Document:

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                                                                    Exhibit 10.8

                          SECURITIES PURCHASE AGREEMENT

     SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of April 27,
2006, by and among Qiao Xing Universal Telephone, Inc., a company incorporated
under the laws of the British Virgin Islands, with headquarters located at Qiao
Xing Science Industrial Park, Tang Quan, Huizhou City, Guangdong, People's
Republic of China, 516023 (the "COMPANY"), Qiao Xing Mobile Communications Co.
Ltd., a company incorporated under the laws of the British Virgin Islands, with
headquarters located at Qiao Xing Science Industrial Park, Tang Quan, Huizhou
City, Guangdong, People's Republic of China, 516023 ("QX")and the investors
listed on the Schedule of Buyers attached hereto (individually, a "BUYER" and
collectively, the "BUYERS").

     WHEREAS:

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

     B. The Company has authorized $40,000,000 in principal amount of
convertible notes of the Company in the form attached hereto as Exhibit A
(together with any convertible notes issued in replacement or exchange thereof
in accordance with the terms thereof, the "NOTES"), which Notes shall be, in
accordance with the terms of the Notes, in whole or in part, (i) convertible
into shares of the Company's common stock, par value $.001 per share ("COMPANY
COMMON STOCK," as converted, the "CONVERSION SHARES") or (ii) in the event of an
initial public offering of QX, exchangeable into shares of the common stock of
QX, par value $0.01 per share ("QX SHARES" as converted, the "EXCHANGE SHARES").

     C. Each Buyer wishes to purchase, severally but not jointly, and the
Company wishes to sell, upon the terms and conditions stated in this Agreement,
(i) that aggregate principal amount of Notes set forth opposite such Buyer's
name in column (3) on the Schedule of Buyers (which aggregate principal amount
for all Buyers shall be $40,000,000) and (ii) warrants, in substantially the
form attached hereto as Exhibit B (the "WARRANTS"), to acquire that number of
shares of Company Common Stock (as exercised, collectively, the "WARRANT
SHARES") set forth opposite such Buyer's name in column (5) on the Schedule of
Buyers.

     D. Contemporaneously with the execution and delivery of this Agreement, the
Company and the Buyers hereto are executing and delivering a registration rights
agreement, substantially in the form attached hereto as Exhibit C (the "COMPANY
RRA"), pursuant to which the Company has agreed to provide certain registration
rights with respect to the Conversion Shares and the Warrant Shares under the
1933 Act and the rules and regulations promulgated thereunder, and applicable
state securities laws.

     E. Contemporaneously with the execution and delivery of this Agreement, QX
and the Buyers hereto are executing and delivering a registration rights
agreement, substantially in the form attached hereto as Exhibit D (the "QX RRA"
and together with the Company RRA, the

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"REGISTRATION RIGHTS AGREEMENTS"), pursuant to which QX has agreed to provide
certain registration rights with respect to the Exchange Shares under the 1933
Act and the rules and regulations promulgated thereunder, and applicable state
securities laws.

     F. The Notes, the Conversion Shares, the Exchange Shares, the Warrants and
the Warrant Shares collectively are referred to herein as the "SECURITIES".

     G. The Notes will rank senior to all future indebtedness of the Company and
will be secured by a guarantee from QX, in the form attached hereto as Exhibit E
(the "GUARANTY")

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

     1.   PURCHASE AND SALE OF NOTES AND WARRANTS.

          (a)  Notes and Warrants.

               (i) Amount. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to each Buyer, and each Buyer severally, but not jointly, agrees to purchase
from the Company on the Closing Date (as defined below), a principal amount of
Notes, as is set forth opposite such Buyer's name in column (4) on the Schedule
of Buyers, along with Warrants to acquire that number of Warrant Shares as is
set forth opposite such Buyer's name in column (5) on the Schedule of Buyers.

               (ii) Closing. The closing (the "CLOSING") of the purchase of the
Notes and the Warrants by the Buyers shall occur at the offices of Schulte Roth
& Zabel LLP, 919 Third Avenue, New York, New York 10022. The date and time of
the Closing (the "CLOSING DATE") shall be 10:00 a.m., New York City Time, on May
23, 2006 (or such other date and time as is mutually agreed to by the Company
and each Buyer) subject to notification of satisfaction (or waiver) of the
conditions to the Closing set forth in Sections 6 and 7 below (or such other
date and time as is mutually agreed to by the Company and each Buyer).

               (iii) Purchase Price. The purchase price for each Buyer (the
"PURCHASE PRICE") of the Notes and related Warrants to be purchased by each such
Buyer at the Closing shall be equal to $1.00 for each $1.00 of principal amount
of Notes being purchased by such Buyer at the Closing.

               (iv) Form of Payment. On the Closing Date, (A) each Buyer shall
pay its Purchase Price to the Company for the Notes and the Warrants to be
issued and sold to such Buyer at the Closing, by wire transfer of immediately
available funds in accordance with the Company's written wire instructions, and
(B) the Company shall deliver to each Buyer the Notes (in the principal amounts
as such Buyer shall have requested prior to the Closing) which such Buyer is
then purchasing along with the Warrants (in the amounts as such Buyer shall have
requested prior to the Closing) such Buyer is purchasing, duly executed on
behalf of the Company and registered in the name of such Buyer or its designee.

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     2.   REPRESENTATIONS AND WARRANTIES OF EACH BUYER.

          Each Buyer represents and warrants with respect to only itself that:

          (a) Organization; Authority. Such Buyer is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the applicable Transaction Documents
(as defined below) and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by such Buyer of the transactions
contemplated by this Agreement and each of the Registration Rights Agreements
has been duly authorized by all necessary action on the part of such Buyer. This
Agreement and each of the Registration Rights Agreements have been duly,
executed and delivered by such Buyer in accordance with the terms hereof, each
will constitute the valid and legally binding obligation of such Buyer,
enforceable against it in accordance with their respective terms, except (a) as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, (b) as enforceability of any
indemnification and contribution provisions may be limited under the federal and
state securities laws and public policy, and (c) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.

          (b) No Conflicts. The execution, delivery and performance by such
Buyer of this Agreement, each Registration Rights Agreement and the Guaranty to
which such Buyer is a party and the consummation by such Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of such Buyer or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Buyer is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations
hereunder.

          (c) No Public Sale or Distribution. Such Buyer (i) is acquiring the
Notes and the Warrants, and (ii) upon conversion of the Notes and exercise of
the Warrants will acquire the Conversion Shares and the Exchange Shares, as
applicable, issuable upon conversion of the Notes and the Warrant Shares
issuable upon exercise of the Warrants, for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the 1933 Act;
provided, however, that by making the representations herein, such Buyer does
not agree to hold any of the Securities for any minimum or other specific term
and reserves the right to dispose of the Securities at any time in accordance
with or pursuant to a registration statement or an exemption under the 1933 Act.
Such Buyer is acquiring the Securities hereunder in the ordinary course of its
business. Such Buyer does not presently have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Securities.

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

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

          (f) Transfer or Resale. Such Buyer understands that except as provided
in the applicable Registration Rights Agreements: (i) the Securities have not
been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Buyer shall have delivered to the
Company an opinion of counsel, in a generally acceptable form, to the effect
that such Securities to be sold, assigned or transferred may be sold, assigned
or transferred pursuant to an exemption from such registration, or (C) such
Buyer provides the Company with reasonable assurance that such Securities can be
sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the 1933 Act, as amended (or a successor rule thereto) (collectively,
"RULE 144"); (ii) any sale of the Securities made in reliance on Rule 144 may be
made only in accordance with the terms of Rule 144 and further, if Rule 144 is
not applicable, any resale of the Securities under circumstances in which the
seller (or the Person (as defined in Section 3(e)) through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the 1933
Act) may require compliance with some other exemption under the 1933 Act or the
rules and regulations of the SEC thereunder; and (iii) neither the Company nor
any other Person is under any obligation to register the Securities under the
1933 Act or any state securities laws or to comply with the terms and conditions
of any exemption thereunder. The Securities may be pledged in connection with a
bona fide margin account or other loan or financing arrangement secured by the
Securities and such pledge of Securities shall not be deemed to be a transfer,
sale or assignment of the Securities hereunder, and no Buyer effecting a pledge
of Securities shall be required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Document (as defined in 3(c)), including, without limitation,
this Section 2(f).

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

      [NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
                              CERTIFICATE NOR THE

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          SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE][EXERCISABLE]
          HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
          BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
          APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
          FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
          EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES
          LAWS, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
          THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND APPLICABLE STATE
          SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A
          UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
          PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
          FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection with
a sale, assignment or other transfer, such holder provides the Company with an
opinion of counsel, in a generally acceptable form, to the effect that such
legend is not required under applicable requirements of the 1933 Act, or (iii)
such holder provides the Company with reasonable assurance that the Securities
can be sold, assigned or transferred pursuant to Rule 144.

          (h) Residency; Holdings. Such Buyer is a resident of that jurisdiction
specified below its address on the Schedule of Buyers. As of April 27, 2006, the
Buyers beneficially owned 2,045,000 shares of Company Common Stock.

          The Company acknowledges and agrees that each Buyer does not make or
has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 2.

     3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND QX.

     Each of the Company and QX hereby makes the following representations and
warranties to each Buyer:

          (a) Significant Subsidiaries. Schedule 3(a) sets forth all of the
Significant Subsidiaries (which for purposes of this Agreement has the meaning
ascribed to such term in Regulation S-X under the Securities Exchange Act of
1934, as amended (the "1934 Act")) of the Company (each a "SUBSIDIARY" and
collectively, "SUBSIDIARIES"). Except as disclosed in

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Schedule 3(a), the Company owns, directly or indirectly, all of the capital
stock of each Significant Subsidiary free and clear of any and all liens,
charges, encumbrances, security interests, rights of first refusal or other
restrictions of any kind ("LIENS"), and all the issued and outstanding shares of
capital stock of each Significant Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights.

          (b) Organization and Qualification. Each of the Company and each
Subsidiary is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use or lease and
operate its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and each
Subsidiary is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not, individually or in the aggregate, have or reasonably
be expected to result in (i) an adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, business or financial condition of the
Company and the Subsidiaries, taken as a whole, or (iii) an adverse impairment
to the Company or QX's ability to perform on a timely basis its obligations
under any Transaction Document to which it is a party (any of (i), (ii) or
(iii), a "MATERIAL ADVERSE EFFECT").

          (c) Authorization; Enforcement. Each of the Company and QX has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of this Agreement, the Notes, the Registration
Rights Agreements, the Warrants, the Guaranty, the Irrevocable Transfer Agent
Instructions (as defined below) and any other documents or agreements executed
in connection with the transactions contemplated hereunder (collectively, the
"TRANSACTION DOCUMENTS") to which it is a party and otherwise to carry out its
obligations hereunder and thereunder and to issue the Securities in accordance
with the terms hereof and thereof. The execution and delivery of each of the
Transaction Documents by the Company and QX, as applicable, and the consummation
by it of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Notes and the Warrants and the reservation for
issuance of the Conversion Shares upon conversion of the Notes, the Exchange
Shares upon exchange of the Notes and the Warrant Shares issuable upon exercise
of the Warrants, have been duly authorized by all necessary action on the part
of the Company and QX, as applicable, and no further action is required by the
Company or QX, or their respective Board of Directors or stockholders in
connection herewith and therewith (other than the filing with the SEC of one or
more Registration Statements in accordance with the requirements of each of the
Registration Rights Agreements and the Stockholder Approval (as defined below)).
Each Transaction Document has been (or upon delivery will have been) duly
executed by the Company and QX, as applicable, and, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the
Company and QX enforceable against them in accordance with such document's
terms, except (a) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (b) as enforceability of any indemnification and contribution

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provisions may be limited under the federal and state securities laws and public
policy, and (c) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.

          (d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and QX to which it is respectively a party
and the consummation by the Company and QX of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Notes and
the Warrants and reservation for issuance of the Conversion Shares, the Exchange
Shares and the Warrant Shares) do not and will not (i) conflict with or violate
any provision of the Company's or any Subsidiary's certificate or articles of
incorporation, any certificate of designations, preferences and rights of any
outstanding series of preferred stock, bylaws or other organizational or charter
documents, board resolutions or joint venture contract or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to
which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree,
business license or other restriction of any court or governmental authority to
which the Company or a Subsidiary is subject (including federal and state
securities laws, regulations of whichever of the New York Stock Exchange, Inc.,
the American Stock Exchange or the Nasdaq National Market (the "PRINCIPAL
MARKET") and applicable laws of the People's Republic of China ("CHINA")) that
the Company Common Stock is listed or quoted for trading on the date in question
(any of the foregoing, a "TRADING MARKET")), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the case of each
of clauses (ii) and (iii), such as would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect and the
Stockholder Approval.

          (e) Filings, Consents and Approvals. Neither the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration (collectively,
"CONSENTS") with, any Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, in each case in
accordance with the terms hereof or thereof, except for the following consents,
authorizations, orders, filings and registrations (except for clauses (ii) and
(v) below, none of which is required to be filed or obtained before the
Closing): (i) the filing with the SEC of one or more Registration Statements in
accordance with the requirements of the Registration Rights Agreements, (ii) the
application(s) to the Principal Market for the listing of the Conversion Shares,
the Exchange Shares and the Warrant Shares for trading thereon in the time and
manner required thereby, (iii) all filings required pursuant to Section 4(g)
hereof, and (iv) those Consents that have been obtained prior to the date hereof
and (v) the Stockholder Approval. As used in this Agreement, "PERSON" means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a
government or any department or agency thereof, including in China.

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          (f) Issuance of the Securities. The Notes and Warrants are duly
authorized, subject to the Stockholder Approval and, upon issuance in accordance
with the terms hereof, will be duly and validly issued, fully paid and
nonassessable, free from all taxes, Liens and charges with respect to the issue
thereof. The Conversion Shares, the Exchange Shares and the Warrant Shares have
been duly authorized and, when issued and paid for in accordance with the
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all taxes, Liens and charges with respect to
the issue thereof. The Company has reserved from its duly authorized capital
stock the maximum number of shares of Company Common Stock issuable pursuant to
the Notes and Warrants in order to issue the full number of Conversion Shares
and Warrant Shares as are or may become issuable in accordance with the terms of
the Notes and the Warrants. QX has reserved from its duly authorized capital
stock the maximum number of shares of QX Shares issuable pursuant to the Notes
in order to issue the full number of Exchange Shares as are or may become
issuable in accordance with the terms of the Notes. Upon receipt of the
Conversion Shares, the Exchange Shares and the Warrant Shares, the Buyers will
have good and marketable title to such Conversion Shares, the Exchange Shares
and the Warrant Shares.

          (g) Capitalization. The number of shares and type of all authorized,
issued and outstanding capital stock of the Company and QX is set forth in
Schedule 3(g). All outstanding shares of capital stock of the Company and QX are
duly authorized, validly issued, fully paid and nonassessable and have been
issued in compliance with all applicable securities laws. Except as set forth in
Schedule 3(g), no securities of the Company or QX are entitled to preemptive or
similar rights, and no Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of the purchase
and sale of the Securities and except as disclosed in Schedule 3(g), there are
no outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of the Company Common Stock or QX
Shares, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Company Common Stock or QX Shares, or securities or rights convertible or
exchangeable into shares of Company Common Stock or QX Shares. Except as set
forth in Schedule 3(g), the issue and sale of the Securities will not,
immediately or with the passage of time, obligate the Company or QX to issue
shares of Company Common Stock or QX Shares, respectively, or other securities
to any Person (other than the Buyers) and will not result in a right of any
holder of Company securities to adjust the exercise, conversion, exchange or
reset price under such securities.

          (h) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the 1933 Act and the 1934 Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two (2) years
preceding the date hereof (or such shorter period as the Company was required by
law to file such reports) (the foregoing materials being collectively referred
to herein as the "SEC REPORTS" and, together with the Schedules to this
Agreement, the "DISCLOSURE MATERIALS") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. The Company has delivered to the Buyers a copy
of all SEC Reports not available on the EDGAR system. As

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of their respective dates, the SEC Reports complied in all material respects
with the requirements of the 1933 Act and the 1934 Act and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The Company is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and any and all applicable rules and regulations promulgated by the SEC
thereunder that are effective as of the date hereof. The financial statements of
the Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the SEC with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
("GAAP"), except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

          (i) Material Changes. Since the date of the latest audited financial
statements included within the SEC Reports, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP or required to be disclosed in filings
made with the SEC, (iii) the Company has not altered its method of accounting or
the identity of its auditors, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, (v) the Company has not issued any equity securities to any
officer, director or any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 (an "AFFILIATE"),
except pursuant to existing Company stock option plans, (vi) the Company has not
sold any assets, individually or in the aggregate, in excess of $250,000 outside
of the ordinary course of business or (vii) the Company has not had capital
expenditures, individually or in the aggregate, in excess of $250,000 outside of
the ordinary course of business. The Company does not have pending before the
SEC any request for confidential treatment of information.

          (j) Litigation. There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has
been the subject of any claim, action or proceeding involving a claim of
violation of or liability

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under federal, state or foreign securities laws or a claim of breach of
fiduciary duty nor has any director or officer engaged in any criminal activity.
There has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the SEC involving the Company or any current
or former director or officer of the Company. The SEC has not issued any stop
order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the 1934 Act or the 1933 Act,
including the Registration Statement.

          (k) Labor Relations. No strike, work stoppage, slow down or other
material labor problem exists or, to the knowledge of the Company, is threatened
or imminent with respect to any of the employees of the Company or any
Subsidiary.

          (l) Compliance. Neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator, governmental body, or
regulatory or self-regulatory authority or (iii) is in violation of any statute,
rule or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and
employment and labor matters, except in each case as would not, individually or
in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

          (m) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations, governmental approvals, business licenses and
permits issued by the appropriate United States federal, state and local or
Chinese and other relevant foreign regulatory authorities necessary to conduct
their respective businesses as described in the SEC Reports, except where the
failure to possess such approvals, business licenses, certificates,
authorizations or permits would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect ("MATERIAL
PERMITS"), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.

          (n) Title to Assets. Except as disclosed in Schedule 3(n), the Company
and the Subsidiaries have good and, where permitted by applicable China law,
marketable title to all real property owned by them that is material to their
respective businesses and good and marketable title in all personal property
owned by them that is material to their respective businesses, in each case free
and clear of all Liens, except for Liens as do not materially affect the value
of such property and do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries. Any real
property and facilities held under lease by the Company and the Subsidiaries or
used in its business are held by them under valid, subsisting and enforceable
leases and land use certificates, as the case may be, of which the Company and
the Subsidiaries are in compliance.

                                       10

<PAGE>

          (o) Patents and Trademarks. Except as disclosed in Schedule 3(o), the
Company and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights that are necessary or material for
use in connection with their respective businesses as described in the SEC
Reports and which the failure to so have would, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse Effect
(collectively, the "INTELLECTUAL PROPERTY RIGHTS"). Schedule 3(o) sets forth a
complete list of all patents, trademarks, servicemarks and trade names that are
used by the Company or its Subsidiaries or in their respective businesses and
owned or co-owned by and registered in the name of the Company or any
Subsidiary, all applications therefore, and all licenses and other intellectual
property agreements relating thereto. All of the Company's Intellectual Property
Rights and relevant applications therefor have been duly registered by the China
Patent and Trademark Office, or the equivalent offices of non-US jurisdictions,
and have been properly maintained in accordance with applicable law in China and
such other jurisdictions. None of the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate or be
abandoned within two (2) years from the date of this Agreement. Neither the
Company nor any Subsidiary has received since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a
claim or otherwise has any knowledge that the Intellectual Property Rights
violate or infringe upon the rights of any Person, except as would not have a
Material Adverse Effect. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable. There is no claim, action or proceeding being
made or brought, or to the knowledge of the Company, being threatened, against
the Company or its Subsidiaries regarding its Intellectual Property Rights.

          (p) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost, except for cost increases being
experienced by companies in similar businesses and risk categories.

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

          (r) Transactions With Affiliates and Employees. Except as set forth in
the SEC Reports filed at least ten (10) days prior to the date hereof, none of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company

                                       11

<PAGE>

is presently a party to any transaction with the Company or any Subsidiary
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.

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

          (t) Internal Accounting Controls. The Company and the Subsidiaries
maintain a system of internal accounting controls which the audit committee of
the board of directors reasonably believes is 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.

          (u) Solvency. Based on the financial condition of the Company as of
the date hereof and as of the Closing Date, (i) the Company's fair saleable
value of its assets exceeds the amount that will be required to be paid on or in
respect of the Company's existing debts and other liabilities (including known
contingent liabilities) as they mature; (ii) the Company's assets do not
constitute unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and
capital availability thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt).

          (v) Placement Agent's Fees. The Company shall be responsible for the
payment of any placement agent's fees, financial advisory or consultancy fees,
brokers' commissions or finder's fee (other than for persons engaged by any
Buyer or its investment advisor) relating to or arising out of the transactions
contemplated hereby, which fees are set

                                       12

<PAGE>

forth on Schedule 3(v). The Company shall pay, and hold each Buyer harmless
against, any liability, loss or expense (including, without limitation,
attorney's fees and out-of-pocket expenses) arising in connection with any such
claim. The Company acknowledges that it has engaged Worldwide Gateway Co., Ltd.
as placement agent (the "AGENT") in connection with the sale of the Securities.
Other than the Agent, the Company has not engaged any placement agent or other
agent in connection with the sale of the Securities.

          (w) Integration. Neither the Company, nor any of its Affiliates, nor
any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated, nor will the Company or
any of its Subsidiaries take any action or steps that would cause the offering
of the Securities to be integrated with other offerings.

          (x) Listing and Maintenance Requirements. The Company has not, in the
two (2) years preceding the date hereof, received notice (written or oral) from
any Trading Market on which the Common Stock is or has been listed or quoted to
the effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is currently in compliance with
all such listing and maintenance requirements and has no reason to believe that
it will not in the foreseeable future continue to be (except as a result of a
failure in the future to comply with minimum trading price requirements), in
compliance with all such listing and maintenance requirements. Subject to the
Stockholder Approval, the issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Principal Market and the Company
Common Stock is currently listed on the Principal Market.

          (y) Voting Agreement. The Company has entered into voting agreements
with Wu Holdings Limited, Rui Lin Wu and Zhi Yang Wu (the "VOTING STOCKHOLDERS")
on April 27, 2006.

          (z) Registration Rights. No holder of securities of the Company has
rights to the registration of any securities of the Company because of the
filing of the Registration Statement or the issuance of the Securities hereunder
that could expose the Company to material liability or any Holder to any
liability or that could impair the Company's ability to consummate the issuance
and sale of the Securities in the manner, and at the times, contemplated hereby,
which rights have not been waived by the holder thereof as of the date hereof.

          (aa) Investment Company. The Company is not, and is not an Affiliate
of, an "investment company" within the meaning of the Investment Company Act of
1940, as amended.

          (bb) Application of Takeover Protections. The Company has taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's
Certificate of Incorporation (or similar charter

                                       13

<PAGE>

documents) or the laws of its state of incorporation that is or could become
applicable to the Buyers solely as a result of the Buyers and the Company
fulfilling their obligations or exercising their rights under the Transaction
Documents, including without limitation the Company's issuance of the Securities
and the Buyers' ownership of the Securities.

          (cc) Disclosure. Each of the Company and QX confirms that neither it
nor any Person acting on its behalf has provided any of the Buyers or their
agents or counsel with any information that the Company or QX believes
constitutes material, non-public information. Each of the Company and QX
understands and confirms that the Buyers will rely on the foregoing
representations and covenants in effecting transactions in securities of the
Company and QX. All disclosure provided to the Buyers regarding each of the
Company and QX, its business and the transactions contemplated hereby, furnished
by or on behalf of the Company and QX (including the Company and QX's
representations and warranties set forth in this Agreement) are true and correct
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 made therein, in the
light of the circumstances under which they were made, not misleading.

          (dd) Acknowledgment Regarding Buyer's Purchase of Securities. Each of
the Company and QX acknowledges and agrees that each Buyer is acting solely in
the capacity of arm's length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby, and that no Buyer is an
officer or director of the Company or QX. Each of the Company and QX
acknowledges that no Buyer is acting as a financial advisor or fiduciary of the
Company or QX (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to such Buyer's purchase of the Securities. Each of the
Company and QX further represents to each Buyer that the Company and QX's
decision to enter into the Transaction Documents has been based solely on the
independent evaluation by the Company, QX and their representatives.

          (ee) Dilutive Effect. Each of the Company and QX understands and
acknowledges that the number of Conversion Shares issuable upon conversion of
the Notes, the number of Exchange Shares issuable upon the exchange of the Notes
and the Warrant Shares issuable upon exercise of the Warrants will increase in
certain circumstances. Each of the Company and QX further acknowledges that its
obligation to issue Conversion Shares upon conversion of the Notes in accordance
with this Agreement and the Notes, its obligation to issue Exchange Shares upon
exchange of the Notes in accordance with this Agreement and the Notes and its
obligation to issue the Warrant Shares upon exercise of the Warrants in
accordance with this Agreement and the Warrants is, in each case, absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of the Company or QX.

          (ff) Indebtedness and Other Contracts. Except as disclosed in Schedule
3(ff), neither the Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument would result in a

                                       14

<PAGE>

Material Adverse Effect, (iii) is in violation of any term of or in default
under any contract, agreement or instrument relating to any Indebtedness, except
where such violations and defaults would not result, individually or in the
aggregate, in a Material Adverse Effect, or (iv) is a party to any contract,
agreement or instrument relating to any Indebtedness, the performance of which,
in the judgment of the Company's officers, has or is expected to have a Material
Adverse Effect. Schedule 3(ff) provides a detailed description of the material
terms of any such outstanding Indebtedness. For purposes of this Agreement: (x)
"INDEBTEDNESS" of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (including, without limitation,
"capital leases" in accordance with GAAP) (other than trade payables entered
into in the ordinary course of business), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property
or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property), (F) all monetary
obligations under any leasing or similar arrangement which, in connection with
GAAP, consistently applied for the periods covered thereby, is classified as a
capital lease, (G) all indebtedness referred to in clauses (A) through (F) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (H) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses (A)
through (G) above; and (y) "CONTINGENT OBLIGATION" means, as to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto.

          (gg) Ranking of Notes. No future Indebtedness of the Company or QX
will be senior to or rank pari passu with the Notes in right of payment, whether
with respect of payment of redemptions, interest, damages or upon liquidation or
dissolution or otherwise.

          (hh) Form F-1/F-3 Eligibility. (i) The Company is eligible to register
the Conversion Shares and the Warrant Shares for resale by the Buyers using Form
F-3 promulgated under the 1933 Act and (ii) to the Company's knowledge, upon an
initial public offering of QX Shares, QX will be eligible to register the
Exchange Shares for resale by the Buyers using Form F-1 promulgated under the
1933 Act.

          (ii) QX Shares.

                                       15

<PAGE>

               (i) The Company is the beneficial and record owner of 80% of the
QX Shares, free and clear of any Liens, and upon issuance of QX Shares by QX in
accordance with the applicable Transaction Documents, QX will transfer to the
Buyers good and marketable title to such QX Shares, free and clear of any Liens.
Upon any such issuance in accordance with the applicable Transaction Documents
to the Buyers of any QX Shares and upon registration in accordance with the QX
RRA, the QX Shares shall be resaleable on the Principal Market without any
delivery or other requirements whatsoever and without the need to make any
registration or other filing with the SEC.

               (ii) The Company has no legal obligation, absolute or contingent,
to any other Person to transfer or sell any of the QX Shares. There is no
action, claim, suit, investigation or proceeding pending or, to the knowledge of
the Company, threatened by or against or affecting the Company or the Company's
ownership of the QX Shares before any court or governmental or regulatory
authority or body, that could affect the ability of QX to issue to the Buyers
any QX Shares. There are no writs, decrees, injunctions or orders of any court
or governmental or regulatory agency, authority or body outstanding against the
Company with respect to the QX Shares.

          (jj) China Subsidiaries

               (i) Schedule 3(jj) sets forth, for each Subsidiary that is
incorporated in China, (i) the legal classification of such entity under the
applicable company laws and foreign investment laws of China, including true and
correct copies of the relevant currently effective business license,
registration documents and capital verification report issued by the relevant
China governmental approval authority for the location in which the Subsidiary
maintains an office or premises for business operations; (ii) the total
investment capital (i.e., debt and equity) and equity (i.e., registered
capital); (iii) the holders of record of the equity (i.e., the registered
capital); (iv) the authorized legal representative, directors, officers, legal
address and each business address, as well as the original China approval
authority and China governmental authority with current jurisdiction over the
entity; and (v) any agreements with respect to the registered capital, including
outstanding securities, contracts, commitments or arrangements granting any
party the right to obtain any equity ownership of the Subsidiary.

               (ii) For each Subsidiary, the holders of record of its registered
capital have contributed in full its subscribed share of the entity's registered
capital pursuant to the relevant joint venture contract and articles of
association, and all such contributions have been verified and certified by a
Chinese registered public accountant according to applicable China law, approved
by all relevant China governmental authorities and fully paid, and verification
certificates have been issued to each such holder of record or previous investor
accordingly. All previous transfers or assignments of registered capital have
been approved by the relevant China governmental authorities and all necessary
corporate action.

               (iii) Each Subsidiary incorporated in China is a limited
liability company duly organized, validly existing and in good standing under
the applicable company laws and foreign investment laws of China, has the status
of a foreign investment enterprise (where applicable), and is a legal person
with all requisite corporate power to own, lease and

                                       16

<PAGE>

operate its properties and to carry on its business as now being conducted in
each place where its business is conducted. The Subsidiary and its business
operations are in compliance with the terms and conditions of its business
license, joint venture contract (where applicable) and articles of association.
The construction of the Subsidiary's operating facilities and operation of its
business is and has been in full compliance with its relevant feasibility study
and business license. Each Subsidiary has received all authorizations,
approvals, license, permits and other rights (including but not limited to those
pertaining to the manufacture, distribution and sale of telephone equipment and
all other products of the Company's business) from China governmental
authorities necessary and appropriate for the continued operation of the
Company's business.

               (iv) All necessary approvals from China governmental authorities
have been received to ensure that each Subsidiary will continue to enjoy, to the
extent permitted by applicable China law, all of the tax clearances, concessions
and other benefits available to such Subsidiary prior to the Closing Date, or
otherwise available under applicable China law to foreign investment enterprises
similarly situated.

               (v) Each Subsidiary is and has been in compliance with applicable
China laws relating to its relationship to its employees or suppliers or to any
governmental taxing or customs authority, and relating to any other aspect of
its business. Each Subsidiary is in compliance with applicable China law
relating to anti-competitive practices, price fixing, and environmental matters,
respectively, and, to its knowledge, there is no proceedings pending or
threatened regarding any violation by it of applicable China law, including work
safety, environmental and employment laws.

               (vi) Each Subsidiary has obtained all required China product
registrations for the products related to its business.

     4.   COVENANTS.

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

          (b) Maintenance of Registration Statement. For so long as any of the
Warrants remain outstanding, the Company and QX, as applicable, shall use its
reasonable best efforts to maintain the effectiveness of the Registration
Statement for the issuance thereunder of the Conversion Shares, Exchange Shares
(provided that an initial public offering of QX Shares has occurred) and the
Warrant Shares; provided that, if at any time while the Notes and the Warrants
are outstanding the Company shall be ineligible to utilize Form F-3 (or any
successor form) for the purpose of issuance of the Warrant Shares the Company
shall promptly amend the Registration Statement on such other form as may be
necessary to maintain the effectiveness of the Registration Statement for this
purpose.

          (c) Form D and Blue Sky. If required, the Company, on or before the
Closing Date, shall take such action as the Company shall reasonably determine
is necessary in order to obtain an exemption for or to qualify the Securities
for sale to the Buyers at the Closing pursuant

                                       17

<PAGE>

to this Agreement under applicable securities or "Blue Sky" laws of the states
of the United States (or to obtain an exemption from such qualification), and
shall provide evidence of any such action so taken to the Buyers on or prior to
the Closing Date. The Company shall make all filings and reports relating to the
offer and sale of the Securities required under applicable securities or "Blue
Sky" laws of the states of the United States following the Closing Date.

          (d) Reporting Status. (i) Until the date on which the Buyers shall
have sold all the Conversion Shares and Warrant Shares and none of the Notes or
Warrants is outstanding (the "REPORTING PERIOD"), the Company shall timely file
all reports required to be filed with the SEC pursuant to the 1934 Act, and the
Company shall not terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
would otherwise permit such termination.

               (ii) Upon consummation of an initial public offering by QX and
until the date on which the Buyers shall have sold all the Exchange Shares and
none of the Notes is outstanding (the "QX REPORTING PERIOD"), QX shall timely
file all reports required to be filed with the SEC pursuant to the 1934 Act, and
QX shall not terminate its status as an issuer required to file reports under
the 1934 Act even if the 1934 Act or the rules and regulations thereunder would
otherwise permit such termination.

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

               (ii) Upon an initial public offering by QX, QX shall promptly
secure the listing of all of the Registrable Securities (for the purposes of
this subsection, as defined in the Registration Rights Agreement between the
Buyers and QX) upon each national securities exchange and automated quotation
system, if any, upon which the Registrable Securities is then listed (subject to
official notice of issuance) and shall maintain such listing of all shares of
Registrable Securities from time to time issuable under the terms of the
Transaction Documents. So long as any Notes are outstanding, QX shall maintain
the Registrable Securities' authorization for listing on the Principal Market.
Neither the Company, QX nor any of its Subsidiaries shall take any action which
would be reasonably expected to result in the delisting or suspension of the
Registrable Securities on the Principal Market. QX shall pay all fees and
expenses in connection with satisfying its obligations under this Section 4(e).

          (f) Fees. At the Closing, the Company shall pay $98,500 for the
reasonable fees and expenses incurred in connection with the transactions
contemplated by the Transaction

                                       18

<PAGE>

Documents to Schulte Roth & Zabel LLP for the benefit of the DKR SoundShore
Oasis Holding Fund Ltd. (a Buyer), which amount shall be withheld by such Buyer
from its aggregate Purchase Price at the Closing. The Company shall be
responsible for the payment of any placement agent's fees, financial advisory
fees, or broker's commissions (other than for Persons engaged by any Buyer)
relating to or arising out of the transactions contemplated hereby. The Company
shall pay, and hold each Buyer harmless against, any liability, loss or expense
(including, without limitation, reasonable attorney's fees and out-of-pocket
expenses) arising in connection with any claim relating to any such payment
including, without limitation, any fees or commissions payable to the Agent.
Except as otherwise set forth in this Agreement or in the Transaction Documents,
each party to this Agreement shall bear its own expenses in connection with the
sale of the Securities to the Buyers.

          (g) Disclosure of Transactions and Other Material Information. The
Company shall, on or before 8:30 a.m., New York City Time, on the first Business
Day following the execution and delivery of this Agreement, issue a press
release reasonably acceptable to the Buyers disclosing all material terms of the
transactions contemplated hereby (the "PRESS RELEASE"). On or before 8:30 a.m.,
New York Time, on the second Business Day following the execution and delivery
of this Agreement, the Company shall file a Current Report on Form 6-K
describing the terms of the transactions contemplated by the Transaction
Documents in the form required by the 1934 Act, and attaching the material
Transaction Documents (including, without limitation, this Agreement and the
form of the Warrants) as exhibits to such filing (including all attachments, the
"6-K FILING"). From and after the filing of the Press Release, no Buyer shall be
in possession of any material, nonpublic information received from the Company,
any of its Subsidiaries or any of its respective officers, directors, employees
or agents, that is not disclosed in such Press Release. The Company shall not,
and shall cause each of its Subsidiaries and its and each of their respective
officers, directors, employees and agents, not to, provide any Buyer with any
material nonpublic information regarding the Company or any of its Subsidiaries
from and after the filing of the press release referred to in the first sentence
of this Section without the express written consent of such Buyer. Subject to
the foregoing, neither the Company nor any Buyer shall issue any press releases
or any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior
approval of any Buyer, to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the 6-K Filing
and contemporaneously therewith and (ii) as is required by applicable law and
regulations, including the applicable rules and regulations of the Principal
Market (provided that in the case of clause (i) each Buyer shall be consulted by
the Company in connection with any such press release or other public disclosure
prior to its release). Other than in connection with the future SEC Reports, the
Company shall not disclose the name of any Buyer without the prior written
consent of such Buyer in any filing, announcement, release or otherwise.

          (h) Additional Registration Statements. Until the date that the
Registration Statement (as defined in the Company RRA) is first declared
effective by the SEC (the "EFFECTIVE DATE"), the Company shall not file a
registration statement under the 1933 Act relating to securities that are not
the Securities.

                                       19
<PAGE>

          (i) Additional Notes; Variable Securities; Dilutive Issuances. So long
as any Buyer beneficially owns any Securities, the Company will not issue any
Notes other than to the Buyers as contemplated hereby and the Company shall not
issue any other securities that would cause a breach or default under the Notes.
For so long as any Notes or Warrants remain outstanding, neither the Company nor
QX shall, in any manner, issue or sell any rights, warrants or options to
subscribe for or purchase Company Common Stock or QX Shares, as applicable, or
directly or indirectly convertible into or exchangeable or exercisable for
Company Common Stock or QX Shares, as applicable, at a price which varies or may
vary with the market price of the Company Common Stock or QX Shares, as
applicable, including by way of one or more reset(s) to any fixed price unless
the conversion, exchange or exercise price of any such security cannot be less
than the then applicable Conversion Price (as defined in the Notes) with respect
to the Company Common Stock or QX Shares, as applicable, into which any Note is
convertible or exchangeable or the then applicable Exercise Price (as defined in
the Warrants) with respect to the Company Common Stock into which any Warrant is
exercisable. For so long as any Notes or Warrants remain outstanding, the
Company shall not, in any manner, enter into or affect any Dilutive Issuance (as
defined in the Notes) if the effect of such Dilutive Issuance is to cause the
Company to be required to issue upon conversion or exchange of any Note or
exercise of any Warrant any shares of Company Common Stock or QX Shares, as
applicable, in excess of that number of shares of Company Common Stock or QX
Shares, as applicable, which the Company or QX, as applicable, may issue upon
conversion or exercise of the Notes and exercise of the Warrants without
breaching the Company's or QX's obligations under the rules or regulations of
the Principal Market.

          (j) Sale of QX Shares. For so long as any Notes or Warrants remain
outstanding, QX shall not, and the Company shall not permit QX to, sell any QX
Shares or any of QX's ownership interest in CEC Telecom Co. Ltd. without the
prior written approval of the Required Holders (as defined in the Notes), other
than the issuance of QX Shares to the Company in exchange for the $40 million
cash contribution from the Company from the proceeds from the transaction
contemplated hereby (the "QX PURCHASE"). The purchase price for the QX Shares
issued in connection with the QX Purchase shall be subject to the reasonable
approval of the Required Holders (such QX Purchase, a "VALID QX PURCHASE").

          (k) Reservation of Shares. The Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance, from
and after the Closing Date, the number of shares of Common Stock issuable upon
the conversion of the Notes and the exercise of the Warrants being issued at the
Closing.

          (l) Use of Proceeds. The Company will use the proceeds from the sale
of the Securities for general corporate purposes.

                                       20

<PAGE>

          (m) Additional Issuances of Securities.

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

                    (1) "CONVERTIBLE SECURITIES" means any stock or securities
     (other than Options) convertible into or exercisable for shares of Company
     Common Stock.

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

                    (3) "COMMON STOCK EQUIVALENTS" means, collectively, Options
     and Convertible Securities.

               (ii) From the Closing Date until the date that is 6 months
thereafter (the "TRIGGER DATE"), the Company will not, directly or indirectly,
offer, sell, grant any option to purchase, or otherwise dispose of (or announce
any offer, sale, grant or any option to purchase or other disposition of) any of
its or its Subsidiaries' debt with no equity component in an amount that exceeds
$3 million, equity or equity equivalent securities, including without limitation
any debt, preferred stock or other instrument or security that is, at any time
during its life and under any circumstances, convertible into or exchangeable or
exercisable for shares of Common Stock or Common Stock Equivalents (any such
offer, sale, grant, disposition or announcement being referred to as a
"SUBSEQUENT PLACEMENT").

               (iii) From the Trigger Date until the date that is 150 days
thereafter, the Company will not, directly or indirectly, effect any Subsequent
Placement, unless the Company shall have first complied with this Section
4(m)(iii).

                    (1) The Company shall deliver to each Buyer a written notice
     (the "OFFER NOTICE") of any bona fide proposed or intended issuance or sale
     or exchange (the "OFFER") of the securities being offered (the "OFFERED
     SECURITIES") in a Subsequent Placement, which Offer Notice shall (w)
     identify and describe the Offered Securities, (x) describe the price and
     other terms upon which they are to be issued, sold or exchanged, and the
     number or amount of the Offered Securities to be issued, sold or exchanged,
     (y) identify the persons or entities (if known) to which or with which the
     Offered Securities are to be offered, issued, sold or exchanged and (z)
     offer to issue and sell to or exchange with such Buyers all of the Offered
     Securities.

                    (2) To accept an Offer, in whole or in part, such Buyer must
     deliver a written notice to the Company prior to the end of the fifth (5th)
     Business Day after such Buyer's receipt of the Offer Notice (the "OFFER
     PERIOD"), setting forth the amount that such Buyer elects to purchase (the
     "NOTICE OF ACCEPTANCE").

                    (3) The Company shall have ten (10) Business Days from the
     expiration of the Offer Period above to offer, issue, sell or exchange all
     or any part of such Offered Securities as to which a Notice of Acceptance
     has not been given by the

                                       21

<PAGE>

     Buyers (the "REFUSED SECURITIES"), but only to the offerees described in
     the Offer Notice (if so described therein) and only upon terms and
     conditions (including, without limitation, unit prices and interest rates)
     that are not more favorable to the acquiring person or persons or less
     favorable to the Company than those set forth in the Offer Notice.

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

                    (5) Upon the closing of the issuance, sale or exchange of
     all or less than all of the Refused Securities, the Buyers shall acquire
     from the Company, and the Company shall issue to the Buyers, the number or
     amount of Offered Securities specified in the Notices of Acceptance, as
     reduced pursuant to Section 4(m)(iii)(4) above if the Buyers have so
     elected, upon the terms and conditions specified in the Offer. The purchase
     by the Buyers of any Offered Securities is subject in all cases to the
     preparation, execution and delivery by the Company and the Buyers of a
     purchase agreement relating to such Offered Securities reasonably
     satisfactory in form and substance to the Buyers and their respective
     counsel.

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

               (iv) The restrictions contained in subsection (ii) and (iii) of
this Section 4(m) shall not apply with respect to any Excluded Securities (as
defined in the Notes).

          (n) Stockholder Approval. The Company shall provide each stockholder
entitled to vote at a special or annual meeting of stockholders of the Company
(the "STOCKHOLDER MEETING"), which initially shall be promptly called and held
not later than May 22, 2006, a proxy statement (the "PROXY STATEMENT"),
substantially in the form which has been previously reviewed by the Buyers and a
counsel of their choice at the expense of the Company which shall not exceed
$10,000, soliciting each such stockholder's affirmative vote at the Stockholder

                                       22

<PAGE>

Meeting for approval of resolutions (the "RESOLUTIONS") providing for the
Company's issuance of all of the Securities as described in the Transaction
Documents in accordance with applicable law and the rules and regulations of the
Principal Market (such affirmative approval being referred to herein as the
"STOCKHOLDER APPROVAL"), and the Company shall use its reasonable best efforts
to solicit its stockholders' approval of the Resolutions and to cause the Board
to recommend to the stockholders that they approve the Resolutions. On or before
8:30 a.m., New York Time, on the fifth Business Day following the execution and
delivery of this Agreement the Proxy Statement shall be filed by the Company
with the SEC (the "PROXY FILING DATE"). The Company shall set the record date
for purposes of voting at the Stockholder Meeting as the fifth Business Day
following the Proxy Filing Date. If, despite the Company's best efforts the
Stockholder Approval is not obtained on or prior to May 31, 2006, the Company
shall cause an additional stockholder meeting to be held each calendar quarter
until such Stockholder Approval is obtained.

     5. TRANSFER AGENT INSTRUCTIONS.

          The Company shall issue irrevocable instructions to the Transfer
Agent, and any subsequent transfer agent, and cause QX to issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, as
applicable, to issue certificates or credit shares to the applicable balance
accounts at DTC, registered in the name of each Buyer or its respective
nominee(s), for the Conversion Shares, Exchange Shares and the Warrant Shares in
such amounts as specified from time to time by each Buyer to the Company upon
the conversion or exchange of the Notes or the exercise of the Warrants in the
form of Exhibit H attached hereto (the "IRREVOCABLE TRANSFER AGENT
INSTRUCTIONS"). The Company represents and warrants that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this Section 5
will be given by the Company to the Transfer Agent or by QX to its transfer
agent, and any subsequent transfer agent with respect to the Securities, and
that the Securities shall otherwise be freely transferable on the books and
records of the Company or QX, as applicable, and to the extent provided in this
Agreement and the other Transaction Documents. If a Buyer effects a sale,
assignment or transfer of the Securities in accordance with Section 2(f), the
Company shall permit the transfer (or cause QX to permit the transfer, as
applicable) and shall promptly instruct the Transfer Agent or QX's transfer
agent, as applicable, to issue one or more certificates or credit shares to the
applicable balance accounts at DTC in such name and in such denominations as
specified by such Buyer to effect such sale, transfer or assignment. In the
event that such a sale, assignment or transfer involves Conversion Shares,
Exchange Shares or Warrant Shares sold, assigned or transferred pursuant to an
effective registration statement or pursuant to Rule 144, the Transfer Agent or
QX's transfer agent, as applicable, shall issue such Securities to the Buyer,
assignee or transferee, as the case may be, without any restrictive legend. The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 5 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5, that a Buyer shall be entitled, in
addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.

                                       23

<PAGE>

     6. CONDITIONS TO THE COMPANY OBLIGATION TO SELL.

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

               (a) Such Buyer shall have executed this Agreement and delivered
the same to the Company.

               (b) Such Buyer shall have delivered to the Company the Purchase
Price for the Notes and the related Warrants being purchased by such Buyer at
the Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.

               (c) The representations and warranties of such Buyer shall be
true and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and such Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Buyer at or prior to the Closing Date.

     7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.

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

               (a) Each of the Company and QX shall have (i) executed and
delivered to such Buyer each of the Transaction Documents to which it is a
party, and (ii) executed and delivered the Notes and related Warrants (in such
amounts as such Buyer shall request) being purchased by such Buyer at the
Closing pursuant to this Agreement.

               (b) Such Buyer shall have received the opinions of the Company's
US counsel and British Virgin Islands counsel, dated as of the Closing Date,
each in a form reasonably acceptable to the Buyers.

               (c) The Company shall have delivered to such Buyer a copy of the
Irrevocable Transfer Agent Instructions, which instructions shall have been
delivered to and acknowledged in writing by the Company's transfer agent and by
QX's transfer agent (as soon as reasonably practicable after QX's transfer agent
is appointed).

               (d) The Company shall have delivered to such Buyer a certificate
evidencing the incorporation and good standing (if applicable) of the Company
and each of its

                                       24

<PAGE>

Subsidiaries in such corporation's jurisdiction of incorporation issued by the
Secretary of State or other comparable authority of such jurisdiction of
incorporation as of a date within 10 days of the Closing Date.

               (e) The Company Common Stock (i) shall be listed on the Principal
Market and (ii) shall not have been suspended, as of the Closing Date, by the
SEC or the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of the
Closing Date, either (A) in writing by the SEC or the Principal Market or (B) by
falling below the minimum listing maintenance requirements of the Principal
Market.

               (f) The Company shall have delivered to such Buyer a certified
copy of the Memorandum and Articles of Association and Certificate of
Incorporation, as amended to date (the "CERTIFICATE OF INCORPORATION") as
certified by appropriate authority under the laws of the British Virgin Islands
within 10 days of the Closing Date.

               (g) The Company shall have delivered to such Buyer a certificate,
executed by the Secretary of the Company and dated as of the Closing Date, as to
(i) the resolutions consistent with this transaction as adopted by the Company's
Board of Directors in a form reasonably acceptable to such Buyer, (ii) the
Certificate of Incorporation and (iii) the Memorandum and Articles of
Association of the Company, each as in effect at the Closing, in the form
attached hereto as Exhibit I.

               (h) The representations and warranties of the Company and QX
shall be true and correct as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date) and each of the Company and QX shall have performed,
satisfied and complied in all respects with the covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or
complied with by the Company or QX at or prior to the Closing Date. Such Buyer
shall have received a certificate, executed by the Chief Executive Officer of
the Company, dated as of the Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by such Buyer in the form
attached hereto as Exhibit G.

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

               (j) The Company shall have obtained all governmental, regulatory
or third party consents and approvals, if any, necessary for the sale of the
Notes, the Conversion Shares, the Exchange Shares, the Warrants and the Warrant
Shares.

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

               (l) The Company shall have obtained Stockholder Approval.

                                       25

<PAGE>

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

     9. MISCELLANEOUS.

          (a) Governing Law; Jurisdiction; Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. The Company and QX hereby appoint Andrew N. Bernstein, Esq., with
offices at 5445 DTC Parkway, Suite 520 Greenwood Village, Colorado 80111, as
their agent for service of process. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

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

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

                                       26

<PAGE>

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

          (e) Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyers, the Company, QX, their
Affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company, QX nor any Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company, QX and the holders of Notes representing at least a majority of the
aggregate principal amount of the Notes, or, if prior to the Closing Date, the
Buyers listed on the Schedule of Buyers as being obligated to purchase at least
a majority of the aggregate principal amount of the Notes, and any amendment to
this Agreement made in conformity with the provisions of this Section 9(e) shall
be binding on all Buyers and holders of Notes, as applicable. No provision
hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought. No such amendment shall be effective to the
extent that it applies to less than all of the holders of the Notes then
outstanding. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties to
the Transaction Documents, holders of Notes, holders of the Warrants, as the
case may be. The Company and QX have not, directly or indirectly, made any
agreements with any Buyers relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents.

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

                                       27

<PAGE>

               If to the Company or QX:

               Qiao Xing Universal Telephone, Inc.
               Qiao Xing Science Industrial Park
               Tang Quan
               Huizhou City, Guangdong,
               People's Republic of China 516023
               Facsimile No.: 011-86-752-2820-268
               Telephone No.: 011-86-752-2820-268
               Attn.: Chairman

               With a copy to:

               Andrew N. Bernstein, P.C.
               5445 DTC Parkway, Suite 520
               Greenwood Village, Colorado 80111
               Facsimile No.: (303) 770-7332
               Telephone No.: (303) 770-7131
               Attn.: Andrew N. Bernstein, Esq.

          If to the Transfer Agent:

               Computershare Trust Company, Inc.
               350 Indiana Street, Suite 800
               Golden, CO 80401
               Facsimile No.: (303) 262-0700
               Telephone No.: (303) 262-0706
               Attn.: Ms. Kellie D. Gwinn
                      Vice President & Trust Officer

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer's representatives as set forth on the Schedule
of Buyers,

               With a copy to:

               Schulte Roth & Zabel LLP
               919 Third Avenue
               New York, New York 10022
               Facsimile No.: (212) 593-5955
               Telephone No.: (212) 756-2000
               Attn.: Eleazer Klein, Esq.

or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number

                                       28

<PAGE>

and an image of the first page of such transmission or (C) provided by an
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.

          Any document shall be deemed to have been duly served if marked for
the attention of the agent at its address (as set out above) or such other
address in the United States as may be notified to the party wishing to serve
the document and delivered in accordance with the notice provisions set forth in
this Section 9(f).

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

          (g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Notes or the Warrants. Neither the Company nor
QX shall assign this Agreement or any rights or obligations hereunder without
the prior written consent of the holders of at least a majority of the aggregate
number of Registrable Securities issued and issuable hereunder, including by way
of a Fundamental Transaction (unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth in the Notes
and the Warrants). A Buyer may assign some or all of its rights hereunder
without the consent of the Company, in which event such assignee shall be deemed
to be a Buyer hereunder with respect to such assigned rights.

          (h) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

          (i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and QX and the Buyers contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and 9
shall survive the Closing and the delivery and exercise of Securities, as
applicable. Each Buyer shall be responsible only for its own representations,
warranties, agreements and covenants hereunder.

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

          (k) Indemnification. (i) In consideration of each Buyer's execution
and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company's other obligations under the
Transaction Documents, the Company shall

                                       29

<PAGE>

defend, protect, indemnify and hold harmless each Buyer and each other holder of
the Securities and all of their shareholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
Persons' agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "INDEMNITEES") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"INDEMNIFIED LIABILITIES"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party that is not an Affiliate of
such Indemnitee (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting from (I) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (II) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, or (III) the
status of such Buyer or holder of the Securities as an investor in the Company.
To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law.

               (ii) Promptly after receipt by an Indemnitee under this Section
9(k) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such
Indemnitee shall, if a claim for indemnification in respect thereof is to be
made against any indemnifying party under this Section 9(k), deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnitee; provided,
however, that an Indemnitee shall have the right to retain its own counsel with
the fees and expenses of not more than one counsel for such Indemnitee to be
paid by the indemnifying party, if, in the reasonable opinion of the Indemnitee,
the representation by such counsel of the Indemnitee and the indemnifying party
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceeding. Legal counsel referred to in the immediately preceding sentence
shall be selected by the Investors holding at least a majority of the Notes. The
Indemnitee shall cooperate fully with the indemnifying party in connection with
any negotiation or defense of any such action or Indemnified Liabilities by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnitee that relates to such action or
Indemnified Liabilities. The indemnifying party shall keep the Indemnitee fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable for any
settlement of any

                                       30

<PAGE>

action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnitee, consent to entry of any judgment or enter
into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnitee of a release from all liability in respect to such Indemnified
Liabilities or litigation. Following indemnification as provided for hereunder,
the indemnifying party shall be subrogated to all rights of the Indemnitee with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnitee under this Section 9(k), except to the extent that the indemnifying
party is prejudiced in its ability to defend such action.

               (iii) The indemnification required by this Section 9(k) shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified
Liabilities are incurred.

               (iv) The indemnity agreements contained herein shall be in
addition to (x) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (y) any liabilities the indemnifying party
may be subject to pursuant to the law.

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

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

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

                                       31

<PAGE>

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

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

                            [SIGNATURE PAGE FOLLOWS]

                                       32

<PAGE>

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

COMPANY:

QIAO XING UNIVERSAL TELEPHONE, INC.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

QX:

QIAO XING MOBILE COMMUNICATIONS CO. LTD.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

                                       33
<PAGE>

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

BUYERS:

DKR SOUNDSHORE OASIS HOLDING FUND LTD.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

                                       34
<PAGE>

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

BUYERS:

CEDAR DKR HOLDING FUND LTD.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

                                       35
<PAGE>

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
                                                                       (3)               (4)                      (5)
            (1)                              (2)                    PRINCIPAL         NUMBER OF         LEGAL REPRESENTATIVE'S
           BUYER                ADDRESS AND FACSIMILE NUMBER     AMOUNT OF NOTES   WARRANT SHARES    ADDRESS AND FACSIMILE NUMBER
---------------------------   --------------------------------   ---------------   --------------   ------------------------------
<S>                           <C>                                <C>               <C>              <C>
DKR SOUNDSHORE OASIS          1281 East Main Street, 3rd Floor      36,000,000         896,973      Schulte Roth & Zabel LLP
HOLDING FUND LTD.             Stamford, CT 06902-3565                                               919 Third Avenue
                              Attention: Barbara Burger                                             New York, New York  10022
                              Facsimile: (203) 674-4735                                             Attention: Eleazer Klein, Esq.
                              Telephone: (203) 324-8367                                             Facsimile: (212) 593-5955
                              Residence: Bermuda                                                    Telephone: (212) 756-2376

CEDAR DKR HOLDING FUND LTD.   1281 East Main Street, 3rd Floor       4,000,000          99,664      Schulte Roth & Zabel LLP
                              Stamford, CT 06902-3565                                               919 Third Avenue
                              Attention: Barbara Burger                                             New York, New York  10022
                              Facsimile: (203) 674-4735                                             Attention: Eleazer Klein, Esq.
                              Telephone: (203) 324-8367                                             Facsimile: (212) 593-5955
                              Residence: Cayman Islands                                             Telephone: (212) 756-2376
</TABLE>

                                       36

<PAGE>

                                    EXHIBITS

Exhibit A   Form of Note
Exhibit B   Form of Warrant
Exhibit C   Form of the Company's Registration Rights Agreement
Exhibit D   Form of the Registration Rights Agreement of Qiao Xing Mobile
            Communications Co. Ltd.
Exhibit E   Form of Guaranty
Exhibit F   Form of Voting Agreement
Exhibit G   Form of Officer's Certificate
Exhibit H   Form of Irrevocable Transfer Agent Instructions
Exhibit I   Form of Secretary's Certificate

                                    SCHEDULES

Schedule 3(a)    Subsidiaries
Schedule 3(g)    Capitalization
Schedule 3(n)    Title to Assets
Schedule 3(o)    Patents and Trademarks
Schedule 3(v)    Placement Agent's Fees
Schedule 3(ff)   Indebtedness and Other Contracts
Schedule 3(jj)   China Subsidiaries

                                       37

<PAGE>

                                    EXHIBIT A

                                       38

<PAGE>

                                    EXHIBIT B

                                       39

<PAGE>

                                    EXHIBIT C

                                       40

<PAGE>

                                    EXHIBIT D

                                       41

<PAGE>

                                    EXHIBIT E

                                       42

<PAGE>

                                    EXHIBIT F

                                       43

<PAGE>

                                    EXHIBIT G

                                       44

<PAGE>

                                    EXHIBIT H

                                       45

<PAGE>

                                    EXHIBIT I

                                       46<PAGE>

                                                                    Exhibit 10.9

                          REGISTRATION RIGHTS AGREEMENT

          REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of June 13,
2006, by and among Qiao Xing Mobile Communications Co. Ltd., a company
incorporated under the laws of the British Virgin Islands, with headquarters
located at Qiao Xing Science Industrial Park, Tang Quan, Huizhou City,
Guangdong, People's Republic of China, 516023 (the "COMPANY"), and the
undersigned buyers (each, a "BUYER", and collectively, the "BUYERS").

          WHEREAS:

          A. In connection with the Securities Purchase Agreement by and among
Qiao Xing Universal Telephone Inc. (the "PARENT"), and the parties hereto of
even date herewith (the "SECURITIES PURCHASE AGREEMENT"), the Parent has agreed,
upon the terms and subject to the conditions set forth in the Securities
Purchase Agreement, to issue and sell to each Buyer (i) convertible notes of the
Parent (the "NOTES") which Notes shall be, in accordance with the terms of the
Notes, in whole or in part, (A) convertible into shares of the Parent's common
stock, par value $.001 per share ("PARENT COMMON STOCK," as converted, the
"CONVERSION SHARES") or (B) in the event of an Initial Public Offering (as
defined below) of the Company, exchangeable into shares (the "COMMON SHARES") of
the common stock of the Company, par value $.01 per share (the "COMMON STOCK")
(as exchanged and/or redeemed, the "EXCHANGE SHARES"), and (ii) warrants which
will be exercisable to purchase shares of the common stock of the Parent.

          B. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 ACT"), and
applicable state securities laws.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:

          1. Definitions.

          Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

               a. "BUSINESS DAY" means any day other than Saturday, Sunday or
any other day on which commercial banks in The City of New York, Hong Kong or
China are authorized or required by law to remain closed.

               b. "EFFECTIVE DATE" means the date the Registration Statement has
been declared effective by the SEC.

<PAGE>

               c. "EFFECTIVENESS DEADLINE" means the date which is 90 days
following the earlier of (i) the Filing Deadline (as defined below) and (ii) the
Filing Date (as defined below).

               d. "FILING DATE" means the date the Registration Statement has
been filed with the SEC.

               e. "FILING DEADLINE" means the date which is three months
following the Initial Public Offering.

               f. "INITIAL PUBLIC OFFERING" means the first public offering of
any class of securities of the Company pursuant to a registration statement
filed with and declared effective by the SEC (or any other equivalent authority
in any other jurisdiction).

               g. "INVESTOR" means a Buyer or any transferee or assignee thereof
to whom a Buyer assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with Section 9 and any
transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.

               h. "PERSON" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

               i. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.

               j. "REGISTRABLE SECURITIES" means (i) the Exchange Shares issued
or issuable upon exchange and/or redemption of the Notes, and (ii) any capital
stock of the Company issued or issuable with respect to the Exchange Shares and
the Notes, as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitations on
exchanges or redemptions of the Notes. Notwithstanding any of the foregoing, any
Exchange Shares sold by the Buyer in an Initial Public Offering shall be
excluded from the definition of Registrable Securities.

               k. "REGISTRATION STATEMENT" means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Registrable Securities.

               l. "REQUIRED HOLDERS" means the holders of at least a majority of
the Registrable Securities.

               m. "REQUIRED REGISTRATION AMOUNT" means 130% of the number of
Exchange Shares issued and issuable pursuant to the Notes as of the trading day
immediately preceding the applicable date of determination, subject to
adjustment as provided in Section 2(e), without regard to any limitations on
exchange or redemption of the Notes.

                                        2

<PAGE>

               n. "RULE 415" means Rule 415 under the 1933 Act or any successor
rule providing for offering securities on a continuous or delayed basis.

               o. "SEC" means the United States Securities and Exchange
Commission.

          2. Registration.

               a. Mandatory Registration. In the event of an Initial Public
Offering and to the extent that less than 100% of (i) the Notes are converted
into the common stock of the Parent prior to an Initial Public Offering and (ii)
the Exchange Shares are sold in the Initial Public Offering, the Company shall
prepare, and, as soon as practicable but in no event later than the Filing
Deadline, file with the SEC the Registration Statement on Form F-3 covering the
resale of all of the Registrable Securities. In the event that Form F-3 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration on another appropriate form reasonably
acceptable to the Required Holders, subject to the provisions of Section 2(d).
The Registration Statement prepared pursuant hereto shall register for resale at
least that number of shares of Common Stock equal to the Required Registration
Amount determined as of the date such Registration Statement is initially filed
with the SEC. The Registration Statement shall contain (except if otherwise
directed by the Required Holders) the "Selling Stockholders" and "Plan of
Distribution" sections in substantially the form attached hereto as Exhibit B.
The Company shall use its best efforts to have the Registration Statement
declared effective by the SEC as soon as practicable, but in no event later than
the Effectiveness Deadline. By 9:30 am on the Business Day following the
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final prospectus to be used in connection with sales
pursuant to such Registration Statement. Notwithstanding the foregoing, to the
extent the first public offering of any class of securities of the Company
pursuant to a registration statement is filed with an entity other than the SEC,
the Company shall amend this Agreement substantially in the form which has been
previously reviewed by the Buyers and a counsel of their choice at the expense
of the Company to provide for the registration of Common Stock on terms that are
substantially equivalent to such terms as provided in this Agreement for
registration of Common Stock with the SEC.

               b. Initial Public Offering. In the event of an Initial Public
Offering, the Investors shall participate in the Initial Public Offering pro
rata in proportion to the number of Registrable Securities requested by the
Investors to be included in the Initial Public Offering. In connection with a
planned Initial Public Offering, the Company shall deliver prompt written notice
(which notice shall be given (i) in the event that the Company has publicly
disclosed such proposed Initial Public Offering, at least thirty (30) calendar
days prior to such proposed Initial Public Offering and (ii) in the event that
the Company has not publicly disclosed such proposed Initial Public Offering (a
"NON-PUBLIC IPO REGISTRATION NOTICE"), no more than ten (10) Business Days prior
to the filing of such proposed Initial Public Offering registration with the SEC
(such period not in excess of ten (10) Business Days, the "NON-PUBLIC IPO
REGISTRATION NOTICE PERIOD")) to all Investors of its intention to undertake
such Initial Public Offering, describing in reasonable detail the proposed
offering and distribution (including the anticipated range of the proposed
offering price, the class and number of securities proposed to be registered and
the distribution arrangements) and of such Investor's right to participate in
such registration under this Section 2(b) as herein provided. If the Investor
elects to participate in such proposed

                                        3

<PAGE>

Initial Public Offering, the Investor shall keep the contents of any Non-Public
IPO Registration Notice confidential prior to the filing of such proposed
Initial Public Offering with the SEC and if the Investor has elected not to
participate in such proposed Initial Public Offering, the Investor shall keep
the contents of any Non-Public IPO Registration Notice confidential during the
Non-Public IPO Registration Notice Period. Subject to the other provisions of
this paragraph, upon the written request of any Investor made within twenty (20)
calendar days, or in the case of a Non-Public IPO Registration Notice, within
five (5) Business Days, after the receipt of such written notice (which request
shall specify the amount of Registrable Securities to be sold), the Company
shall allow the Investors to participate in such offering. Immediately upon
notification to the Company from the underwriter of the price at which such
securities are to be sold, the Company shall so advise each participating
Investor. The Investors requesting to participate may, at any time prior to the
effectiveness of the registration statement for the Initial Public Offering (and
for any reason), revoke such request by delivering written notice to the Company
revoking such requested inclusion.

               c. Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and any increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors based on the number of Registrable Securities held by
each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC. In the event that an Investor sells or otherwise transfers any of such
Investor's Registrable Securities, each transferee shall be allocated a pro rata
portion of the then remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any shares of Common Stock included
in a Registration Statement and which remain allocated to any Person which
ceases to hold any Registrable Securities covered by such Registration Statement
shall be allocated to the remaining Investors, pro rata based on the number of
Registrable Securities then held by such Investors which are covered by such
Registration Statement. The Company shall not include any securities other than
Registrable Securities on any Registration Statement without the prior written
consent of the Required Holders.

               d. Legal Counsel. Subject to Section 5 hereof, the Required
Holders shall have the right to select one legal counsel to review and oversee
any registration pursuant to this Section 2 ("LEGAL COUNSEL"), which shall be
Schulte Roth & Zabel LLP or such other counsel as thereafter designated by the
Required Holders. The Company and Legal Counsel shall reasonably cooperate with
each other in performing the Company's obligations under this Agreement.

               e. Ineligibility for Form F-3. In the event that Form F-3 is not
available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the Required
Holders and (ii) undertake to register the Registrable Securities on Form F-3 as
soon as such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form F-3 covering the Registrable Securities has been
declared effective by the SEC.

                                        4

<PAGE>

               f. Sufficient Number of Shares Registered. In the event the
number of shares available under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable Securities required
to be covered by such Registration Statement or an Investor's allocated portion
of the Registrable Securities pursuant to Section 2(b), the Company shall amend
the applicable Registration Statement, or file a new Registration Statement (on
the short form available therefor, if applicable), or both, so as to cover at
least the Required Registration Amount as of the trading day immediately
preceding the date of the filing of such amendment or new Registration
Statement, in each case, as soon as practicable, but in any event not later than
fifteen (15) days after the necessity therefor arises. The Company shall use its
best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. For purposes of
the foregoing provision, the number of shares available under a Registration
Statement shall be deemed "insufficient to cover all of the Registrable
Securities" if at any time the number of shares of Common Stock available for
resale under the Registration Statement is less than the product determined by
multiplying (i) the Required Registration Amount as of such time by (ii) 0.90.
The calculation set forth in the foregoing sentence shall be made without regard
to any limitations on the exchange or redemption of the Notes and such
calculation shall assume that the Notes are then convertible into shares of
Common Stock at the then prevailing Conversion Rate (as defined in the Notes).

               g. Effect of Failure to File and Obtain and Maintain
Effectiveness of Registration Statement. If (i) a Registration Statement
covering all of the Registrable Securities required to be covered thereby and
required to be filed by the Company pursuant to this Agreement is (A) not filed
with the SEC on or before the Filing Deadline (a "FILING FAILURE") or (B) not
declared effective by the SEC on or before the respective Effectiveness Deadline
(an "EFFECTIVENESS FAILURE") or (ii) on any day after the Effective Date sales
of all of the Registrable Securities required to be included on such
Registration Statement cannot be made for any reason (other than during an
Allowable Grace Period (as defined in Section 3(r)) pursuant to such
Registration Statement (including, without limitation, because of a failure to
keep such Registration Statement effective, to disclose such information as is
necessary for sales to be made pursuant to such Registration Statement or to
register a sufficient number of shares of Common Stock or a suspension or
delisting of the Common Stock on its principal trading exchange or market) (a
"MAINTENANCE FAILURE") then, as relief for the damages to any holder by reason
of any such delay in or reduction of its ability to sell the underlying shares
of Common Stock (which remedy shall not be exclusive of any other remedies
available at law or in equity), the Company shall pay to each holder of
Registrable Securities relating to such Registration Statement an amount in cash
equal to one and one-half percent (1.5%) of the aggregate Purchase Price (as
such term is defined in the Securities Purchase Agreement) of such Investor's
Registrable Securities included in such Registration Statement on each of the
following dates: (i) the day of a Filing Failure and on every thirtieth day (pro
rated for periods totaling less than thirty days) after a Filing Failure until
such Filing Failure is cured; (ii) the day of an Effectiveness Failure and on
every thirtieth day (pro rated for periods totaling less than thirty days) after
an Effectiveness Failure until such Effectiveness Failure is cured; and (iii)
the initial day of a Maintenance Failure and on every thirtieth day (pro rated
for periods totaling less than thirty days) after a Maintenance Failure until
such Maintenance Failure is cured. The payments to which a holder shall be
entitled pursuant to this Section 2(g) are referred to herein as "REGISTRATION
DELAY PAYMENTS." Registration Delay Payments shall be paid on the day of the

                                        5

<PAGE>

Filing Failure, Effectiveness Failure and the initial day of a Maintenance
Failure, as applicable, and thereafter on the earlier of (I) the thirtieth day
after the event or failure giving rise to the Registration Delay Payments has
occurred and (II) the third Business Day after the event or failure giving rise
to the Registration Delay Payments is cured. In the event the Company fails to
make Registration Delay Payments in a timely manner, such Registration Delay
Payments shall bear interest at the rate of one percent and one-half (1.5%) per
month (prorated for partial months) until paid in full.

          3. Related Obligations.

          At such time as the Company is obligated to file a Registration
Statement with the SEC pursuant to Section 2(a), 2(e) or 2(f), the Company will
use its best efforts to effect the registration of the Registrable Securities in
accordance with the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following obligations:

               a. The Company shall submit to the SEC, within two (2) Business
Days after the Company learns that no review of a particular Registration
Statement will be made by the staff of the SEC or that the staff has no further
comments on a particular Registration Statement, as the case may be, a request
for acceleration of effectiveness of such Registration Statement to a time and
date not later than 48 hours after the submission of such request. The Company
shall keep each Registration Statement effective pursuant to Rule 415 at all
times until the earlier of (i) the date as of which the Investors may sell all
of the Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under
the 1933 Act or (ii) the date on which the Investors shall have sold all of the
Registrable Securities covered by such Registration Statement (the "REGISTRATION
PERIOD"). The Company shall ensure that each Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein
(in the case of prospectuses, in the light of the circumstances in which they
were made) not misleading.

               b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3(b)) by reason of the Company filing a report on Form 20-F or any
analogous report under the Securities Exchange Act of 1934, as amended (the
"1934 ACT"), the Company shall have incorporated such report by reference into
such Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement such
Registration Statement.

                                        6

<PAGE>

               c. The Company shall (A) permit Legal Counsel to review and
comment upon (i) a Registration Statement at least five (5) Business Days prior
to its filing with the SEC and (ii) all amendments and supplements to all
Registration Statements (except for reports on Form 20-F) and any similar or
successor reports) within a reasonable number of days prior to their filing with
the SEC, and (B) not file any Registration Statement or amendment or supplement
thereto in a form to which Legal Counsel reasonably objects. The Company shall
not submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto without the prior approval of
Legal Counsel, which consent shall not be unreasonably withheld. The Company
shall furnish to Legal Counsel, without charge, (i) copies of any correspondence
from the SEC or the staff of the SEC to the Company or its representatives
relating to any Registration Statement, (ii) promptly after the same is prepared
and filed with the SEC, one copy of any Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an Investor, and
all exhibits and (iii) upon the effectiveness of any Registration Statement, one
copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto. The Company shall reasonably cooperate with
Legal Counsel in performing the Company's obligations pursuant to this Section
3.

               d. The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge, (i)
promptly after the same is prepared and filed with the SEC, at least one copy of
such Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, if
requested by an Investor, all exhibits and each preliminary prospectus, (ii)
upon the effectiveness of any Registration Statement, ten (10) copies of the
prospectus included in such Registration Statement and all amendments and
supplements thereto (or such other number of copies as such Investor may
reasonably request) and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.

               e. The Company shall use its best efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by Investors of the Registrable Securities covered by a Registration
Statement under such other securities or "blue sky" laws of all applicable
jurisdictions in the United States, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under

                                        7

<PAGE>

the securities or "blue sky" laws of any jurisdiction in the United States or
its receipt of notice of the initiation or threatening of any proceeding for
such purpose.

               f. The Company shall notify Legal Counsel and each Investor in
writing of the happening of any event, as promptly as practicable after becoming
aware of such event, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided that in no event shall such
notice contain any material, nonpublic information), and, subject to Section
3(r), promptly prepare a supplement or amendment to such Registration Statement
to correct such untrue statement or omission, and deliver ten (10) copies of
such supplement or amendment to Legal Counsel and each Investor (or such other
number of copies as Legal Counsel or such Investor may reasonably request). The
Company shall also promptly notify Legal Counsel and each Investor in writing
(i) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness shall be
delivered to Legal Counsel and each Investor by facsimile on the same day of
such effectiveness), (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or related
information, and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.

               g. The Company shall use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify Legal Counsel and each Investor who holds
Registrable Securities being sold of the issuance of such order and the
resolution thereof or its receipt of actual notice of the initiation or
threatening of any proceeding for such purpose.

               h. At the reasonable request of any Investor, the Company shall
furnish to such Investor, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as an Investor may
reasonably request (i) a letter, dated such date, from the Company's independent
certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the Investors, and (ii) an opinion, dated as of
such date, of counsel representing the Company for purposes of such Registration
Statement, in form, scope and substance as is customarily given in an
underwritten public offering, addressed to the Investors.

               i. The Company shall make available for inspection by (i) any
Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents
retained by the Investors (collectively, the "INSPECTORS"), all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "RECORDS"), as shall be reasonably deemed
necessary by each Inspector, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request;
provided, however, that each Inspector shall agree to hold in strict confidence
and shall not make any disclosure (except to an Investor) or use of any Record
or other information which the Company determines in good

                                        8

<PAGE>

faith to be confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the 1933 Act, (b) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other Transaction Document. Each Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and any Investor) shall be deemed
to limit the Investors' ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.

               j. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) the disclosure of such information is necessary to comply with federal or
state securities laws, (ii) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement, (iii)
the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

               k. The Company shall use its best efforts either to (i) cause all
of the Registrable Securities covered by a Registration Statement to be listed
on each securities exchange on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) secure designation and quotation of all of the Registrable Securities
covered by a Registration Statement on the Nasdaq National Market or (iii) if,
despite the Company's best efforts to satisfy the preceding clauses (i) and
(ii), the Company is unsuccessful in satisfying the preceding clauses (i) or
(ii), to secure the inclusion for quotation on The Nasdaq Capital Market or the
NASD's OTC Bulletin Board for such Registrable Securities and, without limiting
the generality of the foregoing, to use its best efforts to arrange for at least
two market makers to register with the National Association of Securities
Dealers, Inc. ("NASD") as such with respect to such Registrable Securities. The
Company shall pay all fees and expenses in connection with satisfying its
obligation under this Section 3(k).

               l. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered and resold
pursuant to a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Investors may reasonably
request and registered in such names as the Investors may request.

                                        9

<PAGE>

               m. If requested by an Investor, the Company shall (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as an Investor reasonably requests to be included therein
relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the number of Registrable
Securities being offered or sold, the purchase price being paid therefor and any
other terms of the offering of the Registrable Securities to be sold in such
offering; (ii) as soon as practicable make all required filings of such
prospectus supplement or post-effective amendment after being notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) as soon as practicable, supplement or make amendments to
any Registration Statement if reasonably requested by an Investor holding any
Registrable Securities.

               n. The Company shall use its best efforts to cause the
Registrable Securities covered by a Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.

               o. The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC in connection with any
registration hereunder.

               p. Within two (2) Business Days after a Registration Statement
which covers Registrable Securities is declared effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to the transfer agent for such Registrable Securities (with copies to the
Investors whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC in the form attached hereto as Exhibit A.

               q. Notwithstanding anything to the contrary herein, at any time
after the Effective Date, the Company may delay the disclosure of material,
non-public information concerning the Company the disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of the Company
and its counsel, in the best interest of the Company and, in the opinion of
counsel to the Company, otherwise required (a "GRACE PERIOD"); provided, that
the Company shall promptly (i) notify the Investors in writing of the existence
of material, non-public information giving rise to a Grace Period (provided that
in each notice the Company will not disclose the content of such material,
non-public information to the Investors) and the date on which the Grace Period
will begin, and (ii) notify the Investors in writing of the date on which the
Grace Period ends; and, provided further, that no Grace Period shall exceed five
(5) consecutive days and during any three hundred sixty five (365) day period
such Grace Periods shall not exceed an aggregate of twenty (20) days and the
first day of any Grace Period must be at least five (5) trading days after the
last day of any prior Grace Period (each, an "ALLOWABLE GRACE PERIOD"). For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Investors receive the notice referred to
in clause (i) and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be applicable during the
period of any Allowable Grace Period. Upon expiration of the Grace Period, the
Company shall again be bound by the first sentence of Section 3(f) with respect
to the information giving rise thereto unless such material, non-public
information is no longer

                                       10

<PAGE>

applicable. Notwithstanding anything to the contrary, the Company shall cause
its transfer agent to deliver unlegended shares of Common Stock to a transferee
of an Investor in accordance with the terms of the Securities Purchase Agreement
in connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale, and delivered a copy of the
prospectus included as part of the applicable Registration Statement (unless an
exemption from such prospectus delivery requirement exists), prior to the
Investor's receipt of the notice of a Grace Period and for which the Investor
has not yet settled.

          4. Obligations of the Investors.

               a. At least five (5) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify each Investor
in writing of the information the Company requires from each such Investor if
such Investor elects to have any of such Investor's Registrable Securities
included in such Registration Statement. It shall be a condition precedent to
the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such Investor shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect the effectiveness of the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.

               b. Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from such Registration Statement.

               c. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(g) or
the first sentence of 3(f), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until such Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(g) or the
first sentence of 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor's receipt of
a notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f) and for which the Investor has not
yet settled.

               d. Each Investor covenants and agrees that it will comply with
the prospectus delivery requirements of the 1933 Act as applicable to it or an
exemption therefrom in connection with sales of Registrable Securities pursuant
to the Registration Statement.

                                       11

<PAGE>

          5. Expenses of Registration.

          All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company, shall be paid by the Company.
The Company shall also reimburse the Investors for the fees and disbursements of
Legal Counsel in connection with registration, filing or qualification pursuant
to Sections 2 and 3 of this Agreement, in an amount not to exceed $15,000.

          6. Indemnification.

          In the event any Registrable Securities are included in a Registration
Statement under this Agreement:

               a. To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor, the directors,
officers, members, partners, employees, agents, representatives of, and each
Person, if any, who controls any Investor within the meaning of the 1933 Act or
the 1934 Act (each, an "INDEMNIFIED PERSON"), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys' fees and amounts paid in settlement or expenses, joint or several,
(collectively, "CLAIMS") incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto ("INDEMNIFIED DAMAGES"),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction in
which Registrable Securities are offered ("BLUE SKY FILING"), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances under which
the statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of this
Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, "VIOLATIONS"). Subject to Section 6(c), the Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an

                                       12

<PAGE>

Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d) and (ii) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.

               b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement and each Person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934 Act
(each, an "INDEMNIFIED PARTY"), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement; and, subject to Section 6(c), such
Investor will reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to such Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented.

               c. Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an

                                       13

<PAGE>

Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. In the case of an
Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Investors holding at least a majority in
interest of the Registrable Securities included in the Registration Statement to
which the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or Claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or Claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent; provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation, and such
settlement shall not include any admission as to fault on the part of the
Indemnified Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

               d. The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.

               e. No Person involved in the sale of Registrable Securities who
is guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) in connection with such sale shall be entitled to
indemnification from any Person involved in such sale of Registrable Securities
who is not guilty of fraudulent misrepresentation.

               f. The indemnity agreements contained herein shall be in addition
to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

                                       14

<PAGE>

          7. Contribution.

          To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable
Securities, which Person is guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) in connection with such sale, shall be
entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (iii)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities pursuant to such Registration Statement.

          8. Reports Under the 1934 Act.

          Provided that an Initial Public Offering has been consummated and with
a view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that may
at any time permit the Investors to sell securities of the Company to the public
without registration ("RULE 144"), the Company agrees to:

               a. make and keep public information available, as those terms are
understood and defined in Rule 144;

               b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and

               c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of Rule
144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual report
of the Company and such other reports and documents so filed by the Company and
(iii) such other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without registration.

          9. Assignment of Registration Rights.

          The rights under this Agreement shall be automatically assignable by
the Investors to any transferee of all or any portion of such Investor's
Registrable Securities if: (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee

                                       15

<PAGE>

or assignee is restricted under the 1933 Act or applicable state securities
laws; (iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein; and (v) such transfer shall have been made in accordance with the
applicable requirements of the Securities Purchase Agreement.

          10. Amendment of Registration Rights.

          Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Required Holders. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Registrable Securities. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of any of this Agreement unless the same consideration also is offered
to all of the parties to this Agreement.

          11. Miscellaneous.

               a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the record owner of such Registrable Securities.

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

     If to the Company:

          Qiao Xing Mobile Communications Co. Ltd.
          Qiao Xing Science Industrial Park
          Tang Quan
          Huizhou City, Guangdong,
          People's Republic of China 516023
          Facsimile No.: 011-86-752-2820-268
          Telephone No.: 011-86-752-2820-268
          Attn.: Chairman

     With a copy to:

                                       16

<PAGE>

          Andrew N. Bernstein, P.C.
          5445 DTC Parkway, Suite 520
          Greenwood Village, Colorado 80111
          Facsimile No.: (303) 770-7332
          Telephone No.: (303) 770-7131
          Attn.: Andrew N. Bernstein, Esq.

     If to Legal Counsel:

          Schulte Roth & Zabel LLP
          919 Third Avenue
          New York, New York  10022
          Telephone: (212) 756-2000
          Facsimile: (212) 593-5955
          Attention: Eleazer N. Klein, Esq.

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

               c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

               d. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient

                                       17

<PAGE>

service of process and notice thereof. The Company hereby appoints Andrew N.
Bernstein, Esq., with offices at 5445 DTC Parkway, Suite 520, Greenwood Village,
Colorado 80111, as its agent for service of process. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

               e. This Agreement, the other Transaction Documents (as defined in
the Securities Purchase Agreement) and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents and the instruments
referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

               f. Subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.

               g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

               h. This Agreement may be executed in identical counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

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

               j. All consents and other determinations required to be made by
the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders.

               k. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.

                                       18

<PAGE>

               l. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

               m. The obligations of each Buyer hereunder are several and not
joint with the obligations of any other Buyer, and no provision of this
Agreement is intended to confer any obligations on any Buyer vis-a-vis any other
Buyer. Nothing contained herein, and no action taken by any Buyer pursuant
hereto, shall be deemed to constitute the Buyers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Buyers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated herein.

                                   * * * * * *

                                       19

<PAGE>

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

                                        COMPANY:

                                        QIAO XING MOBILE COMMUNICATIONS CO. LTD.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

<PAGE>

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

                                        BUYERS:

                                        DKR SOUNDSHORE OASIS HOLDING FUND LTD.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

<PAGE>

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

                                        CEDAR DKR HOLDING FUND LTD.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
<PAGE>

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
                                       BUYER'S ADDRESS           BUYER'S REPRESENTATIVE'S ADDRESS
           BUYER                    AND FACSIMILE NUMBER               AND FACSIMILE NUMBER
           -----                    --------------------         --------------------------------
<S>                           <C>                                <C>
DKR SOUNDSHORE OASIS          1281 East Main Street, 3rd Floor   Schulte Roth & Zabel LLP
HOLDING FUND LTD.             Stamford, CT 06902-3565            919 Third Avenue
                              Attention: Barbara Burger          New York, New York 10022
                              Facsimile: (203) 674-4735          Attn: Eleazer Klein, Esq.
                              Telephone: (203) 324-8367          Facsimile: (212) 593-5955
                              Residence: Bermuda                 Telephone: (212) 756-2000

CEDAR DKR HOLDING FUND LTD.   1281 East Main Street, 3rd Floor
                              Stamford, CT 06902-3565            Schulte Roth & Zabel LLP
                              Attention: Barbara Burger          919 Third Avenue
                              Facsimile: (203) 674-4735          New York, New York  10022
                              Telephone: (203) 324-8367          Attention: Eleazer Klein, Esq.
                              Residence: Cayman Islands          Facsimile: (212) 593-5955
                                                                 Telephone: (212) 756-2376
</TABLE>

<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

Computershare Trust Company, Inc.
350 Indiana Street, Suite 800
Golden, CO 80401
Facsimile No.: (303) 262-0700
Telephone No.: (303) 262-0706
Attn.: Ms. Kellie D. Gwinn
       Vice President & Trust Officer

          Re:  Qiao Xing Mobile Communications Co. Ltd.

Ladies and Gentlemen:

          [We are][I am] counsel to Qiao Xing Mobile Communications Co. Ltd., a
company incorporated under the laws of the British Virgin Islands (the
"COMPANY"), and have represented the Company in connection with that certain
Securities Purchase Agreement (the "SECURITIES PURCHASE AGREEMENT") entered into
by and among the Company, Qiao Xing Universal Telephone, Inc. (the "Parent") and
the buyers named therein (collectively, the "HOLDERS") pursuant to which the
Parent issued to the Holders senior convertible notes (the "NOTES") convertible
into the Company's common stock, $0.01 par value per share (THE "COMMON STOCK").
Pursuant to the Securities Purchase Agreement, the Company also has entered into
a Registration Rights Agreement with the Holders (the "REGISTRATION RIGHTS
AGREEMENT") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issuable upon the exchange
and/or redemption of the Notes, under the Securities Act of 1933, as amended
(the "1933 ACT"). In connection with the Company's obligations under the
Registration Rights Agreement, on ____________ ___, 200_, the Company filed a
Registration Statement on Form F-3 (File No. 333-_____________) (the
"REGISTRATION STATEMENT") with the Securities and Exchange Commission (the
"SEC") relating to the Registrable Securities which names each of the Holders as
a selling stockholder thereunder.

          In connection with the foregoing, [we][I] advise you that a member of
the SEC's staff has advised [us][me] by telephone that the SEC has entered an
order declaring the Registration Statement effective under the 1933 Act at
[ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have
no knowledge, after telephonic inquiry of a member of the SEC's staff, that any
stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.

                                        1

<PAGE>

          This letter shall serve as our standing confirmation to you of the
Company's instruction that the shares of Common Stock are freely transferable by
the Holders pursuant to the Registration Statement. Unless [we][I] advise you of
any suspension of effectiveness of the Registration Statement, you need not
require further letters from us to effect any future legend-free issuance or
reissuance of shares of Common Stock to the Holders as contemplated by

                                        2

<PAGE>

the Company's Irrevocable Transfer Agent Instructions dated June 13, 2006.

                                        Very truly yours,

                                        [ISSUER'S COUNSEL]

                                        By:
                                            ------------------------------------

CC: [LIST NAMES OF HOLDERS]

                                        3

<PAGE>

                                                                       EXHIBIT B

                              SELLING STOCKHOLDERS

     The shares of common stock being offered by the selling stockholders are
issuable upon the exchange and/or redemption of the convertible notes. For
additional information regarding the issuance of those convertible notes, see
"Private Placement of Shares of Convertible Notes" above. We are registering the
shares of common stock in order to permit the selling stockholders to offer the
shares for resale from time to time. Except for the ownership of the convertible
notes issued pursuant to the securities purchase agreement, the selling
stockholders have not had any material relationship with us within the past
three years.

     The table below lists the selling stockholders and other information
regarding the beneficial ownership of the shares of common stock by each of the
selling stockholders. The second column lists the number of shares of common
stock beneficially owned by each selling stockholder, based on its ownership of
the convertible notes, as of ________, 200_, assuming the exchange and/or
redemption of all convertible notes held by the selling stockholders on that
date, without regard to any limitations on exchange, redemption or exercise.

     The third column lists the shares of common stock being offered by this
prospectus by the selling stockholders.

     In accordance with the terms of a registration rights agreement among the
Company and the selling stockholders, this prospectus generally covers the
resale of at least 130% of the sum of (i) the number of shares of common stock
issuable upon the exchange and/or redemption of the convertible notes as of the
trading day immediately preceding the date the registration statement is
initially filed with the SEC. Because the exchange price of the convertible
notes may be adjusted, the number of shares that will actually be issued may be
more or less than the number of shares being offered by this prospectus. The
fourth column assumes the sale of all of the shares offered by the selling
stockholders pursuant to this prospectus.

     Under the terms of the convertible notes, a selling stockholder may not
convert the convertible notes to the extent such exchange, redemption or
exercise would cause such selling stockholder, together with its affiliates, to
beneficially own a number of shares of common stock which would exceed 9.99% of
our then outstanding shares of common stock following such exchange, redemption
or exercise, excluding for purposes of such determination shares of common stock
issuable upon the exchange and/or redemption of the convertible notes which have
not been converted or redeemed. The number of shares in the second column does
not reflect this limitation. The selling stockholders may sell all, some or none
of their shares in this offering. See "Plan of Distribution."

                                        1

<PAGE>

<TABLE>
<CAPTION>
                                                           MAXIMUM NUMBER OF SHARES
                                  NUMBER OF SHARES OWNED      TO BE SOLD PURSUANT     NUMBER OF SHARES OWNED
NAME OF SELLING STOCKHOLDER          PRIOR TO OFFERING        TO THIS PROSPECTUS          AFTER OFFERING
---------------------------       ----------------------   ------------------------   ----------------------
<S>                               <C>                      <C>                        <C>
DKR SoundShore Oasis Holding                                                                     0
Fund Ltd. (1)

CEDAR DKR Holding Fund Ltd. (2)
</TABLE>

(1)  The investment manager of DKR SoundShore Oasis Holding Fund Ltd. (the
     "Fund") is DKR Oasis Management Company LP (the "Investment Manager"). The
     Investment Manager has the authority to do any and all acts on behalf of
     the Fund, including voting any shares held by the Fund. Mr. Seth Fischer is
     the managing partner of Oasis Management Holdings LLC, one of the general
     partners of the Investment Manager. Mr. Fischer has ultimate responsibility
     for trading with respect to the Fund. Mr. Fischer disclaims beneficial
     ownership of the shares.

(2)  The investment manager of CEDAR DKR Holding Fund Ltd. (the "Fund") is DKR
     Oasis Management Company LP (the "Investment Manager"). The Investment
     Manager has the authority to do any and all acts on behalf of the Fund,
     including voting any shares held by the Fund. Mr. Seth Fischer is the
     managing partner of Oasis Management Holdings LLC, one of the general
     partners of the Investment Manager. Mr. Fischer has ultimate responsibility
     for trading with respect to the Fund. Mr. Fischer disclaims beneficial
     ownership of the shares.

                                        1

<PAGE>

                              PLAN OF DISTRIBUTION

     We are registering the shares of common stock issuable upon the exchange
and/or redemption of the convertible notes to permit the resale of these shares
of common stock by the holders of the convertible notes from time to time after
the date of this prospectus. We will not receive any of the proceeds from the
sale by the selling stockholders of the shares of common stock. We will bear all
fees and expenses incident to our obligation to register the shares of common
stock.

     The selling stockholders may sell all or a portion of the shares of common
stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of
common stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent's commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,

     -    on any national securities exchange or quotation service on which the
          securities may be listed or quoted at the time of sale;

     -    in the over-the-counter market;

     -    in transactions otherwise than on these exchanges or systems or in the
          over-the-counter market;

     -    through the writing of options, whether such options are listed on an
          options exchange or otherwise;

     -    ordinary brokerage transactions and transactions in which the
          broker-dealer solicits purchasers;

     -    block trades in which the broker-dealer will attempt to sell the
          shares as agent but may position and resell a portion of the block as
          principal to facilitate the transaction;

     -    purchases by a broker-dealer as principal and resale by the
          broker-dealer for its account;

     -    an exchange distribution in accordance with the rules of the
          applicable exchange;

     -    privately negotiated transactions;

     -    short sales;

     -    sales pursuant to Rule 144;

<PAGE>

     -    broker-dealers may agree with the selling securityholders to sell a
          specified number of such shares at a stipulated price per share;

     -    a combination of any such methods of sale; and

     -    any other method permitted pursuant to applicable law.

     If the selling stockholders effect such transactions by selling shares of
common stock to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of common stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). In connection
with sales of the shares of common stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of common stock in the course of hedging in
positions they assume. The selling stockholders may also sell shares of common
stock short and deliver shares of common stock covered by this prospectus to
close out short positions and to return borrowed shares in connection with such
short sales. The selling stockholders may also loan or pledge shares of common
stock to broker-dealers that in turn may sell such shares.

     The selling stockholders may pledge or grant a security interest in some or
all of the convertible notes or shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or
secured parties may offer and sell the shares of common stock from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling stockholders to include the
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer and donate the
shares of common stock in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.

     The selling stockholders and any broker-dealer participating in the
distribution of the shares of common stock may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commission paid, or any
discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount of shares of common stock being offered and the terms of the offering,
including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.

     Under the securities laws of some states, the shares of common stock may be
sold in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for

                                        2

<PAGE>

sale in such state or an exemption from registration or qualification is
available and is complied with.

     There can be no assurance that any selling stockholder will sell any or all
of the shares of common stock registered pursuant to the registration statement,
of which this prospectus forms a part.

     The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.

     We will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, estimated to be $[ ] in total,
including, without limitation, Securities and Exchange Commission filing fees
and expenses of compliance with state securities or "blue sky" laws; provided,
however, that a selling stockholder will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling stockholders against
liabilities, including some liabilities under the Securities Act, in accordance
with the registration rights agreements, or the selling stockholders will be
entitled to contribution. We may be indemnified by the selling stockholders
against civil liabilities, including liabilities under the Securities Act, that
may arise from any written information furnished to us by the selling
stockholder specifically for use in this prospectus, in accordance with the
related registration rights agreement, or we may be entitled to contribution.

     Once sold under the registration statement, of which this prospectus forms
a part, the shares of common stock will be freely tradable in the hands of
persons other than our affiliates.

                                        3

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