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EXHIBIT 10.1

 
SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of August 31,
2010, by and between GHN Agrispan Holding Company, a Nevada corporation (the
“Company”), having an address at 402 M, No. 16 Xinfeng 3rd Road, Xiamen City,
PRC, and the investors listed on the Schedule of Investors attached hereto as
Appendix A (each, an “Investor” and collectively, the “Investors”).
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to exemptions from registration under the Securities Act (as defined
below), the Company desires to issue and sell to each Investor, and each
Investor, severally and not jointly, desires to purchase from the Company,
shares of the Company’s Series A 10% Convertible Preferred Stock, as more fully
described in this Agreement.
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:
 
ARTICLE 1.
 
DEFINITIONS
 
1.1           Definitions.  In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section ‎1.1:
 
“2010 Annual Report” means the Annual Report of the Company for the fiscal year
ending December 31, 2010, as filed with the Commission on Form 10-K (or such
other form appropriate for such purpose as promulgated by the Commission).
 
“2010 Actual EBIT” has the meaning set forth in Section 4.12(b).
 
“2010 Guaranteed EBIT” has the meaning set forth in Section 4.12(b).
 
“2011 Annual Report” means the Annual Report of the Company for the fiscal year
ending December 31, 2011, as filed with the Commission on Form 10-K (or such
other form appropriate for such purpose as promulgated by the Commission).
 
“2011 Actual EBIT” has the meaning set forth in Section 4.12(c).
 
“2011 Guaranteed EBIT” has the meaning set forth in Section 4.12(c).
 
“Action” as to any Person, 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 such Person,
any of such Person’s Subsidiaries or any of such Person’s or such Subsidiaries’
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 144.
 
“Business Day” means any day except Saturday, Sunday and any day which is a
federal legal holiday or a day on which banking institutions in the State of New
York or State of Nevada 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, Rights,
Preferences, Privileges and Restrictions to be filed with the Secretary of State
for the state of Nevada relating to the Series A Preferred Stock substantially
in the form of Exhibit D attached hereto.
 
“Closing” means the closing of the purchase and sale of the Shares on the
Closing Date.
 
“Closing Date” means August __, 2010, 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 Placement Agent and the Closing Escrow Agent in
the form of Exhibit C hereto.
 
“Closing Escrow Agent” shall mean Signature Bank.
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any securities into which such common stock may hereafter be
reclassified or for which it may be exchanged as a class.
 
“Company” has the meaning set forth in the recitals to this Agreement.
 
“Company Counsel” means Reed Smith LLP, 355 Grand Avenue, Suite 2900, Los
Angeles, CA 90071.
 
“Company Deliverables” has the meaning set forth in Section ‎2.2(a).
 
“Company Entities” means the Company, its Subsidiaries and any entities which
hereafter become Subsidiaries of the Company.
 
“Company Party” has the meaning set forth in Section ‎4.7.
 
“Conversion Shares” means the shares of Common Stock issuable upon conversion of
the Shares.
 
“Disclosure Materials” has the meaning set forth in Section ‎3.1(h).

 
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“EBIT” means, for a particular fiscal year, the consolidated earnings before
interest and taxes, calculated in accordance with GAAP, as reported in the
Company’s Annual Report on Form 10-K for such fiscal year, plus all costs and
expenses associated with the transactions contemplated by this Agreement and the
other Transaction Documents, including, all costs, expenses and non-cash charges
associated with the conversion of the Shares, the exercise of the Warrants, any
change in the fair value of the Warrants or the release of the Escrow Shares to
the Investors and/or the Make Good Pledgor.
 
“Effective Date” means the date that the Registration Statement required by
Section 2(a) of the Registration Rights Agreement is first declared effective by
the Commission.
 
“Escrow Shares” has the meaning set forth in Section 4.12(a).
 
“Evaluation Date” has the meaning set forth in Section ‎3.1(t).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“GAAP” means U.S. generally accepted accounting principles.
 
“Guaranteed EBIT” has the meaning set forth in Section 4.12(b).
 
“Intellectual Property Rights” has the meaning set forth in Section ‎3.1(q).
 
“Investment Amount” means, with respect to each Investor, the Investment Amount
indicated on such Investor’s signature page to this Agreement, which is also
reflected on the Schedule of Investors attached hereto as Appendix A.
 
“Investor Deliverables” has the meaning set forth in Section ‎2.2(b).
 
“Investor Party” has the meaning set forth in Section ‎4.6.
 
“Investor Warrants” shall mean the warrants substantially in the form of Exhibit
A, attached hereto and made a part hereof, respecting the holders’ rights to
purchase the same number of shares of Common Stock as is equal to the number of
Shares issued at the Closing, in the aggregate, at a price per share of $0.75.
 
“Lien” means any lien, charge, encumbrance, security interest, right of first
refusal, right of participation or other restrictions of any kind.
 
“Losses” has the meaning set forth in Section ‎4.6.
 
“Make Good Pledgor” means Ms. Chui Wai Chun.
 
“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, properties
business or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or (iii) a material and adverse impairment to
the Company’s ability to perform on a timely basis its obligations under any
Transaction Document.

 
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“Money Laundering Laws” has the meaning set forth in Section ‎3.1(cc).
 
“New York Courts” means the state and federal courts sitting in the City of New
York, Borough of Manhattan.
 
“OFAC” has the meaning set forth in Section ‎3.1(bb).
 
“Outside Date” means the fifteenth calendar day (if such calendar day is a
Trading Day and if not, then the first Trading Day following such fifteenth
calendar day) following the date of 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.
 
“Placement Agent” means National Securities Corporation.
 
“Placement Agent Agreement” means the Placement Agent Agreement, dated as of May
27, 2010, among the Placement Agent and the Company.
 
“Placement Agent Warrants” means the warrants to be issued and sold by the
Company to the Placement Agent at the Closing pursuant to the Placement Agent
Agreement.
 
“Placement Agent Shares” means any shares of Common Stock issuable upon the
exercise of Placement Agent Warrants.
 
“PRC” means the People’s Republic of China, not including Taiwan, Hong Kong and
Macau.
 
“Preferred Stock” means the shares of Series A 10% Convertible Preferred Stock
having the rights, preferences and privileges and subject to the limitations set
forth in the Certificate of Designation.
 
“Registrable Securities” shall mean, collectively, the Conversion Shares and the
Warrant Shares.
 
“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the date hereof, among the Company and the Investors, in the form of
Exhibit B 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 Registrable Securities.
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“SEC Reports” has the meaning set forth in Section ‎3.1(h).

 
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“Securities” has the meaning set forth in Section 4.1(c).
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Securities Escrow Agent” means Globex Transfer LLC.
 
“Securities Escrow Agreement” means the Securities Escrow Agreement, dated as of
the date hereof, among the Company, the Securities Escrow Agent, the Make Good
Pledgor and the Investors, in the form of Exhibit E hereto.
 
“Share Delivery Date” has the meaning set forth in Section 4.1(c).
 
“Shares” means the shares of Preferred Stock being issued and sold to the
Investors by the Company hereunder (not including the Warrant Shares).
 
“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” of any Person means any “subsidiary” as defined in Rule 1-02(x) of
the Regulation S-X promulgated by the Commission under the Exchange Act of such
Person.
 
“Trading Day” means (i) a day on which the Common Stock is traded on a Trading
Market or (ii) if the Common Stock is not listed or quoted on any Trading
Market, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i) or (ii)
hereof, then Trading Day shall mean a Business Day.
 
“Trading Market” means whichever of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the
NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed
or quoted for trading on the date in question.
 
“Transaction Documents” means this Agreement, the Registration Rights Agreement,
the Closing Escrow Agreement, the Securities Escrow Agreement, the Investor
Warrants and the Placement Agent Warrants and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
 
“Transfer Agent” means Globex Transfer LLC, the current transfer agent of the
Company with a mailing address of 780 Deltona Blvd., Suite 202, Deltona, FL
32725, and a facsimile number of (386) 267-3124, and any successor transfer
agent of the Company.
 
“Warrant Shares” shall mean, collectively, the shares of Common Stock to be
issued upon exercise of the Investor Warrants.

 
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ARTICLE 2.
 
PURCHASE AND SALE
 
2.1           Purchase and Sale; Closing.
 
(a)           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 Shares and Investor Warrants 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 Placement Agent and the
Company as provided in the Closing Escrow Agreement.  The Company shall cause
the Shares and Investor Warrants 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 Closing Escrow Agreement.
 
(b)           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 Shares and Investor Warrants set forth next to such Investor’s name on
Schedule A attached hereto in exchange for such Investor’s portion of the
Original Purchase Price.  The Closing shall take place at the offices of Pryor
Cashman LLP, 7 Times Square, New York, New York on the Closing Date or at such
other location or time as the parties may agree.
 
2.2           Closing Deliveries.  (a)  At the Closing, the Company shall
deliver or cause to be delivered to each Investor the following (the “Company
Deliverables”):
 
 (i)              a certificate evidencing a number of Shares set forth opposite
such Investor’s name on Appendix A hereto under the heading “Preferred Shares,”
registered in the name of such Investor; and
 
 (ii)            an Investor Warrant, issued in the name of such Investor,
pursuant to which such Investor shall have the right to acquire such number of
Warrant Shares set forth opposite such Investor’s name on Appendix A hereto
under the heading “Warrant Shares”; and
 
 (iii)           the Registration Rights Agreement duly executed by the Company.
 
(b)           By the Closing, each Investor shall deliver or cause to be
delivered this agreement and the agreements specified in Section ‎5.2(d), each
duly signed by the Investor (collectively, the “Investor Deliverables”).
 
ARTICLE 3.
 
REPRESENTATIONS AND WARRANTIES
 
3.1           Representations and Warranties of the Company.  Except as
otherwise described in SEC Reports or as set forth under the corresponding
section of the Disclosure Schedules, which Disclosure Schedules shall be deemed
a part hereof, the Company hereby makes the following representations and
warranties to each Investor as of the date hereof and as of the Closing Date as
follows (which representations and warranties shall be deemed to apply, where
appropriate, to each Subsidiary of the Company):

 
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(a)           Subsidiaries.  The Company has no Subsidiaries other than those
listed in Exhibit 21 to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2009.  Except as disclosed in Schedule 3.1(a) hereto, the
Company owns, directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens and all the issued and
outstanding shares of capital stock or other equity interests of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase such securities.
 
(b)           Organization and Qualification.  Each of the Company and the
Subsidiaries is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted except
where failure to be so qualified, organized or have such power and authority
would not reasonably be expected to result in a Material Adverse
Effect.  Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents.  Each of the Company and the
Subsidiaries is duly qualified to conduct its businesses and is in good standing
as a foreign corporation or other entity in each jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect.
 
(c)           Authorization; Enforcement.  The Company has the requisite
corporate and other power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations thereunder.  The execution and delivery 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 it in connection with
such authorization.  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 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.
 
(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 organization or charter documents, or
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or material asset of the Company or any Subsidiary is bound or
affected, except to the extent that such conflict, default, termination,
amendment, acceleration or cancellation right would not reasonably be expected
to result in a Material Adverse Effect 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 to the extent that such violation would not reasonably be
expected to result in a Material Adverse Effect.

 
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(e)           Filings, Consents and Approvals.  The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any United States 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 ‎4.4, (v) filings, consents and approvals required by the rules and
regulations of the applicable Trading Market, (vi) the filing of the Certificate
of Designation with the Secretary of State of the State of Nevada, (vii) those
that have been made or obtained prior to the date of this Agreement, and (viii)
other post closing securities filings or notifications required to be made under
federal or state securities laws.
 
(f)            Issuance of Shares.  The Shares, the Conversion Shares, the
Warrant Shares and the Placement Agent Shares have been duly authorized and,
when issued and paid for in accordance with the Transaction Documents, will be
duly and validly issued, fully paid and nonassessable, free and clear of all
Liens other than restrictions on transfer provided for in the Transaction
Documents and under applicable federal and state securities laws.  As of the
Closing, the Company has reserved from its duly authorized capital stock the
shares of Preferred Stock and Common Stock issuable pursuant to the Transaction
Documents in order to issue the Shares, the Conversion Shares, the Warrant
Shares and the Placement Agent 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, script 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 Shares and the Investor Warrants hereunder
will not, immediately or with the passage of time, obligate the Company or any
Subsidiary to issue shares of Common Stock or other securities to any Person
(other than the Investors and the Placement Agent) and will not result in a
right of any holder of Company or Subsidiary securities to adjust the exercise,
conversion, exchange or reset price under such securities.

 
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(h)           SEC Reports.  Except as set forth on Schedule ‎3.1(h) to this
Agreement, the Company has timely 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, the “Disclosure Materials”)
or has timely filed for 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 or the Exchange Act, as applicable, and the
applicable 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.
 
(i)            Financial Statements.  As of their respective dates, the
financial statements of the Company included in the SEC Reports complied as to
form in all material respects with applicable accounting requirements and the
applicable published rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements were
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..
 
(j)            Press Releases.  To the knowledge of the Company, 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.
 
(k)           Material Changes.  Except as specified on Schedule ‎3.1(k) or in
the Disclosure Materials, since June 30, 2010 (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 or any of its
Subsidiaries has incurred any material liabilities (contingent or otherwise)
other than (A) trade payables, accrued expenses and other liabilities incurred
in the ordinary course of business consistent with past practice, and (B)
liabilities not in excess of $100,000 in the aggregate not required to be
reflected in the Company’s or its Subsidiaries’ financial statements pursuant to
GAAP or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting or the identity of its
auditors, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) the
Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock-based plans.

 
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(l)            Litigation.  There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Shares or the Warrants, or (ii) if there were an unfavorable
decision, individually or in the aggregate, would have or could reasonably be
expected to have 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 of its current or
former directors or officers (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 under the Exchange Act or the
Securities Act.
 
(m)          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 its Subsidiaries.
 
(n)           Indebtedness; Compliance.  Except as disclosed on Schedule
‎3.1(n), neither the Company nor any of its Subsidiaries is a party to any
indenture, debt, capital lease obligations, mortgage, loan or credit agreement
by which it or any of its properties is bound.  Neither the Company nor any of
its Subsidiaries is (i) 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 such entity under), nor has the Company or any of
its Subsidiaries 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),
except where such default or violation could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, (ii) in violation of any order of any court, arbitrator or governmental
body, except where such order could not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect or (iii) in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as
could not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect.  The Company is in compliance in all
material respects with all effective requirements of the Sarbanes-Oxley Act of
2002, as amended, and the rules and regulations thereunder that are applicable
to it, except where such noncompliance could not have or reasonably be expected
to result in a Material Adverse Effect.
 
(o)           Regulatory Permits.  The Company and its Subsidiaries possesses
all certificates, authorizations and permits issued by the appropriate United
States or 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 written
notice of proceedings relating to the revocation or modification of any such
permits.

 
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(p)           Title to Assets.  There is no real property that is material to
the respective businesses of the Company and its Subsidiaries, except as
disclosed in the Disclosure Materials.  The Company and the Subsidiaries have
good and marketable title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, 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 with 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.
 
(q)           Patents and Trademarks.  Set forth on Schedule ‎3.1(q) is a list
of patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights that the
Company and its Subsidiaries own or have 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 and material to the business of the Company and its Subsidiaries
in connection with its businesses as described in the Disclosure Materials.
Neither the Company nor any of its Subsidiaries has received a written notice
that the Intellectual Property Rights used by it violates or infringes upon the
rights of any Person.  Except as otherwise disclosed in the Disclosure
Materials, to the knowledge of the Company and its Subsidiaries , all such
Intellectual Property Rights are enforceable and 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 the Subsidiaries has any Intellectual Property Rights that are
necessary and material to the business of the Company or its Subsidiaries 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, the Company or its Subsidiaries which has been asserted
against the Company or its Subsidiaries. The Intellectual Property Rights and
the owner thereof or agreement through which they are licensed to the Company or
its Subsidiaries are set forth in the Disclosure Materials.
 
(r)            Insurance.  The Company and its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which it
is engaged and in the country in which the Company and the Subsidiaries
operate.  The Company and the Subsidiaries have no reason to believe that they
will not be able to renew their existing respective insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue their businesses on terms consistent with market
for the Company’s and the Subsidaries’ lines of business.

 
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(s)           Transactions With Affiliates and Employees; Customers.  Except as
set forth in the Disclosure Materials, none of the officers, directors or 5% or
more shareholders 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 of its Subsidiaries (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
such Person or, to the knowledge of the Company, any entity in which any
officer, director, or such employee or 5% or more shareholder has a substantial
interest or is an officer, director, trustee or partner.  The Company does not
owe any money or other compensation to any of their respective officers or
directors or shareholders, except to extent of contracts and ordinary course
compensation arrangements specified in Schedule ‎3.1(s).  No material customer
of the Company or the Subsidiaries has indicated its intention to diminish its
relationship with the Company or the Subsidiaries, and the Company and the
Subsidiaries have no knowledge from which they could reasonably conclude that
any such customer relationship may be adversely affected.
 
(t)           Internal Accounting Controls.  Except as set forth in the
Disclosure Materials, 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 and the Subsidiaries are establishing disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
the Subsidiaries and designed such disclosure controls and procedures to ensure
that material information relating to the Company Entities 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 Item 307 of 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.
 
(u)           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 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 (ii) 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).

 
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(v)           Certain Fees.  Except as described in Schedule ‎3.1(v), no
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.  The Investors shall have no obligation with
respect to any fees or with respect to any claims (other than such fees or
commissions owed by an Investor pursuant to written agreements executed by such
Investor which fees or commissions shall be the sole responsibility of such
Investor) made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement.
 
(w)           Certain Registration Matters.  Assuming the accuracy of the
Investors’ representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the
Shares and the Warrants by the Company to the Investors under the Transaction
Documents.  As of the date hereof, the Company is eligible to register the
Warrant Shares and the Conversion Shares for resale by the Investors under Form
S-1 promulgated under the Securities Act.  Except as specified in Schedule
‎3.1(w) the Company has not granted or agreed to grant to any Person other than
the Investors pursuant to the Registration Rights Agreement 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 or waived.
 
(x)            Listing and Maintenance Requirements.  Except as specified in the
SEC Reports, the Company has not, in the twelve months preceding the date
hereof, received notice from any Trading Market on which the Common Stock is or
has been listed to the effect that the Company is not in compliance with the
listing or maintenance requirements thereof.  The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with the listing and maintenance requirements for continued listing
of the Common Stock on the Trading Market on which the Common Stock is currently
listed or quoted.  The issuance and sale of the Shares or the Investor Warrants
under the Transaction Documents does not contravene the rules and regulations of
the Trading Market on which the Common Stock is currently listed or quoted, and
no approval of the stockholders of the Company thereunder is required for the
Company to issue and deliver to the Investors the Shares, the Conversion Shares,
the Investor Warrants or the Warrant Shares as contemplated by the Transaction
Documents.
 
(y)           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.
 
(z)            No Additional Agreements.  The Company has no agreement or
understanding with any Investor with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction Documents.
 
(aa)          Foreign Corrupt Practices Act.  Neither Company nor any of its
Subsidiaries, nor to the knowledge of the Company, any agent or other person
acting on behalf of the Company or any of its Subsidiaries, 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 of
its Subsidiaries (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.

 
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(bb)          OFAC. Neither the Company nor any of its Subsidiaries, to the
knowledge of the Company, any director, officer, agent, employee, Affiliate or
Person acting on behalf of the Company or any of the Subsidiaries, 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 Shares, 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.
 
(cc)           Money Laundering Laws. The operations of the Company and its
Subsidiaries 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 with respect to the Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened.
 
(dd)          Disclosure.  Neither the Company 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 or its businesses, except insofar as the
existence and terms of the proposed transactions contemplated hereunder may
constitute such information. The Company understands and confirms that the
Investors will rely on the foregoing representations and covenants in effecting
transactions in securities of the Company.  All disclosure provided to the
Investors regarding the Company and its businesses and the transactions
contemplated hereby, furnished by or on behalf of the Company (including its
representations and warranties set forth in this Agreement and the disclosure
set forth in any diligence report or business plan provided by the Company or
any Person acting on the Company’s behalf) are true and correct and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
 
(ee)           No General Solicitation.  Neither the Company, nor any of its
affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Shares and the
Investor Warrants.
 
(ff)            Escrow Shares. The Make Good Pledgor is the sole record and
beneficial owners of the Escrow Good Shares, and hold such shares free and clear
of all Liens.
 
(gg)          Additional PRC Representations and Warranties.

 
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(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 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.
 
Each Investor acknowledges and agrees that the Company has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.1.

 
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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 of the date hereof and as of the Closing Date 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, partnership or
other power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents to which it is a party or a signatory
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 Transaction Document executed
by such Investor 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 Shares and the
Investor Warrants as principal for its own account and not with a view to or for
distributing or reselling such Shares or Investor Warrants or any other
Securities or any part thereof, without prejudice, however, to such Investor’s
right at all times to sell or otherwise dispose of all or any part of the
Securities in compliance with applicable federal and state securities
laws.  Subject to the immediately preceding sentence, nothing contained herein
shall be deemed a representation or warranty by such Investor to hold the
Securities for any period of time.  Such Investor is acquiring the Shares and
the Investor Warrants hereunder in the ordinary course of its business. Such
Investor does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Securities.
 
(c)           Investor Status.  At the time such Investor was offered the Shares
and the Investor Warrants, it was, and at the date hereof it is, and as of the
Closing Date it will be, (i) an “accredited investor” as defined in Rule 501(a)
under the Securities Act or (ii) a “qualified institutional buyer” as defined in
Rule 144A(a) under the Securities Act.  Such Investor is not a registered
broker-dealer under Section 15 of the Exchange Act.  Such Investor has such
experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in the Shares and the Investor
Warrants.  Such Investor acknowledges that an investment in the Shares and the
Investor Warrants is speculative and involves a high degree of risk.
 
(d)           General Solicitation.  Such Investor is not purchasing the Shares
or the Investor Warrants as a result of any advertisement, article, notice,
meeting, or other communication regarding the Shares or the Investor Warrants
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.

 
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(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 Shares and the Investor Warrants and the merits and risks of
investing in the Shares and the Investor Warrants; (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 the Placement Agent regarding an
investment in the Company and (2) the 30th day prior to the date of this
Agreement.  Such Investor covenants that neither it nor any Person acting on its
behalf or pursuant to any understanding with it will engage in any transactions
in the securities of the Company (including Short Sales) prior to the time that
the transactions contemplated by this Agreement are publicly disclosed.
 
(g)           Independent Investment Decision.  Such Investor has independently
evaluated the merits of its decision to purchase the Shares and the Investor
Warrants 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 the Placement Agent or any of its agents, counsel or
Affiliates in making its investment decision hereunder, and confirms that none
of such Persons has made any representations or warranties to such Investor in
connection with the transactions contemplated by the Transaction Documents.
 
(h)           Rule 144.  Such Investor understands that the Securities must be
held indefinitely unless such Securities are registered under the Securities Act
or an exemption from registration is available.  Such Investor acknowledges that
it is familiar with Rule 144 and that such Investor has been advised that
Rule 144 permits resales only under certain circumstances.  Such Investor
understands that to the extent that Rule 144 is not available, such Investor
will be unable to sell any Securities without either registration under the
Securities Act or the existence of another exemption from such registration
requirement.
 
(i)            Financial Risks. The Investor acknowledges that the Investor is
able to bear the financial risks associated with an investment in the Shares and
the Investor Warrants 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 Shares and Investor Warrants 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
Shares and Investor Warrants being purchased by the Investor from the Company.

 
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(j)            Certain Fees. 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.
 
(k)           General.  Such Investor understands that the Securities are being
offered and sold in reliance on a transactional exemption from the registration
requirements of federal and state securities laws and the Company is relying
upon the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Investor set forth herein in order to
determine the applicability of such exemptions and the suitability of such
Investor to acquire the Securities.  Such Investor understands that no United
States federal or state agency or any government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
 
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           Transferability; Certificate.  (b)  The Securities (as defined in
Section 4.1(c)) may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of the Securities other than
pursuant to an effective registration statement, to the Company, to an Affiliate
of an Investor or in connection with a pledge as contemplated by 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 (as defined in Section 4.1(c))
will contain the following legend, until such time as they are not required
under Section 4.1(d):
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE 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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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).
 
(c)           Certificates evidencing the Shares, the Conversion Shares, the
Investor Warrant, the Warrant Shares or any Escrow Shares released to Investors
(collectively, the “Securities”), 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, while a registration statement (including the Registration
Statement) covering such Securities 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 in the event the Registration Statement with respect to the
Securities is no longer current), or (ii) following a sale or transfer of such
Securities pursuant to Rule 144 (assuming the transferee is not an Affiliate of
the Company), or (iii) while such Securities are eligible for sale by the
selling Investor without volume restrictions under Rule 144.  If an Investor
shall make a sale or transfer of Securities either (x) pursuant to Rule 144 or
(y) pursuant to a registration statement and in each case shall have delivered
to the Company or the Company’s transfer agent the certificate representing the
applicable Securities containing a restrictive legend which are the subject of
such sale or transfer and a representation letter in customary form (the date of
such sale or transfer and Securities delivery being the “Share Delivery Date”)
and (1) the Company shall fail to deliver or cause to be delivered to such
Investor a certificate representing such Securities that is free from all
restrictive or other legends by the third Trading Day following the Share
Delivery Date and (2) following such third Trading Day after the Share Delivery
Date and prior to the time such Securities are received free from restrictive
legends, the Investor, or any third party on behalf of such Investor, purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Investor of such Securities (a “Buy-In”), then,
in addition to any other rights available to the Investor under the Transaction
Documents and applicable law, the Company shall pay in cash to the Investor (for
costs incurred either directly by such Investor or on behalf of a third party)
the amount by which the total purchase price paid for Common Stock as a result
of the Buy-In (including brokerage commissions, if any) exceed the proceeds
received by such Investor as a result of the sale to which such Buy-In
relates.  The Investor shall provide the Company written notice indicating the
amounts payable to the Investor in respect of the Buy-In.  The Company may not
make any notation on its records or give instructions to any transfer agent of
the Company that enlarge the restrictions on transfer set forth in this Section.

 
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4.2           Furnishing of Information.  As long as any Investor owns any
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act.  As long as any Investor owns Securities, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
the Investors and make publicly available in accordance with Rule 144(c) such
information as is required for the Investors to sell the Securities under Rule
144.  The Company further covenants that it will take such further action as any
holder of Securities may reasonably request, all to the extent required from
time to time to enable such Person to sell the Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144.
 
4.3           Integration.  The Company shall not, and shall use its best
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Shares and the Investor Warrants in a manner that would
require the registration under the Securities Act of the sale of the Shares and
the Investor Warrants to the Investors, or that would be integrated with the
offer or sale of the Shares and the Investor Warrants for purposes of the rules
and regulations of any Trading Market in a manner that would require stockholder
approval of the sale of the Shares and the Investor Warrants to the Investors.
 
4.4           Subsequent Registrations.  The Company may not file any
registration statement (other than on Form S-8 or Form S-4) with the Commission
with respect to any securities of the Company prior to the time that all
Registrable Securities 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 Registrable
Securities.
 
4.5           Securities Laws Disclosure; Publicity.  By 5:00 p.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 4.12 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
the Registration Statement and any exhibits to filings made in respect of this
transaction in accordance with periodic filing requirements under the Exchange
Act) or any regulatory agency or Trading Market, 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           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 in respect thereof
(collectively, “Losses”) that any such Investor Party may suffer or incur as a
result of or relating to any misrepresentation, breach or inaccuracy of any
representation, warranty, covenant or agreement made by the Company in any
Transaction Document.  In addition to the indemnity contained herein, the
Company will reimburse each Investor Party for its reasonable legal and other
expenses (including the cost of any investigation, preparation and travel in
connection therewith) incurred in connection therewith, as such expenses are
incurred.  Except as otherwise set forth herein, the mechanics and procedures
with respect to the rights and obligations under this Section ‎4.6 shall be the
same as those set forth in Section 5 of the Registration Rights Agreement.
 
4.7           Indemnification of Company Entities.  In addition to the indemnity
provided in the Registration Rights Agreement, each Investor, severally and not
jointly, will indemnify and hold the Company Entities and their directors,
officers, shareholders, partners, employees and agents (each, a “Company Party”)
harmless from any and all Losses that any such Company 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 such Investor in any
Transaction Document.  In addition to the indemnity contained herein, such
Investor will reimburse each Company 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, any Company Entity nor any other Person acting on its or their
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.

 
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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) the Company will take all action reasonably
necessary to continue the listing and trading of its Common Stock on a Trading
Market and will comply in all material respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading Market.
 
4.10         Use of Proceeds.  The Company will use the net proceeds from the
sale of the Shares hereunder for general corporate purposes, including working
capital and other growth initiatives.
 
4.11         Further Assurances.  Each Investor will, the Company will, and the
Company will cause its management to, use their respective reasonable best
efforts to satisfy all of the closing conditions under Section ‎5.1, and will
not take any action which could frustrate or delay the satisfaction of such
conditions.  In addition, either prior to or following the Closing, each
Investor signatory will, and the Company will, and the Company will cause its
management to, perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
 
4.12         Make Good Shares.
 
(a)           At the Closing, upon the execution of the Securities Escrow
Agreement, the Make Good Pledgor shall deliver to the Securities Escrow Agent a
stock certificate or stock certificates evidencing shares of Common Stock equal
to the number of Shares issued at the Closing (collectively, the “Escrow
Shares”).  All Escrow Shares shall be accompanied by stock powers executed in
blank with signature medallion guaranteed.
 
(b)           If the EBIT for the fiscal year ended December 31, 2010 as
reported in the 2010 Annual Report (the “2010 Actual EBIT”) is less than
$7,000,000 (the “2010 Guaranteed EBIT”), then the holders of Shares (“Holders”)
shall be entitled to receive on a “pro rata” basis some or all of the Escrow
Shares as follows:
 
If the percentage determined by dividing the 2010 Actual EBIT by the 2010
Guaranteed EBIT is:
 
 (i)             less than one hundred percent (100%), but at least ninety-five
percent (95%), then five percent (5%) of the Escrow Shares shall be released to
the Investors;
 
 (ii)            less than ninety-five percent (95%), but at least eighty-five
percent (85%), then twenty-five percent (25%) of the Escrow Shares shall be
released to the Investors;
 
 (iii)           less than eighty-five percent, but at least sixty-five percent
(65%), then fifty percent (50%) of the Escrow Shares shall be released to the
Investors;
 
 (iv)           less than sixty-five percent (65%), but at least fifty percent
(50%), then seventy-five percent (75%) of the Escrow Shares shall be released to
the Investors; and

 
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 (v)           less than fifty percent (50%), then one hundred percent (100%) of
the Escrow Shares shall be release to the Investors.
 
(c)           If the EBIT for the fiscal year ended December 31, 2011 as
reported in the 2011 Annual Report (the “2011 Actual EBIT”) is less than
$9,000,000 (the “2011 Guaranteed EBIT”), then the Holders shall be entitled to
receive on a “pro rata” basis some or all of the Escrow Shares that remain in
escrow at such time (the “Remaining Escrow Shares”), as follows:
 
If the percentage determined by dividing the 2011 Actual EBIT by the 2011
Guaranteed EBIT is:
 
 (i)             less than one hundred percent (100%), but at least ninety-five
percent (95%), then five percent (5%) of the Remaining Escrow Shares shall be
released to the Investors;
 
 (ii)            less than ninety-five percent (95%), but at least eighty-five
percent (85%), then twenty-five percent (25%) of the Remaining Escrow Shares
shall be released to the Investors;
 
 (iii)           less than eighty-five percent, but at least sixty-five percent
(65%), then fifty percent (50%) of the Remaining Escrow Shares shall be released
to the Investors;
 
 (iv)           less than sixty-five percent (65%), but at least fifty percent
(50%), then seventy-five percent (75%) of the Remaining Escrow Shares shall be
released to the Investors; and
 
 (v)            less than fifty percent (50%), then one hundred percent (100%)
of the Remaining Escrow Shares shall be release to the Investors.
 
If the 2011 Actual EBIT is greater than or equal to the 2011 Guaranteed EBIT,
then all of the Remaining Escrow Shares shall be released to the Make Good
Pledgor.
 
(d)           Within 10 Business Days after the final determination of the
number of Escrow Shares to which the Holders 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 Holders on a “pro rata”
basis such number of Escrow Shares as are set forth in such instructions.  If
less than all of the Remaining Escrow Shares are delivered to the Holders, the
Securities Escrow Agent shall return the undistributed Remaining Escrow Shares
to the Make Good Pledgor 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 Preferred Stock held by a Holders bears
to the total outstanding shares of Preferred Stock.  Notwithstanding anything to
the contrary set forth herein, in the event of the conversion of shares of
Preferred Stock, the shares of Preferred Stock so converted shall remain
outstanding for the purpose of receiving distribution of Escrow Shares pursuant
to this Section.

 
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(e)           The determination regarding the number and the distribution, if
any, of the Escrow Shares to be distributed to the Holders pursuant to Section
4.12(b) shall be made by the Company and the Placement Agent within 10 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 60 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 Holders on a
pro rata basis within 10 Business Days following the expiration of such 60 day
period.
 
(f)            The determination regarding the number and the distribution, if
any, of the Remaining Escrow Shares to be distributed to the Holders pursuant to
Section 4.12(c) shall be made by the Company and the Placement Agent within 10
Business Days after the date the Company is required to file its 2011 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 2011 Annual Report with the Commission within 60 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 Remaining Escrow Shares shall be
delivered to the Holders on a pro rata basis within 10 Business Days following
the expiration of such 60 day period.
 
(g)           In the event that the Company and the Placement Agent cannot agree
on the number of the Escrow Shares or Remaining Escrow Shares, as the case may
be, to which the Holders are entitled within the 10 Business Day period provided
in clauses (e) or (f) above, then the Company shall select a
nationally-recognized, independent accounting firm registered with the Public
Company Accounting Oversight Board (the “Independent Expert”) and the Company
and the Placement Agent shall jointly retain and refer their disagreements for
final determination to the Independent Expert.  The Company and the Placement
Agent shall instruct the Independent Expert promptly to review this Section 4
and to determine (i) 2010 Actual EBIT or 2011 Actual EBIT, as the case may be,
based solely on the terms of this Agreement and (ii) the number of the Escrow
Shares or Remaining Escrow Shares, as the case may be, to which the Holders are
entitled, if any.  The Company and the Placement Agent shall request that the
Independent Expert deliver to the Company and the Placement Agent, as promptly
as practicable but in no event later than twenty (20) calendar days after its
retention, a report that sets forth its calculation of 2010 Actual EBIT or 2011
Actual EBIT, as the case may be, and its determination of the number of the
Escrow Shares or Remaining Escrow Shares, as the case may be, to which the
Holders are entitled, if any.  The decision of the Independent Expert shall be
final, conclusive and binding on the parties.  The costs and expenses of the
Independent Expert shall be borne by the Company.  Each of the Company and the
Placement Agent agrees to promptly execute, if requested by the Independent
Expert, a reasonable engagement letter, including customary indemnities by the
Company and the Make Good Pledgor in favor of the Independent Expert.
 
(h)           Notwithstanding anything to the contrary set forth herein, only
Holders as of the date of any release of Escrow Shares shall be entitled to
their pro rata portion of the Escrow Shares to be released at such time
calculated based on their ownership interest at the time when the applicable
Escrow Shares become deliverable hereunder.

 
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(i)            If any term or provision of this Section 4.12 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 and Investor Warrants.  The obligation of each Investor to
acquire Shares and Investor Warrants at the Closing is subject to the
satisfaction or waiver by such Investor, at or before the Closing, of each of
the following conditions:
 
(a)           Representations and Warranties.  The representations and
warranties of the Company contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing as though made
on and as of such date;
 
(b)           Performance.  The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing;
 
(c)           No Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;
 
(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)           Company Agreements.  The Company shall have delivered or cause to
be delivered:
 
 (i)            The Closing Escrow Agreement, duly executed by the Company, the
Placement Agent and the Closing Escrow Agent;
 
 (ii)           The Securities Escrow Agreement, duly executed by the Company,
the Make Good Pledgor and the Securities Escrow Agent; and
 
 (iii)          The Registration Rights Agreement, duly executed by the Company;
 
(f)            Company Deliverables.  The Company shall have delivered the
Company Deliverables in accordance with Section ‎2.2(a);
 
(g)           Deposit of Escrow Shares.  The Make Good Pledgor shall have
deposited the Escrow Shares 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

 
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(h)           Termination.  This Agreement shall not have been terminated as to
such Investor in accordance with Section ‎6.5.
 
5.2           Conditions Precedent to the Obligations of the Company to Sell
Shares and Investor Warrants.  The obligation of the Company to sell Shares and
Investor Warrants 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 shall
have delivered a completed Selling Holder Questionnaire (as defined in the
Registration Rights Agreement); and
 
(e)           Termination.  This Agreement shall not have been terminated as to
such Investor in accordance with Section ‎6.5.
 
ARTICLE 6.
 
MISCELLANEOUS
 
6.1           Fees and Expenses.  Each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of the Transaction Documents.  The Company
shall pay all stamp and other taxes and duties levied in connection with the
sale of the Shares.
 
6.2           Entire Agreement.  The Transaction Documents, together with the
Exhibits, Appendix A and Appendix B, 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.

 
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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, if sent by any means other than facsimile.  The
address for such notices and communications shall be as follows:
 

 
If to the Company:
GHN Agrispan Holding Company
402 M, No. 16 Xinfeng 3rd Road
Xiamen City, PRC
Facsimile:  (86)05925738806
Attn.: President
       
With a copy to:
Reed Smith LLP
355 Grand Avenue, Suite 2900
Los Angeles, CA 90071
Facsimile: (213) 457-8080
Attention: Allen Z. Sussman, 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
Attention.: 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 shares
of Preferred Stock issued pursuant to 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 Shares.

 
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6.5           Termination.  This Agreement may be terminated as to any Investor
prior to Closing as follows:
 
(a)           by written agreement of any Investor (as to itself but no other
Investor) and the Company, a copy of which shall be delivered 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, 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 Section ‎6.5(a) or ‎6.5(b), each
Investor shall have the right to a return of up to its entire Investment Amount,
without interest or deduction.  The Company covenants and agrees to cooperate
with such Investor in obtaining the return of its Investment Amount.
 
In the event of a termination pursuant to this Section ‎6.5, 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 subscribers for the majority
in interest of the Shares (or, after the Closing, consent of the Investors,
including any of their successor or assigns, holding a majority in interest of
the Shares).  Any Investor may assign any or all of its rights under the
Transaction Documents to any Person to whom such Investor assigns or transfers
any Shares, provided such transferee agrees in writing to be bound, with respect
to the transferred Shares, by the provisions thereof 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 ‎4.6 (as to each
Investor Party and Company Party).

 
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6.9             Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof.  Each
party agrees that all Actions 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 Action, any claim that it is not personally subject to the jurisdiction
of any such New York Court, or that such Action 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
Action 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 an Action to
enforce any provisions of a Transaction Document, then the prevailing party in
such Action 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 Action.
 
6.10           Survival.  The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery of the
Shares and the Investor Warrants.
 
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 or electronic portable document format 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 or electronic portable document format 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.

 
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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, such notice, demand or election in whole or in part
without prejudice to its future actions and rights.
 
6.14           Replacement of Shares.  If any certificate or instrument
evidencing any 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 Shares.  If a replacement
certificate or instrument evidencing any 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.

 
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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 Shares and Investor Warrants 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 Shares and Investor Warrants 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.
 
6.18           Limitation of Liability.  Notwithstanding anything herein to the
contrary, each party acknowledges and agrees that the liability of a party
arising directly or indirectly, under any Transaction Document of any and every
nature whatsoever shall be satisfied solely out of the assets of such party, and
that no trustee, officer, other investment vehicle or any other Affiliate of
such party or any investor, shareholder or holder of shares of beneficial
interest of such party shall be personally liable for any liabilities of such
party.
 
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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.
 
 

 
GHN AGRISPAN HOLDING COMPANY
         
 
By:
/s/        Name        Title           

 
 

 
 
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[SIGNATURE PAGES FOR INVESTORS TO FOLLOW]
 
 
 
 
 
 
 
 
 
 
 
 

 
 

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IN WITNESS WHEREOF, the parties hereto have caused the Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 

 
NAME OF INVESTOR
     

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By:
   

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Name:
   

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Title:
   

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Investment Amount:
 

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Tax ID No.:
   

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ADDRESS FOR NOTICE
   
c/o:
   

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Street:
   

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City/State/Zip:
 

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Attention:
   

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Tel:
   

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Fax:
   

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Appendix A
Schedule of Investors
 
Appendix B
Disclosure Schedules
 
Exhibit A
Form of Investor Warrant
 
Exhibit B
Form of Registration Rights Agreement
 
Exhibit C
Closing Escrow Agreement
 
Exhibit D
Certificate of Designation
 
Exhibit E
Securities Escrow Agreement
 

 
 
 
 
 
 
 
 
 

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