SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of December
21, 2010, by and among CFO Consultants, Inc., a Nevada corporation (the
“Company”) and the investors identified on the signature pages hereto (each, an
“Investor” and collectively, the “Investors”).
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to exemptions from registration under the Securities Act (as defined
below), the Company desires to issue and sell to each Investor and each
Investor, severally and not jointly, desires to purchase from the Company,
certain securities of the Company, as more fully described in this Agreement.
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:
 
ARTICLE 1.
DEFINITIONS
 
1.1.          Definitions.  In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:
 
“Action” means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending
or threatened in writing against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator, governmental
or administrative agency, regulatory authority (federal, state, county, local or
foreign), stock market, stock exchange or trading facility.
 
“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144.
 
“Business Day” means any day except Saturday, Sunday and any day which is a
federal legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other governmental action to close.
 
“Buy-In” has the meaning set forth in Section 4.1(c).
 
“Closing” means the closing of the purchase and sale of the Securities pursuant
to Article II.
 
“Closing Date” means the Business Day on which all of the conditions set forth
in Sections 5.1 and 5.2 hereof are satisfied, or such other date as the parties
may agree.

 
 

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"Closing Escrow Agreement" means the Closing Escrow Agreement, dated as of the
date hereof, between the Company and the escrow agent (the “Escrow Agent”)
identified therein, in the form of Exhibit C hereto.
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any securities into which such common stock may hereafter be
reclassified or for which it may be exchanged as a class.
 
“Common Stock Equivalents” means any securities of the Company or any Subsidiary
which entitle the holder thereof to acquire Common Stock at any time, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.
 
“Company Counsel” means Loeb & Loeb LLP.
 
“Company Deliverables” has the meaning set forth in Section 2.2(a).
 
“Disclosure Materials” has the meaning set forth in Section 3.1(h).
 
“Effective Date” means the date that the Registration Statement required by
Section 2(a) of the Registration Rights Agreement is first declared effective by
the Commission.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“GAAP” means U.S. generally accepted accounting principles.
 
“Intellectual Property Rights” has the meaning set forth in Section 3.1(p).
 
“Investment Amount” means, with respect to each Investor, the Investment Amount
indicated on such Investor’s signature page to this Agreement.
 
“Investor Deliverables” has the meaning set forth in Section 2.2(b).
 
“Investor Party” has the meaning set forth in Section 4.7.
 
“Lien” means any lien, charge, encumbrance, security interest, right of first
refusal, right of participation or other restrictions of any kind.
 
“Lockup Agreement” means collectively, the Lockup Agreements, each dated as of
the Closing Date, by and between the Company and each person listed as a
signatory thereto, in the form attached as Exhibit E hereto.
 
“Losses” means any loss, liability, obligation, claim, contingency, damage, cost
or expense, including all judgments, amounts paid in settlements, court costs
and reasonable attorneys’ fees and costs of investigation related thereto.

 
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“Make Good Escrow Agreement” means the Make Good Escrow Agreement, dated as of
the date hereof, among the Company, Kai Bo Holdings Ltd., as make good pledgor,
and Collateral Agents, LLC, as escrow agent (the “Make Good Escrow Agent”), in
the form of Exhibit D hereto.
 
“Material Adverse Effect” means any of (i) a material and adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material and adverse effect on the results of operations, assets, prospects,
business or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, except for results or consequences attributable
to the effects of, or changes in, general economic or capital markets conditions
or effects and changes that generally affect the industries in which the Company
operates, such as regulatory action by the PRC or municipal governments or (iii)
a material and adverse impairment to the Company’s ability to perform on a
timely basis its obligations under any Transaction Document.
 
“New York Courts” means the state and federal courts sitting in the City of New
York, Borough of Manhattan.
 
“Outside Date” means the sixtieth day following the date of this Agreement.
 
“PRC” means, for the purpose of this Agreement, the People’s Republic of China,
not including Taiwan, Hong Kong and Macau.
 
“Per Share Purchase Price” equals $0.25.
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the date of this Agreement, among the Company and the Investors, in the
form of Exhibit A hereto.
 
“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Investors of the Securities and the Escrow Shares (as defined in the Make Good
Escrow Agreement).
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“SEC Reports” has the meaning set forth in Section 3.1(h).

 
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“Securities” means the Shares, the Warrants and the Warrant Shares.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Share Delivery Date” has the meaning set forth in Section 4.1(c).
 
“Shares” means the shares of Common Stock being offered and sold to the
Investors by the Company hereunder.
 
“Short Sales” include, without limitation, all “short sales” as defined in Rule
200 promulgated under Regulation SHO under the Exchange Act and all types of
direct and indirect stock pledges, forward sale contracts, options, puts, calls,
swaps and similar arrangements (including on a total return basis), and sales
and other transactions through non-US broker dealers or foreign regulated
brokers.
 
“Subsidiary” means any “significant subsidiary” as defined in Rule 1-02(w) of
the Regulation S-X promulgated by the Commission under the Exchange Act.  For
purposes of this Agreement, the term Subsidiaries shall be deemed to include
Hong Kong Wai Bo International Limited, Yunnan Zhaoyang Weili Starch Co, Ltd.,
Guizhou Province Weining Weili Starch Co., Ltd. and Gansu Weibao Starch Co.,
Ltd.
 
“Trading Day” means (i) a day on which the Common Stock is traded on a Trading
Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed on a Trading Market (other than the OTC Bulletin Board), a day on which
the Common Stock is traded in the over-the-counter market, as reported by the
OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading
Market, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.
 
“Trading Market” means whichever of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the
NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed
or quoted for trading on the date in question.
 
“Transaction Documents” means this Agreement, the Registration Rights Agreement,
the Warrants, the Lockup Agreement, the Closing Escrow Agreement, the Make Good
Escrow Agreement and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
 
“Warrants” means the Common Stock purchase warrants in the form of Exhibit B,
which are issuable  to the Investors at the Closing.
 
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

 
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ARTICLE 2.
PURCHASE AND SALE
 
2.1.          Closing.  Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Investor, and
each Investor shall, severally and not jointly, purchase from the Company, a)
the Shares representing such Investor’s Investment Amount, calculated as the
quotient of such Investor’s Investment Amount divided by the Per Share Purchase
Price; as set forth opposite such Investor's name on the Schedule of Investors,
and (b) the Warrants to acquire that number of Warrant Shares set forth opposite
such Investor's name on the Schedule of Investors..  The Closing shall take
place at the offices of Pillsbury Winthrop Shaw Pittman LLP, counsel for Roth
Capital Partners, LLC, at 1540 Broadway, New York, NY 10036 on the Closing Date
or at such other location or time as the parties may agree.
 
2.2.          Closing Deliveries.  (a)  At the Closing, the Company shall
deliver or cause to be delivered to each Investor the following (the “Company
Deliverables”):
 
(i)           a single certificate representing that number of aggregate Shares
to be issued and sold at Closing to such Investor, registered in the name of
such Investor;
 
(ii)          a Warrant, registered in the name of such Investor, pursuant to
which such Investor shall have the right to acquire the number of shares of
Common Stock equal to 20% of the number of Shares issuable to such Investor
pursuant to Section 2.2(a)(i), at an exercise price per share that is equal to
130% of the Per Share Purchase Price;
 
(iii)         the Closing Escrow Agreement, duly executed by all parties
thereto;
 
(iv)         the Make Good Escrow Agreement, duly executed by all parties
thereto;
 
(v)          the legal opinion of Company Counsel, in agreed form, addressed to
the Investors;
 
(vi)         the Registration Rights Agreement, duly executed by the Company;
and
 
(vii)        the Lockup Agreements, duly executed by each party thereto.
 
(b)           At the Closing, each Investor shall deliver or cause to be
delivered the following (collectively, the “Investors Deliverables”):
 
(i)           to the Escrow Agent, for deposit and disbursement in accordance
with the Closing Escrow Agreement, its Investment Amount, in immediately
available funds, by wire transfer to an account designated in writing by the
Company for such purpose; and
 
(ii)          to the Company, the Registration Rights Agreement, the Closing
Escrow Agreement and the Investor Questionnaires, duly executed by such
Investor.

 
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ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
 
3.1.         Representations and Warranties of the Company.  The Company hereby
makes the following representations and warranties to each Investor:
 
(a)           Subsidiaries.  The Company has no direct or indirect Subsidiaries
other than as specified in the Schedule 3.1(a).  Except as disclosed in Schedule
3.1(a), the Company owns, directly or indirectly, all of the capital stock of
each Subsidiary free and clear of any and all Liens, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights.
 
(b)           Organization and Qualification.  The Company and each Subsidiary
are duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents.  The Company and each Subsidiary are
duly qualified to conduct its respective businesses and are in good standing as
a foreign corporation or other entity in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.
 
(c)           Authorization; Enforcement.  The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder.  The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company in
connection therewith.  Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with
the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

 
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(d)           No Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company’s or any Subsidiary’s certificate or
articles of incorporation, bylaws or other organizational or charter documents,
or (ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect.
 
(e)           Filings, Consents and Approvals.  The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any United States or People’s Republic of
China court or other federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than (i) the filing with the
Commission of one or more Registration Statements in accordance with the
requirements of the Registration Rights Agreement, (ii) filings required by
state securities laws, (iii) the filing of a Notice of Sale of Securities on
Form D with the Commission under Regulation D of the Securities Act, (iv) the
filings required in accordance with Section 4.5 and (v) those that have been
made or obtained prior to the date of this Agreement.
 
(f)           Issuance of the Shares.  The Securities have been duly authorized
and, when issued and paid for in accordance with the Transaction Documents, will
be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens.  The Company has reserved from its duly authorized capital stock the
shares of Common Stock issuable pursuant to this Agreement and the Warrants in
order to issue the Shares and the Warrant Shares.
 
(g)           Capitalization.  The number of shares and type of all authorized,
issued and outstanding capital stock of the Company, and all shares of Common
Stock reserved for issuance under the Company’s various option and incentive
plans, is specified in the SEC Reports.  Except as specified in the SEC Reports,
no securities of the Company are entitled to preemptive or similar rights, and
no Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.  Except as specified in the SEC
Reports, there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any Person
any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common
Stock.  The issue and sale of the Securities hereunder will not, immediately or
with the passage of time, obligate the Company to issue shares of Common Stock
or other securities to any Person (other than the Investors) and will not result
in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.

 
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(h)           SEC Reports; Financial Statements.  To the knowledge of the
Company, the Company has filed all reports required to be filed by it under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the twelve months preceding the date hereof (or such shorter
period as the Company was required by law to file such reports) (the foregoing
materials being collectively referred to herein as the “SEC Reports” and,
together with the Schedules to this Agreement (if any), the “Disclosure
Materials”) on a timely basis or has timely filed a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing.  Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.
 
(i)           Press Releases.  The press releases disseminated by the Company
prior to the date of this Agreement taken as a whole do not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made and when made, not misleading.
 
(j)           Material Changes.  Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports and except as arising as a result of the transactions
contemplated by the Transaction Documents, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables, accrued
expenses and other liabilities incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (iii) the Company has not altered
its method of accounting or the identity of its auditors, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock, and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to
existing Company stock option plans. The Company does not have pending before
the Commission any request for confidential treatment of information.

 
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(k)           Litigation.  There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Shares or (ii) except as specifically disclosed in the SEC
Reports, could, if there were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect.  Neither the Company nor any Subsidiary, nor any director or officer
thereof (in his or her capacity as such), is or has been the subject of any
Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty, except as specifically
disclosed in the SEC Reports.  There has not been, and to the knowledge of the
Company, there is not pending any investigation by the Commission involving the
Company or any current or former director or officer of the Company (in his or
her capacity as such).  The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the
Company or any Subsidiary under the Exchange Act or the Securities Act.
 
(l)             Labor Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.
 
(m)           Compliance.  Neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including, without limitation, all foreign, federal,
state and local laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and labor matters,
except in each case as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.  The Company is
in compliance with all effective requirements of the Sarbanes-Oxley Act of 2002,
as amended, and the rules and regulations thereunder, that are applicable to it,
except where such noncompliance could not have or reasonably be expected to
result in a Material Adverse Effect.
 
(n)           Regulatory Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, and neither the
Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such permits.
 
(o)           Title to Assets.  The Company and the Subsidiaries have valid land
use rights for all real property owned by them that is material to their
respective businesses and good and marketable title in all personal property
owned by them that is material to their respective businesses, in each case free
and clear of all Liens, except for Liens as do not materially affect the value
of such property and do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries. Any real
property and facilities held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases of which the Company
and the Subsidiaries are in compliance, except as could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

 
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(p)           Patents and Trademarks.  The Company and the Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to
so have could, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect (collectively, the “Intellectual Property
Rights”).  Neither the Company nor any Subsidiary has received a written notice
that the Intellectual Property Rights used by the Company or any Subsidiary
violates or infringes upon the rights of any Person.  Except as set forth in the
SEC Reports, to the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.
 
(q)           Insurance.  The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged.  The Company has no reason to believe
that it will not be able to renew its and the Subsidiaries’ existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business on terms
consistent with market for the Company’s and such Subsidiaries’ respective lines
of business.
 
(r)           Transactions With Affiliates and Employees.  Except as set forth
in the SEC Reports, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
 
(s)           Internal Accounting Controls.  Except as set forth in the SEC
Reports, the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (a) transactions are executed in
accordance with management’s general or specific authorization, (b) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (c) access to assets
is permitted only in accordance with management’s general or specific
authorization and (d) the recorded accountability for assets is compared with
the existing assets at quarterly intervals and appropriate action is taken with
respect to any material differences.  The Company maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15 under the Exchange Act)
that are effective in ensuring that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the Commission, including, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure.

 
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(t)           Solvency.  Based on the financial condition of the Company as of
the Closing Date (and assuming that the Closing shall have occurred), (i) the
Company’s fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company’s existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid.  The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).
 
(u)           Certain Fees.  Except as payable to Roth Capital Partners, LLC, no
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.  The Investors shall have no obligation with
respect to any fees or with respect to any claims (other than such fees or
commissions owed by an Investor pursuant to written agreements executed by such
Investor which fees or commissions shall be the sole responsibility of such
Investor) made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement.
 
(v)           Certain Registration Matters. Assuming the accuracy of the
Investors’ representations and warranties set forth in Section 3.2(b)-(e), no
registration under the Securities Act is required for the offer and sale of the
Shares and Warrants and the offer of the Warrant Shares by the Company to the
Investors under the Transaction Documents.  The Company is eligible to register
its Common Stock for resale by the Investors under Form S-1 promulgated under
the Securities Act.  Except as specified in Schedule 3.1(v), the Company has not
granted or agreed to grant to any Person any rights (including “piggy-back”
registration rights) to have any securities of the Company registered with the
Commission or any other governmental authority that have not been satisfied.
 
(w)           Listing and Maintenance Requirements.  Except as specified in the
SEC Reports, the Company has not, in the two years preceding the date hereof,
received notice from any Trading Market to the effect that the Company is not in
compliance with the listing or maintenance requirements thereof.  The Company
is, and has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with the listing and maintenance requirements for
continued listing of the Common Stock on the Trading Market on which the Common
Stock is currently listed or quoted.  The issuance and sale of the Shares under
the Transaction Documents does not contravene the rules and regulations of the
Trading Market on which the Common Stock is currently listed or quoted, and no
approval of the stockholders of the Company thereunder is required for the
Company to issue and deliver to the Investors the Shares contemplated by the
Transaction Documents.

 
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(x)           Investment Company.  The Company is not, and is not an Affiliate
of, and immediately following the Closing will not have become, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.
 
(y)           Application of Takeover Protections.  The Company has taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
Articles of Incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Investors as a
result of the Investors and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation the Company’s issuance of the Shares and the Investors’ ownership of
the Securities.
 
(z)           No Additional Agreements.  The Company does not have any agreement
or understanding with any Investor with respect to the transactions contemplated
by the Transaction Documents other than as specified in the Transaction
Documents.
 
(aa)           Consultation with Auditors.  The Company has consulted its
independent auditors concerning the accounting treatment of the transactions
contemplated by the Transaction Documents, and in connection therewith has
furnished such auditors complete copies of the Transaction Documents.
 
(bb)           Foreign Corrupt Practices Act.  Neither the Company or any
Subsidiary, nor to the knowledge of the Company, any agent or other person
acting on behalf of the Company or any Subsidiary, has, directly or indirectly,
(i) used any funds, or will use any proceeds from the sale of the Securities,
for unlawful contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any
foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company or any Subsidiary
(or made by any Person acting on their behalf of which the Company is aware)
which is in violation of law, or (iv) has violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.
 
(cc)           PFIC.  Neither the Company nor any Subsidiary is or intends to
become a “passive foreign investment company” within the meaning of Section 1297
of the U.S. Internal Revenue Code of 1986, as amended.
 
(dd)           OFAC. Neither the Company nor any Subsidiary nor, to the
knowledge of the Company, any director, officer, agent, employee, Affiliate or
Person acting on behalf of the Company or any Subsidiary, is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the sale of the Securities, or lend, contribute
or otherwise make available such proceeds to any Subsidiary, joint venture
partner or other Person or entity, towards any sales or operations in Cuba,
Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the
purpose of financing the activities of any Person currently subject to any U.S.
sanctions administered by OFAC.

 
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(ee)           Money Laundering Laws. The operations of each of the Company and
any Subsidiary are and have been conducted at all times in compliance with the
money laundering statutes of applicable jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any applicable governmental agency (collectively,
the “Money Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.
 
(ff)          Other Representations and Warranties Relating to the Company and
Subsidiaries.
 
(i)           All material consents, approvals, authorizations or licenses
requisite under PRC law for the due and proper establishment and operation of
the Company and its Subsidiaries have been duly obtained from the relevant PRC
governmental authorities and are in full force and effect.
 
(ii)           All filings and registrations with the PRC governmental
authorities required in respect of the Company and its Subsidiaries and its
capital structure and operations including, without limitation, the registration
with the Ministry of Commerce, the China Securities Regulatory Commission, the
State Administration of Industry and or their respective local divisions of
Commerce, the State Administration of Foreign Exchange, tax bureau and customs
authorities have been duly completed in accordance with the relevant PRC rules
and regulations, except where, the failure to complete such filings and
registrations does not, and would not, individually or in the aggregate, have a
Material Adverse Effect.
 
(iii)           The Company and its Subsidiaries have complied with all relevant
PRC laws and regulations regarding the contribution and payment of their
registered share capital, the payment schedule of which has been approved by the
relevant PRC governmental authorities.  There are no outstanding commitments
made by the Company or any Subsidiary to sell any equity interest in any
Subsidiary.
 
(iv)           No Subsidiary has received any letter or notice from any relevant
PRC governmental authority notifying it of revocation of any licenses or
qualifications issued to it or any subsidy granted to it by any PRC governmental
authority for non-compliance with the terms thereof or with applicable PRC laws,
or the lack of compliance or remedial actions in respect of the activities
carried out by such Subsidiary, except such revocation as does not, and would
not, individually or in the aggregate, have a Material Adverse Effect.
 
(v)           All Subsidiaries have conducted their business activities within
the permitted scope of business or has otherwise operated its business in
compliance with all relevant legal requirements and with all requisite licenses
and approvals granted by competent PRC governmental authorities other than such
non-compliance that do not, and would not, individually or in the aggregate,
have a Material Adverse Effect.  As to licenses, approvals and government grants
and concessions requisite or material for the conduct of any material part of
any Subsidiary’s business which is subject to periodic renewal, the Company has
no knowledge of any reasons related to such Subsidiary for which such requisite
renewals will not be granted by the relevant PRC governmental authorities.

 
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(gg)           With regard to employment and staff or labor, the Subsidiaries
have complied with all applicable PRC laws and regulations in all material
respects, including, without limitation, laws and regulations pertaining to
welfare funds, social benefits, medical benefits, insurance, retirement
benefits, pensions or the like, other than such non-compliance that do not, and
would not, individually or in the aggregate, have a Material Adverse Effect.
 
(hh)           Disclosure.  The Company confirms that neither it nor any Person
acting on its behalf has provided any Investor or its respective agents or
counsel with any information that the Company believes constitutes material,
non-public information concerning the Company, the Subsidiaries or their
respective businesses, except insofar as the existence and terms of the proposed
transactions contemplated hereunder may constitute such information. The Company
understands and confirms that the Investors will rely on the foregoing
representations and covenants in effecting transactions in securities of the
Company.  Except as specified below, all disclosure provided to the Investors
regarding the Company, the Subsidiaries or their respective businesses and the
transactions contemplated hereby, furnished by or on behalf of the Company
(including the Company’s representations and warranties set forth in this
Agreement) are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
 
Each Investor acknowledges and agrees that the Company has not made nor makes
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.1.
 
3.2.         Representations and Warranties of the Investors.  Each Investor
hereby, for itself and for no other Investor, represents and warrants to the
Company as follows:
 
(a)           Organization; Authority.  Such Investor is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out
its obligations thereunder. The execution, delivery and performance by such
Investor of the transactions contemplated by this Agreement has been duly
authorized by all necessary corporate or, if such Investor is not a corporation,
such partnership, limited liability company or other applicable like action, on
the part of such Investor.  Each of this Agreement and the Registration Rights
Agreement has been duly executed by such Investor, and when delivered by such
Investor in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Investor, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.

 
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(b)           Investment Intent.  Such Investor is acquiring the Securities as
principal for its own account for investment purposes only and not with a view
to or for distributing or reselling such Securities or any part thereof, without
prejudice, however, to such Investor’s right at all times to sell or otherwise
dispose of all or any part of such Securities in compliance with applicable
federal and state securities laws.  Subject to the immediately preceding
sentence, nothing contained herein shall be deemed a representation or warranty
by such Investor to hold the Securities for any period of time.  Such Investor
is acquiring the Securities hereunder in the ordinary course of its business.
Such Investor does not have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Securities.
 
(c)           Investor Status.  At the time such Investor was offered the
Securities, it was, and at the date hereof it is, an “accredited investor” as
defined in Rule 501(a) under the Securities Act.  Such Investor is not a
registered broker-dealer under Section 15 of the Exchange Act.
 
(d)           General Solicitation.  Such Investor is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
 
(e)           Access to Information.  Such Investor acknowledges that it has
reviewed the Disclosure Materials and has been afforded (i) the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Subsidiaries
and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment.  Neither such inquiries nor any other investigation conducted by or
on behalf of such Investor or its representatives or counsel shall modify, amend
or affect such Investor’s right to rely on the truth, accuracy and completeness
of the Disclosure Materials and the Company’s representations and warranties
contained in the Transaction Documents.  Such Investor acknowledges that
notwithstanding the foregoing, any draft of the Registration Statement to be
filed on Form S-1 in connection with the transactions contemplated hereby that
was provided to such Investor prior to the date hereof was incomplete in the
form distributed, and such Investor is not relying on such draft on Form S-1 in
making its decision to enter into the transactions contemplated hereby.
 
(f)           Certain Trading Activities.  Such Investor has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Investor, engaged in any transactions in the securities
of the Company (including, without limitations, any Short Sales involving the
Company’s securities) since the earlier to occur of (1) the time that such
Investor was first contacted by the Company or Roth Capital Partners, LLC
regarding an investment in the Company and (2) the 30th day prior to the date of
this Agreement.  Such Investor covenants that neither it nor any Person acting
on its behalf or pursuant to any understanding with it will engage in any
transactions in the securities of the Company (including Short Sales) prior to
the time that the transactions contemplated by this Agreement are publicly
disclosed.

 
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(g)           Independent Investment Decision.  Such Investor has independently
evaluated the merits of its decision to purchase the Securities pursuant to the
Transaction Documents, and such Investor confirms that it has not relied on the
advice of any other Investor’s business and/or legal counsel in making such
decision.  Such Investor has not relied on the business or legal advice of Roth
Capital Partners, LLC or any of its agents, counsel or Affiliates in making its
investment decision hereunder, and confirms that none of such Persons has made
any representations or warranties to such Investor in connection with the
transactions contemplated by the Transaction Documents.
 
(h)           Rule 144.  Such Investor understands that the Securities must be
held indefinitely unless such Securities are registered under the Securities Act
or an exemption from registration is available.  Such Investor acknowledges that
it is familiar with Rule 144 and that such Investor has been advised that Rule
144 permits resales only under certain circumstances.  Such Investor understands
that to the extent that Rule 144 is not available, such Investor will be unable
to sell any Securities without either registration under the Securities Act or
the extistence of another exemption from such registration statement.
 
The Company acknowledges and agrees that no Investor has made or makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.
 
ARTICLE 4.
OTHER AGREEMENTS OF THE PARTIES
 
4.1.          (a)           Securities may only be disposed of in compliance
with state and federal securities laws.  In connection with any transfer of the
Securities other than pursuant to an effective registration statement, to the
Company, to an Affiliate of an Investor or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.
 
(b)           Certificates evidencing the Securities will contain the following
legend, until such time as they are not required under Section 4.1(c):
 
[NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED]
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION
OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY.  [THESE SECURITIES AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES] [THESE SECURITIES] MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

 
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The Company acknowledges and agrees that an Investor may from time to time
pledge, and/or grant a security interest in some or all of the Securities
pursuant to a bona fide margin agreement in connection with a bona fide margin
account and, if required under the terms of such agreement or account, such
Investor may transfer pledged or secured Securities to the pledgees or secured
parties.  Such a pledge or transfer would not be subject to approval or consent
of the Company and no legal opinion of legal counsel to the pledgee, secured
party or pledgor shall be required in connection with the pledge, but such legal
opinion may be required in connection with a subsequent transfer following
default by the Investor transferee of the pledge.  No notice shall be required
of such pledge.  At the appropriate Investor’s expense, the Company will execute
and deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of the
Securities including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of selling
stockholders thereunder.  Except as otherwise provided in Section 4.1(c), any
Securities subject to a pledge or security interest as contemplated by this
Section 4.1(b) shall continue to bear the legend set forth in this Section
4.1(b) and be subject to the restrictions on transfer set forth in Section
4.1(a).

 
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(c)           Certificates evidencing Securities shall not contain any legend
(including the legend set forth in Section 4.1(b)):  (i) while a registration
statement (including the Registration Statement) covering such Securities is
then effective, or (ii) following a sale or transfer of such Securities pursuant
to Rule 144 (assuming the transferee is not an Affiliate of the Company), or
(iii) while such Securities are eligible for sale by the selling Investor
without volume restrictions under Rule 144.  The Company agrees that following
the Effective Date or such other time as legends are no longer required to be
set forth on certificates representing Securities under this Section 4.1(c), it
will, no longer than three Trading Days following the delivery by an Investor to
the Company or the Transfer Agent of a certificate representing such Securities
containing a restrictive legend, deliver or instruct the Transfer Agent to
deliver to such Investor, Securities which are free of all restrictive and other
legends.  If the Company is then eligible, certificates for Securities subject
to legend removal hereunder shall be transmitted by the Transfer Agent to an
Investor by crediting the prime brokerage account of such Investor with the
Depository Trust Company System as directed by such Investor.  If an Investor
shall make a sale or transfer of Securities either (x) pursuant to Rule 144 or
(y) pursuant to a registration statement and in each case shall have delivered
to the Company or the Company’s transfer agent the certificate representing the
applicable Securities containing a restrictive legend which are the subject of
such sale or transfer and a representation letter in customary form (the date of
such sale or transfer and Securities delivery being the “Securities Delivery
Date”) and (1) the Company shall fail to deliver or cause to be delivered to
such Investor a certificate representing such Securities that is free from all
restrictive or other legends by the third Trading Day following the Securities
Delivery Date and (2) following such third Trading Day after the Securities
Delivery Date and prior to the time such Securities are received free from
restrictive legends, the Investor, or any third party on behalf of such
Investor, purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Investor of such
Securities (a “Buy-In”), then, in addition to any other rights available to the
Investor under the Transaction Documents and applicable law, the Company shall
pay in cash to the Investor (for costs incurred either directly by such Investor
or on behalf of a third party) the amount by which the total purchase price paid
for Common Stock as a result of the Buy-In (including brokerage commissions, if
any) exceed the proceeds received by such Investor as a result of the sale to
which such Buy-In relates.  The Investor shall provide the Company written
notice indicating the amounts payable to the Investor in respect of the
Buy-In.  The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section.
 
4.2.          Furnishing of Information.  As long as any Investor owns the
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act.  As long as any Investor owns Securities, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
the Investors and make publicly available in accordance with Rule 144(c) such
information as is required for the Investors to sell the Securities under Rule
144.  The Company further covenants that it will take such further action as any
holder of Securities may reasonably request, all to the extent required from
time to time to enable such Person to sell the Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144.
 
4.3.          Integration.  The Company shall not, and shall use its best
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Investors, or that
would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of any Trading Market in a manner that would require
stockholder approval of the sale of the Securities to the Investors.
 
4.4.          Subsequent Registrations.  Other than pursuant to the Registration
Statement, prior to the Effective Date, the Company may not file any
registration statement (other than on Form S-8)  with the Commission with
respect to any securities of the Company.

 
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4.5.          Securities Laws Disclosure; Publicity.  By 9:30 a.m. (New York
time) on the Trading Day following the execution of this Agreement the Company
shall issue a press release disclosing the transactions contemplated hereby.  On
the Trading Day following the execution of this Agreement the Company will file
a Current Report on Form 8-K disclosing the material terms of the Transaction
Documents (and attach as exhibits thereto the Transaction Documents).  In
addition, the Company will make such other filings and notices in the manner and
time required by the Commission and the Trading Market on which the Common Stock
may be listed.  Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Investor, or include the name of any Investor in any
filing with the Commission (other than the Registration Statement and any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the Exchange Act) or any regulatory agency or
Trading Market upon which the Common Stock may be listed, without the prior
written consent of such Investor, except to the extent such disclosure is
required by law or applicable Trading Market regulations.
 
4.6.          Limitation on Issuance of Future Priced Securities.  During the
six months following the Closing Date, the Company shall not issue any “Future
Priced Securities” as such term is described by NASD IM-4350-1.
 
4.7.          Indemnification of Investors.  In addition to the indemnity
provided in the Registration Rights Agreement, the Company will indemnify and
hold the Investors and their directors, officers, shareholders, partners,
employees and agents (each, an "Investor Party") harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys' fees and costs of investigation (collectively, "Losses")
that any such Investor Party may suffer or incur as a result of or relating to
any misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the Company in any Transaction Document.  In
addition to the indemnity contained herein, the Company will reimburse each
Investor Party for its reasonable legal and other expenses (including the cost
of any investigation, preparation and travel in connection therewith) incurred
in connection therewith, as such expenses are incurred.  Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 4.7 shall be the same as those set forth in
Section 5 of the Registration Rights Agreement.
 
4.8.          Non-Public Information.  The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Investor
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Investor
shall have executed a written agreement regarding the confidentiality and use of
such information.  The Company understands and confirms that each Investor shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.
 
4.9.          Listing of Securities.  The Company agrees, (i) if the Company
applies to have the Common Stock traded on any other Trading Market, it will
include in such application the Securities, and will take such other action as
is necessary or desirable to cause the Securities to be listed on such other
Trading Market as promptly as possible, and (ii) it will take all action
reasonably necessary to continue the listing and trading of its Common Stock on
a Trading Market and will comply in all material respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Trading
Market.
 
4.10.        Use of Proceeds.  The Company will use the net proceeds from the
sale of the Shares and Warrants hereunder for capacity expansion and for working
capital purposes and not for the satisfaction of any portion of the Company’s
debt (other than payment of trade payables and accrued expenses in the ordinary
course of the Company’s business and consistent with prior practices), or to
redeem any Common Stock or Common Stock Equivalents.

 
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4.11.        Reverse Stock Split.  The Company covenants and agrees that within
60 days following the Closing Date, it will take the actions necessary to
effectuate a 1 for 16.09 reverse stock split of its Common Stock such that its
pre-offering number of shares outstanding (calculated as though such reverse
split has happened and after giving effect to the issuance of 323,920,000 shares
to the former Waibo Shareholders and 9,441,667 to the holder of the Convertible
Note, each as defined in the Company's Current Report on Form 8-K dated October
21, 2010, which issuance will take place immediately prior to or concurrently
with such reverse stock split) would be 23,428,300 and its post-offering number
of shares outstanding (calculated on the same basis) would be 24,000,000,
including, without limitation, obtaining the required consent of its
shareholders, amending its charter documents (if required) and filing an
information statement with the Commission.
 
4.12.        Increase in Authorized Stock.  The Company covenants and agrees
that within 60 days following the Closing Date it will take the actions
necessary to increase the number of authorized shares of Common Stock to
600,000,000 shares, including, without limitation, obtaining the required
consent of its shareholders, amending its charter documents (if required) and
filing an information statement with the Commission.
 
4.13.        Change of Auditor.  The Company covenants and agrees that within
270 days following the Closing Date, it will change its independent public
accounting firm to one of the top ten public accounting firms.
 
4.14         Voting of Shares.  Each Investor covenants and agrees that it shall
vote its shares of Common Stock in favor of the Company’s proposals to
effectuate a reverse stock split and increase its authorized shares of Common
Stock as described in Section 4.11 and 4.12 herein at any meeting of
shareholders held to vote on such matters.
 
ARTICLE 5.
CONDITIONS PRECEDENT TO CLOSING
 
5.1.          Conditions Precedent to the Obligations of the Investors to
Purchase Securities.  The obligation of each Investor to acquire Securities at
the Closing is subject to the satisfaction or waiver by such Investor, at or
before the Closing, of each of the following conditions:
 
(a)           Representations and Warranties.  The representations and
warranties of the Company contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing as though made
on and as of such date;
 
(b)           Performance.  The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing;
 
(c)           No Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

 
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(d)           Adverse Changes.  Since the date of execution of this Agreement,
no event or series of events shall have occurred that reasonably could have or
result in a Material Adverse Effect or a material adverse change with respect to
the Subsidiaries;
 
(e)           Company Deliverables.  The Company shall have delivered the
Company Deliverables in accordance with Section 2.2(a); and
 
(f)           Termination.  This Agreement shall not have been terminated as to
such Investor in accordance with Section 6.5.
 
5.2.         Conditions Precedent to the Obligations of the Company to Sell
Securities.  The obligation of the Company to sell Securities at the Closing is
subject to the satisfaction or waiver by the Company, at or before the Closing,
of each of the following conditions:
 
(a)           Representations and Warranties.  The representations and
warranties of each Investor contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made on and as of such date;
 
(b)           Performance.  Each Investor shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by such Investor at or prior to the Closing;
 
(c)           No Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;
 
(d)           Investors Deliverables.  Each Investor shall have delivered its
Investors Deliverables in accordance with Section 2.2(b); and
 
(e)           Termination.  This Agreement shall not have been terminated as to
such Investor in accordance with Section 6.5.
 
ARTICLE 6.
MISCELLANEOUS
 
6.1.         Fees and Expenses.  Each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of the Transaction Documents.  The Company
shall pay all stamp and other taxes and duties levied in connection with the
sale of the Securities.

 
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6.2.          Entire Agreement.  The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
 
6.3.          Notices.  Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile
(provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile number specified in this Section prior to 6:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section on a day that is not a Trading
Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) upon
actual receipt by the party to whom such notice is required to be given, if sent
by any means other than facsimile transmission.  The address for such notices
and communications shall be as follows:
 
If to the Company:
CFO Consultants, Inc.
 
Rm. 2102 F & G, Nan Fung Centre
 
264-298 Castle Peak Rd.
 
Tsuen Wan, N.T., Hong Kong
 
Facsimile:  852-2412-0239
 
Attn.:  Chief Executive Officer
   
With a copy to:
Loeb & Loeb LLP
 
345 Park Avenue
 
New York, NY 10154
 
Facsimile:  (212) 504-3013
 
Attn.:  Mitchell S. Nussbaum, Esq.
   
If to an Investor:
To the address set forth under such Investor’s name on the signature pages
hereof;

 
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
 
6.4.          Amendments; Waivers; No Additional Consideration.  No provision of
this Agreement may be waived or amended except in a written instrument signed by
the Company and the Investors holding a majority of the Securities.  No waiver
of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.  No
consideration shall be offered or paid to any Investor to amend or consent to a
waiver or modification of any provision of any Transaction Document unless the
same consideration is also offered to all Investors who then hold Securities.
 

 
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6.5.          Termination.  This Agreement may be terminated prior to Closing:

(a)           by written agreement of the Investors and the Company;
 
(b)           by the Company or an Investor (as to itself but no other Investor)
upon written notice to the other, if the Closing shall not have taken place by
6:30 p.m. Eastern time on the Outside Date; provided, that the right to
terminate this Agreement under this Section 6.5(b) shall not be available to any
Person whose failure to comply with its obligations under this Agreement has
been the cause of or resulted in the failure of the Closing to occur on or
before such time;
 
(c)           by an Investor (as to itself but no other Investor) if it
concludes in good faith that any of the conditions precedent contained in
Section 5.1 shall have been breached or shall not be capable of being satisfied
by the Outside Date despite the assumed best efforts of the Company.
 
In the event of a termination pursuant to this Section, the Company shall
promptly notify all non-terminating Investors and shall pay to the terminating
Investor(s) all of the fees and expenses incurred by such Investors (including
reasonable legal fees and expenses) in connection with this Agreement and the
transactions contemplated by this Agreement through the termination date.  Other
than as to the foregoing fees and expenses, upon a termination in accordance
with this Section 6.5, the Company and the terminating Investor(s) shall not
have any further obligation or liability (including as arising from such
termination) to the other and no Investor will have any liability to any other
Investor under the Transaction Documents as a result therefrom.
 
6.6.          Construction.  The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.  The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any
party.  This Agreement shall be construed as if drafted jointly by the parties,
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any provisions of this Agreement or any of
the Transaction Documents.
 
6.7.          Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Investors.  Any Investor may
assign any or all of its rights under this Agreement to any Person to whom such
Investor assigns or transfers any Securities, provided such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the “Investors.”
 
6.8.          No Third-Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.7 (as to each
Investor Party).

 
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6.9.          Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof.  Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the New York
Courts.  Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of the any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum.  Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.  Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby.  If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document, then
the prevailing party in such Proceeding shall be reimbursed by the other party
for its reasonable attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Proceeding.
 
6.10.        Survival.  The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery of the
Securities.
 
6.11.        Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
 
6.12.        Severability.  If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
 
6.13.        Rescission and Withdrawal Right.  Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Investor exercises a right, election, demand
or option under a Transaction Document and the Company does not timely perform
its related obligations within the periods therein provided, then such Investor
may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.

 
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6.14.        Replacement of Securities.  If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.  The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.  If a replacement
certificate or instrument evidencing any Securities is requested due to a
mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.
 
6.15.        Remedies.  In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Investors and the Company will be entitled to specific performance under the
Transaction Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
 
6.16.        Payment Set Aside.  To the extent that the Company makes a payment
or payments to any Investor pursuant to any Transaction Document or an Investor
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
 
6.17.        Independent Nature of Investors’ Obligations and Rights.  The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document.  The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor.  Nothing contained herein or in
any Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.  Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents.  Each Investor shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose.  The Company acknowledges that each of the
Investors has been provided with the same Transaction Documents for the purpose
of closing a transaction with multiple Investors and not because it was required
or requested to do so by any Investor.

 
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6.18.        Limitation of Liability.  Notwithstanding anything herein to the
contrary, the Company acknowledges and agrees that the liability of an Investor
arising directly or indirectly, under any Transaction Document of any and every
nature whatsoever shall be satisfied solely out of the assets of such Investor,
and that no trustee, officer, other investment vehicle or any other Affiliate of
such Investor or any investor, shareholder or holder of shares of beneficial
interest of such a Investor shall be personally liable for any liabilities of
such Investor.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
CFO CONSULTANTS, INC.
 
By:
   
Name:
 
Title:

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR INVESTORS FOLLOW]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
NAME OF INVESTOR
_________________________________________
 
By:______________________________________
Name:
Title:
 
Investment Amount:  $_______________________
 
Tax ID No.:________________________________
 
ADDRESS FOR NOTICE
 
c/o:______________________________________
 
Street:____________________________________
 
City/State/Zip:______________________________
 
Attention:_________________________________
 
Tel:______________________________________
 
Fax:______________________________________
 
DELIVERY INSTRUCTIONS
(if different from above)
 
c/o:______________________________________
 
Street:____________________________________
 
City/State/Zip:_____________________________
 
Attention:_________________________________
 
Tel:______________________________________

 
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