<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>feb220058kex101.txt
<TEXT>
Exhibit 10.1

                            STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE  AGREEMENT (this "Agreement") is entered into as of the
28 day  of  January,  2005  by and  among  BIOWELL  TECHNOLOGY  INC.,  a  Taiwan
corporation,  located at 18F, No. 959,  Chung Cheng Road,  Chungho City,  Taipei
County,  Taiwan 235, ROC, ") (the  "Company") and APPLIED DNA SCIENCES,  INC., a
Nevada  corporation,  located at 9229 West  Sunset  Boulevard,  Suite  830,  Los
Angeles, California, 90069 ("APDN").

                                    RECITALS

     WHEREAS,  the  Company  is  engaged  in  the  business  of  developing  and
manufacturing  DNA markers (such business along with any other technology now or
hereafter  developed,  manufactured  or  used  by the  Company,  the BVI Sub (as
defined  below) or any  respective  affiliate  thereof to protect  corporate and
intellectual property from counterfeiting,  fraud, piracy,  product diversion or
unauthorized intrusion, the "Business"); and

     WHEREAS,  APDN desires to acquire from the Company, and the Company desires
to sell and transfer to APDN,  all of the Company's  intellectual  property used
in,  useful to or relating to the  Business;  such  acquisition  to be completed
through (i) a sale or other  transfer  of such  intellectual  property  from the
Company to a British Virgin Island (BVI) company (the "BVI Sub") to be formed by
the Company and owned on a pro-rata  basis by the existing  shareholders  of the
Company  (the  "Company   Shareholders"  and  together  with  the  Company,  the
"Sellers"),  (ii) an  acquisition  of the stock of the BVI Sub by a wholly-owned
BVI  subsidiary to be formed by APDN (the "APDN Sub" and together with APDN, the
"Buyers") on the terms and subject to the conditions  hereinafter set forth (the
"Sale"); and

     WHEREAS,  it is the  intent of the  Sellers  and the  Buyers  that the Sale
satisfy  all of the  applicable  requirements  in The  Republic of China and the
United States of America.

     NOW,  THEREFORE,  in  consideration  of  the  mutual  premises,  covenants,
representations,  warranties and agreements set forth herein, and for other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, and intending to be legally bound hereby, the Parties hereto agree
as follows:

                                    ARTICLE I
                                   DEFINITIONS

     Section 1.1 Definitions. (a) As used in this Agreement, the following terms
have the meanings specified in this Section 1.1(a).

     "Acquisition Proposal" means any inquiry, proposal or offer from any Person
relating to an Acquisition Transaction.

     "Acquisition  Transaction" means any transaction or series of transactions,
other than a  transaction  agreed to by the  Sellers  and the Buyers in writing,
involving  any  (a)  direct  or  indirect  acquisition  or  purchase  of  all or
substantially  all of the  Purchased  Stock or  Purchased  Assets  or any  other
similar transaction that would have substantially the same result or (b) merger,
consolidation,  business  combination,  sale  of all or  substantially  all  the
assets,  recapitalization,   liquidation,  dissolution  or  similar  transaction
involving  either of the  Company  or the BVI Sub (other  than the  transactions
between the Parties hereto contemplated by this Agreement).
<PAGE>

     "Advanced Costs" shall have the meaning set forth in Section 7.5(d).

     Agreement"  shall have the meaning set forth in the  paragraph  immediately
prior to the Recitals.

     "APDN" shall have the meaning set forth in the paragraph  immediately prior
to the Recitals.

     "APDN Shares" shall have the meaning set forth in Section 3.1.

     "APDN Sub" shall have the meaning set forth in the Recitals.

     Assumed   Agreements"   means   any   contract,   agreement,    commitment,
understanding  or instrument  which relates to the Purchased  Stock or Purchased
Assets or which is listed on Exhibit A attached hereto.

     "Assumed Liabilities" shall have the meaning set forth in Section 2.3.

     "Assumption  Agreement"  means the Assumption  Agreement to be executed and
delivered by the Buyers and the Sellers at the Closing.

     "Business" shall have the meaning set forth in the Recitals.

     "Business Day" means any day that is not a Saturday, Sunday or other day on
which the banking institutions are required or authorized by law to be closed in
Los Angeles, California, USA.

     "Buyers" shall have the meaning set forth in the Recitals.

     "Buyer Representatives" means either of the Buyers' respective accountants,
employees, counsel, financial advisors and other authorized representatives.

     "BVI Sub" shall have the meaning set forth in the Recitals.

     "Company"  shall have the  meaning set forth in the  paragraph  immediately
prior to the Recitals.

     "Closing" shall have the meaning set forth in Section 4.1.

     "Closing Date" shall have the meaning set forth in Section 4.1.

     "Company"  shall have the  meaning set forth in the  paragraph  immediately
prior to the Recitals.

                                       2
<PAGE>
     "Company Financial  Statements" shall have the meaning set forth in Section
5.6.

     "Company Interim Financial  Statements" shall have the meaning set forth in
Section 5.6.

     "Company Shareholders" shall have the meaning set forth in the Recitals.

     "Copyrights" shall have the meaning set forth in Section 5.11.

     "Employment Agreements" shall have the meaning set forth in Section 4.2(d).

     "Encumbrances"  means  any  mortgages,  pledges,  liens,  claims,  charges,
security  interests,  conditional and installment sale agreements,  activity and
use limitations, restrictions, encumbrances and charges of any kind.

     "Environmental  Laws" means all Taiwanese or United States  federal,  state
and local  laws,  statutes,  regulations,  rules,  ordinances,  codes,  decrees,
judgments,  or judicial  or  administrative  orders  relating  to  pollution  or
protection of the  environment  applicable to either of the Company's or the BVI
Sub's business.

     "Governmental Authority" means any Taiwanese, BVI or United States federal,
state  or  local  governmental  or  regulatory  authority,  department,  agency,
commission or body.

     "Indemnified Party" shall have the meaning set forth in Section 7.2(a).

     "Indemnifying Party" shall have the meaning set forth in Section 7.5(a).

     "Intellectual Property" shall have the meaning set forth in Section 5.11.

     "Intellectual  Property Assignment" shall mean the agreement to be executed
at Closing pursuant to which the Sellers shall assign all of their right,  title
and interest in and to their Intellectual Property to the APDN Sub.

     "Intellectual  Property Rights" shall have the meaning set forth in Section
5.11.

     "Know-how"  means all  information  and materials owned by, or licensed to,
the Seller and any Subsidiary to the extent used by the Seller in conducting its
business, including any product specifications,  technical knowledge, expertise,
skill,   practice,   inventions,   procedures,   trade   secrets,   confidential
information,  and  other  data,  market  studies  and all other  experience  and
know-how, in tangible or intangible form, whether or not patented or patentable;
provided,  however,  that  Know-how  shall not include (i) any plant,  property,
equipment or employees, and (ii) any items to the extent that any applicable law
prohibits their transfer.

     "Knowledge"  means,  with  respect  each of the  Sellers  or to each of the
Buyers, as to a particular matter, the knowledge of any officer of either of the
Sellers or the Buyers, as the case may be.

     "License Agreement" shall mean the license to the Company from the APDN Sub
pursuant to which the Company is licensed the right to sell  products  using the
Intellectual  Property in specified  geographical areas on the terms and subject
to the conditions set forth therein.

                                       3
<PAGE>
     "Loss" or "Losses" shall have the meaning set forth in Section 7.2(a).

     "Marks" shall have the meaning set forth in Section 5.11(c).

     "Material  Adverse  Effect"  means any change or changes  in, or effect on,
either of the  Sellers or the BVI Sub or the  Purchased  Stock or the  Purchased
Assets that is individually,  or are in the aggregate,  reasonably  likely to be
materially  adverse to the Purchased Stock or the Purchased  Assets,  other than
(i) any  change or effect  resulting  from or arising  in  connection  with this
Agreement or any of the transactions contemplated hereby, and (ii) any change in
or  effect  on the  Purchased  Stock  or the  Purchased  Assets  which  is cured
(including by the payment of money) by the Sellers before the Termination Date.

     "Non-Competition  Agreements"  shall have the  meaning set forth in Section
8.9.

     "Nondisclosure  Contracts"  shall  have the  meaning  set forth in  Section
5.11(l).

     "Parties" means the Company and APDN.

     "Party" means each of the Company and APDN.

     "Patent" means any patents,  provisional  patent  applications  and similar
instruments  (including  any  divisions,  continuations,  continuations-in-part,
reissues,  renewals,  extensions or the like of any such patent,  application or
instrument) as well as any foreign equivalents  thereof (including  certificates
of invention and any applications therefor).

     "Patent  Assignment"  shall mean the  agreement  to be  executed at Closing
pursuant to which the Company and the BVI Sub shall  assign all of their  right,
title and interest in and to their respective Patents to the APDN Sub.

     "Permitted Encumbrances" means (i) any Encumbrance for Taxes not yet due or
delinquent  or for those  Taxes  being  contested  in good faith by  appropriate
proceedings for which adequate  reserves have been  established;  (ii) statutory
mechanics',  carriers',  workers', repairers' and other similar liens arising or
incurred in the  ordinary  course of business  relating  to  obligations  of the
Sellers which are secured by  possession  of any of the  Purchased  Stock or the
Purchased  Assets;  and  (iii)  any  minor  imperfection  of  title  or  similar
Encumbrance  that would not materially  adversely  effect the Purchased Stock or
the Purchased Assets.

     "Person"   means  any   individual,   corporation,   partnership,   limited
partnership,  limited liability company, syndicate, group, trust, association or
other  organization or entity or government,  political  subdivision,  agency or
instrumentality of a government.

     "Pledge Agreement" shall have the meaning set forth in Section 7.3.

     Programs" shall have the meaning set forth in Section 5.11(d).

                                       4
<PAGE>
     "Purchased Assets" shall have the meaning set forth in Section 2.1.

     "Purchased Stock" shall have the meaning set forth in Section 2.1.

     Purchase Price" shall have the meaning set forth in Section 3.1.

     "Purchase  Price  Adjustment  Amount"  shall have the  meaning set forth in
Section 2.6.

     "Related Person" shall have the meaning set forth in Section 5.17.

     "Sale" shall have the meaning set forth in the Recitals.

     "Sellers" shall have the meaning set forth in the Recitals.

     "Subsidiary"  means,  with respect to any Person,  any corporation or other
entity of which the outstanding  securities or equity  interests having ordinary
voting  power to elect a majority  of the board of  directors  or other  Persons
performing  similar functions of such Person are owned directly or indirectly by
such other Person.

     "Tax" and "Taxes" means (i) all taxes, charges, fees, levies,  penalties or
other assessments of any kind whatsoever imposed by any Taiwanese, BVI or United
States federal,  state,  local or foreign taxing authority,  including,  but not
limited to, income,  excise,  property,  sales,  transfer,  franchise,  payroll,
withholding,  social security or other taxes,  whether computed on a separate or
consolidated,  unitary or combined  basis or in any other manner,  including any
interest,  penalties or additions attributable thereto or (ii) liability for the
payment of any amounts of the type  described in clause (i) above as a result of
being party to any  agreement or any express or implied  obligation to indemnify
or otherwise succeed to the liability of any other Person.

     "Tax Return" means any return, report, information return or other document
(including any related or supporting information) required to be supplied to any
Governmental Authority with respect to Taxes.

     "Termination Date" shall have the meaning set forth in Section 10.1(e).

     "Third Party Claim" shall have the meaning set forth in Section 7.4.

     "Trademark  Assignment"  shall mean the agreement to be executed at Closing
pursuant  to which the  Company  and the BVI Sub shall each  assign all of their
right, title and interest in and to their respective Marks to the APDN Sub.

     "Transfer Taxes" shall have the meaning set forth in Section 8.5.

     Section 1.2 Construction. The terms "hereby," "hereto," "hereunder" and any
similar terms as used in this Agreement, refer to this Agreement in its entirety
and not only to the particular portion of this Agreement where the term is used.
The  term  "including"   when  used  herein  without  the  qualifier,   "without
limitation,"  shall  mean  "including,  without  limitation."  Wherever  in this
Agreement the singular  number is used,  the same shall include the plural,  and
the  masculine  gender shall include the feminine and neuter  genders,  and vice
versa, as the context shall require.  The word,  "or," shall not be construed to
be exclusive. Provisions shall apply, when appropriate, to successive events and
transactions.

                                       5
<PAGE>

                                   ARTICLE II
                                PURCHASE AND SALE

     Section 2.1 Purchase  and Sale of Stock.  Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement,  at the Closing, the
Company  Shareholders  shall sell, assign,  convey,  transfer and deliver to the
APDN Sub, and the APDN Sub shall, in exchange for the Purchase Price pursuant to
Article  III,  purchase  and  acquire  from the  Sellers,  free and clear of all
Encumbrances (except for Permitted  Encumbrances),  all of the rights, title and
interest  in and to all of the  capital  stock  of the BVI Sub  (the  "Purchased
Stock").  Without  limiting  the effect of the  foregoing,  the  Parties  hereto
acknowledge  and  agree  that the prior to the  Closing  all  rights,  title and
interest of either of the Sellers  in, to and under all of the  following  items
(the "Purchased  Assets") shall be sold or otherwise  transferred to the BVI Sub
from the Company:

     (a) the Assumed Agreements;

     (b) all confidentiality, noncompete or nondisclosure agreements executed by
vendors,  suppliers or employees of the Company or other third parties,  in each
case, relating to the Business;

     (c)  originals  or  copies  of  the  Company's  books,  operating  records,
operating, safety and maintenance manuals,  engineering design plans, blueprints
and as-built  plans,  specifications,  procedures  and similar  items  primarily
relating  to the  Business;  all  invoices,  books of account,  customer  lists,
billing  records and other  customer  correspondence  primarily  relating to the
Business  manufactured  and marketed by the Company in 2001,  2002 and 2003; all
vendor and supplier lists,  invoices,  billing records and  correspondence  with
vendors and suppliers in 2001, 2002 and 2003; marketing  materials,  price lists
and other  books and  records  relating  to the  marketing,  sales and  services
provided by the Company in 2001,  2002 and 2003 in connection with the operation
of the Business;

     (d) all of the rights,  claims or causes of action of either of the Sellers
against a third party related to the Business or the Assumed  Agreements arising
out of transactions occurring prior to the Closing Date; and

     (e) all Intellectual Property and Intellectual Property Rights owned by, or
licensed to, either of the Sellers, together with all related income, royalties,
damages  and  payments  due or payable at the Closing or  thereafter  (including
damages  and  payments  for past or future  infringements  or  misappropriations
thereof),   the   right  to  sue  and   recover   for  past   infringements   or
misappropriations  thereof,  any  and  all  corresponding  rights  that,  now or
hereafter,  may be secured  throughout  the world and all  copies  and  tangible
embodiments of any such Intellectual Property.

     Section 2.3 Assumed  Liabilities.  On the Closing Date,  the APDN Sub shall
execute and deliver to the BVI Sub the Assumption  Agreement,  substantially  in

                                       6
<PAGE>
the form of  Exhibit B  attached  hereto,  pursuant  to which the APDN Sub shall
assume and agree to pay,  perform and discharge when due (i) the liabilities and
obligations of either of the BVI Sub under the Assumed  Agreements (the "Assumed
Liabilities"),  in  accordance  with the  respective  terms and  subject  to the
respective  conditions thereof and (ii) all liabilities and obligations  related
to the Business  arising from any actions or omissions of the APDN Sub occurring
after the Closing.

     Section 2.4  Assignment of Certain  Contracts.  Effective upon the Closing,
the BVI Sub shall  assign to the APDN Sub,  and the APDN Sub shall  assume,  the
Assumed Agreements on the following terms and conditions:

     (a)  The  Assumed  Agreements  are  listed  on  Exhibit  A  hereto  and are
identified by the date of the Assumed Agreement (if available),  the other party
or parties to the Assumed Agreement and the address of such party or parties (if
available),  as the case may be. To the extent any such information is set forth
on Exhibit A and is later determined by the Company not to be available or to be
inaccurate in any material respect, the Sellers shall promptly notify the Buyers
of any such lack of availability or inaccuracy.

     (b) If there exists on the Closing  Date any default  related to an Assumed
Agreement  which relates to the Business,  the Sellers shall be responsible  for
any and all amounts to be cured as a condition to the  assumption and assignment
of such Assumed Agreement.

     Section 2.6  Assignability  and Consents.  Notwithstanding  anything to the
contrary  contained  in  this  Agreement,  if the  sale,  assignment,  transfer,
conveyance or delivery or attempted sale,  assignment,  transfer,  conveyance or
delivery to APDN Sub of any asset to be included in the Purchased  Assets is (a)
prohibited  by any  applicable  law or (b)  would  require  any  authorizations,
approvals, consents or waivers from a third Person or Governmental Authority and
such authorizations, approvals, consents or waivers shall not have been obtained
prior to the  Closing,  then in either case the Buyers  shall have the option of
either (i) proceeding with the Closing without the sale,  assignment,  transfer,
conveyance or delivery of such asset and in such instance this  Agreement  shall
not constitute an agreement for the sale,  assignment,  transfer,  conveyance or
delivery of such asset;  provided,  however, the Purchase Price shall be reduced
by a number of shares of APDN  common  stock  equal in value to the fair  market
value of such asset as reasonably  determined by the Buyers (the "Purchase Price
Adjustment  Amount"),  or (ii)  terminating  this  Agreement  by  notice  to the
Sellers;  nothing  in this  Section  2.6 shall be deemed to waive the  rights of
Buyers not to consummate the transactions  contemplated by this Agreement if the
conditions  to its  obligations  set forth in Sections 9.1 and 9.2 have not been
satisfied.  In the event that the  Buyers  elects to  proceed  with the  Closing
without  the sale,  assignment,  transfer,  conveyance  or  delivery of any such
asset,  then following the Closing,  the Parties shall use their reasonable best
efforts,  and cooperate with each other, to obtain promptly such authorizations,
approvals,  consents or waivers; provided, however, that, except as provided for
in Section 8.3,  neither the Buyers nor the Sellers shall be required to pay any
consideration  to obtain any such  authorization,  approval,  consent or waiver.
Pending  such  authorization,  approval,  consent or waiver,  the Parties  shall
cooperate  with each  other in any  mutually  agreeable,  reasonable  and lawful
arrangements  designed  to provide to the  Buyers  the  benefits  of use of such
asset. Once authorization, approval, consent or waiver for the sale, assignment,
transfer,  conveyance  or  delivery  of  any  such  asset  not  sold,  assigned,
transferred,  conveyed or delivered at the Closing is obtained,  the Company Sub
shall  assign,  transfer,  convey and deliver such asset to the APDN Sub and the
APDN Sub shall  deliver to the Company  Shareholders  a number of shares of APDN
common stock equal in value to the Purchase Price Adjustment Amount.

                                       7
<PAGE>
                                   ARTICLE III
                                 PURCHASE PRICE

     Section 3.1 Purchase Price. In  consideration  for the Purchased Stock, and
subject to the terms and conditions of this Agreement, at the Closing the Buyers
shall deliver to the Sellers,  36,000,000 shares of APDN common stock, par value
$.50  per  share  (the  "APDN  Shares"  or  the  "Purchase   Price"),   adjusted
proportionately in the event of any APDN Stock-Split,  reclassification or stock
dividend.

                                   ARTICLE IV
                                   THE CLOSING

     Section  4.1 Time and Place of  Closing.  Upon the terms and subject to the
satisfaction of the conditions  contained in Article IX of this  Agreement,  the
closing of the sale of the Purchased  Stock  contemplated by this Agreement (the
"Closing") shall take place at British Virgin Islands at 10:00 A.M. (local time)
no later  than the fifth  (5th)  Business  Day  following  the date on which the
conditions  set  forth  in  Article  IX have  been  satisfied  (other  than  the
conditions  with respect to actions the  respective  parties hereto will take at
the Closing itself) or, to the extent permitted,  waived in writing,  or at such
other  place or time as APDN and the Company may  mutually  agree.  The date and
time at which the  Closing  actually  occurs is  hereinafter  referred to as the
"Closing Date." The parties will seek to close on or before March 21, 2005.

     Section 4.2  Deliveries  by the Sellers.  At or prior to the  Closing,  the
Sellers shall deliver the following to the APDN Sub:

     (a) the  Purchased  Stock  of BVI  Subsidaries,  along  with a stock  power
endorsed in blank for all such Purchased Stock;

     (b) the License Agreement, duly executed by the Company (Exhibit J);

     (c) the Assumption  Agreement (Exhibit B) and all such other instruments of
assignment or  conveyance  as shall be  reasonably  necessary to transfer to the
APDN Sub all of the Sellers' rights,  title and interest in, to and under all of
the Purchased  Assets,  in accordance  with this Agreement  (including,  without
limitation,  the  Intellectual  Property  Assignment  (Exhibit  D),  the  Patent
Assignment (Exhibit E) and the Trademark Assignment (Exhibit F));

     (d) employment agreements (the "Employment Agreements") executed by the key
employees  of the  Sellers  (as  reasonably  determined  by APDN)  on terms  and
conditions satisfactory to the key employees and APDN (Exhibit I);

     (e) the  Non-Competition  Agreements,  duly  executed by the  stockholders,
officers,  directors  and key  employees  of each of the Company and the BVI Sub
(Exhibit H);

     (f) the Pledge Agreement, duly executed by the Company (Exhibit G);

                                       8
<PAGE>
     (g) an  agreement  executed by the Sellers  pursuant to which the  Seller's
rights to transfer the APDN shares shall be delineated.

     (h) all consents, waivers or approvals obtained by the Sellers with respect
to the Purchased  Stock and the  consummation  of the  transactions  required in
connection with the sale of the Purchased Stock  contemplated by this Agreement,
to the extent specifically required hereunder;

     (i) the certificates contemplated by Section 9.2(b);

     (j) a certified copy of the Certificate of Incorporation  and the Bylaws or
other formation and governing  documents of the Company and the BVI Sub, each as
in effect as of the Closing,  together with a certificate  of good standing from
appropriate office of the government of Taiwan or BVI, as applicable;

     (k)  certified  copies  of the  resolutions  duly  adopted  by the board of
directors  of each of the Company  and the BVI Sub  authorizing  the  execution,
delivery and  performance  of this Agreement and the  transactions  contemplated
hereby;

     (l) an opinion of legal counsel to the Sellers covering the matters usually
covered in a  transaction  of this nature and in form and  substance  reasonably
satisfactory to the legal counsel to the Buyers;

     (m) an opinion of intellectual property counsel to the Sellers covering the
matters  usually  covered  in a  transaction  of this  nature  and in  form  and
substance reasonably satisfactory to the legal counsel to the Buyers,  including
but not limited to, the validity,  enforceability and  non-contravention  of the
Intellectual Property and Intellectual Property Rights;

     (n) all such other  agreements,  documents,  instruments  and  writings  as
required to be  delivered by either of the Sellers or the BVI Sub at or prior to
the Closing Date pursuant to this  Agreement or as reasonably  requested by APDN
to fulfill the intent of the Parties hereto.

     Section 4.3  Deliveries  by the  Buyers.  At or prior to the  Closing,  the
Buyers shall deliver the following to the Sellers:

     (a) the APDN  Shares,  along with a stock  power  endorsed in blank for all
such APDN Shares;

     (b) the License Agreement, duly executed by the APDN Sub;

     (c) the Employment Agreements, duly executed by APDN;

     (d) a certified copy of the Certificate of Incorporation  and the Bylaws or
other formation or governing  documents of each of the Buyers, each as in effect
as of the  Closing,  together  with a  certificate  of good  standing  from  the
appropriate governmental office;

                                       9
<PAGE>
     (e) certified copies of the resolutions duly adopted by each of the Buyer's
board of directors  authorizing the execution,  delivery and performance of this
Agreement and the transactions contemplated hereby;

     (f) the Non-Competition  Agreements, duly executed by either or both of the
Buyers;

     (g) the Pledge Agreement, duly executed by either or both of the Buyers;

     (h) the Assumption  Agreement,  the Intellectual  Property Assignment,  the
Patent Assignment and the Trademark Assignment,  duly executed by either or both
of the Buyers;

     (i) the certificate contemplated by Section 9.3(b); and

     (j) an  opinion  of legal  counsel  to the  Buyers  in form  and  substance
reasonably satisfactory to the legal counsel to the Sellers; and

     (k) such other  agreements,  documents,  instruments  and  writings  as are
required to be delivered by either of the Buyers at or prior to the Closing Date
pursuant to this Agreement or as reasonably  requested by the Company to fulfill
the intent of the Parties hereto.

                                    ARTICLE V
                    REPRESENTATIONS AND WARRANTIES OF SELLER

     As an  inducement  to the  Buyers  to  enter  into  this  Agreement  and to
consummate the transactions contemplated hereby, the Sellers joint and severally
represent and warrant to each of the Buyers as follows:

     Section 5.1 Organization; Qualification. Each of the Company and BVI Sub is
a corporation duly incorporated or formed, validly existing and in good standing
under  the laws of its  jurisdiction  of  incorporation  or  formation,  has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on the Business as is now being conducted.

     Section 5.2 Authority  Relative to this Agreement.  Each of the Sellers has
all power,  authority  and  capacity  necessary  to  execute  and  deliver  this
Agreement and to consummate the transactions  contemplated hereby. To the extent
required under  applicable law, the execution and delivery of this Agreement and
the  consummation  of the  transactions  contemplated  hereby have been duly and
validly  authorized  by each of the Sellers,  the board of  directors,  managing
members or general  partners  of the  Sellers,  as the case may be, and no other
corporate or organizational proceedings on the part of the Sellers are necessary
to authorize  this  Agreement or to  consummate  the  transactions  contemplated
hereby.  This Agreement has been duly and validly executed and delivered by each
of the Sellers, and assuming that this Agreement constitutes a valid and binding
agreement  of each of the Buyers  constitutes  a valid and binding  agreement of
each of the Sellers,  enforceable against each of the Sellers in accordance with
its  terms,  except  that  such  enforceability  may be  limited  by  applicable
bankruptcy,  insolvency,  moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally or general principles of equity.

                                       10
<PAGE>
     Section 5.3 Consents and Approvals; No Violation. Neither the execution and
delivery of this  Agreement by the Sellers nor the sale of the  Purchased  Stock
pursuant to this Agreement will (a) conflict with or result in any breach of any
provision  of the  Certificate  or  Articles of  Incorporation,  Bylaws or other
formation or governing document,  of any of the Sellers (b) require any consent,
approval,  authorization  or permit of, or filing with or  notification  to, any
Governmental Authority which has not otherwise been obtained or made; (c) result
in a  default  (or  give  rise to any  right  of  termination,  cancellation  or
acceleration)  under any of the terms,  conditions  or  provisions  of any note,
bond, mortgage,  indenture, license, agreement or other instrument or obligation
to which any of the  Sellers  is a party or by which any of the  Sellers  or the
Purchased  Stock  may  be  bound,   except  for  such  defaults  (or  rights  of
termination,  cancellation or  acceleration)  as to which  requisite  waivers or
consents have been obtained; or (d) violate any order, writ, injunction, decree,
statute,  rule or regulation  applicable to any of the Sellers, or the Purchased
Stock.

     Section 5.4 Title to Purchased Stock.  Each Seller holds of record and owns
beneficially the number of shares of Purchased Stock set forth next to his, hers
or its name under Section 5.4 of the Disclosure Schedule,  free and clear of any
restrictions  on  transfer,  security  interests,  options,  warrants,  purchase
rights, contracts,  commitments,  equities,  claims, and demands. No Seller is a
party to any option,  warrant,  purchase  right, or other contract or commitment
that could require such Seller to sell,  transfer,  or otherwise  dispose of any
capital  stock of BVI Sub (other than this  Agreement).  No Seller is a party to
any voting trust, proxy, or other agreement or understanding with respect to the
voting of any capital stock of the BVI Sub

     Section 5.5 Title to Assets;  Licenses.  At the  Closing,  the Buyers shall
acquire all right,  title and  interest  in, to and under  subject to such being
assumed and assigned in  accordance  with  Section  2.5),  all of the  Purchased
Assets,  in each case free and clear of all  Encumbrances,  except for Permitted
Encumbrances.  Exhibit A includes a complete  and correct  list of all  licenses
issued by either of the  Sellers  under  any of its  Patents,  and all  licenses
issued to either of the Sellers with respect to any technology used by either of
the Sellers in the Business  that is not owned by either of the Sellers.  All of
the licenses listed in Exhibit A are in full force and effect,  in good standing
and are assignable to the Buyers and, unless the Buyers elect otherwise, will be
included in the Assumption Agreement.

     Section 5.6 [Reserved].

     Section 5.7. No Undisclosed Liabilities. Except as set forth in Section 5.7
of the  Disclosure  Schedule,  The BVI Sub has no any  material  liabilities  or
obligations of any nature, whether absolute, accrued, contingent, or otherwise.

     Section  5.8.  Taxes.  The BVI Sub has  properly  and timely  filed all Tax
returns in all necessary  jurisdictions and has paid all Taxes,  assessments and
penalties due and payable. All such Tax returns were complete and correct in all
respects  as  filed,  and no claims  have been  assessed  with  respect  to such
returns, except as set forth in Section 5.8 of the Disclosure Schedule.

     For purposes of this Agreement,  the term "Tax" shall mean any Taiwan,  BVI
or  United  States  federal,   national,  state,  provincial,   local  or  other
jurisdictional income, gross receipts,  property,  sales, use, license,  excise,
franchise,  employment,  payroll,  estimated,  alternative or add-on minimum, ad
valorem,  transfer or excise tax, or any other tax, custom,  duty,  governmental
fee or other like  assessment or charge imposed by any  Governmental  Authority,
together with any interest or penalty imposed thereon.

                                       11
<PAGE>

     Section 5.9 [Reserved].

     Section 5.10. Books and Records. Except as disclosed in Section 5.10 of the
Disclosure  Schedule,  the books of account and other records of each of the BVI
Sub, all of which shall be made available to the Buyers upon request,  are true,
correct and  complete.  Except as disclosed  in Section  5.10 of the  Disclosure
Schedule,  the minute  books of the BVI Sub contain  true,  correct and complete
records of all meetings  held of, and action taken by, the equity  holders,  the
Board of  Directors,  and  committees  of the Board of  Directors of each of the
respective entities.  The books of the Company and the BVI Sub are true, correct
and  complete.  At the  Closing,  all of those books and records  will be in the
possession of the Company and the BVI Sub, as the case may be.

     Section 5.11.  Intellectual Property.  "Intellectual Property Rights" means
all Patents,  trademarks,  trademark  applications,  trade names, service marks,
service mark  applications,  copyrights (both registered and  unregistered,  the
"Copyrights"),  copyright applications and trade secrets of the BVI Sub assigned
to it by the  Company  pursuant to the  Intellectual  Property  Assignment  with
respect to Intellectual  Property (as defined below). All intellectual  property
(other than with respect to  "off-the-shelf" or other third party software which
is generally  commercially  available) of the BVI Sub which has been assigned to
it by the Company pursuant to the Intellectual  Property  Assignment and is used
in the conduct of the Business as presently  conducted or as presently  proposed
to be  conducted,  including,  computer  programs  and other  computer  software
(including,   without  limitation,  all  source  and  object  code,  algorithms,
architecture,  structure,  display  screens,  layouts  and  development  tools),
inventions,  patents,  patent applications,  designs,  samples,  specifications,
schematics,  know-how,  trade secrets,  proprietary processes and formulae,  and
development tools, promotional materials,  databases,  customer lists, supplier,
vendor and dealer lists and marketing research,  and all documentation and media
constituting,  describing  or  relating  to the  foregoing,  including,  without
limitation,  manuals,  memoranda and records,  all  collectively  constitute the
"Intellectual Property" for purposes of this Agreement.

     (a)  Ownership  of  Intellectual   Property  Rights.  Except  as  otherwise
disclosed  on Section  5.11(a) of the  Disclosure  Schedule,  the BVI Sub is the
exclusive  owner of,  and has good,  valid  and  marketable  title to all of the
Intellectual  Property  Rights and  Intellectual  Property free and clear of all
liens,  and except as otherwise  disclosed on Section  5.11(a) of the Disclosure
Schedule,  has the  right to use  without  payment  to a third  party all of the
Intellectual Property Rights. No claim is pending or, to the Sellers' Knowledge,
threatened  against the Company or the BVI Sub and/or its  respective  officers,
employees,  and consultants to the effect that any of the Intellectual  Property
Rights is invalid or unenforceable by the BVI Sub. Except as otherwise disclosed
on Schedule 5.11(a) of the Disclosure Schedule,  all former and current material
or key employees, and all current material or key consultants and contractors of
the  Company  and  the  BVI Sub  have  executed  written  instruments  with  the
respective  entity  that  assigns  to the  respective  entity  all rights to any
material inventions,  improvements,  discoveries,  or information relating to or
used in connection with the respective  entity's  Business.  To the Knowledge of
each of the Sellers (after due inquiry of its respective employees), no employee
of the  Company or the BVI Sub  involved in any  respect  with their  respective
business  has  entered  into any  agreement  (other  than  agreements  with such
entity), either before or after the commencement of employment with such entity,

                                       12
<PAGE>
that  restricts  or  limits  in any way the  scope or type of work in which  the
employee is engaged by such entity or requires the employee to transfer, assign,
or disclose  information  concerning his or her work on behalf of such entity to
anyone other than such entity.

     (b)  Patents.  Section  5.11(b)  of the  Disclosure  Schedule  sets forth a
complete  and  accurate  list and  summary  description  of all of the BVI Sub's
Patents.  All of the issued  Patents are currently in material  compliance  with
formal  legal  requirements  (including  without  limitation  payment of filing,
examination  and  maintenance  fees and proofs of working or use), and are valid
and  enforceable  and not  subject to any  maintenance  fees or taxes or actions
falling due within ninety (90) days after the date of the Closing.  In each case
where a Patent is held by the BVI Sub by  assignment,  the  assignment  has been
duly  recorded  with the U.S.  Patent  and  Trademark  Office  and/or  all other
jurisdictions  of  registration.  No Patent has been or is now  involved  in any
interference, reissue, re-examination or opposition proceeding. To the Knowledge
of each of the Sellers,  there is no  potentially  interfering  patent or patent
application of any third party.

     (c)  Trademarks.  Section  5.11(c) of the Disclosure  Schedule sets forth a
complete  and  accurate  list and  summary  description  of all of the BVI Sub's
registered  trademarks and servicemarks (the "Marks").  All Marks that have been
registered  with the United States Patent and Trademark  Office and/or any other
jurisdiction are currently in material compliance with formal legal requirements
(including without limitation the timely  post-registration filing of affidavits
of use  and  incontestability  and  renewal  applications),  and are  valid  and
enforceable. In each case where a Mark is held by the BVI Sub by assignment, the
assignment  has been duly  recorded with the U.S.  Patent and  Trademark  Office
and/or all other applicable  jurisdictions of registration.  No Mark has been or
is now involved in any opposition,  invalidation or cancellation proceeding and,
to the  Knowledge  of each of the  Sellers,  no such action is  threatened  with
respect to any of the Marks.

     (d)  Copyrights.  Section  5.11(d) of the Disclosure  Schedule sets forth a
complete  and  accurate  list  and  summary  description  of all the  BVI  Sub's
Copyrights.  Except as set forth in Section 5.11(d) of the Disclosure  Schedule,
all Copyrights that have been registered with the United States Copyright Office
and/or other  jurisdictions  are  currently in material  compliance  with formal
legal requirements,  are valid and enforceable.  In each case where a registered
Copyright is held by the BVI Sub by  assignment,  the  assignment  has been duly
recorded  with the U.S.  Copyright  Office  and/or  all other  jurisdictions  of
registration.  None of the  source  or object  code,  algorithms,  or  structure
included in the computer  programs,  computer  databases,  software,  or related
systems which is relevant to the Business is copied from, based upon, or derived
from any other source or object code, algorithm or structure in violation of the
rights of any third party.  Any  substantial  similarity  of the Programs to any
computer program owned by any third party did not result from the Programs being
copied from,  based upon, or derived from any such computer  software program in
violation of the rights of any third party.

     (e) Trade  Secrets.  Each of the Company  and BVI Sub has taken  reasonable
security  measures  (including,  without  limitation,  entering into appropriate
confidentiality  and  nondisclosure  agreements  with material or key former and
present officers,  directors,  employees, and consultants of each of the Company
and BVI Sub and any other  persons  with  access to the  trade  secrets,  to the
extent  deemed  necessary  by the Company  and BVI Sub) to protect the  secrecy,
confidentiality and value of each of such trade secrets.  Except as disclosed on
Section 5.11(e) of the Disclosure Schedule, there has not been any breach by any
party to any such confidentiality or non-disclosure agreement. The trade secrets
have not been  disclosed by either of the Company or BVI Sub to any person other
than employees or  contractors  thereof who had a need to know and use the trade
secrets in the course of their  employment or contract  performance  or to third
parties bound by a confidentiality  agreement.  Except as otherwise disclosed in
Section  5.11(e) of the  Disclosure  Schedule,  the Company and BVI Sub have the
right to use,  free and  clear of  claims of third  parties,  all trade  secrets
utilized by it. No third party has  asserted  that the use by either the Company
or BVI Sub of any trade secret violates the rights of any third party.

     (f) Exclusivity of Rights.  Except as otherwise provided in Section 5.11(f)
of the Disclosure Schedule, the BVI Sub has the exclusive right to use, license,
distribute,  transfer  and  bring  infringement  actions  with  respect  to  the
Intellectual Property Rights or the Intellectual  Property.  Except as otherwise
provided in Section 5.11(f) of the Disclosure Schedule,  neither the Company nor
BVI Sub (i) has licensed or granted to anyone rights of any nature to use any of
the  Intellectual  Property  Rights  or  Intellectual  Property  outside  of the
ordinary  course  of  business;  and (ii) is not  obligated  to and does not pay
royalties or other fees to anyone for such ownership,  use,  license or transfer
of any of its Intellectual Property Rights or Intellectual Property.

                                       13
<PAGE>

     (g) Licenses Received. All licenses or other agreements under which BVI Sub
is granted  rights by others in  Intellectual  Property  Rights or  Intellectual
Property are listed in Section 5.11(g) of the Disclosure Schedule. Except as set
forth  thereon,  all such  licenses  or other  agreements  are in full force and
effect,  neither the Company nor BVI Sub is or was in default of such license or
other  agreements  and, to the  Knowledge  of each of the  Sellers,  there is no
material  default by any other party  thereto.  To the  Knowledge of each of the
Sellers,  the licensors under the licenses and other agreements under which such
BVI Sub is granted  rights have all  requisite  power and authority to grant the
rights purported to be conferred thereby.

     (h) Licenses  Granted.  All licenses or other agreements under which either
the Company or BVI Sub has  granted  rights to others in  Intellectual  Property
Rights or Intellectual  Property are listed in Section 5.11(h) of the Disclosure
Schedule. Except as set forth thereon, all such licenses or other agreements are
in full force and effect,  and neither the Company nor BVI Sub is or has been in
material  default  there under and to the Knowledge of each of the Sellers there
is no material default by any other party thereto.

     (i) Sufficiency.  The Intellectual  Property and the Intellectual  Property
Rights constitute all of the intellectual property assets of each of the Sellers
necessary  for  the  operation  of the  Business  as  currently  conducted,  and
presently proposed to be conducted.

     (j) Infringement.  None of the Intellectual  Property  infringes or, to the
Knowledge  of each of the Sellers,  is alleged to infringe any United  States of
America or other patent, trademark, service mark, trade name, copyright or other
proprietary right or is a derivative work based on the work of any other person.

     (l)  Nondisclosure  Contracts.  Each  of the  Nondisclosure  Contracts  (as
defined below) is a valid and binding  obligation of the Company and BVI Sub, as
the case may be, enforceable against it in accordance with its terms, subject to
principles  of equity and  applicable  bankruptcy,  insolvency  and similar laws

                                       14
<PAGE>
affecting   creditors'  rights  generally.   For  purposes  of  this  Agreement,
"Nondisclosure   Contracts"  means  all  nondisclosure  and/or   confidentiality
agreements entered into between the Company or BVI Sub and Persons in connection
with disclosures relating to the Business and the Intellectual Property Rights.

     Section  5.12  Litigation.  Except  as set  forth  in  Section  5.12 of the
Disclosure  Schedule,  there is no litigation or governmental or  administrative
proceeding  or  investigation  pending  or,  to the  Knowledge  of either of the
Sellers, threatened against the Company or BVI Sub or affecting the Intellectual
Property, Intellectual Property Rights, Purchased Stock or Purchased Assets, or,
as to matters related to BVI Sub, against any officer, director,  stockholder or
key employee of such Seller,  nor, to the Knowledge of either of the Sellers (a)
has any material event occurred,  or (b) does any material  condition  exist, on
the basis of which any such claim may be asserted.

     Section 5.13. Permits; Compliance with Laws. Except as set forth in Section
5.13 of the Disclosure  Schedule,  the BVI Sub has all governmental  franchises,
authorizations,  approvals, orders, consents, licenses,  certificates,  permits,
registrations,  qualifications  or other  rights  and  privileges  (collectively
"Permits")  necessary  to  permit  it to own its  property  and to  conduct  its
business as it is  presently  conducted,  and all such  Permits are valid and in
full force and effect,  except  where the failure to own or obtain such a Permit
would not have a Material Adverse Effect. No Permit is subject to termination as
a result of the execution of this Agreement or consummation of the  transactions
contemplated  hereby.  Each of the Company and BVI Sub is now and has heretofore
been in compliance with all applicable statutes,  ordinances,  orders, rules and
regulations  promulgated by any federal,  state, municipal or other Governmental
Authority,  which apply to the conduct of its business, except where the failure
to so comply would not have a Material  Adverse Effect.  Neither the Company nor
BVI Sub has  entered  into or been  subject  to any  judgment,  consent  decree,
compliance  order or  administrative  order  with  respect  to any aspect of its
respective business,  affairs,  properties or assets or received any request for
information, notice, demand letter, administrative inquiry or formal or informal
complaint or claim from any  regulatory  agency with respect to any aspect of is
respective business, affairs, properties or assets.

     Section 5.14. Absence of Certain Changes and Events. Except as set forth in
Section 5.14 of the Disclosure  Schedule,  since the date of the Company Interim
Financial Statements, each of the Company and BVI Sub has conducted its business
only in the ordinary course of business  consistent with past practice.  Without
limiting the generality of the immediately preceding sentence,  since January 1,
2004,  there has not been any damage to or  destruction or loss of any Purchased
Asset or Intellectual Property, whether or not covered by insurance.

     Section  5.15  Contracts;  No  Defaults.  Section  5.15  of the  Disclosure
Schedule contains a complete and accurate list, and the BVI Sub has delivered to
the Buyers true, correct and complete copies, of:

          i. each contract that involves  performance of services or delivery of
goods or materials by the BVI Sub of an amount or value in excess of $25,000;

                                       15
<PAGE>

          ii. each contract that involves performance of services or delivery of
goods or  materials  to either of the BVI Sub of an amount or value in excess of
$25,000;

          iii. and other contract  affecting any leasehold or other interest in,
any real or personal property;

          iv.  each   licensing   contract  with  respect  to  Patents,   Marks,
Copyrights,  trade secrets or other Intellectual  Property,  including contracts
with current or former  employees,  consultants  or  contractors  regarding  the
appropriation or the non-disclosure of any Intellectual Property Assets;

          v. each joint  venture,  partnership  and other  contract  involving a
sharing of profits,  losses,  costs or liabilities by the BVI Sub with any other
Person or requiring BVI Sub to make a capital contribution; and

          vi.  each  contract  containing  covenants  that in any way purport to
restrict  the  business  activity  of BVI Sub or limit the freedom of BVI Sub to
engage in any line of business or to compete with any Person or hire any Person.

     Section 5.16 Absence of Certain  Payments.  Neither the Company nor BVI Sub
nor any director,  officer,  agent or employee  thereof nor, to the Knowledge of
each of the Sellers, any other Person associated with or acting for or on behalf
of the Company or BVI Sub, has directly or indirectly (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback or other payment to any
Person,  private or public,  regardless of form, whether in money,  property, or
services (i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain special concessions or
for special  concessions  already  obtained,  for or in respect of either of the
Sellers or any  Affiliate of the Company or BVI Sub, or (iv) in violation of any
legal  requirement,  or (b) established or maintained any fund or asset that has
not been recorded in the books and records of the Company or BVI Sub.

     Section 5.17.  Relationships  with Related Persons.  Except as set forth in
Section 5.17 of the Disclosure Schedule, no officer, director or employee of the
Company or BVI Sub, nor any spouse or child of any of them or any  Affiliate of,
or any Person associated with, any of them ("Related Person"),  has any interest
in any  property  or asset used in or  pertaining  to the  business  of BVI Sub.
Except as set forth in  Section  5.17 of the  Disclosure  Schedule,  no  Related
Person has owned or presently owns an equity  interest or any other financial or
profit  interest in a Person that has (i) had business  dealings  with either of
the Company or BVI Sub, or (ii) engaged in  competition  with the Company or BVI
Sub.  Except as set forth in the  Disclosure  Schedule,  no Related  Person is a
party to any contract  with, or has any claim or right  against,  the Company or
BVI Sub relating to the Purchased Stock or the Purchased Assets. .

     Section 5.18 No Restrictions on Business  Activities.  There is no contract
or Governmental  Order binding upon the Purchased Assets or, to the Knowledge of
the Sellers,  threatened  that has or could  reasonably  be expected to have the
effect of prohibiting or materially impairing the use of the Purchased Assets by
BVI Sub or the acquisition of the Purchased Stock by the Buyers.

                                       16
<PAGE>
     Section 5.19 Disclosure.  No  representation  or warranty by the Sellers in
this Agreement,  nor in any certificate,  schedule or exhibit delivered or to be
delivered  pursuant  to  this  Agreement,  and no  statement  in the  Disclosure
Schedule,  contains or will contain any untrue  statement of material  fact,  or
omits or will omit to state a material  fact  necessary  to make the  statements
herein or therein, in light of the circumstances under which they were made, not
misleading.

     Section  5.20  Environmental  Matters.  There  are no  claims,  actions  or
proceedings under or relating to Environmental  Laws pending or, to the Seller's
Knowledge,  threatened against or relating to the BVI Sub, the Purchased Assets,
or the Business which would,  individually or in the aggregate,  have a Material
Adverse Effect.

     Section 5.21  Brokers.  No person is entitled to any  brokerage,  financial
advisory,  finder's or similar fee or  commission  payable by either the Company
or,  the  BVI Sub in  connection  with  the  transactions  contemplated  by this
Agreement. Such fees, if any, shall be paid in full by the Sellers.

                                   ARTICLE VI
                   REPRESENTATIONS AND WARRANTIES OF THE BUYER

     As an inducement  to the Sellers to enter this  Agreement and to consummate
the transactions  contemplated  hereby, each of the Buyers jointly and severally
represents and warrants to each of the Sellers as follows:

     Section  6.1  Organization.  Each  of  the  Buyers  is a  corporation  duly
incorporated or formed,  validly existing and in good standing under the laws of
its state or other governmental  authority of incorporation or formation and has
all  requisite  corporate  power and  authority  to own,  lease and  operate its
properties and to carry on its respective business as is now being conducted.

     Section 6.2 Authority  Relative to this  Agreement.  Each of the Buyers has
full corporate  power and authority to execute and deliver this Agreement and to
consummate the transactions  contemplated  hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the respective board of directors of each of
the  Buyers  and no other  corporate  proceedings  on the part of  either of the
Buyers  is  necessary  to  authorize   this   Agreement  or  to  consummate  the
transactions  contemplated  hereby.  This  Agreement  has been duly and  validly
executed and delivered by each of the Buyers,  and assuming that this  Agreement
constitutes a valid and binding agreement of each of the Sellers,  constitutes a
valid and binding agreement of each of the Buyers,  enforceable  against each of
the Buyers in accordance with its terms,  except that such enforceability may be
limited by applicable bankruptcy,  insolvency,  moratorium or other similar laws
affecting or relating to enforcement of creditors'  rights  generally or general
principles of equity.

     Section 6.3 Consents and Approvals; No Violation. Neither the execution and
delivery of this  Agreement  by each of the Buyers nor the purchase by either or
both of the Buyers of the Purchased  Assets and the assumption by either or both
of the Buyers of the  Assumed  Agreements  pursuant to this  Agreement  will (a)

                                       17
<PAGE>
conflict  with or result in any breach of any  provision of the  Certificate  of
Incorporation  or Bylaws of the  applicable  Buyer;  (b)  require  any  consent,
approval,  authorization  or permit of, or filing with or  notification  to, any
Governmental  Authority  which has not been  otherwise  obtained or made; or (c)
result in a default (or give rise to any right of  termination,  cancellation or
acceleration)  under any of the terms,  conditions or provisions of any material
note,  bond,  mortgage,  indenture,  agreement,  lease  or other  instrument  or
obligation  to which  either  of the  Buyers  is a party or by which  any of its
assets  may be bound,  except  for such  defaults  (or  rights  of  termination,
cancellation or  acceleration)  as to which  requisite  waivers or consents have
been obtained.

     Section 6.4 Legal Proceedings and Judgments.  There are no material claims,
actions, proceedings or investigations pending or, to the Knowledge of either of
the Buyers,  threatened  against or relating to either of the Buyers  before any
court which could  reasonably  be expected to materially  adversely  affect such
Buyer's ability to consummate the transactions contemplated hereby.

     Section 6.5  Brokers.  No person is entitled  to any  brokerage,  financial
advisory,  finder's or similar fee or commission payable by either of the Buyers
in connection  with the  transactions  contemplated by this Agreement based upon
arrangements made by or on behalf of either of the Buyers.

                                   ARTICLE VII
                          SURVIVAL AND INDEMNIFICATION

     Section 7.1 Survival of  Representations,  Warranties  and  Covenants.  All
representations,  warranties,  covenants,  and agreements of the Sellers and the
Buyers made in this  Agreement and all  agreements,  documents  and  instruments
executed by such  parties  pursuant  hereto  shall be deemed to have been relied
upon by the  party or  parties  to whom they are made,  and  shall  survive  the
Closing,  regardless  of any  investigation  on the  part of such  party  or its
representatives  and (b)  shall  bind  and may be  relied  upon by the  parties'
respective  successors and assigns,  whether so expressed or not, and, except as
otherwise  provided in this  Agreement,  all such  representations,  warranties,
covenants  and  agreements  shall  inure to the benefit of the parties and their
respective successors and assigns,  whether so expressed or not. Notwithstanding
the foregoing,  the  representations  and warranties  contained in Article V and
Article VI hereof  shall  expire and  terminate  and be of no further  force and
effect  after  the date  which is two (2)  years  following  the  Closing  Date;
provided,  however, the representations and warranties contained in (i) Sections
5.1, 5.2, 5.3, 5.4, 5.5, 5.21,  6.1, 6.2, 6.3 and 6.5 shall survive  forever and
(ii) Sections 5.8 and 5.20 shall survive until the  expiration of the applicable
statute of limitations and; provided further,  that any written claim for breach
thereof  made  prior to any such  expiration  date and  delivered  to the  party
against whom such  indemnification is sought shall survive thereafter and, as to
any such  claim,  such  applicable  expiration  will not  effect  the  rights to
indemnification  of the party making such claim and; provided further,  that any
such written claim by the Buyer with respect to a breach of the  representations
and   warranties  of  the  Seller  may,  with  respect  to  fraud,   intentional
misrepresentation  or a deliberate or willful breach by the Seller,  be given at
any time.

                                       18
<PAGE>
     Section 7.2 Indemnification.

     (a) Each of the Sellers agrees to defend,  indemnify and hold harmless each
of the Buyers,  and their respective  managers,  members,  partners,  directors,
officers,  employees  and agents of each of the  foregoing  and each  person who
controls  any of them  (Persons  receiving  the  benefit of the  indemnification
agreement herein shall be referred to collectively as "Indemnified  Parties" and
individually  as an  "Indemnified  Party")  from and against any and all losses,
claims, damages, obligations, liens, assessments, judgments, fines, liabilities,
and  other  reasonable  costs  and  expenses  (including,   without  limitation,
interest, penalties and any reasonable investigation,  legal and other expenses)
actually  incurred in connection with, and any amount paid in settlement of, any
third party action,  suit or proceeding or any claim  asserted,  as the same are
incurred,  of any kind or nature whatsoever which has actually been sustained or
suffered by any such Indemnified Party (a "Loss" or "Losses"), without regard to
any investigation by any of the Indemnified Parties, based upon, arising out of,
by reason of or otherwise in respect of or in  connection  with (i) any material
breach of any representation,  warranty, covenant or agreement made by either of
the Sellers in this  Agreement  or in any  agreement or  instrument  executed by
either of the Sellers pursuant to this Agreement,  or (ii) any third Party claim
as defined in Section 7.4.

     (b) The indemnification  and contribution  provided for in this Section 7.2
will remain in full force and effect regardless of any investigation  made by or
on behalf of the Indemnified Party or any officer,  director,  partner,  member,
employee, agent or controlling person of the Indemnified Party.

     Section 7.3 Security for  Indemnification  Claims.  As security for each of
the  Sellers'  indemnification  and  contribution  obligations  provided in this
Article  VII, the Company  shall,  pursuant to a pledge  agreement  (the "Pledge
Agreement") to be executed with the Buyers at the Closing,  pledge to the Buyers
for a period of three years  following  the Closing  Date,  any of the Company's
rights in and to the License Agreement, each on terms and conditions as provided
in the Pledge  Agreement.  It being  understood that the pledge of the Company's
rights in and to the License  Agreement  shall  continue until the settlement of
any indemnification claim outstanding at the end of the pledge period.

     Section 7.4 Third Party  Claims.  If any third party shall notify either of
the Buyers with respect to any matter  alleging facts that, if true,  would mean
that any of the  Sellers has  breached  any of its  respective  representations,
warranties  or covenants in this  Agreement (a "Third Party  Claim"),  then APDN
and/or  APDN Sub shall  promptly  notify the  Company  and thereof in writing in
accordance with Section 7.5.

     Section 7.5 Notice; Payment of Losses; Defense of Claims.

     (a) An Indemnified Party which seeks to assert its  indemnification  rights
pursuant  to this  Section 7 shall  give  written  notice  thereof  to the party
required to provide such  indemnification  (individually  and  collectively,  an
"Indemnifying  Party")  promptly after receipt of any written claim by any third
party and in any event not later than thirty (30) days after receipt of any such
written  claim or not later than ten (10) business days after the receipt of any
such written  claim in the event such  written  claim is in the form of a formal

                                       19
<PAGE>
complaint (or substantially equivalent pleading) filed with a court of competent
jurisdiction  and served on the  Indemnified  Party,  specifying  in  reasonable
detail the  amount,  nature and source of the  claim,  and  including  therewith
copies of any  notices  or other  documents  received  from third  parties  with
respect to such claim; provided, however, that failure to give such notice shall
not  limit  the  right  of  an  Indemnified   Party  to  recover   indemnity  or
reimbursement  except to the extent  that the  Indemnifying  Party  suffers  any
material  damages or is materially  prejudiced as a result of such failure.  The
Indemnified  Party shall also provide the  Indemnifying  Party with such further
information  concerning any such claims as the Indemnifying Party may reasonably
request by written notice.

     (b) Within thirty (30) business days after receiving  notice of a claim for
indemnification or reimbursement complying with Section 7.5(a), the Indemnifying
Party shall, by written notice to the Indemnified  Party,  either (i) concede or
deny liability for the claim in whole or in part, or (ii) in the case of a Third
Party  Claim,  advise  that the matters set forth in the notice are, or will be,
subject  to  contest  or legal  proceedings  not yet  finally  resolved.  If the
Indemnifying Party concedes liability in whole or in part, it shall,  within ten
(10)  business  days of such  concession,  pay the  amount  of the  claim to the
Indemnified  Party to the extent of the  liability  conceded.  Any such  payment
shall be made in immediately  available  funds equal to the amount of such claim
so payable,  except as may otherwise be agreed by the Indemnifying Party and the
relevant  Indemnified  Party,  each acting  reasonably and in good faith. If the
Indemnifying  Party  denies  liability  in whole or in part or advises  that the
matters  set forth in the notice  are,  or will be,  subject to contest or legal
proceedings not yet finally resolved,  then the Indemnifying Party shall make no
payment  (except for the amount of any conceded  liability  payable as set forth
above) until the matter is resolved in accordance with this Agreement.

     (c) If  within  twenty  (20)  business  days  after  receiving  the  notice
described  in the  preceding  paragraph  (a) the  Indemnifying  Party  (i) gives
written  notice to the  Indemnified  Party stating that the  Indemnifying  Party
would be liable under the provisions  hereof for indemnity in the amount of such
claim if such claim  were valid and that the  Indemnifying  Party  disputes  and
intends to defend against such claim,  liability or expense at the  Indemnifying
Party's own cost and expense and (ii) provides assurance  reasonably  acceptable
to such  Indemnified  Party  that such  indemnification  will be paid  fully and
promptly  if  required  upon  the  final  resolution  of  such  claim  and  such
Indemnified  Party will not be  required  to incur  cost or  expense  during the
proceeding,  then counsel for the defense shall be selected by the  Indemnifying
Party (subject to the consent of such Indemnified  Party which consent shall not
be unreasonably  withheld) and such  Indemnified  Party shall not be required to
make any payment with respect to such claim, liability or expense as long as the
Indemnifying  Party is  conducting a good faith and diligent  defense at its own
expense;  provided,  however, that the assumption of defense of any such matters
by the Indemnifying Party shall relate solely to the claim, liability or expense
that is subject or potentially subject to  indemnification.  If the Indemnifying
Party assumes such defense in accordance with the preceding  sentence,  it shall
have the right, with the consent of such Indemnified  Party, which consent shall
not be unreasonably  withheld,  to settle all  indemnifiable  matters related to
claims by third parties  which are  susceptible  to being  settled  provided the
Indemnifying  Party's  obligation to indemnify such  Indemnified  Party therefor
will be fully satisfied by payment of money by the  Indemnifying  Party pursuant
to a settlement which includes a complete release of such Indemnified  Party and
does not subject the  Indemnified  Party to any other adverse  consequence.  The
Indemnifying  Party shall keep such Indemnified  Party apprised of the status of

                                       20
<PAGE>
the  claim,   liability  or  expense  and  any  resulting  suit,  proceeding  or
enforcement action,  shall furnish such Indemnified Party with all documents and
information  that such  Indemnified  Party  shall  reasonably  request and shall
consult with such Indemnified Party prior to acting on major matters,  including
settlement discussions. Notwithstanding anything herein stated, such Indemnified
Party shall at all times have the right to fully  participate in such defense at
its own expense directly or through  counsel;  provided,  however,  if the named
parties to the action or proceeding  include both the Indemnifying Party and the
Indemnified  Party and  representation of both parties by the same counsel would
be  inappropriate  under  applicable  standards  of  professional  conduct,  the
reasonable  expense of separate counsel for such Indemnified Party shall be paid
by the  Indemnifying  Party,  provided,  that such  Indemnifying  Party shall be
obligated to pay for only one counsel in any jurisdiction.  If no such notice of
intent to dispute  and  defend is given by the  Indemnifying  Party,  or if such
diligent  good  faith  defense  is not  being or ceases  to be  conducted,  such
Indemnified Party shall, at the expense of the Indemnifying Party, undertake the
defense of (with counsel selected by such Indemnified Party), and shall have the
right to  compromise  or settle,  such claim,  liability or expense  (exercising
reasonable business judgment).  If such claim,  liability or expense is one that
by its nature cannot be defended solely by the Indemnifying Party, as determined
in the  reasonable  discretion  of the  Indemnifying  Party,  then the  relevant
Indemnified  Party shall make available all  information and assistance that the
Indemnifying   Party  may  reasonably  request  and  shall  cooperate  with  the
Indemnifying Party in such defense.

     (d) Notwithstanding anything to the contrary in this Section 7, no amounts,
costs  or  expenses  to be  advanced  or paid by the  Indemnifying  Party  to an
Indemnified  Party, or incurred by the Indemnifying  Party  (including,  without
limitation,  the costs of defense,  investigation  and legal counsel incurred by
the Indemnifying  Party on behalf of the relevant  Indemnified Party) in advance
of a final,  non-appealable  determination as to the  culpability,  liability or
fault of the relevant Indemnified Party, or applicability of the indemnification
obligations of the Indemnifying  Party pursuant to this Section 7 (collectively,
"Advanced Costs"), shall be advanced, paid, incurred or required to be advanced,
paid  or  incurred,  unless  the  Indemnifying  Party  shall  have  received  an
undertaking  by or on  behalf  of the  relevant  Indemnified  Party  (including,
without  limitation,  the  posting  of a  bond)  in an  amount  and  upon  terms
reasonably satisfactory to the Indemnifying Party, to reimburse the Indemnifying
Party  in  full  for  Advanced   Costs  which  are   determined,   by  a  final,
non-appealable  determination,  to have not been properly payable or owing to or
on behalf of the relevant  Indemnified Party by the Indemnifying  Party pursuant
to this Section 7.

     (e)  Notwithstanding  anything  to the  contrary  in  this  Agreement,  the
indemnification provided for in this Section 7 shall be in addition to any other
claim and remedy of an Buyer and any other Indemnified Party at law or in equity
for any Loss,  actually incurred by such Indemnified  Party based upon,  arising
out of, by reason of or otherwise in respect of or in connection  with any third
party action,  suit,  proceeding or claim;  provided,  however,  that any amount
received under this Section 7 by such  Indemnified  Party shall be deducted from
any  other  award  received  by such  Indemnified  Party  based  on  such  Loss.
Notwithstanding anything to the contrary in this Section 7.4(e), the limitations
on indemnification set forth in Section 7.3 hereof shall be deemed to apply with
equal force and effect with respect to any actions, suits, proceedings,  claims,
causes of action, remedies or Losses which the Buyer may have in addition to the
indemnification provided for in this Section 7 at law or in equity.

                                       21
<PAGE>
                                  ARTICLE VIII
                            COVENANTS OF THE PARTIES

     Section 8.1 Conduct of Business.  (a) During the period  commencing  on the
date of this  Agreement and ending on the Closing Date,  other than as permitted
in writing by APDN,  each of the Company  and the BVI Sub shall  preserve in all
material  respects  the  Purchased  Assets,  and  endeavor to  preserve,  in all
material respects, the goodwill and relationships with customers,  suppliers and
others having business dealings with the Company.

     (b) Prior to the Closing Date,  without the prior written  consent of APDN,
neither  of the  Sellers  nor the BVI Sub  shall  create,  incur or  assume  any
Encumbrance  upon the  Purchased  Stock or the  Purchased  Assets.  Prior to the
Closing Date,  without the prior written consent of APDN, neither of the Sellers
nor the BVI Sub shall sell, lease (as lessor),  license (as licensor),  transfer
or otherwise dispose of, any of the Purchased Stock or the Purchased Assets.

     Section 8.2 Access to Information;  Maintenance of Records. (a) Between the
date of this Agreement and the Closing Date, the Company shall,  during ordinary
business  hours,  upon  reasonable  notice (i) give APDN and APDN  Subreasonable
access to the Company's  books,  records,  plants,  offices and other facilities
relating to the Purchased Assets or where the Purchased Assets are located, (ii)
permit APDN to make such reasonable  inspections  thereof as they may reasonably
request,  and (iii) furnish APDN and APDN Sub with such  financial and operating
data and other information with respect to the Purchased Assets as APDN and APDN
Sub may from time to time reasonably request.  Notwithstanding  anything in this
Section  8.2(a) to the contrary,  APDN and APDN Sub shall not have access to the
Company's employee records and personnel and medical records.

     (b) All  information  furnished  to or obtained by the Buyers or any of the
Buyers'   Representatives  or  any  of  the  Sellers  or  any  of  the  Sellers'
Representatives  pursuant  to this  Agreement  shall be treated as  Confidential
Information of the disclosing party for all purposes.  Each Party agrees to hold
in confidence,  and protect, such Confidential  Information with the same degree
of care as it uses for its own  Confidential  Information,  and in any  event at
least a reasonable degree of care.

     (c) For a period of three (3) years after the Closing, the Buyers and their
respective  successors and assigns shall have  reasonable  access to each of the
Sellers'  books and records  relating to the  Purchased  Assets,  including  all
information  pertaining to the Assumed  Agreements or other matters  relating to
the Purchased  Assets.  Such access shall be afforded by the Party in possession
of such books and records upon receipt of reasonable  advance  notice and during
normal  business  hours;  provided,  however,  that (i) any such access shall be
conducted in such a manner as not to interfere  unreasonably  with the operation
of the business of any Party, (ii) no Party shall be required to take any action
which would constitute a waiver of the attorney-client  privilege,  and (iii) no
Party need supply the other party with any information which such Party is under
a legal  obligation  not to supply.  The Party  exercising  this right of access
shall be solely responsible for any costs or expenses incurred by it pursuant to
this Section 8.2(c).  If the Party in possession of such books and records shall
desire to dispose of any such books and records upon or prior to the  expiration

                                       22
<PAGE>
of such period,  such Party  shall,  prior to such  disposition,  give the other
Party a reasonable  opportunity at such other Party's expense,  to segregate and
remove such books and records as such other Party may select.

     Section 8.3 Expenses.  All costs and expenses  incurred in connection  with
this Agreement and the  transactions  contemplated  hereby shall be borne by the
party incurring such costs and expenses.

     Section 8.4 Further Assurances.  (a) Subject to the terms and conditions of
this Agreement,  each of the Parties hereto shall use reasonable best efforts to
take,  or cause to be taken,  all  action,  and to do, or cause to be done,  all
things  reasonably  necessary,  proper or advisable  under  applicable  laws and
regulations to consummate and make effective the sale of the Purchased  Stock in
accordance  with this  Agreement,  including  using  reasonable  best efforts to
ensure  timely  satisfaction  of  the  conditions   precedent  to  each  Party's
obligations  hereunder.  Neither  any of the Sellers nor the BVI Sub, on the one
hand,  nor the Buyers,  on the other  hand,  shall,  without  the prior  written
consent of the other Party,  take any action which would  reasonably be expected
to  prevent  or  materially  impede,  interfere  with or delay the  transactions
contemplated by this Agreement.  From time to time on or after the Closing Date,
each  of the  Sellers  and the BVI Sub  shall,  at its own  respective  expense,
execute and deliver such  documents  to the Buyers as the Buyers may  reasonably
request in order to more  effectively  vest in the Buyers title to the Purchased
Assets,  subject  to  Permitted  Encumbrances.  From time to time after the date
hereof,  the Buyers  shall,  at their own  expense,  execute  and  deliver  such
documents to the Sellers as the Sellers may reasonably  request in order to more
effectively  consummate  the sale of the Purchased  Stock and the assumption and
assignment of the Assumed  Liabilities and the Assumed  Agreements in accordance
with this Agreement.

     (b) In the event that any  Purchased  Asset shall not have been conveyed to
the Buyers at the Closing,  each of the Sellers  shall,  subject to Section 2.6,
use reasonable best efforts to convey such asset to the Buyers as promptly as is
practicable after the Closing.

     Section 8.5 Tax Matters.  All excise,  sales, use,  transfer,  value added,
registration, stamp, recording and similar Taxes, levies, charges and recording,
filing and other fees  (collectively,  "Transfer  Taxes") incurred in connection
with the  transactions  contemplated  by this Agreement shall be paid equally by
APDN and or APDN Sub and the Company.  The Buyers shall, at the equal expense of
the Buyers and Sellers,  timely pay and file all necessary Tax returns and other
documentation  with  respect to all such  Transfer  Taxes and,  if  required  by
applicable  law, the Sellers  shall join in the execution of any Tax returns and
other documentation at the Buyers' request.

     Section 8.6 Litigation  Support.  In the event and for so long as either of
the Buyers are  actively  contesting  or  defending  against any  action,  suit,
proceeding,  hearing,  investigation,  charge,  complaint,  claim,  or demand in
connection with (a) any transaction contemplated under this Agreement or (b) any
fact, situation,  circumstance,  status,  condition,  activity,  practice, plan,
occurrence,  event, incident, action, failure to act, or transaction relating to
the  Purchased  Stock or the Purchased  Assets and either of the Buyers'  rights
thereunder, the Sellers and the BVI Sub will cooperate with the Buyers and their
counsel in the contest or defense, make available its respective personnel,  and
provide  such  testimony  and access to each of the  Seller's  and the BVI Sub's

                                       23
<PAGE>
books and  records  as shall be  reasonably  necessary  in  connection  with the
contest or defense, all at the sole cost and expense of the Buyers.

     Section 8.7  Notification.  The Company  shall notify APDN and the APDN Sub
and keep them advised of the occurrence of (a) any litigation or  administrative
proceeding pending or, to the Knowledge of either of the Company or the BVI Sub,
threatened  against  either  of the  Sellers  or the BVI  Sub  which  could,  if
adversely determined, have a Material Adverse Effect and (b) any material damage
or  destruction  of any of the  Purchased  Assets.  The Buyers  shall notify the
Sellers  and keep them  advised of the  occurrences  of any event or  occurrence
which could  reasonably be expected to materially  adversely  affect the Buyers'
ability to consummate the transactions contemplated hereby.

     Section 8.9 Covenant Not to Compete. For a period of twenty (20) years from
and after the Closing  Date,  neither  the  Company nor the BVI Sub,  nor any of
their respective stockholders, officers, directors or key employees shall engage
in the Business,  directly or indirectly,  except in accordance with the License
Agreement.   Each  such  Person  shall  execute  a   non-competition   agreement
(collectively,  the  "Non-Competition  Agreements") with the Buyers on terms and
conditions as provided  therein.  If the final  judgment of a court of competent
jurisdiction  declares that any term or provision of this Section 8.9 is invalid
or unenforceable, then the Parties agree that the court making the determination
of  invalidity  or  unforceability  shall  have the power to reduce  the  scope,
duration,  or area of the term or  provision  with a term or  provision  that is
valid and  enforceable and that comes closest to expressing the intention of the
invalid  or  unenforceable  term or  provision,  and  this  Agreement  shall  be
enforceable  as so modified  after the  expiration  of the time within which the
judgment may be appealed.

     Section 8.10 Risk of Loss.  Until the Closing,  the risk of loss and damage
to the Purchased Assets shall be borne by the Sellers.

     Section 8.11 No Acquisition Transactions.  Upon execution of this Agreement
as set forth or until its termination in Article 10 below neither of the Sellers
nor the BVI Sub will directly or indirectly  transfer or dispose of or encumber,
or solicit or engage in any negotiations or discussions  regarding the transfer,
disposition  or  encumbrance  of, all or any part of the Purchased  Stock or the
Purchased  Assets  with any third  party  and  shall not enter  into any form of
agreement  relating to any such  transfer,  disposition  or  encumbrance  of the
Purchased Stock or the Purchased Assets. If either of the Sellers or the BVI Sub
receives any such  unsolicited  Acquisition  Proposal  from any third party,  it
promptly shall notify APDN of such Acquisition  Proposal,  the terms thereof and
the party making the same.

     Section  8.12  Compliance  with the License  Agreement.  The Company  shall
comply  with the  product  supply and  technical  assistance  provisions  of the
License  Agreement,  such provisions as listed on Exhibit K attached  hereto.  A
breach of such provisions or of any other provisions of the License Agreement by
the Company shall also be a breach of this Agreement.


                                       24
<PAGE>
                                   ARTICLE IX
                              CONDITIONS TO CLOSING

     Section 9.1  Conditions to Each Party's  Obligations to Effect the Closing.
The respective  obligations of each Party to effect the sale and purchase of the
Purchased  Stock shall be subject to the  fulfillment at or prior to the Closing
Date of the following conditions:

     (a) no preliminary or permanent  injunction or other order or decree by any
federal or state court which prevents the consummation of the sale of a material
part of the Purchased Stock or Purchased Assets  contemplated  hereby shall have
been issued and remain in effect (each Party agreeing to use its reasonable best
efforts to have any such  injunction,  order or decree  lifted)  and no statute,
rule or regulation shall have been enacted by any  Governmental  Authority which
prohibits  the  consummation  of the sale of the  Purchased  Stock or  Purchased
Assets; and

     (b) no  petition  shall have been filed  with the  bankruptcy  Court or any
court seeking to  reorganize  or liquidate  either of the Company or the BVI Sub
nor shall a trustee or receiver have been  appointed to take charge of either of
the Company's or the BVI Sub's assets and business.

     Section 9.2 Conditions to  Obligations of the Buyer.  The obligation of the
Buyers to effect  the  purchase  of the  Purchased  Stock  contemplated  by this
Agreement shall be subject to the fulfillment at or prior to the Closing Date of
the following additional conditions:

     (a) each of the Sellers and the BVI Sub shall have  performed  and complied
in all material  respects with the covenants  contained in this Agreement  which
are required to be performed and complied with by such entity on or prior to the
Closing Date and the representations and warranties of each of the Sellers which
are set forth in this Agreement (without regard as to any qualifications therein
as to materiality)  shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date (except to the extent that any
such  representation  or warranty speaks as of a particular date) as though made
at and as of the Closing Date.

     (b) the Buyers shall have received a certificate  from the chief  executive
officer of each of the Company and the BVI Sub dated as of the Closing  Date, to
the effect that, to the best of such  officer's  knowledge,  the  conditions set
forth in Section 9.2(a) have been satisfied;

     (c) the Purchased  Stock and the Purchased  Assets shall have been released
from all  Encumbrances and there shall be no Encumbrances on the Purchased Stock
or the Purchased Assets (other than the Permitted Encumbrances);

     (d)  each of the  Sellers  and the BVI Sub  shall  have  complied  with the
requirements  to permit the sale and  transfer  of the  Purchased  Stock and the
Purchased Assets to the Buyers on the terms of this Agreement, free and clear of
all Encumbrances (except Permitted Encumbrances);

     (e)  none  of  the  Purchased  Assets  shall  have  been  destroyed,  lost,
confiscated, abandoned or otherwise made impossible for sale and transfer to the
Buyers under the terms of this Agreement;

     (f) the Buyers' patent counsel shall have completed a due diligence  review
of the  Patents,  patent  applications  and patent  disclosures,  continuations,
renewals and divisions;  trademarks,  service marks,  trade dress,  trade names,
corporate names, logos and Internet domain names, and trademark and service mark
registrations,  renewals and applications therefor and issued its report thereon
in form and scope satisfactory to Buyers in their sole discretion;

     (g)  the  Company  Shareholders  shall  have  formed  the  BVI  Sub and the
Purchased Assets shall have been sold or otherwise  transferred from the Company
to the BVI Sub; and

     (h) the Buyers shall have received the other items to be delivered pursuant
to Section 4.2.

     Any  condition  specified  in this Section 9.2 may be waived by the Buyers;
provided that no such waiver shall be effective  against the Buyers unless it is
set forth in a writing executed by the Buyers.

     Section 9.3 Conditions to Obligations of the Seller. The obligation of each
Seller to effect the sale of the Purchased Stock  contemplated by this Agreement
shall be  subject  to the  fulfillment  at or prior to the  Closing  Date of the
following additional conditions:

                                       25
<PAGE>

     (a) the Buyers shall have  performed and complied in all material  respects
with  the  covenants  contained  in this  Agreement  which  are  required  to be
performed  and  complied  with by the Buyers on or prior to the Closing Date and
the  representations  and  warranties  of the Buyers which are set forth in this
Agreement  (without regard as to any  qualifications  therein as to materiality)
shall  be true  and  correct  in all  material  respects  as of the date of this
Agreement  and as of the  Closing  Date  (except  to the  extent  that  any such
representation or warranty speaks as of a particular date) as though made at and
as of the Closing Date;

     (b) the  Sellers  shall have  received  a  certificate  from an  authorized
officer of the each of the Buyers,  dated as of the Closing  Date, to the effect
that,  to the best of such  officer's  knowledge,  the  conditions  set forth in
Section 9.3(a) have been satisfied;

     (c) the provisions of the Engagement  Agreement  between Giuliani  Partners
LLC and APDN dated August 3, 2004 shall be revised in a manner  satisfactory  to
the Company;

     (d) the  Board of  Directors  of APDN  shall be  reconstituted  in a manner
satisfactory to the Company;

     (e) the APDN Sub shall have been formed by APDN; and

     (f) the Sellers  shall have  received the other items to be delivered to it
pursuant to Section 4.3.

     Any  condition  specified in this Section 9.3 may be waived by the Sellers;
provided that no such waiver shall be effective against the Sellers unless it is
set forth in writing executed by the Sellers.

                                       26
<PAGE>
                                    ARTICLE X
                           TERMINATION AND ABANDONMENT

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

     (a) written consent of the Company and APDN;

     (b) APDN, if there has been a material violation or breach by either of the
Sellers of any covenant,  representation  or warranty made by them  contained in
this  Agreement  which has  prevented the  satisfaction  of any condition to the
obligations of the Buyers to effect the Closing and such violation or breach has
not been cured by the Seller within ten (10) Business Days of receipt of written
notice thereof or waived by the Buyers;

     (c) the Company, if there has been a material violation or breach by either
of the Buyers of any covenant,  representation  or warranty made by it contained
in this Agreement  which has prevented the  satisfaction of any condition to the
obligations  of the Sellers to effect the Closing and such  violation  or breach
has not been cured by the Buyers  within  ten (10)  Business  Days of receipt of
written notice thereof or waived by the Sellers;

     (d) the Company or APDN, if (i) there shall be any law or  regulation  that
makes consummation of the transactions  contemplated hereby illegal or otherwise
prohibited or (ii)  consummation of the transactions  contemplated  hereby would
violate any  nonappealable  final  order,  decree or judgment of the  bankruptcy
court or any court or governmental body having competent jurisdiction; or

     (e) the Company or APDN, if the Closing shall not have occurred on or prior
to July 31, 2005 (the "Termination Date"); provided that the neither the Company
nor APDN,  as the case may be,  shall be entitled to  terminate  this  Agreement
pursuant  to this  Section  10.1(e) if the failure of the Closing to occur on or
prior to such date results  primarily  from such Party itself or its  respective
affiliate breaching any  representation,  warranty or covenant contained in this
Agreement.

     Section  10.2  Procedure  and  Effect of  Termination.  (a) In the event of
termination of this Agreement and abandonment of the  transactions  contemplated
hereby by either or both of the Parties pursuant to Section 10.1, written notice
thereof shall forthwith be given by the terminating Party to the other Party and
this Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by any of the Parties hereto.

     (b) If this Agreement is terminated as provided  herein,  said  termination
shall  not be the  sole  remedy  of  the  Parties  hereto  with  respect  to any
termination  not due to a Party's  breach  of any  covenant,  representation  or
warranty  contained in this  Agreement  and the  non-breaching  Party shall have
available  all other  remedies  available  to it at law or in equity;  provided,
however,  it is hereby agreed that if  termination is due to a breach or default
by the other Party,  then, in addition to all other remedies  available to it at
law  or  in  equity,  the  non-breaching  Party  shall  be  reimbursed  for  its
out-of-pocket  expenses  incurred in connection  with this Agreement and actions
related  thereto  (including  any due  diligence  review  by the  Buyers  of the
Purchased Assets). In such an instance,  the breaching Party shall reimburse the
non-breaching  Party's  expenses  promptly upon receipt of an accounting of such
expenses; and

                                       27
<PAGE>
     (c) all  Confidential  Information from the Company or the BVI Sub shall be
returned to the Company,  and all  Confidential  Information  from either of the
Buyers shall be returned to the Buyers.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

     Section 11.1  Amendment and  Modification.  This  Agreement may be amended,
modified or supplemented only by written agreement of the Company and APDN.

     Section 11.2 Waiver of Compliance;  Consents.  Except as otherwise provided
in this  Agreement,  any  failure  of any of the  Parties  to  comply  with  any
obligation,  covenant or condition herein may be waived by the Party entitled to
the benefits thereof only by a written  instrument  signed by the Party granting
such waiver,  but such waiver or failure to insist upon strict  compliance  with
such  obligation,  covenant,  or condition  shall not operate as a waiver of, or
estoppel with respect to any subsequent or other failure.

     Section 11.3  Survival.  The Parties  hereto agree that only the  covenants
contained  in this  Agreement to be performed at or after the Closing Date shall
survive  the Closing  hereunder,  and each Party  hereto  shall be liable to the
other after the Closing Date for any breach thereof.

     Section 11.4 Intentionally not used.

     Section 11.5 Notices. All notices and other communications  hereunder shall
be in writing and shall be deemed given (i) when personally  sent/delivered,  by
facsimile  transmission  (with hard copy to  follow) or sent by express  courier
(charges  prepaid)  or (ii) five (5) days  following  mailing by  registered  or
certified  mail postage  prepaid and return  receipt  requested.  Unless another
address is  specified in writing,  notices,  demands and  communications  to the
Sellers and the Buyers shall be sent to the addresses indicated below:

         If to either of the Company or the BVI  Sub, to:

                  Biowell Technology, Inc.
                  18F No 959 Chung Cheng Road
                  Chungho City
                  Taipai County
                  Taiwan 235
                  ROC

         with a copy to:            Dr. Jun-Jei Sheu
                                    Chairman & CEO
                                    Fax: 011-886-2-22215258



                                       28
<PAGE>

if to the Buyers, to:

                  Applied DNA Sciences, Inc.
                  9229 West Sunset Boulevard, Suite 830
                  Los Angeles, California 90069

         with a copy to:            Peter Brocklesby
                                    President
                                    Fax: 310-860-1303

     Section 11.6  Assignment.  This Agreement and all of the provisions  hereof
shall be binding  upon and inure to the benefit of the parties  hereto and their
respective  successors and permitted,  but neither this Agreement nor any of the
rights,  interests  or  obligations  hereunder  shall be  assigned  by any party
hereto,  including by operation of law, without the prior written consent of the
other Party; provided,  however, each of the Buyers shall be permitted to assign
the Agreement to an affiliate without the consent of the Sellers. Any assignment
of this Agreement or any of the rights,  interests or  obligations  hereunder in
contravention  of this Section 11.6 shall be null and void and shall not bind or
be recognized by the Company or APDN.

     Section 11.7 Third-Party  Beneficiaries.  If either of the Buyers sells any
of the Purchased Stock or the Purchased  Assets within three (3) years following
the Closing  Date,  the Buyers may  designate  the  purchase of such assets as a
third party beneficiary of the representations, warranties and covenants of each
of the Sellers.

     Section 11.8 Severability. If any term or other provision of this Agreement
is invalid,  illegal or incapable of being enforced by any rule of law or public
policy,  all other terms,  conditions  and  provisions of this  Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions  contemplated hereby is not affected in any manner
materially  adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties hereto
shall  negotiate  in good  faith to modify  this  Agreement  so as to effect the
original  intent of the Parties as closely as possible in a mutually  acceptable
manner in order that the  transactions  contemplated  hereby be  consummated  as
originally contemplated to the fullest extent possible.

     Section  11.9  Governing  Law.  This  Agreement  shall be  governed  by and
construed in accordance with the laws of the State of Nevada  (regardless of the
laws that might  otherwise  govern under  applicable  principles of conflicts of
law) as to all  matters,  including  but not  limited to  matters  of  validity,
construction, effect, performance and remedies.

     Section 11.10 Submission to Jurisdiction. Any dispute, controversy or claim
arising  out of or  relating  to  this  Agreement  or  any  other  agreement  or
instrument  contemplated hereby or entered into in connection herewith or any of
the  transactions  contemplated  hereby or thereby  shall be resolved by binding
arbitration.  The arbitration shall be conducted by the International Chamber of
Commerce which shall administer the arbitration  under its commercial rules. The
arbitration  shall  take  place  in  Den  Haag,  Holland.   The  parties  hereto
irrevocably  submit to the exclusive  jurisdiction  of such entity.  The parties
hereby irrevocably waive, to the fullest extent permitted by applicable law, any
objection  which  they may now or  hereafter  have to the laying of venue of any
such  dispute  brought in such venue or any  defense  of  inconvenient  forum in
connection therewith.

                                       29
<PAGE>
     Section 11.11  Counterparts.  This  Agreement may be executed and delivered
(including by facsimile  transmission) in two or more  counterparts,  and by the
different Parties hereto in separate counterparts,  each of which, when executed
and delivered, shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.

     Section 11.12  Incorporation  of Exhibits and  Schedules.  The Exhibits and
Schedules attached hereto and referred to herein are hereby  incorporated herein
by reference and made a part of this  Agreement for all purposes as if fully set
forth herein.

     Section 11.13 Entire Agreement.  This Agreement (including the Exhibits and
the Schedules) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and  understandings
among the parties with respect thereto.

     Section  11.14  Headings.   The  descriptive  headings  contained  in  this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.

     Section  11.15  Equitable  Remedies.  Each of the  Sellers  and each of the
Buyers  hereby  acknowledge  and agree that money damages may not be an adequate
remedy  for any breach or  threatened  breach of any of the  provisions  of this
Agreement and that, in such event, the Sellers or their respective successors or
assigns,  or the Buyers or their respective  successors or assigns,  as the case
may be,  may, in addition  to any other  rights and  remedies  existing in their
favor,  apply any court of  competent  jurisdiction  for  specific  performance,
injunctive  and/or other relief in order to enforce or prevent any violations of
this Agreement.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       30
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed  as of the  date  first  above  written  by their  respective  officers
thereunto duly authorized.



                                             BIOWELL TECHNOLOGY, INC.


                                             By:  /s/ DR. J.J. SHEU
                                                  -----------------
                                                  Name: Dr. J.J. Sheu
                                                  Title: Chairman & CEO


                                             APPLIED DNA SCIENCES, INC.



                                             By:  /s/ PETER P. BROCKLESBY
                                                  -----------------------
                                                  Name: P. Brocklesby
                                                  Title: President

                                       31














</TEXT>
</DOCUMENT>
