereof for the purpose of effecting any of the
     foregoing;

          vi. the Company shall default in any of its obligations under any
     mortgage, credit agreement or other facility, indenture agreement,
     factoring agreement or other instrument under which there may be issued, or
     by which there may be secured or evidenced any indebtedness for borrowed
     money or money due under any long term leasing or factoring arrangement of
     the Company in an amount exceeding $150,000, whether such indebtedness now
     exists or shall hereafter be created and such default shall result in such
     indebtedness becoming or being declared due and payable prior to the date
     on which it would otherwise become due and payable;

          vii. the Common Stock shall not be eligible for quotation on or quoted
     for trading on a Trading Market and shall not again be eligible for and
     quoted or listed for trading thereon within five Trading Days;

                                       11
<PAGE>
          viii. the Company shall be a party to any Change of Control
     Transaction or Fundamental Transaction, shall agree to sell or dispose of
     all or in excess of 33% of its assets in one or more transactions (whether
     or not such sale would constitute a Change of Control Transaction) or shall
     redeem or repurchase more than a de minimis number of its outstanding
     shares of Common Stock or other equity securities of the Company (other
     than redemptions of Conversion Shares and repurchases of shares of Common
     Stock or other equity securities of departing officers and directors of the
     Company; provided such repurchases shall not exceed $100,000, in the
     aggregate, for all officers and directors during the term of this
     Debenture);

          ix. the Company shall fail for any reason to deliver certificates to a
     Holder prior to the fifth Trading Day after a Conversion Date pursuant to
     and in accordance with Section 4(d) or the Company shall provide notice to
     the Holder, including by way of public announcement, at any time, of its
     intention not to comply with requests for conversions of any Debentures in
     accordance with the terms hereof;

                                       12
<PAGE>

     b) Remedies Upon Event of Default. If any Event of Default occurs, the full
principal amount of this Debenture, together with interest and other amounts
owing in respect thereof, to the date of acceleration shall become, at the
Holder's written election, immediately due and payable in cash. The aggregate
amount payable upon an Event of Default shall be equal to the Mandatory
Prepayment Amount. Commencing 5 days after the occurrence of any Event of
Default that results in the eventual acceleration of this Debenture, the
interest rate on this Debenture shall accrue at the rate of 18% per annum, or
such lower maximum amount of interest permitted to be charged under applicable
law. All Debentures for which the full Mandatory Prepayment Amount hereunder
shall have been paid in accordance herewith shall promptly be surrendered to or
as directed by the Company. The Holder need not provide and the Company hereby
waives any presentment, demand, protest or other notice of any kind, and the
Holder may immediately and without expiration of any grace period enforce any
and all of its rights and remedies hereunder and all other remedies available to
it under applicable law. Such declaration may be rescinded and annulled by
Holder at any time prior to payment hereunder and the Holder shall have all
rights as a Debenture holder until such time, if any, as the full payment under
this Section shall have been received by it. No such rescission or annulment
shall affect any subsequent Event of Default or impair any right consequent
thereon.

Section 9.        Miscellaneous.
                  --------------

     a) Notices. Any and all notices or other communications or deliveries to be
provided by the Holders hereunder, including, without limitation, any Notice of
Conversion, shall be in writing and delivered personally, by facsimile, sent by
a nationally recognized overnight courier service, addressed to the Company, at
the address set forth above, facsimile number 303-730-9985, Attn: Mr. Les Bates
with a copy to 303-296-8880, Attn: Henry F. Schlueter, Esq. or such other
address or facsimile number as the Company may specify for such purposes by
notice to the Holders delivered in accordance with this Section. Any and all
notices or other communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by facsimile, sent by a
nationally recognized overnight courier service addressed to each Holder at the
facsimile telephone number or address of such Holder appearing on the books of
the Company, or if no such facsimile telephone number or address appears, at the
principal place of business of the Holder. Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m. (New York City time), (ii) the date after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the second Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given.

     b) Absolute Obligation. Except as expressly provided herein, no provision
of this Debenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, interest and liquidated
damages (if any) on, this Debenture at the time, place, and rate, and in the
coin or currency, herein prescribed. This Debenture is a direct debt obligation
of the Company. This Debenture ranks pari passu with all other Debentures now or
hereafter issued under the terms set forth herein.

                                       12
<PAGE>
     c) Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost,
stolen or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Debenture, or in lieu of
or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the principal amount of this Debenture so mutilated, lost, stolen or
destroyed (unless the Holder had previously effected a conversion of such
Debenture) but only upon receipt of evidence of such loss, theft or destruction
of such Debenture, and of the ownership hereof, and indemnity, if requested, all
reasonably satisfactory to the Company.

     d) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Debenture shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by any of the Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and
federal courts sitting in the City of New York, Borough of Manhattan (the "New
York Courts"). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), 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, or such New York Courts are improper or
inconvenient venue for such proceeding. 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 via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Debenture 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 hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Debenture or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Debenture,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its attorneys fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.

     e) Waiver. Any waiver by the Company or the Holder of a breach of any
provision of this Debenture shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Debenture. The failure of the Company or the Holder to insist upon strict
adherence to any term of this Debenture on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Debenture. Any waiver
must be in writing.

     f) Severability. If any provision of this Debenture is invalid, illegal or
unenforceable, the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. If it shall be found
that any interest or other amount deemed interest due hereunder violates
applicable laws governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate of interest.
The Company covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on this Debenture as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has
been enacted.

                                       13
<PAGE>
     g) Next Business Day. Whenever any payment or other obligation hereunder
shall be due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day.

     h) Headings. The headings contained herein are for convenience only, do not
constitute a part of this Debenture and shall not be deemed to limit or affect
any of the provisions hereof.

                              *********************

                                       14
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed by a duly authorized officer as of the date first above indicated.

                                          NEW FRONTIER ENERGY, INC.

                                          By:_______________________________
                                               Name:
                                               Title:

                                       15
<PAGE>

                                     ANNEX A

                              NOTICE OF CONVERSION

     The undersigned hereby elects to convert principal under the 2.5%
Convertible Debenture of New Frontier Energy, Inc., a Colorado corporation (the
"Company"), due on [____________ , into shares of common stock, par value $0.001
per share (the "Common Stock"), of the Company according to the conditions
hereof, as of the date written below. If shares are to be issued in the name of
a person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and
opinions as reasonably requested by the Company in accordance therewith. No fee
will be charged to the holder for any conversion, except for such transfer
taxes, if any.

     By the delivery of this Notice of Conversion the undersigned represents and
warrants to the Company that its ownership of the Common Stock does not exceed
the amounts determined in accordance with Section 13(d) of the Exchange Act,
specified under Section 4 of this Debenture.

     The undersigned agrees to comply with the prospectus delivery requirements
under the applicable securities laws in connection with any transfer of the
aforesaid shares of Common Stock.

Conversion calculations:
                           Date to Effect Conversion:

                           Principal Amount of Debentures to be Converted:

                           Payment of Interest in Common Stock __ yes  __ no
                              If yes,  $_____ of Interest  Accrued on Account
                              of  Conversion at Issue.

                           Number of shares of Common Stock to
be issued:

                           Signature:

                           Name:

                           Address:

                                       16
<PAGE>

                                   Schedule 1

                               CONVERSION SCHEDULE

The 2.5% Convertible Debentures due on [________, in the aggregate principal
amount of $____________ issued by New Frontier Energy, Inc. This Conversion
Schedule reflects conversions made under Section 4 of the above referenced
Debenture.

                                     Dated:

<TABLE>
<CAPTION>
                                                           Aggregate Principal
                                                             Amount Remaining
      Date of Conversion                                      Subsequent to
(or for first entry, Original                                   Conversion
         Issue Date)              Amount of Conversion         (or original              Company Attest
                                                            Principal Amount)
------------------------------- ------------------------- ----------------------- ------------------------------
<S>                              <C>                        <C>                    <C>

------------------------------- ------------------------- ----------------------- ------------------------------

------------------------------- ------------------------- ----------------------- ------------------------------

------------------------------- ------------------------- ----------------------- ------------------------------

------------------------------- ------------------------- ----------------------- ------------------------------
</TABLE>

                                       17

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