Exhibit 10.1
 
SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of October 29,
2009, by and among Longwei Petroleum Investment Holding Limited, a Colorado
corporation (collectively with its predecessors, the “Company”), and the
investors listed on the Schedule of Buyers attached hereto as Annex A and
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 Section 4(2) of the Securities Act (as defined below) and Rule 506
promulgated thereunder, the Company desires to issue and sell to the Investors
and the Investors desires to purchase for an aggregate  purchase price of up to
Fifteen Million Dollars ($15,000,000) as  more fully described in this Agreement
an aggregate of up to (i) Thirteen Million Six Hundred Thirty Seven Thousand
(13,637,000) shares of the Company’s Series A Convertible Preferred Stock, no
par value per share (“Series A Preferred Stock”), with each share of Series A
Preferred Stock being initially convertible into one (1) share of the Company’s
common stock, no par value per share (“Common Stock”), subject to adjustment,
and (ii)  Common Stock purchase warrants (the “Warrants”) to purchase Thirteen
Million Six Hundred Thirty Seven Thousand (13,637,000) shares of Common Stock at
an exercise equal to one hundred and ten percent (110%) of  the Closing Market
Price (as defined below) of the Common Stock as of the Closing Date (as defined
below).
 
 
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:
 
 “2010 Annual Report” means the Annual Report of the Company for the fiscal year
ending June 30, 2010, as filed with the Commission on Form 10-K (or such other
form appropriate for such purpose as promulgated by the Commission).
 
“2010 Guaranteed ATNI” shall have the meaning set forth in Section 4.11.
 
“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.
 
 
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“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 405 of the Securities
Act.
 
“After Tax Net Income” shall mean the Company’s income after taxes for the
fiscal year ending June 30, 2010 determined in accordance with GAAP as reported
in the 2010 Annual Report, but excluding (and therefore, adding back) any
expense arising from the  transactions contemplated by this Agreement and the
other Transaction Documents.
 
 “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).
 
“Certificate of Designation” shall mean the Certificate of Designations,
Preferences and Rights file to be filed with the Secretary of State for the
state of Colorado relating to the Series A Preferred Stock substantially in the
form of Exhibit A attached hereto.
 
“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.
 
"Closing Escrow Agreement" means the Escrow Agreement, dated as of the date
hereof, among the Company, the Investors parties thereto and the Closing Escrow
Agent in the form of Exhibit B hereto.
 
“Closing Escrow Agent” shall mean Signature Bank.
 
“Closing Market Price” shall mean the closing price of the Common Stock on the
principal market or exchange on which the Common Stock is traded or quoted on
the day prior to the date as of which such price is being determined.
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, no par value per share,
and any securities into which such common stock may hereafter be reclassified or
for which they may be exchanges 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.
 
 
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“Company Counsel” means Sichenzia Ross Friedman Ference LLP.
 
“Company Deliverables” has the meaning set forth in Section 2.3(a).
 
“Disclosure Materials” has the meaning set forth in Section 3.1(h).
 
“Dividend Shares” shall have the meaning set forth in the Certificate of
Designation
 
“Evaluation Date” has the meaning set forth in Section 3.1(s).
 
“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).
 
 “Investor Deliverables” has the meaning set forth in Section 2.3(b).
 
“Investor Party” has the meaning set forth in Section 4.7.
 
“Lien” means any lien, charge, encumbrance, security interest, right of first
refusal or other restrictions of any kind.
 
“Losses” shall have the meaning set forth in Section 4.7.
 
“Make Good Escrow Pledgors” shall mean Mr. Cai Yongjun and Mr. Xue Yongping.
 
“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, or (iii) an adverse impairment to the Company’s
ability to perform on a timely basis its obligations under any Transaction
Document.
 
“Money Laundering Laws” has the meaning set forth in Section 3.1(ee).
 
“New York Courts” means the state and federal courts sitting in the City of New
York, Borough of Manhattan.
 
“Original Purchase Price” means, with respect to each Investor, the Original
Purchase Price indicated on such Investor’s signature page to this Agreement.
 
“OFAC” has the meaning set forth in Section 3.1(dd).
 
“Outside Date” means October 31 2009, provided, that if such day should fall on
a day that is not a Business Day, the Outside Date shall be deemed the next day
that is a Business Day.
 
 
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“Original Purchase Price” means, with respect to each Investor, the Original
Purchase Price indicated on such Investor’s signature page to this Agreement.
 
“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.
 
“PRC” means the People’s Republic of China, not including Taiwan, Hong Kong and
Macau.
 
“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.
 
“Placement Agent” shall mean National Securities Corporation.
 
“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 C 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 Shares and the Dividend Shares, if any.
 
“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).
 
“Security” shall mean, collectively, one share of Series A Preferred and one
Warrant being offered and sold by the Company hereunder.
 
“Securities” means, collectively, the Series A Preferred Stock and the Warrants.
 
“Securities Act” means the means Securities Act of 1933, as amended.
 
“Securities Escrow Agent” shall mean Signature Bank.
 
“Securities Escrow Agreement” means the Securities Escrow Agreement, dated as of
the date hereof, among the Company, the Escrow Agent, the Make Good Pledgors and
the Investors, in the form of Exhibit D hereto.
 
“Series A Preferred Stock” means the shares of Series A Preferred Stock having
the rights, preferences and privileges and subject to the limitations set forth
in the Certificate of Designation.
 
“Share Delivery Date” has the meaning set forth in Section 4.1(c).
 
 
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“Shares” means collectively the shares of Common Stock issued or issuable (i) on
conversion of the Series A Preferred Stock and (ii) on exercise of the Warrants.
 
“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, as to the Company, any “subsidiary” as defined in Rule
1-02(x) of the Regulation S-X promulgated by the Commission under the Exchange
Act.
 
“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.
 
 “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 Closing Escrow Agreement, the Securities Escrow Agreement and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.
 
 “Warrants” means the warrants substantially in the form of Exhibit E attached
hereto.
 
“4.9% Limitation” shall have the meaning set forth in Section 2.1.
 

 
ARTICLE 2.
 
PURCHASE AND SALE
 
2.1. Purchase and Sale. Upon the terms and subject to the conditions set forth
herein, and in accordance with applicable law, the Company agrees to sell to the
Investors, and each Investor agrees to purchase from the Company, on the Closing
Date, the number of Securities for the purchase price set forth next to such
Investor’s name on Schedule A attached hereto (the “Original Purchase
Price).   At or prior to the Closing each Investor shall wire the portion of the
Original Purchase Price set forth opposite such Investor’s name on Schedule A to
the Closing Escrow Agent, who shall release the Original Purchase Price to the
Company upon receipt of instructions from the Investors and the Company as
provided in the Escrow Agreement.  The Company shall cause the Securities to be
issued to the Investors upon the release of the Original Purchase Price to the
Company by the Closing Escrow Agent pursuant to the terms of the Escrow
Agreement.  Except as expressly provided in the Certificate of Designation and
the Warrants, an Investor shall not be entitled to convert the Series A
Preferred Stock into shares of Common Stock or to exercise the Warrants to the
extent that such conversion or exercise would result in beneficial ownership by
the Investor and its Affiliates of more than 4.9% of the then outstanding number
of shares of Common Stock on such date after giving effect to such conversion or
exercise.  For the purposes of this Agreement beneficial ownership shall be
determined in accordance with Section 13(d) of the 1934 Act, and Regulation
13d-3 thereunder.  The limitation set forth in this Section 2.1.2 is referred to
as the “4.9% Limitation.”
 
 
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2.2. 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, the number of
Securities  representing such Investor’s Original Purchase Price.  The Closing
shall take place at the offices of Guzov Ofsink, LLC, 600 Madison Avenue, New
York, New York 10022, on the Closing Date or at such other location or time as
the parties may agree.
 
2.3. Closing Deliveries
 
.  (a)  At the Closing, the Company shall deliver or cause to be delivered to
each Investor the following (the “Company Deliverables”):
 
(i) certificates evidencing shares of Series A Preferred Stock and Warrants to
be issued and sold at Closing registered in the name of such Investor; and
 
(ii) the legal opinion of Company Counsel, in agreed form, addressed to the
Investors.
 
(b) By the Closing, each Investor shall deliver or cause to be delivered the
agreements specified in Section 5.2(d), each duly signed by such Investor
(collectively, the “Investor Deliverables”).
 
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 SEC Reports.  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 any and all Lines and 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.
 
 
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(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 or any Subsidiary 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.
 
(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)
except as set forth in Schedule 3.1(d)(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 United States federal and state securities laws and
regulations and PRC national and provincial 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.  Except as set forth in Schedule 3.1(e),
neither the Company nor any Subsidiary is required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any United States or PRC 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
hereof and (v) those that have been made or obtained prior to the date of this
Agreement.
 
 
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(f) Issuance of the Securities.  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..
 
(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 Schedule 3.1(g).  Except as specified in Schedule 3.1(g), 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 Schedule 3.1(g), there are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of 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 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.
 
(h) SEC Reports; Financial Statements.  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.
 
 
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(i) Press Releases.  The press releases disseminated by the Company during the
twelve months preceding 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, (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)
neither the Company nor any Subsidiary has incurred any liabilities (direct,
indirect, 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 Company or Subsidiary 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.
 
(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 Securities 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 or
any Subsidiary.
 
(m) Indebtedness; Compliance. Except as disclosed on Schedule 3.1(m), neither
the Company nor any Subsidiary is a party to any indenture, debt, loan or credit
agreement by which it or any of its properties is bound.  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 would 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 would
not, individually or in the aggregate, 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 United States
and PRC 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.  Except as set forth in Schedule 3.1(o), the Company and
the Subsidiaries have valid land use rights for all real property 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.
 
(p) Patents and Trademarks.  Schedule 3.1(p) sets forth all of the patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, licenses and other similar rights that the Company and its
Subsidiaries owns or has the rights to use (collectively, the “Intellectual
Property Rights”).  The Intellectual Property Rights constitute all of the
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and other similar rights that are necessary
for use by the Company and its Subsidiaries in connection with their respective
businesses as described in the SEC Reports. Neither the Company nor any of its
Subsidiaries has received a written or oral notice that the Intellectual
Property Rights used by any of them violates or infringes upon the rights of any
Person.  Except as set forth in Schedule 3.1(p), all such Intellectual Property
Rights are enforceable and to the knowledge of the Company and its Subsidiaries,
there is no existing infringement by another Person of any of the Intellectual
Property Rights.  To the knowledge of the Company and its Subsidiaries, no
former or current employee, no former or current consultant, and no third-party
joint developer of the Company or its Subsidiaries has any Intellectual Property
Rights made, developed, conceived, created or written by the aforesaid employee,
consultant or third-party joint developer during the period of his or her
retention by, or joint venture with, such Company or Subsidiary which can be
asserted against any of the Company or any such Subsidiary.  The Intellectual
Property Rights and the owner thereof or agreement through which they are
licensed to any of the Company or its Subsidiaries are set forth on Schedule
3.1(p).
 
 
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(q) Insurance.   Schedule 3.1(q) sets forth a list of all the insurance policies
held by the Company and each Subsidiary.  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; Customers.  Except as set forth
in Schedule 3.1(r), 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. No material customer of the Company or any Subsidiary has indicated its
intention to diminish its relationship with the Company or any Subsidiary and
none of them has any knowledge from which it would reasonably conclude that any
such customer relationship may be adversely affected.
 
(s) Internal Accounting Controls.  The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.  The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that material
information relating to the Company, including its Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company’s Form 10-K or 10-Q, as the case may be, is
being prepared.  The Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures in accordance with
Regulation S-K under the Exchange Act for the Company’s most recently ended
fiscal quarter or fiscal year-end (such date, the “Evaluation Date”).  The
Company presented in its most recently filed Form 10-K or Form 10-Q the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation
Date.  Since the Evaluation Date, there have been no significant changes in the
Company’s internal controls or, to the Company’s knowledge, in other factors
that could significantly affect the Company’s internal controls.
 
 
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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 described in Schedule 3.1(u), 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 and the other Transaction Documents.  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
Securities  by the Company to the Investors under the Transaction
Documents.  The Company is eligible to register the Shares for resale by the
Investors under Form S-1 promulgated under the Securities Act.  Except as set
forth on 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 Securities
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 shareholders of the Company thereunder is required for the
Company to issue and deliver to the Investors the Securities contemplated by
Transaction Documents.
 
(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.
 
 
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(y) 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.
 
(z) 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.
 
(aa) Foreign Corrupt Practices Act.  Neither the Company nor any Subsidiary, nor
to the knowledge of the Company, any agent or other person acting on behalf of
any of the Company or any Subsidiary, has, directly or indirectly, (i) used any
funds, or will use any proceeds from the sale of the Shares, 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.
 
(bb) 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.
 
(cc) 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.
 
(dd) 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 and/or any Subsidiary with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened.
 
 
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(ee) Additional PRC Representations and Warranties.
 
(i) All material consents, approvals, authorizations or licenses requisite under
PRC law for the due and proper establishment and operation of the Company and
the 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 the Subsidiaries and their operations
including, without limitation, the registration with the Ministry of Commerce,
the State Administration of Industry and Commerce, the State Administration for
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 the Subsidiaries have complied with all relevant PRC laws
and regulations regarding the contribution and payment of its registered share
capital, the payment schedule of which has been approved by the relevant PRC
governmental authorities.  There are no outstanding rights of, or commitments
made by the Company or any Subsidiary to sell any of their respective equity
interests.
 
(iv) Neither the Company nor any Subsidiary is in receipt of any letter or
notice from any relevant PRC governmental authority notifying it of the
revocation, or otherwise questioning the validity, 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 need for compliance or remedial actions in respect of the activities
carried out by the Company or such Subsidiary, except such revocation as does
not, and would not, individually or in the aggregate, have a Material Adverse
Effect.
 
(v) The Company and the Subsidiaries have conducted their respective business
activities within their permitted scope of business or have otherwise operated
their respective businesses 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 part of the Company or any Subsidiaries’ business which
is subject to periodic renewal, neither the Company nor such Subsidiary has any
knowledge of any grounds on which such requisite renewals will not be granted by
the relevant PRC governmental authorities.
 
(vi) With regard to employment and staff or labor, the Company and 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.
 
 
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(ff) 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 that (i) if disclosed, would reasonably be expected to have a
material effect on the price of the Common Stock or (ii) according to applicable
law, rule or regulation, should have been disclosed publicly by the Company
prior to the date hereof but which has not been so disclosed, 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.  No representation or warranty made
by the Company in this Agreement and no certificate or document furnished to the
Investors pursuant to this Agreement contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements
contained herein or therein, taken as a whole and in the light of the
circumstances under which they were made herein or therein, not misleading.
 
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 and the other Transaction Documents (to which it
is a party) 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 other Transaction Documents (to which it is a party)  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.
 
(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 the Securities or the Shares 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 and Shares 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 or the Shares 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 or  the Shares.
 
(c) Investor Status.  At the time such Investor was offered the Securities, it
was, and at the date hereof it is, and as of the Closing Date will be, 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.
 
 
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(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.
 
(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 National Securities Corp. 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 is made public.
 
(g) Independent Investment Decision.  Such Investor has independently evaluated
the merits of its decision to purchase 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
National Securities Corp. 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) Financial Risks. The Investor acknowledges that the Investor is able to bear
the financial risks associated with an investment in the Securities being
purchased by the Investor from the Company and that it has been given full
access to such records of the Company and to the officers of the Company as it
has deemed necessary or appropriate to conduct its due diligence investigation.
The Investor is capable of evaluating the risks and merits of an investment in
the Securities being purchased by the Investor from the Company by virtue of its
experience as an investor and its knowledge, experience, and sophistication in
financial and business matters and the Investor is capable of bearing the entire
loss of its investment in the Securities being purchased by the Investor from
the Company.
 
 
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(i) Certain Fees. Except as set forth on Schedule 3.2(i), no brokerage or
finder’s fees or commissions are or will be payable by any Investor 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 and the other Transaction Documents based upon arrangements made
by or on behalf of the Investor.
 
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)
 
The Securities and the Shares may only be disposed of in compliance with state
and federal securities laws.  In connection with any transfer of the Securities
and the Shares 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 Securities will contain the following
legend, until such time as they are not required under Section 4.1(d):
 
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 MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
 
 
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(c)           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 or Shares 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 thereof 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).
 
(d) Certificates evidencing the Securities and the Shares shall not contain any
legend (including the legend set forth in Section 4.1(b)): (i) in the event of a
sale of such Securities or Shares, while a registration statement (including the
Registration Statement) covering such Securities or Shares is then effective and
a prospectus meeting the requirements of Section 10 of the Securities Act is
available (provided, however, that the Company reserves the right to issue stop
transfer instructions to the transfer agent (with a copy to the Investors) with
respect to the Securities or Shares in the event that the Registration Statement
with respect to the Securities or Shares is no longer current) or (ii) following
a sale or transfer of such Securities or Shares pursuant to Rule 144 (assuming
the transferee is not an Affiliate of the Company), or (iii) while such
Securities or Shares are eligible for sale under Rule 144(i)(2).  If an Investor
shall make a sale or transfer of Securities or Shares 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 Securities or Shares 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 delivery being the “Share Delivery
Date”) and (1) the Company shall fail to deliver or cause to be delivered to
such Investor a certificate representing such Shares that is free from all
restrictive or other legends by the third Trading Day following the Share
Delivery Date and (2) following such five Business Day after the Share Delivery
Date and prior to the time such Shares 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
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.
 
 
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4.2. Furnishing of Information
 
.  As long as any Investor owns any Securities or Shares, 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 or Shares, 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 or Shares under Rule 144.  The Company further
covenants that it will take such further action as any holder of Securities or
Shares may reasonably request, all to the extent required from time to time to
enable such Person to sell the Securities or Shares 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
 
.  Except as set forth on Schedule 4.4, 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 prior to the time that all Shares are
registered pursuant to one or more effective Registration Statement(s), and the
prospectuses forming a portion of such Registration Statement(s) is available
for the resale of all Shares
 
4.5. Securities Laws Disclosure; Publicity
 
.   By 9:00 a.m. (New York time) on the Trading Day following the Closing Date,
the Company shall issue a press release disclosing the transactions contemplated
hereby and the Closing (including, without limitation, details with respect to
the make good provision and thresholds contained in Section 4.11 herein).  On
the fourth 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), and on the fourth Trading Day following the Closing Date the Company
will file an additional Current Report on Form 8-K to disclose the Closing.   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
is 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 a 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, without the prior written consent of such Investor, except to the extent
such disclosure is required by law or Trading Market regulations.
 
 
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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 (including any schedule thereto).  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 Shares
 
.  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
Shares, and will take such other action as is necessary or desirable to cause
the Shares 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 Securities
hereunder 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.
 
4.11. Escrow Shares.
 
(a) At the Closing, upon the execution of the Securities Escrow Agreement , the
Make Good Pledgors shall deliver to the Securities Escrow Agent a stock
certificate or stock certificates evidencing an aggregate of 13,499,274 shares
of Common Stock (collectively, the “Escrow Shares”).  All Escrow Shares shall be
accompanied by stock powers executed in blank with signature medallion
guaranteed.
 
 
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(i) If the After Tax Net Income reported in the 2010 Annual Report is less than
$23,900,000 (the “2010 Guaranteed ATNI), then the Investors shall be entitled to
receive on a “pro rata” basis some or all of the Escrow Shares determined
according to the following formula:
 

E
Minus
C
((A / B) X D)

For the purposes of the foregoing formula:
 
 
A = Actual ATNI 2010
B = 2010 Guaranteed ATNI  ($23,900,000)
C = Escrow Shares (13,499,274)
D = Initial Conversion Price of Series A Preferred Stock ($1.10)
E = Total Investment Amount ($14,849,201.50)

For example if the actual ATNI was $ 20 million the number of Escrow Shares that
would be distributed prorate to the Investors would be 2,658,491 calculated as
follows:

$14,849,201.50                                                       Minus     13,499,274
(20,000,000/23,900,000) X 1.10

(ii) Within five days after the determination of the number of Escrow Shares to
which the Investors are entitled calculated in the manner set forth above  the
Placement Agent and the Company shall give joint written instructions to the
Securities Escrow Agent to, and upon receipt of such written instructions, the
Securities Escrow Agent shall, within five Business Days after receipt of such
instructions deliver to the Investors on a “pro rata” basis such number of
Escrow Shares.  If less than all of the Escrow Shares are delivered to the
Investors, the Securities Escrow Agent shall return the undistributed Escrow
Shares to the Make Good Pledgors pursuant to the joint instructions of the
Placement Agent and the Company.  For purposes of this Section “pro rata” means
the percentage that the number of shares of Series A Preferred held by a
Investor bears to the total outstanding shares of Series A Preferred
Stock.  Notwithstanding anything to the contrary set forth herein, in the event
of the conversion of shares of Series A Preferred, the shares of Series A
Preferred so converted shall remain outstanding for the purpose of receiving
distribution of Escrow Shares pursuant to this Section.
 
(iii) The determination regarding the number and the distribution, if any, of
the Escrow Shares to be distributed to the Investors pursuant to this Section
shall be made within five (5) Business Days after the date the Company is
required to file its 2010 Annual Report with the Commission (after giving effect
to any extension pursuant to Rule 12b-25 of the Exchange Act).  In the event
that the Company does not file its 2010 Annual Report with the Commission within
thirty (30) days after the date such filing was required, after giving effect to
any extension pursuant to Rule 12b-25 of the Exchange Act, all of the Escrow
Shares shall be delivered to the Investors on a pro rata basis within five (5)
Trading Days following the expiration of such thirty (30) day period.
 
 
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(iv) Notwithstanding anything to the contrary set forth herein, only those
Investors who own shares of Series A Preferred issued hereunder and remain
shareholders of the Company at the time that any Escrow Shares become
deliverable hereunder shall be entitled to their pro rata portion of the Escrow
Shares calculated based on their ownership interest at the time when the
applicable Escrow Shares become deliverable hereunder.
 
(v)  Notwithstanding anything to the contrary contained in this Section 4.11 or
in the Securities Escrow Agreement, the parties agree that for purposes of
determining whether or not the 2010 Guaranteed ATNI has been achieved,
 
(A) the release of any or all of the Escrow Shares shall not be counted as an
expense, charge, or other deduction from revenues in calculating net income even
though GAAP may require contrary treatment,
 
(B) any registration delay payments arising under the Registration Rights
Agreement that are accrued or paid by the Company to any Series A Purchaser will
be excluded from the calculation of After-Tax Net Income, and
 
(C) so long as the Escrow Shares remain in escrow, such shares shall not be
counted in calculating a quorum for stockholder voting purposes nor shall such
shares be voted at any meeting of stockholders or included in a shareholders
written consent.

 
(b) The Company will provide the Placement Agent with (i) the Company’s audited
financial statements for 2010, prepared in accordance with GAAP, on or before
September 30, 2010 (or such later date that the Company files its 2010 Annual
Report so as to allow the Placement Agent the opportunity to evaluate whether
the 2010 Guaranteed ATNI has been attained.
 
(c) If any term or provision of this Section 4.11 contradicts or conflicts with
any term or provision of the Securities Escrow Agreement, the terms of the
Securities Escrow Agreement shall control.
 

 
ARTICLE 5.
 
CONDITIONS PRECEDENT TO CLOSING
 
5.1. Conditions Precedent to the Obligations of the Investors to Purchase Shares
 
.  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:
 
 
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(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;
 
(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;
 
(e) No Suspensions of Trading in Common Stock; Listing.  Trading in the Common
Stock shall not have been suspended by the Commission or any Trading Market
(except for any suspensions of trading of not more than one Trading Day solely
to permit dissemination of material information regarding the Company) at any
time since the date of execution of this Agreement, and the Common Stock shall
have been at all times since such date listed for trading on a Trading Market;
 
(f) Company Agreements.  The Company shall have delivered:
 
(i) The Closing Escrow Agreement, duly executed by the Company and the Closing
Escrow Agent;
 
(ii) The Securities Escrow Agreement, duly executed by the Company, the Make
Good Pledgors and the Securities Escrow Agent; and
 
(iii) The Registration Rights Agreement, duly executed by the Company.
 
(g)           Company Deliverables.  The Company shall have delivered the
Company Deliverables in accordance with Section 2.2(a);
 
(h)           Deposit of Escrow Shares.  The Company and the Make Good Pledgors
shall have deposited 13,637,000 shares of Common Stock into escrow in accordance
with the Securities Escrow Agreement along with bank signature stamped stock
powers executed in blank (or such other signed instrument of transfer acceptable
to the Company’s transfer agent); and
 
(i)           Termination.  This Agreement shall not have been terminated as to
such Investor in accordance with Section 6.5.
 

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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) Investor Deliverables.  Each Investor shall have executed and delivered each
of the Transaction Documents to which it is a party; 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 issuance of the Securities.
 
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) the Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given.  The address for such notices and communications shall be as
follows:
 
 
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If to the Company:
Longwei Petroleum Investment Holding Limited

No. 30, Guanghua Street, Xiaojingyu Xiang,
Wanbailin District,
Taiyan City, Shanxi Province
People’s Republic of China 030024
 
Attn: Chief Executive Officer

 
Facsimile:617-977-8618

 
With a copy to:
Sichenzia Ross Friedman Ference LLP

61 Broadway, 322 Floor
New York, NY 10006
 
Facsimile:  212 930-9725

 
Attn.:  Darrin M Ocasio, Esq.

 
If to an Investor:
To the address set forth under such Investor’s name on the signature pages
hereof;

 
 
With a copy to:
National Securities Corporation

330 Madison Avenue, 18th Floor
New York, NY 10017
 
Facsimile:  (212) 380 2828

 
Attn.: Jonathan C. Rich

 
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
then outstanding Series A Preferred Stock issued this Agreement.  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
and/or Shares.  Without the written consent or the affirmative vote of each
Investor affected thereby, an amendment or waiver under this Section 6.4 may not
waive or amend any Transaction Document the effect of which would be to permit
the Company to (1) name any Investor as an underwriter in a Registration
Statement without such Investor’s specific written consent thereto, or (2) not
include any Registrable Securities (as defined in the Registration Rights
Agreement) of an Investor in a Registration Statement due to their refusal to be
named as an underwriter therein, in each case, other than in accordance with
Article 2 of the Registration Rights Agreement.
 
 
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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, a copy of which shall
be provided to the Closing Escrow Agent; and
 
(b)    by the Company or an Investor (as to itself but no other Investor) upon
written notice to the other and to the Closing Escrow Agent, 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.
 
In the event of a termination pursuant to this Section, the Company shall
promptly notify all non-terminating Investors. 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) and that National
Securities Corp. is a third party beneficiary of the Company's representations
and warranties contained herein.
 
 
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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 or Shares
 
.  If any certificate or instrument evidencing any Securities or Shares 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 or Shares 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.
 
 
 
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED.
 
 
By:

 
 
Name:

 
 
Title:

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
 
SIGNATURE PAGES 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:

 
Original Purchase
Price:  $                                                                           
 
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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Annex A
 
SCHEDULE OF BUYERS
 

(1)
(2)
 
Buyer
 
 
 
 
Address and
Facsimile Number