EXHIBIT 10.1
 
SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of April 17,
2008, by and among Yongye Biotechnology International, Inc., a Nevada
corporation (the “Company”), Fullmax Pacific Limited, an international business
company incorporated in the British Virgin Islands (“BVI”), Inner Mongolia
Yongye Nong Feng Biotechnology Co., Ltd., a cooperative joint venture organized
under the laws of the People’s Republic of China (“CJV”), and the investors
listed on the Schedule of Investors attached hereto as Appendix A (each, an
“Investor” and collectively, the “Investors”).
 
WHEREAS, on the date hereof, the Company entered into a Share Exchange
Agreement, which will be filed with the Company’s Current Report on Form 8-K
under the Exchange Act (as defined below) (the “Exchange Agreement”) as an
exhibit (a draft of which Form 8-K (the “Super 8-K”) is attached hereto as
Appendix B), with BVI and the Company, and the shareholder of BVI, pursuant to
which the Company will, subject to the terms and conditions thereof, acquire all
of the equity interest of BVI and, indirectly, all of BVI’s subsidiaries, in
exchange for at least 84.7% of the total outstanding shares of Common Stock
(hereinafter defined) on a fully diluted basis as of the time of the closing of
the exchange under the Exchange Agreement and immediately prior to the Closing
under this Agreement (the “Exchange”).
 
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 Common 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:
 
“2008 Annual Report” means the Annual Report of the Company for the fiscal year
ending December 31, 2008, as filed with the Commission on Form 10-K (or such
other form appropriate for such purpose as promulgated by the Commission).
 
“2008 Guaranteed ATNI” has the meaning set forth in Section 4.11.
 
“2008 Make Good Shares” has the meaning set forth in Section 4.11.

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“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.
 
“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.
 
“After Tax Net Income” shall have the meaning set forth in Section 4.11.
 
“Available Undersubscription Amount” has the meaning set forth in Section 4.15.
 
“Basic Amount” has the meaning set forth in Section 4.15(b).
 
“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).
 
“BVI” has the meaning set forth in the recitals to this Agreement.
 
“CJV” has the meaning set forth in the recitals to this Agreement.
 
“CJV Founder” means Mr. Zishen Wu.
 
“Closing” means the closing of the purchase and sale of the Shares pursuant to
Article II.
 
“Closing Date” means the Business Day on which all of the conditions set forth
in Sections 5.1 and 5.2 hereof are satisfied, or such other date as the parties
may agree.
 
“Closing Escrow Agreement” means the Closing Escrow Agreement, dated as of the
date hereof, among the Company, the CJV, the Placement Agent (defined below),
the Investors and the Escrow Agent (defined below), in the form of Exhibit A
hereto, as may be amended from time to time pursuant to Section 6.4 of this
Agreement.
 
“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 Entities” means the Company, BVI, CJV and all existing Subsidiaries of
any such entities and any other entities which hereafter become Subsidiaries of
any such entities.

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“Common Stock Equivalents” means any securities of the Company or any Subsidiary
which entitle the holder thereof to acquire Common Stock at any time, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.
 
“Company U.S. Counsel” means Loeb & Loeb LLP, having an address at 345 Park
Avenue, New York, NY 10154, Attention: Mitchell S. Nussbaum, Esq., with a Fax
No. of (212) 407-4990.
 
“Company Deliverables” has the meaning set forth in Section 2.2(a).
 
“Disclosure Materials” has the meaning set forth in Section 3.1(h).
 
“Effective Date” means the date that the Registration Statement required by
Section 2(a) of the Registration Rights Agreement is first declared effective by
the Commission.
 
“Escrow Agent” means Tri-State Title & Escrow, LLC with an address at 360 Main
Street, Washington, VA 22747.
 
“Evaluation Date” has the meaning set forth in Section 3.1(s).
 
“Exchange” has the meaning set forth in the recitals to this Agreement.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Exchange Agreement” has the meaning set forth in the recitals to this
Agreement.
 
“Existing Company Entities” means the Company, BVI, CJV and their respective
Subsidiaries.
 
“GAAP” means U.S. generally accepted accounting principles.
 
“Initial Financing” shall mean the issuance, after the date hereof and within
120 days after the date hereof, of Common Stock or convertible debt securities
to not more than five accredited investors (with any such investors as shall be
affiliated being considered as one such investor) for an aggregate consideration
to the Company in an amount not to exceed $10 million, provided that such
accredited investors shall meet the definition thereof contained in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
 
“Intellectual Property Rights” has the meaning set forth in Section 3.1(p).
 
“Intellectual Property Rights Licensing Agreements” has the meaning set forth in
Section 3.1(p).

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“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 4.7.
 
“Investor Warrants” shall mean the warrant certificates in the form of Exhibit
B-1, attached hereto and made a part hereof, respecting the holders’ rights to
purchase 1,623,905 shares of Common Stock in the aggregate, at a price per share
of $1.848.
 
“Lien” means any lien, charge, encumbrance, security interest, right of first
refusal, right of participation or other restrictions of any kind.
 
“Lockup Agreement” means the Lockup Agreement, dated as of the date hereof, by
and between the Company and each person listed as a signatory thereto, in the
form attached as Exhibit E hereto.
 
“Losses” has the meaning set forth in Section 4.7.
 
“Make Good Escrow Agreement” means the Make Good Escrow Agreement, dated as of
the date hereof, among the Company, Tri-State Title & Escrow, LLC, as escrow
agent (the “Make Good Escrow Agent”), the Make Good Pledgor (defined below) and
the Investors, in the form of Exhibit C hereto, as may be amended from time to
time pursuant to Section 6.4 of this Agreement.
 
“Make Good Pledgor” means, Full Alliance International Limited, an international
business company incorporated under the laws of the British Virgin Islands, as
to 2,000,000 shares of the Company’s Common Stock issued to the Make Good
Pledgor, constituting the 2008 Make Good Shares.
 
“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,
prospects, business or condition (financial or otherwise) of the Company and the
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, or the Exchange Agreement.
 
“Money Laundering Laws” has the meaning set forth in Section 3.1(ff).
 
“New York Courts” means the state and federal courts sitting in the City of New
York, Borough of Manhattan.
 
“Notice” has the meaning set forth in Section 4.13.
 
“Notice of Acceptance” has the meaning set forth in Section 4.15.

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“Offer” has the meaning set forth in Section 4.15.
 
“Offer Notice” has the meaning set forth in Section 4.15.
 
“Offer Period” has the meaning set forth in Section 4.15.
 
“Offered Securities” has the meaning set forth in Section 4.15.
 
“OFAC” has the meaning set forth in Section 3.1(ee).
 
“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.
 
“Per Share Purchase Price” equals $1.5396.
 
“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 Warrant” shall mean the warrant certificate issued to ROTH
Capital Partners, LLC in the form of Exhibit B-2, attached hereto and made a
part hereof, representing the warrant holder’s right to purchase 649,562 shares
of Common Stock at a price per share of $1.848.
 
“PRC” means, for the purpose of this Agreement, the People’s Republic of China,
not including Taiwan, Hong Kong and Macau.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or, to the knowledge of the Company,
threatened.
 
“Refused Securities” has the meaning set forth in Section 4.15.
 
“Registrable Securities” shall mean, collectively, the Shares, the Make Good
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 D hereto.
 
“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Investors of the Shares.
 
“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.
 
“Share Delivery Date” has the meaning set forth in Section 4.1(c).
 
“Shares” means the 6,495,619 shares of Common Stock being issued and sold to the
Investors by the Company hereunder.
 
“Short Sales” include, without limitation, all “short sales” as defined in Rule
200 promulgated under Regulation SHO under the Exchange Act and all types of
direct and indirect stock pledges, forward sale contracts, options, puts, calls,
swaps and similar arrangements (including on a total return basis), and sales
and other transactions through non-US broker dealers or foreign regulated
brokers.
 
“Subsequent Placement” has the meaning set forth in Section 4.15.
 
“Subsequent Placement Agreement” has the meaning set forth in Section 4.15.
 
“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. Notwithstanding anything to the contrary set forth in any Transaction
Document, BVI, CJV and their respective subsidiaries are each considered a
Subsidiary of the Company.
 
“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 Make Good Escrow Agreement, the Lockup
Agreement and any other documents or agreements executed in connection with the
transactions contemplated hereunder.
 
“Transfer Agent” means Empire Stock Transfer Inc., the current transfer agent of
the Company with a mailing address of 2470 Saint Rose Parkway, Suite 304,
Henderson, NV 89074 and a facsimile number of (702) 974-1444, and any successor
transfer agent of the Company.
 
“Trigger Date” has the meaning set forth in Section 4.15.

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“Undersubscription Amount” has the meaning set forth in Section 4.15.
 
“Warrant Shares” shall mean, collectively, the Common Stock to be issued under
the Investor Warrants together with the Common Stock to be issued under the
Placement Agent Warrant.
 
ARTICLE 2.
PURCHASE AND SALE
 
2.1 Closing. Subject to the terms and conditions set forth in this Agreement, at
the Closing the Company shall issue and sell to each Investor, and each Investor
shall, severally and not jointly, purchase from the Company, the Shares
representing such Investor’s Investment Amount, calculated as the quotient of
such Investor’s Investment Amount divided by the Per Share Purchase Price. The
Closing shall take place at the offices of Loeb & Loeb LLP on the Closing Date
or at such other location or time as the parties may agree.
 
2.2 Closing Deliveries. (a) At the Closing, the Company shall deliver or cause
to be delivered to each Investor the following (the “Company Deliverables”):
 
(i) a single certificate, dated the Closing Date, issued to each Investor,
respectively, representing that number of aggregate Shares to be issued and sold
at Closing to such Investor, determined under Section 2.1, registered in the
name of such Investor;
 
(ii) an Investor Warrant, dated the Closing Date, issued to each Investor,
respectively, representing the Investor’s right to purchase its pro rata portion
of 1,623,905 aggregate Shares at a per Share price of $1.848;
 
(iii) the Placement Agent Warrant, dated the Closing Date;
 
(iv) the legal opinion of Company U.S. Counsel, in agreed form, addressed to the
Investors; and
 
(v) the legal opinion of special PRC counsel to CJV , in agreed form, addressed
to the Investors.
 
(b) By the Closing, each Investor shall deliver or cause to be delivered the
agreements specified in Section 5.2(d), each duly signed by such Investor
(collectively, the “Investor Deliverables”).
 
(c) Within two (2) Trading Days following the date of this Agreement, each
Investor shall deliver to the Escrow Agent for deposit and disbursement in
accordance with the Closing Escrow Agreement, its Investment Amount, in United
States Dollars and in immediately available funds, by wire transfer to an
account designated in writing by the Company for such purpose.

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ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of the Company. The Company, BVI and CJV
hereby jointly and severally make the following representations and warranties
to each Investor:
 
(a) Subsidiaries. None of the Existing Company Entities have any direct or
indirect Subsidiaries other than as disclosed in Schedule 3.1(a) hereto. Except
as disclosed in Schedule 3.1(i) hereto, upon the consummation of the Exchange,
(i) the Company owns, directly or indirectly, all of the capital stock of each
other Existing Company Entity, and each other Existing Company Entity alone or
together with other Existing Company Entities owns, directly or indirectly, all
of the capital stock of its respective Subsidiaries, in each case free and clear
of any and all Liens, and (ii) all the issued and outstanding shares of capital
stock of each Existing Company Entity and each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights.
 
(b) Organization and Qualification. Each Existing Company Entity, and the Make
Good Pledgor, is duly incorporated or otherwise organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and
use its respective properties and assets and to carry on its respective business
as currently conducted and as to be conducted as specified in the Exchange
Agreement or otherwise in the Current Report on Form 8-K to be filed in
accordance with Section 4.5 herein. No Existing Company Entity is, and neither
is the Make Good Pledgor, in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each Existing Company Entity, and the Make
Good Pledgor, is duly qualified to conduct its respective 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. Each Existing Company Entity which is or is to
become party to any Transaction Document and the Exchange Agreement, and the
Make Good Pledgor, has the requisite corporate and other power and authority to
enter into and to consummate the transactions contemplated by each such
Transaction Document and the Exchange Agreement to which it is a party and
otherwise to carry out its obligations thereunder. The execution and delivery of
the Transaction Documents, by each Existing Company Entity, and by the Make Good
Pledgor, to be party thereto and the consummation by each of them of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of such Existing Company Entity, or the Make Good Pledgor, as
the case may be, and no further action is required by any of them in connection
with such authorization. Each Transaction Document and the Exchange Agreement
has been (or upon delivery will have been) duly executed by the Company, each
other Existing Company Entity and the Make Good Pledgor, required to execute the
same and each Subsidiary (to the extent any of them is a party thereto) and,
when delivered in accordance with the terms hereof, will constitute the valid
and binding obligation of the Company, such Existing Company Entity, the Make
Good Pledgor and such Subsidiary, enforceable against the Company, the Existing
Company Entity, the Make Good Pledgor and the Subsidiary, as the case may be,
each 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. The
execution and delivery of the Exchange Agreement by each party thereto and the
consummation by each of them of the transactions contemplated thereby have been
duly authorized by all necessary action on the part of each such party thereto,
and no further action is required by any of them in connection with such
authorization. The Exchange Agreement has been duly executed by each party
thereto and will constitute the valid and binding obligation of each party
thereto enforceable against each party thereto in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

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(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents and the Exchange Agreement by the Company, and each other Existing
Company Entity and Subsidiary, and the Make Good Pledgor (to the extent a party
thereto) and the consummation by the Company, and such other Existing Company
Entities and Subsidiaries, and the Make Good Pledgor, of the transactions
contemplated thereby do not and will not (i) conflict with or violate any
provision of the Company’s, such Existing Company Entity’s or any Subsidiary’s
or the Make Good Pledgor’s certificate or articles of incorporation, bylaws or
other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing an Existing
Company Entity or Subsidiary or Make Good Pledgor debt or otherwise) or other
understanding to which any Existing Company Entity or any Subsidiary, or the
Make Good Pledgor is a party or by which any property or asset of the Company or
any Subsidiary or the Make Good Pledgor is bound or affected, or (iii) result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any United States or PRC court or governmental authority to
which the Company or a Subsidiary or the Make Good Pledgor is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company or a Subsidiary or the Make Good Pledgor is bound or
affected; except in the case of each of clauses (ii) and (iii), such as could
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect.
 
(e) Filings, Consents and Approvals. No Existing Company Entity is, and the Make
Good Pledgor is not, required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or registration with, any
United States or PRC court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and
performance by the Company, and each Subsidiary, and the Make Good Pledgor, to
the extent such Subsidiary or the Make Good Pledgor, as the case may be, is a
party thereto, of the Transaction Documents or the Exchange Agreement, other
than (i) the filing with the Commission of one or more Registration Statements
in accordance with the requirements of the Registration Rights Agreement, (ii)
filings required by state securities laws, (iii) the filing of a Notice of Sale
of Securities on Form D with the Commission under Regulation D of the Securities
Act, (iv) the filings required in accordance with Section 4.5, (v) filings,
consents and approvals required by the rules and regulations of the applicable
Trading Market, (vi) those that have been made or obtained prior to the date of
this Agreement, (vii) registrations, notices or filings required to be made in
order to comply with the currency and exchange control requirements imposed by
the Chinese government and/or Chinese law, if any, and (vii) other post closing
securities filings or notifications required to be made under federal or state
securities laws.

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(f) Issuance of the Shares. The Shares and the Warrant Shares have been duly
authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens. As of the Closing, the Company has reserved from its
duly authorized capital stock the shares of Common Stock issuable pursuant to
this Agreement in order to issue the Shares and the Warrant Shares.
 
(g) Capitalization. The number of shares and type of all authorized, issued and
outstanding capital stock of the Company, and all shares of Common Stock
reserved for issuance under the Company’s various option and incentive plans, is
specified in Schedule 3.1(g). Except as specified in Schedule 3.1(g), no
securities of any Existing Company Entity are entitled to preemptive or similar
rights, and no Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as specified in Schedule
3.1(g), there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any Person
any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.
The issue and sale of the Shares 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
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.
Except as set forth in Schedule 3.1(g), no Existing Company Entity has issued
any capital stock in a private placement transaction, including, without
limitation, in a transaction commonly referred to in the PRC as a “1 ½
transaction.”
 
(h) SEC Reports; Financial Statements. The Company has filed all reports
required to be filed by it under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (or such shorter period as the Company was required by
law to file such reports), (the foregoing materials being collectively referred
to herein as the “SEC Reports” and, together with Appendix B hereto and the
schedules to this Agreement, the “Disclosure Materials”) on a timely basis or
has timely filed a valid extension of such time of filing and has filed any such
SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company and each
Subsidiary included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

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(i) Press Releases. 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.
 
(j) Material Changes. Except as specifically disclosed in the Disclosure
Materials, since December 31, 2007 (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) no Existing Company Entity has incurred any
liabilities (contingent or otherwise) other than (A) trade payables, accrued
expenses and other liabilities incurred in the ordinary course of business
consistent with past practice, and (B) liabilities not 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) no Existing Company Entity has altered its
method of accounting or the identity of its auditors, (iv) no Existing Company
Entity has 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) no Existing Company
Entity has issued any equity securities to any officer, director or Affiliate,
except pursuant to existing Company stock option plans. The Company does not
have pending before the Commission any request for confidential treatment of
information.
 
(k) Litigation. There is no Action which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the
Shares or (ii) if there were an unfavorable decision, individually or in the
aggregate, result in a loss or liability in an amount in excess of $10,000 or
have or reasonably be expected to result in a Material Adverse Effect. No
Existing Company Entity, nor any director or officer thereof (in his or her
capacity as such), is or has been, and the Make Good Pledgor and none of its
directors or officers are or have 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 any Existing Company
Entity or the Make Good Pledgor or any of their respective 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 or any Subsidiary under the Exchange
Act or the Securities Act.

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(l) Labor Relations. No material labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of any Existing
Company Entity. No Existing Company Entity has any employment or labor
contracts, agreements or other understandings with any Person.
 
(m) Indebtedness; Compliance. Except as disclosed on Schedule 3.1(m), no
Existing Company Entity is, and the Make Good Pledgor is not, a party to any
indenture, debt, capital lease obligations, mortgage, loan or credit agreement
by which it or any of its properties is bound. No Existing Company Entity is,
and the Make Good Pledgor is not, (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 any
Existing Company Entity nor the Make Good Pledgor received notice of a claim
that it is in default under or that it is in violation of, any indenture, loan
or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) in violation of any order of any court,
arbitrator or governmental body, 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 Exchange Agreement complies with all applicable laws, rules and
regulations of the United States and the PRC. The Company is in compliance with
all effective requirements of the Sarbanes-Oxley Act of 2002, as amended, and
the rules and regulations thereunder that are applicable to it, except where
such noncompliance could not have or reasonably be expected to result in a
Material Adverse Effect.
 
(n) Regulatory Permits. The Existing Company Entities possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to possess such
permits could not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect, and no Existing Company Entity
has received any notice of proceedings relating to the revocation or
modification of any such permits.
 
(o) Title to Assets. There is no real property that is material to the
respective businesses of the Existing Company Entities, except as disclosed in
the Disclosure Materials. The Existing Entities have good and marketable title
in all personal property owned by them that is material to their respective
businesses, in each case free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by such Existing
Company Entity. Any real property and facilities held under lease by any
Existing Company Entity are held by them under valid, subsisting and enforceable
leases of which such Existing Company Entity is in compliance, except as could
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect.

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(p) Patents and Trademarks. The Disclosure Materials have disclosed patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, licenses and other similar rights that the Existing Company
Entities 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 Existing Company Entities in connection with their
respective businesses as described in the Disclosure Materials. No Existing
Company Entity has received a written notice that the Intellectual Property
Rights used by any of them violates or infringes upon the rights of any Person.
Except as otherwise disclosed in the Disclosure Materials, to the knowledge of
the Existing Company Entities, 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 Existing Company
Entities, no former or current employee, no former or current consultant, and no
third-party joint developer of any Existing Company Entity has any Intellectual
Property Rights that are necessary and material to the business of the Existing
Company Entities made, developed, conceived, created or written by the aforesaid
employee, consultant or third-party joint developer during the period of his or
her retention by, or joint venture with, such Existing Company Entity which has
been asserted against any Existing Company Entity. The Intellectual Property
Rights and the owner thereof or agreement through which they are licensed to any
of the Existing Company Entities are set forth in the Disclosure Materials
 
(q) Insurance. Each Existing Company Entity is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses it is engaged and in the country in
which the Existing Company Entities operate. The Company has no reason to
believe that it or any Existing Company Entity will not be able to renew its
existing respective insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business on terms consistent with market for the Company’s and such other
Existing Company Entity’s respective lines of business.
 
(r) 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 any Existing Company Entity, and, to the knowledge of the
Company, none of the employees of any Existing Company Entity, is presently a
party to any transaction with any Existing Company Entity (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. None of the Existing Company Entities owes 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(r). No material customer of any Existing Company
Entity has indicated their intention to diminish their relationship with such
Existing Company Entity and no Existing Company Entity has any knowledge from
which it could reasonably conclude that any such customer relationship may be
adversely affected.

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(s) Internal Accounting Controls. The Existing Company Entities 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 is establishing disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company Entities
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-KSB or 10-QSB, 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-B 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-KSB or Form 10-QSB the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date.
 
(t) Solvency. Based on the financial condition of the Company, including the
Existing Company Entities, as of the Closing Date (and assuming that the Closing
shall have occurred), (i) each Existing Company Entity’s assets do not
constitute unreasonably small capital to carry on their respective 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 such Existing Company Entity, and
projected capital requirements and capital availability thereof and (ii) the
current cash flow of such Existing Company Entity, together with the proceeds
such Existing Company Entities would receive, were they to liquidate all of
their respective 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 Existing Company Entities do not
intend to incur debts beyond their respective 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). The Make Good Pledgor is not insolvent.
 
(u) Certain Fees. Except as described in Schedule 3.1(u), no brokerage or
finder’s fees or commissions are or will be payable by any Existing Company
Entity to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Investors shall have no obligation with
respect to any fees or with respect to any claims (other than such fees or
commissions owed by an Investor pursuant to written agreements executed by such
Investor which fees or commissions shall be the sole responsibility of such
Investor) made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement.
 
(v) Certain Registration Matters. Assuming the accuracy of the Investors’
representations and warranties set forth in Sections 3.2(b)-(e), no registration
under the Securities Act is required for the offer and sale of the Shares by the
Company to the Investors under the Transaction Documents. The Company is
eligible to register its Common Stock for resale by the Investors under Form S-1
promulgated under the Securities Act. Except as specified in Schedule 3.1(v), no
Existing Company Entity has 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.

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(w) Listing and Maintenance Requirements. Except as specified in the SEC
Reports, the Company has not, in the two years preceding the date hereof,
received notice from any Trading Market to the effect that the Company is not in
compliance with the listing or maintenance requirements thereof. The Company is,
and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with the listing and maintenance requirements for continued
listing of the Common Stock on the Trading Market on which the Common Stock is
currently listed or quoted. The issuance and sale of the Shares under the
Transaction Documents does not contravene the rules and regulations of the
Trading Market on which the Common Stock is currently listed or quoted, and no
approval of the stockholders of the Company thereunder is required for the
Company to issue and deliver to the Investors the Shares as contemplated by the
Transaction Documents.
 
(x) Investment Company. The Company is not, and is not an Affiliate of, and
immediately following the Closing will not have become, an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.
 
(y) Application of Takeover Protections. The Company has taken all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti–takeover provision under the Company’s
Certificate of Incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Investors as a
result of the Investors and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including, without
limitation, the Company’s issuance of the Shares and the Investors’ ownership of
the Shares.
 
(z) No Additional Agreements. No Existing Company Entity has any agreement or
understanding with any Investor with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction Documents.
 
(aa) Consultation with Auditors. The Company has consulted its independent
auditors concerning the accounting treatment of the transactions contemplated by
the Transaction Documents, and in connection therewith has furnished such
auditors complete copies of the Transaction Documents.
 
(bb) Make Good Shares. The Make Good Pledgor is the sole record and beneficial
owner of the 2008 Make Good Shares, and holds such shares free and clear of all
Liens.

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(cc) Foreign Corrupt Practices Act. No Existing Company Entity, nor to the
knowledge of the Company, any agent or other person acting on behalf of any
Existing Company Entity, 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 such Existing Company Entity (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.
 
(dd) PFIC. The Company is not, and does not intend to become a “passive foreign
investment company” within the meaning of Section 1297 of the U.S. Internal
Revenue Code of 1986, as amended.
 
(ee) OFAC. No Existing Company Entity nor, to the knowledge of the Company, any
director, officer, agent, employee, Affiliate or Person acting on behalf of any
Existing Company Entity, 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.
 
(ff) Money Laundering Laws. The operations of each Existing Company Entity 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 any Existing
Company Entity with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.
 
(gg) Other Representations and Warranties Relating to CJV.
 
(i) All material consents, approvals, authorizations or licenses requisite under
PRC law for the due and proper establishment and operation of CJV 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 CJV and its capital structure and operations including,
without limitation, the registration with the Ministry of Commerce, the China
Securities Regulatory Commission, the State Administration of Industry and or
their respective local divisions of Commerce, the State Administration of
Foreign Exchange, tax bureau and customs authorities have been duly completed in
accordance with the relevant PRC rules and regulations, except where, the
failure to complete such filings and registrations does not, and would not,
individually or in the aggregate, have a Material Adverse Effect.

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(iii) CJV has 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 commitments made by the Company or any Subsidiary to sell any
equity interest in CJV.
 
(iv) CJV has not received any letter or notice from any relevant PRC
governmental authority notifying it of revocation of any licenses or
qualifications issued to it or any subsidy granted to it by any PRC governmental
authority for non-compliance with the terms thereof or with applicable PRC laws,
or the lack of compliance or remedial actions in respect of the activities
carried out by CJV, except such revocation as does not, and would not,
individually or in the aggregate, have a Material Adverse Effect.
 
(v) CJV has conducted its business activities within the permitted scope of
business or has otherwise operated its business in compliance with all relevant
legal requirements and with all requisite licenses and approvals granted by
competent PRC governmental authorities other than such non-compliance that do
not, and would not, individually or in the aggregate, have a Material Adverse
Effect. As to licenses, approvals and government grants and concessions
requisite or material for the conduct of any material part of CJV’s business
which is subject to periodic renewal, the Company has no knowledge of any
reasons related to the CJV for which such requisite renewals will not be granted
by the relevant PRC governmental authorities.
 
(vi) With regard to employment and staff or labor, CJV has 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.
 
(vii) All agreements to which CVJ is a party, and that are material to the
business of CJV, are valid, enforceable and free of defaults on the part of all
parties thereto except for defaults as are of a nonmaterial nature not entitling
any party to terminate such agreement(s).
 
(hh) Disclosure. Neither any Company Entity nor any Person acting on its behalf
has provided any Investor or its respective agents or counsel with any
information that any Company Entity believes constitutes material, non-public
information concerning the Company, the Subsidiaries or their respective
businesses, except insofar as the existence and terms of the proposed
transactions contemplated hereunder may constitute such information. The Company
understands and confirms that the Investors will rely on the foregoing
representations and covenants in effecting transactions in securities of the
Company. All disclosure provided to the Investors regarding the Company Entities
and their respective businesses and the transactions contemplated hereby,
furnished by or on behalf of the Company Entities (including their respective
representations and warranties set forth in this Agreement and the disclosure
set forth in any diligence report or business plan provided by any Company
Entity or any Person acting on such Company Entity’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.

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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
follows:
 
(ii) Organization; Authority. Such Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the 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 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.
 
(jj) Investment Intent. Such Investor is acquiring the Shares as principal for
its own account and not with a view to or for distributing or reselling such
Shares or any part thereof, without prejudice, however, to such Investor’s right
at all times to sell or otherwise dispose of all or any part of such Shares in
compliance with applicable federal and state securities laws. Subject to the
immediately preceding sentence, nothing contained herein shall be deemed a
representation or warranty by such Investor to hold the Shares for any period of
time. Such Investor is acquiring the Shares 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 Shares.
 
(kk) Investor Status. At the time such Investor was offered the Shares, it was,
and at the date hereof it is, an “accredited investor” as defined in Rule 501(a)
under the Securities Act. Such Investor is not a registered broker-dealer under
Section 15 of the Exchange Act. 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. Such Investor acknowledges that an investment in
the Shares is speculative and involves a high degree of risk.
 
(ll) General Solicitation. Such Investor is not purchasing the Shares as a
result of any advertisement, article, notice, meeting, or other communication
regarding the Shares 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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(mm) 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 merits and risks of investing in the Shares; (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 Existing Company Entities’ representations
and warranties contained in the Transaction Documents.
 
(nn) Certain Trading Activities. Such Investor has not directly or indirectly,
nor has any Person acting on behalf of or pursuant to any understanding with
such Investor, engaged in any transactions in the securities of the Company
(including, without limitations, any Short Sales involving the Company’s
securities) since the earlier to occur of (1) the time that such Investor was
first contacted by the Company or Roth Capital Partners, LLC regarding an
investment in the Company and (2) the 30th day prior to the date of this
Agreement. Such Investor covenants that neither it nor any Person acting on its
behalf or pursuant to any understanding with it will engage in any transactions
in the securities of the Company (including Short Sales) prior to the time that
the transactions contemplated by this Agreement are publicly disclosed.
 
(oo) Independent Investment Decision. Such Investor has independently evaluated
the merits of its decision to purchase the Shares pursuant to the Transaction
Documents, and such Investor confirms that it has not relied on the advice of
any other Investor’s business and/or legal counsel in making such decision. Such
Investor has not relied on the business or legal advice of ROTH Capital
Partners, LLC or any of its agents, counsel or Affiliates in making its
investment decision hereunder, and confirms that none of such Persons has made
any representations or warranties to such Investor in connection with the
transactions contemplated by the Transaction Documents.
 
(pp) 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.
 
(qq) 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.

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The Existing Company Entities acknowledge and agree 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. (a) Shares may only be disposed of in
compliance with state and federal securities laws. In connection with any
transfer of the Shares other than pursuant to an effective registration
statement, to the Company, to an Affiliate of an Investor or in connection with
a pledge as contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Shares 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(c):
 
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.
 
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 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).

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(c) Certificates evidencing Shares and Make Good Shares, if ever Make Good
Shares are due to be delivered pursuant to the Transaction Documents
(collectively with the Shares, the “Securities”), shall not contain any legend
(including the legend set forth in Section 4.1(b)): (i) while a registration
statement (including the Registration Statement) covering such Securities is
then effective, or (ii) following a sale or transfer of such Securities pursuant
to Rule 144 (assuming the transferee is not an Affiliate of the Company), or
(iii) while such Securities are eligible for sale by the selling Investor
without volume restrictions under Rule 144. The Company agrees that following
the Effective Date or such other time as legends are no longer required to be
set forth on certificates representing Securities under this Section 4.1(c), it
will, no longer than three (3) Trading Days following the delivery by an
Investor to the Company or the Transfer Agent of a certificate representing such
Securities containing a restrictive legend, deliver or instruct the Transfer
Agent to deliver to such Investor, Securities which are free of all restrictive
and other legends. If the Company is then eligible, certificates for Securities
subject to legend removal hereunder shall be transmitted by the Transfer Agent
to an Investor by crediting the prime brokerage account of such Investor with
the Depository Trust Company System as directed by such Investor. If an Investor
shall make a sale or transfer of Securities either (x) pursuant to Rule 144 or
(y) pursuant to a registration statement and in each case shall have delivered
to the Company or the Company’s transfer agent the certificate representing the
applicable Securities containing a restrictive legend which are the subject of
such sale or transfer and a representation letter in customary form (the date of
such sale or transfer and Securities delivery being the “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. Except in connection with the Initial Financing, 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 in a manner
that would require the registration under the Securities Act of the sale of the
Shares to the Investors, or that would be integrated with the offer or sale of
the Shares 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 to the
Investors.
 
4.4 Subsequent Registrations. Except as may be required in connection with the
Initial Financing, he Company may not file any registration statement with the
Commission with respect to any securities of the Company prior to the time that
all Registrable Shares are registered pursuant to one or more effective
Registration Statement(s), and the prospectuses forming a portion of such
Registration Statement(s) is available for the resale of all Registrable Shares.
 
4.5 Securities Laws Disclosure; Publicity. By 5:00 p.m. (New York time) on the
Trading Day following the Closing Date, (a) the Company shall issue a press
release, disclosing the transactions contemplated by the Transaction Documents
(including, without limitation, details with respect to the make good provision
and threshold (i.e. After Tax Net Income) contained in Section 4.11 herein as
well as projected revenue estimates for the Company for the fiscal year ending
December 31, 2008) and the Closing and (b) the Company will file the Super 8-K
substantially in the form attached hereto as Appendix B, disclosing the material
terms of the Transaction Documents, including details with respect to the make
good provision and threshold (i.e. After Tax Net Income) contained in Section
4.11 herein (and attach as exhibits thereto all existing Transaction Documents)
and the Closing. The Company covenants that following such disclosure, the
Investors shall no longer be in possession of any material, non-public
information with respect to any of the Existing Company Entities. 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 Limitation on Issuance of Future Priced Securities. During the twelve months
following the Closing Date, the Company shall not issue any “Future Priced
Securities” as such term is described by NASD IM-4350-1.
 
4.7 Indemnification of Investors. In addition to the indemnity provided in the
Registration Rights Agreement, the Company Entities will jointly and severally
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 any of the Company
Entities in any Transaction Document. In addition to the indemnity contained
herein, the Company will reimburse each Investor Party for its reasonable legal
and other expenses (including the cost of any investigation, preparation and
travel in connection therewith) incurred in connection therewith, as such
expenses are incurred. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 4.7
shall be the same as those set forth in Section 5 of the Registration Rights
Agreement.
 
4.8 Non-Public Information. The Company covenants and agrees that neither it,
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.
 
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 capital expenditures, research and development, marketing,
sales and distribution expansion and working capital purposes and for the
purchase from Inner Mongolia Yongye Biotechnology Co. Limited of existing
finished goods inventory and for no other purposes.

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4.11 Make Good Shares.
 
(a) The Make Good Pledgor agrees that in the event that the After Tax Net Income
(as defined below) reported in the 2008 Annual Report is less than $10,263,919
(the “2008 Guaranteed ATNI”), all of the 2008 Make Good Shares (as defined
below) shall be transferred in accordance with the Make Good Escrow Agreement to
the Investors on a pro-rata basis (determined by dividing each Investor’s
Investment Amount by the aggregate of all Investment Amounts delivered to the
Company by the Investors hereunder) for no consideration other than their
respective Investment Amounts paid to the Company at Closing. The “2008 Make
Good Shares” means the 2,000,000 shares of Common Stock (as equitably adjusted
for any stock splits, stock combinations, stock dividends or similar
transactions) required to be deposited with the Make Good Escrow Agent pursuant
to the Make Good Escrow Agreement. In the event that the After Tax Net Income
reported in the 2008 Annual Report is equal to or greater than the 2008
Guaranteed ATNI, no transfer of the 2008 Make Good Shares shall be required by
the Make Good Pledgor to the Investors and such 2008 Make Good Shares shall be
returned to the Make Good Pledgor in accordance with the Make Good Escrow
Agreement. Any such transfer of the 2008 Make Good Shares shall be made to the
Investors or the Make Good Pledgor, as applicable, within 10 Business Days after
the date which the 2008 Annual Report is filed with the Commission and a copy
thereof is delivered to Make Good Escrow Agent. Notwithstanding the foregoing or
anything else to the contrary herein, for purposes of determining whether or not
the 2008 Guaranteed ATNI has been met, the following items shall not be deemed
to be an expense, charge, or any other deduction from revenues even though GAAP
may require contrary treatment or the Annual Report for the fiscal year filed
with the Commission by the Company may report otherwise: (i) any accounting
charges for issuing warrants, and (ii) the release of any of the 2008 Make Good
Shares to the Make Good Pledgor as a result of the operation of this Section
4.11.
 
No other exclusions shall be made for any non-recurring expenses of the Company,
including liquidated damages under the Transaction Documents, in determining
whether the 2008 Guaranteed ATNI has been achieved. If prior to the second
anniversary of the filing of the 2008 Annual Report, the Company or their
auditors report or recognize that the financial statements contained in such
report are subject to amendment or restatement such that the Company would
recognize or report adjusted After Tax Net Income of less than the 2008
Guaranteed ATNI, then notwithstanding any prior return of 2008 Make Good Shares
to the Make Good Pledgor, the Make Good Pledgor will, within 10 Business Days
following the earlier of the filing of such amendment or restatement or
recognition, deliver the relevant 2008 Make Good Shares to the Investors. “After
Tax Net Income” shall mean the Company’s operating income after taxes for the
fiscal year ending December 31, 2008, determined in accordance with GAAP as
reported in the 2008 Annual Report.
 
(b) If the 2008 Annual Report is not filed timely with the Commission and
remains unfiled for a period in excess of 45 days after the last day that the
same was required to have been filed (taking into account the relief permitted
under Rule 12(b)-25 of the Exchange Act), then ATNI for the fiscal year ending
December 31, 2008 shall be deemed to be less than the 2008 Guaranteed ATNI, and
all of the 2008 Make Good Shares shall be transferred in accordance with the
Make Good Escrow Agreement to the Investors on a pro-rata basis.

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(c) In connection with the foregoing, the Make Good Pledgor agrees that,
contemporaneously with, and as a condition to, the Closing, the Make Good
Pledgor will deposit all 2008 Make Good Shares into escrow in accordance with
the Make Good Escrow Agreement along with stock powers executed in blank (or
such other signed instrument of transfer acceptable to the Company’s transfer
agent), and the handling and disposition of the 2008 Make Good Shares shall be
governed by this Section 4.11 and the Make Good Escrow Agreement. The Make Good
Escrow Agent shall notify the Investors when it has received from the Make Good
Pledgor the 2008 Make Good Shares and associated stock powers. The Make Good
Pledgor understands and agrees that the Investors’ right to receive 2008 Make
Good Shares pursuant to this Section 4.11 and the Make Good Escrow Agreement
shall continue to run to the benefit of each Investor even if such Investor
shall have transferred or sold all or any portion of its Shares, and that each
Investor shall have the right to assign its rights to receive all or any such
shares of Common Stock to other Persons in conjunction with negotiated sales or
transfers of any of its Shares. The Make Good Pledgor represents and warrants
that it has carefully considered and understands its obligations and rights
under this Section 4.11 and the Make Good Escrow Agreement, and in furtherance
thereof (x) has consulted with its legal and other advisors with respect thereto
and (y) hereby forever waives and agrees that it may not assert any equitable
defenses in any Proceeding involving the 2008 Make Good Shares.
 
(d) The Company covenants and agrees that upon any transfer of 2008 Make Good
Shares to the Investors in accordance with the Make Good Escrow Agreement, the
Company shall promptly instruct its Transfer Agent to reissue such 2008 Make
Good Shares in the applicable Investor’s name and deliver the same as directed
by such Investor.
 
(e) If any term or provision of this Section 4.11 contradicts or conflicts with
any term or provision of the Make Good Escrow Agreement, the terms of the Make
Good Escrow Agreement shall control.
 
4.12 Intentionally Omitted.
 
4.13 Further Assurances. The Company will, and will cause all of the Company
Entities and their management to, use their 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, the CJV Founder and each Company Entity
signatory hereto will, and will cause each other Company Entity and 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.
 
4.14 Financial Professionals. (a) The Company covenants and agrees that, no
later than 365 days following the Closing Date, the Company will hire a chief
financial officer who has experience as a senior financial officer of a United
States public reporting company and who is (i) fluent in English, (ii) residing
or will reside, upon employment by the Company, in Asia, and (iii) familiar with
(x) GAAP and (y) auditing procedures and compliance for United States public
companies (such a chief financial officer being referred to as a “Qualified
CFO”). The Company shall enter into an employment agreement with the Qualified
CFO for a term of no less than two years. Should the Qualified CFO be dismissed
at any time prior to the second anniversary of the Closing Date, then the
Company shall replace the Qualified CFO with a chief financial officer who fits
the criteria set forth herein as soon as practicable. By 9:00 a.m. (New York
time) on the second Trading Day following the hiring of such Qualified CFO, the
Company will file a Current Report on Form 8-K disclosing the information
required by Item 5.02 of Form 8-K. If the Company fails to comply timely with
the appointment of a Qualified CFO and filing of a Current Report on Form 8-K
disclosing the information required by Item 5.02 of Form 8-K, as required in
this Section 4.14(a) above (the “Qualified CFO Requirement”), then commencing on
the date that the Qualified CFO Requirement was to have been satisfied
hereunder, and on each monthly anniversary thereof, until the Qualified CFO
Requirement is satisfied, the Company shall pay to the Investors, as liquidated
damages and not as a penalty, by wire transfer in immediately available funds,
an aggregate amount equal to 1% of the total Investment Amount hereunder for all
of the Investors, which shall be paid to the Investors pro rata in accordance
with their respective Investment Amounts, until such time as the Qualified CFO
Requirement is satisfied. The liquidated damages pursuant to the terms of this
Section 4.14(a) in no event shall exceed, in the aggregate, an amount equal to
6% of the total Investment Amount hereunder for all of the Investors in the
aggregate, but shall be independent of any other damages payable under Section
4.14(b) and elsewhere in this Agreement or any other Transaction Document.

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(b) The Company covenants and agrees that, no later than 180 days following the
Effective Date, the Company shall have hired a “top 15” independent registered
public accounting firm having its principal office in the United States (or
other independent registered public accounting firm reasonably acceptable to the
Placement Agent), that has experience as the independent registered public
accounting firm for a United States public reporting company and having
principals who are (i) a certified public accountants, (ii) fluent in English,
and (iii) an expert in (x) GAAP and (y) auditing procedures and compliance for
United States public companies (such audit firm being referred to as a
“Qualified Auditor”). The Company shall enter into an audit engagement agreement
with the Qualified Auditor for a term of no less than 12 months, to conduct the
annual financial audit of the Company, prepare the audited annual financial
statements of the Company required to be included in its United States public
company filings and review and assist in the preparation of the unaudited
quarterly financial statements of the Company required to be included in its
United States public company filings. Should the Qualified Auditor be dismissed
at any time within 18 months after the Closing Date, then the Company shall
replace the Qualified Auditor with another independent registered public
accounting firm that satisfies the criteria set forth herein as soon as
practicable. By 9:00 a.m. (New York time) on the second Trading Day following
the engagement of such Qualified CFO, the Company will file a Current Report on
Form 8-K disclosing the information required by Item 4.01 of Form 8-K. If the
Company fails to comply timely with the appointment of a Qualified Auditor and
filing of a Current Report on Form 8-K disclosing the information required by
Item 4.01 of Form 8-K, as required in this Section 4.14(b) above (the “Qualified
Auditor Requirement”), then commencing on the date that the Qualified Auditor
Requirement was to have been satisfied hereunder, and on each monthly
anniversary thereof, until the Qualified Auditor Requirement is satisfied, the
Company shall pay to the Investors, as liquidated damages and not as a penalty,
by wire transfer in immediately available funds, an aggregate amount equal to 1%
of the total Investment Amount hereunder for all of the Investors, which shall
be paid to the Investors pro rata in accordance with their respective Investment
Amounts, until such time as the Qualified Auditor Requirement is satisfied. The
liquidated damages pursuant to the terms of this Section 4.14(b) in no event
shall exceed, in the aggregate, an amount equal to 6% of the total Investment
Amount hereunder for all of the Investors in the aggregate, but shall be
independent of any other damages payable under Section 4.14(a) and elsewhere in
this Agreement or any other Transaction Document.

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4.15 .  Right of First Refusal. (a) From the date hereof until the one year
anniversary of the Effective Date (plus one additional day for each Trading Day
following the Effective Date of any Registration Statement during which either
(1) the Registration Statement is not effective or (2) the prospectus forming a
portion of the Registration Statement is not available for the resale of all
Registrable Securities (as defined in the Registration Rights Agreement)) (the
“Trigger Date”), the Company will not, directly or indirectly, offer, sell,
grant any option to purchase, or otherwise dispose of (or announce any offer,
sale, grant or any option to purchase or other disposition of) any of its equity
or equity equivalent securities, including, without limitation, any debt,
preferred stock or other instrument or security that is, at any time during its
life and under any circumstances, convertible into or exchangeable or
exercisable for shares of Common Stock or Common Stock Equivalents, or if the
Company shall receive an offer regarding the purchase of the Company’s
securities and desires to offer securities consistent with or otherwise in
connection with or in furtherance of such offer (any such offer, sale, grant,
disposition or announcement being referred to as a “Subsequent Placement”)
unless the Company shall have first complied with this Section 4.15. If the
Company desires to engage in a Subsequent Placement it shall deliver to each of
the Investors a written notice requesting their written approval to receive
nonpublic information regarding the Company. The Investors shall have ten (10)
days to deliver to the Company such approval. Any Investor failing to deliver
timely to the Company such written approval, or who shall have delivered to the
Company a written notice withholding such approval, shall be deemed to have
waived its rights under this Section 4.15 with regard to such Subsequent
Placement. The Investors who, in response to such request from the Company,
shall have delivered timely to the Company a written approval to receive
nonpublic information regarding the Company (collectively, the “Responding
Investors” and each a “Responding Investor”), shall receive a written notice
that the Company desires to engage in a Subsequent Placement specifying the
general terms of the offering the Company desires to make (including, without
limitation, all information relating to price, structure and amount of such
offering, but not including the identity of any potential investors therein) and
for a period of at least twenty (20) Business Days after the giving of such
notice the Company agrees to negotiate in good faith with the Responding
Investors the terms of a sale of the Company’s securities to the Responding
Investors.
 
(b) In the event that a Subsequent Placement contemplated in the last sentence
of Section 4.15(a) shall not have closed by the 30th Business Day following the
delivery to the Responding Investors of the written notice for such Subsequent
Placement, and in any event prior to such Subsequent Placement, the Company
shall deliver to the Responding Investors a written notice (the “Offer Notice”)
of any proposed or intended issuance or sale or exchange (the “Offer”) of the
securities being offered (the “Offered Securities”) in a Subsequent Placement,
which Offer Notice shall (v) identify and describe the Offered Securities, (x)
include the final form of documents and agreements governing the Subsequent
Placement, (y) specify the price and other terms upon which the Offered
Securities are to be issued, sold or exchanged, and the number or amount of the
Offered Securities to be issued, sold or exchanged, and (z) offer to issue and
sell to or exchange with such Investors all of the Offered Securities, allocated
among such Responding Investors (a) based on such Responding Investor’s pro rata
portion of the total Investment Amount hereunder attributable to such Responsing
Investors (the “Basic Amount”), and (b) with respect to each of the Responding
Investors that elects to purchase its Basic Amount, any additional portion of
the Offered Securities attributable to the Basic Amounts of other Responding
Investors as such Responding Investor shall indicate it will purchase or acquire
should the other Responding Investors subscribe for less than their Basic
Amounts (the “Undersubscription Amount”), which process shall be repeated until
the Responding Investors shall have an opportunity to subscribe for any
remaining Undersubscription Amount.

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(c) To accept an Offer, in whole or in part, such Responding Investor must
deliver a written notice to the Company prior to the end of the fifth Business
Day after such Responding Investor’s receipt of the Offer Notice (the “Offer
Period”), setting forth the portion of such Responding Investor’s Basic Amount
that such Responding Investor elects to purchase and, if such Responding
Investor shall elect to purchase all of its Basic Amount, the Undersubscription
Amount, if any, that such Responding Investor elects to purchase (in either
case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all
Responding Investors are less than the total of all of the Basic Amounts, then
each Responding Investor who has set forth an Undersubscription Amount in its
Notice of Acceptance shall be entitled to purchase, in addition to the Basic
Amounts subscribed for, the Undersubscription Amount it has subscribed for;
provided, however, that if the Undersubscription Amounts subscribed for exceed
the difference between the total of all the Basic Amounts and the Basic Amounts
subscribed for (the “Available Undersubscription Amount”), each Responding
Investor who has subscribed for any Undersubscription Amount shall be entitled
to purchase only that portion of the Available Undersubscription Amount as the
Basic Amount of such Investor bears to the total Basic Amounts of all Responding
Investors that have subscribed for Undersubscription Amounts, subject to
rounding by the Company to the extent its deems reasonably necessary.
 
(d) The Company shall have sixty (60) Business Days from the expiration of the
Offer Period above to (i) offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Responding Investors (the “Refused Securities”), but only to the offerees
described in the Offer Notice (if so described therein) and only upon terms and
conditions (including, without limitation, unit prices and interest rates) that
are not more favorable to the acquiring person or persons or less favorable to
the Company than those set forth in the Offer Notice and (ii) to publicly
announce (a) the execution of such Subsequent Placement Agreement (as defined
below), and (b) either (x) the consummation of the transactions contemplated by
such Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which shall be filed with the Commission on a Current
Report on Form 8-K with such Subsequent Placement Agreement and any documents
contemplated therein filed as exhibits thereto. If no disclosure has been made
by the Company by the end of the sixty (60) Business Day period referred to in
this subsection (d), the Subsequent Placement shall be deemed to have been
abandoned and the Responding Investors shall no longer be deemed to be in
possession of any non-public information with respect to the Company.
 
(e) In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in this
Section 4.15), then each Responding Investor may, at its sole option and in its
sole discretion, reduce the number or amount of the Offered Securities specified
in its Notice of Acceptance to an amount that shall be not less than the number
or amount of the Offered Securities that such Responding Investor elected to
purchase pursuant to Section 4.15(c) above multiplied by a fraction, (i) the
numerator of which shall be the number or amount of Offered Securities the
Company actually proposes to issue, sell or exchange (including Offered
Securities to be issued or sold to Investors pursuant to Section 4.15(c) above
prior to such reduction) and (ii) the denominator of which shall be the original
amount of the Offered Securities. In the event that any Responding Investor so
elects to reduce the number or amount of Offered Securities specified in its
Notice of Acceptance, the Company may not issue, sell or exchange more than the
reduced number or amount of the Offered Securities unless and until such
securities have again been offered to the Responding Investors in accordance
with Section 4.15(b) above.

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(f) Upon the closing of the issuance, sale or exchange of all or less than all
of the Refused Securities, the Responding Investors shall acquire from the
Company, and the Company shall issue to the Responding Investors, the number or
amount of Offered Securities specified in the Notices of Acceptance, as reduced
pursuant to Section 4.15(e) above if the Responding Investors have so elected,
upon the terms and conditions specified in the Offer. The purchase by the
Responding Investors of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Responding Investors
of a purchase agreement relating to such Offered Securities substantially the
same in form and substance as the agreement disclosed above in Section
4.15(b)(x) and otherwise reasonably satisfactory to Responding Investors’
counsel (such agreement, the “Subsequent Placement Agreement”).
 
(g) Any Offered Securities not acquired by the Responding Investors or other
persons in accordance with Section 4.15(f) above may not be issued, sold or
exchanged until they are again offered to the Investors under the procedures
specified in this Agreement.
 
(h) In exchange for the Company’s willingness to agree to these procedures, each
Responding Investor hereby irrevocably agrees that it will hold in strict
confidence any and all Offer Notices, the information contained therein, and the
fact that the Company is contemplating a Subsequent Placement, until such time
as the Company is obligated to make the disclosures required by Section 4.15(d),
or unless it notifies the Company in writing that it no longer desires to
receive Offer Notices.
 
(i) The rights contained in this Section 4.15 shall not apply to the issuance
and sale by the Company of (i) shares of Common Stock or Common Stock
Equivalents in connection with the Initial Financing, (ii) shares of Common
Stock or Common Stock Equivalents issued as consideration for the acquisition of
another company or business in which the shareholders of the Company do not have
an ownership interest, and where the primary purpose is not to raise capital for
the Company or any Subsidiary, which acquisition has been approved by the Board
of Directors of the Company, or (iii) securities issued in connection with the
Initial Financing.
 
ARTICLE 5.
CONDITIONS PRECEDENT TO CLOSING
 
5.1. Conditions Precedent to the Obligations of the Investors to Purchase
Shares. The obligation of each Investor to acquire Shares at the Closing is
subject to the satisfaction or waiver by such Investor, at or before the
Closing, of each of the following conditions:

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(a) Representations and Warranties. The representations and warranties of the
Existing Company Entities 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 Existing Company Entities and the Make Good Pledgor 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 or a material adverse change with respect to the Company
or the Subsidiaries;
 
(e) CJV Intellectual Property Rights. The CJV shall provide to the Investors
evidence acceptable to the Investors that all Intellectual Property Rights are
either (i) validly owned by the CJV, or (ii) (a) if owned by any Person other
than the CJV or its predecessor, subject to valid and binding Intellectual
Property Right Licensing Agreements which may not be terminated for any reason
until any such Intellectual Property Right covered thereby is validly owned by
the CJV, or (b) if owned by the predecessor of the CJV, the application for the
change of the registered owner information from that of the CJV’s predecessor to
the CJV’s current name, address and other related updates which is or may be
required by relevant PRC authorities in charge of such Intellectual Property is
submitted by the CJV to the relevant PRC authority on or before the Closing.
 
(f) PRC, Nevada, and US Opinions. The Company shall have delivered to the
Investors, and the Investors shall be able to rely upon, the legal opinions that
the Company shall have received from its legal counsel in Nevada and the PRC
(which, among other things, shall confirm the legality arrangements between PRC
operating entity and its corporate ownership structure, including CJV, BVI and
the Company, under applicable PRC law and the legality of the restructuring
being effected with BVI in connection with the Exchange) and with regard to the
same and the Make Good Pledgor and from Company U.S. Counsel and Nevada counsel
with regard to the Exchange and the enforceability of the Transaction Documents;
 
(g) Closing Officer’s Certificate. At the Closing, the Company shall have
delivered to each Investor an officer’s certificate to the effect that each of
the conditions specified in Sections 5.1(a) - 5.1(e) is satisfied in all
respects;
 
(h) Company Agreements. The Company shall have delivered or cause to be
delivered:
 
(i) This Agreement, duly executed by the Company, BVI and CJV;

30

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(ii) The Closing Escrow Agreement, duly executed by the Company and the Escrow
Agent;
 
(iii) The Make Good Escrow Agreement, duly executed by all parties thereto
(other than the Investors) and certificates for the Make Good Shares, with stock
powers in respect of the same, executed in blank by the Make Good Pledgor shall
have been delivered to the Make Good Escrow Agent;
 
(iv) The Registration Rights Agreement, duly executed by the Company; and
 
(v) Lockup Agreements, duly executed by the Company and each officer and member
of the Board of Directors of the Company listed on Schedule 5.1(h)(v) attached
hereto;.
 
(i) Company Deliverables. The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a);
 
(j) Exchange. The Exchange, as described in, and to be effectuated pursuant to,
the Exchange Agreement, shall have been completed; and
 
(k) 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. The
obligation of the Company to sell Shares 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 delivered the Registration
Rights Agreement, the Closing Escrow Agreement and the Make Good Escrow
Agreement, each duly executed by such Investor and a completed Selling Holder
Questionnaire (as defined in the Registration Rights Agreement); and

31

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(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.
 
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 (i) facsimile (provided the sender
receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section or (ii) electronic mail (i.e., Email)
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 (i) facsimile at the facsimile number specified in this Section or (ii)
electronic mail (i.e., Email) on a day that is not a Trading Day or later than
6:30 p.m. (New York City time) on any Trading Day, or (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 or Email
transmission. The address for such notices and communications shall be as
follows:
 

 
If to the Company:
Yongye Biotechnology International, Inc.
6th Floor, Suite 608 Xue Yuan International Tower
No. 1 Zhichun Road
Haidian District
Beijing 100083
PR China
Facsimile:  +86 10.8231.1797
Email: wzs@china-yongye.com
Attn.:  CEO
       
With a copy to:
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Facsimile: (212) 407-4000
Email: mnussbaum@loeb.com
Attention: Mitchell S. Nussbaum, Esq.

 
32

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

 
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
 
6.4 Amendments; Waivers; No Additional Consideration. No provision of this
Agreement may be waived or amended except in a written instrument signed by the
Company and the Investors holding a majority of the Shares at the time of the
waiver or amendment. 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.
 
6.5 Termination. This Agreement may be terminated prior to Closing:
 
(a) by written agreement of the Investors and the Company, a copy of which shall
be provided to the Escrow Agent; and
 
(b) by the Company or an Investor (as to itself but no other Investor) upon
written notice to the other, with a copy to the Escrow Agent, if the Closing
shall not have taken place by 6:30 p.m. Eastern time on the Outside Date;
provided, that the right to terminate this Agreement under this Section 6.5(b)
shall not be available to any Person whose failure to comply with its
obligations under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such time.
 
In the event of a termination pursuant to Section 6.5(a) or 6.5(b), each
Investor shall have the right to a return of up to its entire Investment Amount
deposited with the Escrow Agent pursuant to Section 2.2(b)(i), without interest
or deduction. The Company covenants and agrees to cooperate with such Investor
in obtaining the return of its Investment Amount, and shall not communicate any
instructions to the contrary to the Escrow Agent.
 
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.

33

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6.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors. Any Investor may assign any
or all of its rights under this Agreement to any Person to whom such Investor
assigns or transfers any Shares, provided such transferee agrees in writing to
be bound, with respect to the transferred Shares, by the provisions hereof that
apply to the “Investors.”
 
6.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.7 (as to each Investor
Party).
 
6.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the New York
Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of the any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document, then
the prevailing party in such Proceeding shall be reimbursed by the other party
for its reasonable attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Proceeding.
 
6.10 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery of the Shares.

34

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6.11 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
 
6.12 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
 
6.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Investor exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Investor may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.
 
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.

35

--------------------------------------------------------------------------------

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

36

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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.

 
YONGYE BIOTECHNOLOGY INTERNATIONAL, INC.
         
By:
  /s/ Zishen Wu
 
Name:  Zishen Wu
 
Title:    CEO
             
FULLMAX PACIFIC LIMITED
         
By:
  /s/ Zhong Xingmei
 
Name:  Zhong Xingmei
 
Title:    Director
             
INNER MONGOLIA YONGYE NONG FENG
BIOTECHNOLOGY CO., LTD.
         
By:
  /s/ Zishen Wu
 
Name:  Zishen Wu
 
Title:    CEO
             
Only as to Sections 4.11 and 4.13 herein:
 
FULL ALLIANCE INTERNATIONAL LIMITED
         
By:
  /s/ Zhong Xingmei
 
Name:  Zhong Xingmei
 
Title:    Director

 
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOR INVESTORS TO FOLLOW]

Signature Page to the Securities Purchase Agreement

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
MARION LYNTON
 
By:
/s/ Steve Napoli
Name:
Steve Napoli
Title:
Agent/Advisor
Investment Amount:
$43,878.60
Tax ID No.:
 
 
ADDRESS FOR NOTICE
 
c/o:
Ardsley Partners
Street:
262 Harbor Drive, 4th Floor
City/State/Zip:
Stamford, CT 06902
Attention:
Steve Napoli
Tel:
(203) 564-4230
Fax:
(203) 355-0715
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 1 of 19

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
ARDSLEY PARTNERS FUND II, LP
 
By:
/s/ Steve Napoli
Name:
Steve Napoli
Title:
Agent/Advisor
Investment Amount:
$1,708,956
Tax ID No.:
13-3476175
 
ADDRESS FOR NOTICE
 
c/o:
Ardsley Partners
Street:
262 Harbor Drive, 4th Floor
City/State/Zip:
Stamford, CT 06902
Attention:
Steve Napoli
Tel:
(203) 564-4230
Fax:
(203) 355-0715
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 2 of 19

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
ARDSLEY OFFSHORE FUND, LTD
 
By:
/s/ Steve Napoli
Name:
Steve Napoli
Title:
Agent/Advisor
Investment Amount:
$1,108,512
Tax ID No.:
n/a
 
ADDRESS FOR NOTICE
 
c/o:
Ardsley Partners
Street:
262 Harbor Drive, 4th Floor
City/State/Zip:
Stamford, CT 06902
Attention:
Steve Napoli
Tel:
(203) 564-4230
Fax:
(203) 355-0715
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 3 of 19

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
ARDSLEY PARTNERS INSTITUTIONAL FUND, LP
 
By:
/s/ Steve Napoli
Name:
Steve Napoli
Title:
Agent/Advisor
Investment Amount:
$1,139,304
Tax ID No.:
061-1399855
 
ADDRESS FOR NOTICE
 
c/o:
Ardsley Partners
Street:
262 Harbor Drive, 4th Floor
City/State/Zip:
Stamford, CT 06902
Attention:
Steve Napoli
Tel:
(203) 564-4230
Fax:
(203) 355-0715
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 4 of 19

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.
 
By:
/s/David Greenhouse
Name:
David Greenhouse
Title:
Managing Director
Investment Amount:
$700,000
Tax ID No.:
13-3916551
 
ADDRESS FOR NOTICE
 
c/o:
Special Situations Private Equity Fund, L.P.
Street:
527 Madison Avenue, Suite 2600
City/State/Zip:
New York, New York 10022
Attention:
Marianne Hicks/David Greenhouse
Tel:
(631) 725-3779 ext 3
Fax:
(631) 319-6670
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 5 of 19

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
SPECIAL SITUATIONS CAYMAN FUND, L.P.
 
By:
/s/David Greenhouse
Name:
David Greenhouse
Title:
Managing Director
Investment Amount:
$1,300,000
Tax ID No.:
98-0132442
 
ADDRESS FOR NOTICE
 
c/o:
Special Situations Private Equity Fund, L.P.
Street:
527 Madison Avenue, Suite 2600
City/State/Zip:
New York, New York 10022
Attention:
Marianne Hicks/David Greenhouse
Tel:
(631) 725-3779 ext 3
Fax:
(631) 319-6670
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 6 of 19

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
JAYHAWK PRIVATE EQUITY FUND, LP
 
By:
/s/ Michael D. Schmitz
Name:
Michael D. Schmitz
Title:
CFO of 6P of 6P
Investment Amount:
$940,767.34
Tax ID No.:
20-5004931
 
ADDRESS FOR NOTICE
 
c/o:
Jayhawk Capital
Street:
5410 West 61st Place, Suite 100
City/State/Zip:
Mission, KS 66205
Attention:
Michael Schmitz
Tel:
(913) 642-2611
Fax:
(913) 642-8661
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 7 of 19

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
JAYHAWK PRIVATE EQUITY CO-INVEST FUND, LP
 
By:
/s/ Michael D. Schmitz
Name:
Michael D. Schmitz
Title:
CFO of 6P of 6P
Investment Amount:
$59,232.66
Tax ID No.:
20-5249125
 
ADDRESS FOR NOTICE
 
c/o:
Jayhawk Capital
Street:
5410 West 61st Place, Suite 100
City/State/Zip:
Mission, KS 66205
Attention:
Michael Schmitz
Tel:
(913) 642-2611
Fax:
(913) 642-8661
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 8 of 19

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
BTG INVESTMENTS, LLC
 
By:
/s/Gordon J. Roth
Name:
Gordon J. Roth
Title:
Manager
Investment Amount:
$725,000
Tax ID No.:
20-0306951
 
ADDRESS FOR NOTICE
 
c/o:
BTG Investments, LLC
Street:
24 Corporate Plaza
City/State/Zip:
New port Beach, CA 92660
Attention:
Gordon J. Roth
Tel:
(949) 720-5774
Fax:
(949) 720-7241
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 9 of 19

--------------------------------------------------------------------------------

 
IN WITNESSWHEREOF, 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
 
MIDSOUTH INVESTOR FUND LP
 
By:
/s/ Lyman O. Heidtke
Name:
Lyman O. Heidtke
Title:
General Partner
Investment Amount:
$250,000
Tax ID No.:
58-2566576
 
ADDRESS FOR NOTICE
 
c/o:
Lyman O. Heidtke
Street:
201 4th Avenue, North Suit 1950
City/State/Zip:
Nashville, TN 37219
Attention:
Lyman O. Heidtke
Tel:
(615) 254-0992
Fax:
(615) 254-1603
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 10 of 19

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IN WITNESSWHEREOF, 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
 
STRAUS PARTNERS, LP
 
By:
/s/ Andrew Marks
Name:
Andrew Marks
Title:
CFO
Investment Amount:
$300,000
Tax ID No.:
13-3976076
 
ADDRESS FOR NOTICE
 
c/o:
Straus Asset Management
Street:
320 Park Avenue, 10th Floor
City/State/Zip:
New York, NY 10022
Attention:
Andrew Marks
Tel:
(212) 415-7274
Fax:
(212) 415-7256
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 11 of 19

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IN WITNESSWHEREOF, 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
 
STRAUS-GEPT PARTNERS, LP
 
By:
/s/ Andrew Marks
Name:
Andrew Marks
Title:
CFO
Investment Amount:
$200,000
Tax ID No.:
13-4054804
 
ADDRESS FOR NOTICE
 
c/o:
Straus Asset Management
Street:
320 Park Avenue, 10th Floor
City/State/Zip:
New York, NY 10022
Attention:
Andrew Marks
Tel:
(212) 415-7274
Fax:
(212) 415-7256
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 12 of 19

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IN WITNESSWHEREOF, 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
 
ANDREW PARKo
 
By:
/s/ Andrew Park
Name:
Andrew Park    
Title:
 
Investment Amount:
$75,000
Tax ID No.:
   
ADDRESS FOR NOTICE
 
c/o:
Spyglass Capital Partners, LLC
Street:
201 Post Street, 11th Floor
City/State/Zip:
San Francisco, CA 94108
Attention:
Andrew Park
Tel:
(415) 394-3409
Fax:
(415) 946-3555
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 13 of 19

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IN WITNESSWHEREOF, 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
 
BAI YE FENG
 
By:
/s/ Bai Ye Feng
Name:
Bai Ye Feng
Title:
 
Investment Amount:
$450,000
Tax ID No.:
   
ADDRESS FOR NOTICE
 
c/o:
 
Street:
86 Wellington Street
City/State/Zip:
Central Hong Kong
Attention:
Bai Ye Feng
Tel:
+ 852-975-81851
Fax:
+ 852-301-58525
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 14 of 19

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IN WITNESSWHEREOF, 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
 
RICHARD D. SQUIRES
 
By:
/s/ Richard D. Squires
Name:
Richard D. Squires
Title:
 
Investment Amount:
$100,000
Tax ID No.:
   
ADDRESS FOR NOTICE
 
c/o:
 
Street:
100 Crescent Court, Suite 450
City/State/Zip:
Dallas, TX 75201
Attention:
Richard Squires
Tel:
(214) 270-2150
Fax:
(214) 468-8870
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 15 of 19

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IN WITNESSWHEREOF, 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
 
COOPER FAMILY TRUST DTD 08/01/04
 
By:
/s/Chad Cooper
Name:
Chad Cooper
Title:
Co-Trustee
Investment Amount:
$25,000
Tax ID No.:
   
ADDRESS FOR NOTICE
 
c/o:
Roth Capital Partners, LLC
Street:
24 Corporate Plaza
City/State/Zip:
New Port Beach, CA 92660
Attention:
Chad Cooper
Tel:
(949) 533-5380
Fax:
 
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 16 of 19

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IN WITNESSWHEREOF, 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
 
CHESTNUT RIDGE PARTNERS, LP
 
By:
/s/ Kenneth Holz
Name:
Kenneth Holz
Title:
CFO
Investment Amount:
$275,000
Tax ID No.:
03-0404154
 
ADDRESS FOR NOTICE
 
c/o:
Chestnut Ridge, LP
Street:
50 Tice Boulevard
City/State/Zip:
Woodcliff Lake, NJ 07677
Attention:
Kenneth Holtz
Tel:
(201) 802-9494
Fax:
(201) 802-9450
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
c/o Goldman Sachs & Co
Street:
1 New York Plaza, 44th Floor
City/State/Zip:
New York, New York 10004
Attention:
Simba Mhungu
Tel:
(212) 902-8059
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 17 of 19

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IN WITNESSWHEREOF, 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
 
CORONADO CAPITAL PARTNERS, LP
 
By:
/s/ Zach Easton
Name:
Zach Easton
Title:
President
Investment Amount:
$250,000
Tax ID No.:
20-2427088
 
ADDRESS FOR NOTICE
 
c/o:
MS Howells
Street:
20555 North Pima Road, #100
City/State/Zip:
Scottsdale, AZ 85255
Attention:
Zach Easton
Tel:
(408) 415-0093
Fax:
 
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
c/o Jefferies & Co
Street:
FAO Coronado Capital Partners
20555 N. Pine Road , #100
City/State/Zip:
Scottsdale, AZ 85255
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 18 of 19

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IN WITNESSWHEREOF, 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
 
SEI PRIVATE TRUST Co FAO
 
The JM SMUCKER CO MASTER TRUST
 
By:
/s/ Zach Easton
Name:
Zach Easton
Title:
President, Coronado Capital Management
Investment Amount:
$350,000
Tax ID No.:
23-3060382
 
ADDRESS FOR NOTICE
 
c/o:
SPTC Specialized Trust Admin Services
Street:
1 Freedom Valley Drive
City/State/Zip:
Oaks, PA 19456
Attention:
Suzanne Rokosny
Tel:
 
Fax:
 
 
DELIVERY INSTRUCTIONS
    (if different from above)
 
c/o:
 
Street:
 
City/State/Zip:
 
Attention:
 
Tel:
 
Fax:
 

 
Investor Signature Page to the Securities Purchase Agreement
Page 19 of 19

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