Exhibit 10.1

SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of February
16, 2007, by and among Concept Ventures Corporation, a Nevada corporation, and
all predecessors thereto (collectively, the “Company”), the selling stockholder
identified on the signature page hereto (the “Selling Stockholder”) and the
investors identified on the signature pages hereto (each, an “Investor” and
collectively, the “Investors”).
 
WHEREAS, on September 6, 2006, the Company entered into a Share Exchange
Agreement, which is attached to the Company’s September 11, 2006 Current Report
on Form 8-K under the U.S. Securities Exchange Act of 1934, as amended (the
“Exchange Agreement”), with Ritar International Group Limited, a British Virgin
Islands company (“Ritar”), pursuant to which the Company will, subject to the
terms and conditions thereof, acquire all of the equity interest of Ritar and,
indirectly, all of Ritar’s subsidiaries, in exchange for at least 50.1% of the
Common Stock on a fully diluted basis as of the time of the closing of the
exchange under the Exchange Agreement and as of the Closing under this Agreement
(the "Exchange").
 
WHEREAS, the closing of the Exchange is conditioned, among other things, on the
concurrent consummation of the financing contemplated by this Agreement.
 
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 the Selling
Stockholder desires to sell to each Investor, and each Investor, severally and
not jointly, desires to purchase from the Company and the Selling Stockholder,
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, the Selling Stockholder
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:
 
“2007 Guaranteed ATNI” has the meaning set forth in Section 4.11.
 
“2007 Investor Shares” has the meaning set forth in Section 4.11.
 
“2008 Guaranteed ATNI” has the meaning set forth in Section 4.11.
 
“2008 Investor Shares” has the meaning set forth in Section 4.11. 
 
“Action” means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending
or threatened in writing against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator, governmental
or administrative agency, regulatory authority (federal, state, county, local or
foreign), stock market, stock exchange or trading facility.
 

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“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144.
 
“Business Day” means any day except Saturday, Sunday and any day which is a
federal legal holiday or a day on which banking institutions in the State of New
York, the State of Texas or the province of Guangdong in the People’s Republic
of China are authorized or required by law or other governmental action to
close.
 
“Buy-In” has the meaning set forth in Section 4.1(c).
 
“Closing” means the closing of the purchase and sale of the Securities pursuant
to Article II.
 
“Closing Date” means the Business Day on which all of the conditions set forth
in Sections 5.1 and 5.2 hereof are satisfied, or such other date as the parties
may agree.
 
"Closing Escrow Agreement" means the Closing Escrow Agreement, dated as of the
date hereof, between the Company, the Selling Stockholder, Roth Capital
Partners, LLC and the escrow agent (the “Escrow Agent”) identified therein, in
the form of Exhibit C hereto.
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any securities into which such common stock may hereafter be
reclassified or for which it may be exchanged as a class.
 
“Common Stock Equivalents” means any securities of the Company or any Subsidiary
which entitle the holder thereof to acquire Common Stock at any time, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.
 
“Company Counsel” means Thelen Reid Brown Raysman & Steiner LLP.
 
“Company Deliverables” has the meaning set forth in Section 2.2(a).
 
“Disclosure Materials” has the meaning set forth in Section 3.1(h).
 
“Effective Date” means the date that the Registration Statement required by
Section 2(a) of the Registration Rights Agreement is first declared effective by
the Commission.
 
“Evaluation Date” has the meaning set forth in Section 3.1(s).
 
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“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.
 
“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers or directors of the Company pursuant to any stock or option
plan duly adopted by the Board of Directors of the Company or a majority of the
members of a committee of directors established for such purpose, (b) securities
upon the exercise or exchange of or conversion of any Securities issued
hereunder or to any placement agents in connection with the transactions
contemplated hereby and/or securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that such securities have not been amended since the
date of this Agreement to increase the number of such securities or to decrease
the exercise, exchange or conversion price of any such securities, and (c)
securities issued pursuant to acquisitions or strategic transactions, provided
any such issuance shall only be to a Person which is, itself or through its
subsidiaries, an operating company in a business synergistic with the business
of the Company and in which the Company receives benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities.
 
“GAAP” means U.S. generally accepted accounting principles.
 
“Intellectual Property Rights” has the meaning set forth in Section 3.1(p).
 
“Investment Amount” means, with respect to each Investor, the Investment Amount
indicated on such Investor’s signature page to this Agreement.
 
“Investor Deliverables” has the meaning set forth in Section 2.2(b).
 
“Investor Party” has the meaning set forth in Section 4.7.
 
“Lien” means any lien, charge, encumbrance, security interest, right of first
refusal, right of participation or other restrictions of any kind.
 
“Lockup Agreement” means collectively, the Lockup Agreements, each dated as of
the Closing Date, by and between the Company and each person listed as a
signatory thereto, in the form attached as Exhibit E hereto.
 
“Losses” means any loss, liability, obligation, claim, contingency, damage, cost
or expense, including all judgments, amounts paid in settlements, court costs
and reasonable attorneys’ fees and costs of investigation related thereto.
 
“Make Good Escrow Agreement” means the Make Good Escrow Agreement, dated as of
the date hereof, among the Company, Roth Capital Partners, LLC, as agent, the
escrow agent (the “Make Good Escrow Agent”) identified therein and Mr. Jiada Hu,
in the form of Exhibit D hereto.
 
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“Make Good Pledgor” means Mr. Jiada Hu.
 
“Material Adverse Effect” means any of (i) a material and adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material and adverse effect on the results of operations, assets, prospects,
business or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) an adverse impairment to the Company’s
ability to perform on a timely basis its obligations under any Transaction
Document.
 
“New York Courts” means the state and federal courts sitting in the City of New
York, Borough of Manhattan.
 
“Outside Date” means the sixtieth day following the date of this Agreement.
 
“Per Unit Purchase Price” equals $2.14.
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the date of this Agreement, among the Company and the Investors, in the
form of Exhibit A hereto.
 
“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Investors of the Securities.
 
“Ritar” has the meaning set forth in the recitals to this Agreement.
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“SEC Reports” has the meaning set forth in Section 3.1(h).
 
“Securities” means the Shares, the Selling Stockholder Shares, the Warrants and
the Warrant Shares.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
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“Selling Stockholder Shares” means the shares of Common Stock being offered and
sold by the Selling Stockholder to the Investors hereunder in such number as is
set forth below the Selling Stockholder’s signature to this Agreement.
 
“Share Delivery Date” has the meaning set forth in Section 4.1(c).
 
“Shares” means the shares of Common Stock being offered and sold to the
Investors by the Company hereunder.
 
“Short Sales” include, without limitation, all “short sales” as defined in Rule
200 promulgated under Regulation SHO under the Exchange Act and all types of
direct and indirect stock pledges, forward sale contracts, options, puts, calls,
swaps and similar arrangements (including on a total return basis), and sales
and other transactions through non-US broker dealers or foreign regulated
brokers.
 
“Subsidiary” means any “significant subsidiary” as defined in Rule 1-02(w) of
the Regulation S-X promulgated by the Commission under the Exchange Act.
 
“Trading Day” means (i) a day on which the Common Stock is traded on a Trading
Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed on a Trading Market (other than the OTC Bulletin Board), a day on which
the Common Stock is traded in the over-the-counter market, as reported by the
OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading
Market, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.
 
“Trading Market” means whichever of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the
NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed
or quoted for trading on the date in question.
 
“Transaction Documents” means this Agreement, the Registration Rights Agreement,
the Warrants, the Lockup Agreements, the Closing Escrow Agreement, the Make Good
Escrow Agreement and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
 
“Warrants” means the Common Stock purchase warrants in the form of Exhibit B,
which are issuable to the Investors at the Closing.
 
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.
 
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ARTICLE 2.
PURCHASE AND SALE
 
2.1. Closing.
 
(a) Subject to the terms and conditions set forth in this Agreement, at the
Closing: (i) the Company shall issue and sell to each Investor, and each
Investor shall, severally and not jointly, purchase from the Company, Shares in
such number as equals the quotient (rounded down to the nearest whole share)
obtained by dividing (1) 86.88% of such Investor’s Investment Amount by (2) the
Per Unit Purchase Price; and (ii) the Selling Stockholder shall sell to each
Investor, and each Investor shall, severally and not jointly, purchase from the
Selling Stockholder, Selling Stockholder Shares in such number as equals the
quotient (rounded down to the nearest whole share) obtained by dividing (1)
13.12% of such Investor’s Investment Amount by (2) the Per Unit Purchase Price.
The Closing shall take place at the offices of Bryan Cave LLP, 1290 Avenue of
the Americas, New York, NY 10104 or at such other location as the parties may
agree.
 
(b) The Company and the Selling Stockholder will cooperate with one another, and
will cause the Selling Stockholder Shares to be issued to the Investors at
Closing as part of a single stock certificate from the Company to each Investor
that will include all Shares and Selling Stockholder Shares being acquired by
such Investor under this Agreement. In furtherance thereof, the Selling
Stockholder hereby (i) instructs the Company to retain and cause to be delivered
to the Investors at Closing in accordance with Section 2.2 such number of shares
of Common Stock otherwise deliverable to the Selling Stockholder under the
Exchange Agreement as equals the total number of Selling Stockholder Shares
subject to sale to Investors hereunder, and (ii) agrees to deliver to the
Company such documents (including legal opinions) as the Company may require to
effect the transfer of such shares to the name of the Investors at the Closing,
including executed stock powers.
 
2.2. Closing Deliveries. (a) At the Closing, the Company shall deliver or cause
to be delivered to each Investor the following (the “Company Deliverables”):
 
(i) a single certificate representing that number of aggregate Shares and
Selling Stockholder Shares to be issued and sold at Closing to such Investor,
determined under Section 2.1(a), registered in the name of such Investor;
 
(ii) a Warrant, registered in the name of such Investor, pursuant to which such
Investor shall have the right to acquire the number of shares of Common Stock
equal to 20% of the number of Shares and Selling Stockholder Shares issuable to
such Investor pursuant to Section 2.2(a)(i), at an exercise price per share that
is equal to 130% of the Per Unit Purchase Price;
 
(iii) the Closing Escrow Agreement, duly executed by all parties thereto;
 
(iv) the Make Good Escrow Agreement, duly executed by all parties thereto;
 
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(v) the legal opinion of Company Counsel, in agreed form, addressed to the
Investors;
 
(vi) the Registration Rights Agreement, duly executed by the Company; and
 
(vii) the Lockup Agreements, duly executed by each party thereto.
 
(b) At the Closing, each Investor shall deliver or cause to be delivered the
following (collectively, the “Investors Deliverables”):
 
(i) to the Escrow Agent (or as otherwise instructed by the Company in the case
of Investors who are based in the People’s Republic of China), for deposit and
disbursement in accordance with the Closing Escrow Agreement and the Flow of
Funds Memorandum attached as an exhibit thereto (or as otherwise instructed by
the Company in the case of Investors who are based in the People’s Republic of
China), its Investment Amount, in immediately available funds, by wire transfer
to an account designated in writing by the Company for such purpose; and
 
(ii) to the Company, the Registration Rights Agreement, duly executed by such
Investor.
 
2.3. Interim Closings. The Company shall have the ability to effectuate interim
Closings under this Agreement, provided, that the minimum amount upon which the
Company may effectuate any Closing shall be $8,000,000.
 
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
 
3.1. Representations and Warranties of the Company. The Company hereby makes the
following representations and warranties to each Investor with the intention and
understanding that, as to matters pertaining to Ritar and its subsidiaries and
the Exchange, such representations and warranties are made as of the Closing
Date and assuming that the Exchange shall have been consummated immediately
prior to the Closing:
 
(a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than
as specified in the Schedule 3.1(a). Except as disclosed in Schedule 3.1(a), the
Company owns, directly or indirectly, all of the capital stock of each
Subsidiary free and clear of any and all Liens, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights. As of
the Closing, the Company shall own 100% of the capital stock of Ritar in
accordance with the Exchange Agreement, free and clear of all Liens. The term
“Subsidiaries” shall be deemed to include Ritar and its subsidiaries as if the
Exchange shall have been consummated as of the time of the execution of this
Agreement, with the effect that all references to Subsidiaries of the Company in
this Agreement shall also refer to Ritar and its subsidiaries.
 
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(b) Organization and Qualification. The Company and each Subsidiary are duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. The Company and each Subsidiary are duly
qualified to conduct its respective businesses and are in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.
 
(c) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents and otherwise to carry out its obligations
thereunder. The execution and delivery of each of the Transaction Documents by
the Company and the consummation by it of the transactions contemplated thereby
have been duly authorized by all necessary action on the part of the Company and
no further action is required by the Company in connection therewith. Each
Transaction Document has been (or upon delivery will have been) duly executed by
the Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or by other equitable principles of general
application.
 
(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated thereby and the sale of the Selling Stockholder Shares hereunder do
not and will not (i) conflict with or violate any provision of the Company’s or
any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.
 
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(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any United States or People’s Republic of China
court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents or by reason of the sale of the Selling Stockholder
Shares hereunder, other than (i) the filing with the Commission of one or more
Registration Statements in accordance with the requirements of the Registration
Rights Agreement, (ii) filings required by state securities laws, (iii) the
filing of a Notice of Sale of Securities on Form D with the Commission under
Regulation D of the Securities Act, (iv) the filings required in accordance with
Section 4.5 and (v) those that have been made or obtained prior to the date of
this Agreement. To the knowledge of the Company, the Selling Stockholder is not
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any United States or
People’s Republic of China court or other federal, state, local or other
governmental authority or any other Person in connection with the execution,
delivery and performance by them of the Transaction Documents or by reason of
the sale of the Selling Stockholder Shares hereunder.
 
(f) Issuance of the Shares. The Securities have been duly authorized and, when
issued and paid for in accordance with the Transaction Documents, will be duly
and validly issued, fully paid and nonassessable, free and clear of all Liens.
The Company has reserved from its duly authorized capital stock the shares of
Common Stock issuable pursuant to this Agreement and the Warrants in order to
issue the Shares and the Warrant Shares. When issued, the Selling Stockholder
Shares were duly authorized and were validly issued, fully paid and
nonassessable. The Selling Stockholder is the sole record owner of the Selling
Stockholder Shares to be sold hereunder.
 
(g) Capitalization. The number of shares and type of all authorized, issued and
outstanding capital stock of the Company, and all shares of Common Stock
reserved for issuance under the Company’s various option and incentive plans, is
specified in the SEC Reports. Except as specified in the SEC Reports, no
securities of the Company are entitled to preemptive or similar rights, and no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as specified in the SEC Reports, there are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.
The issue and sale of the Securities hereunder will not, immediately or with the
passage of time, obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Investors) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities.
 
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(h) SEC Reports; Financial Statements. To the knowledge of the Company, the
Company has filed all reports required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the twelve months preceding the date hereof (or such shorter period as the
Company was required by law to file such reports), including, for this purpose,
the current report on Form 8-K that is being filed by the Company on or about
the date hereof to disclose the transactions contemplated hereby and by the
Exchange Agreement (the foregoing materials being collectively referred to
herein as the “SEC Reports” and, together with the Schedules to this Agreement
(if any), the “Disclosure Materials”) on a timely basis or has timely filed a
valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing. Such financial statements have been prepared in accordance with
GAAP applied on a consistent basis during the periods involved, except as may be
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
The Ritar Financial Statements 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. The Ritar 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 Ritar and its consolidated Subsidiaries as of
and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
 
(i) Press Releases. The press releases disseminated by the Company during the
twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made,
not misleading.
 
(j) Material Changes. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in the SEC
Reports and except as arising as a result of the transactions contemplated by
the Transaction Documents, including, as a result of the acquisition of Ritar,
(i) there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse Effect, (ii) the
Company has not incurred any liabilities (contingent or otherwise) other than
(A) trade payables, accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting or the identity of its
auditors, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) the
Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans. The Company
does not have pending before the Commission any request for confidential
treatment of information.
 
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(k) Litigation. There is no Action which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the
Shares or (ii) except as specifically disclosed in the SEC Reports, could, if
there were an unfavorable decision, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor any director or officer thereof (in his or her
capacity as such), is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty, except as specifically disclosed in the SEC Reports.
There has not been, and to the knowledge of the Company, there is not pending
any investigation by the Commission involving the Company or any current or
former director or officer of the Company (in his or her capacity as such). The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.
 
(l) Labor Relations. No material labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company.
 
(m) Compliance. Neither the Company nor any Subsidiary (i) is in default under
or in violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as
could not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect. The Exchange Agreement complies with all
applicable laws, rules and regulations of the United States and the People’s
Republic of China. The Company is in compliance with all effective requirements
of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
thereunder, that are applicable to it, except where such noncompliance could not
have or reasonably be expected to result in a Material Adverse Effect.
 
(n) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, and neither the
Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such permits.
 
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(o) Title to Assets. The Company and the Subsidiaries have valid land use rights
for all real property owned by them that is material to their respective
businesses and good and marketable title in all personal property owned by them
that is material to their respective businesses, in each case free and clear of
all Liens, except for Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases of which the Company and the
Subsidiaries are in compliance, except as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect.
 
(p) Patents and Trademarks. The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to
so have could, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). Neither the Company nor any Subsidiary has received a written notice
that the Intellectual Property Rights used by the Company or any Subsidiary
violates or infringes upon the rights of any Person. Except as set forth in the
SEC Reports, to the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.
 
(q) Insurance. The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged. The Company has no reason to believe that it will
not be able to renew its and the Subsidiaries’ existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business on terms consistent with
market for the Company’s and such Subsidiaries’ respective lines of business.
 
(r) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
 
(s) Internal Accounting Controls. The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that material
information relating to the Company, including its Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company’s Form 10-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.
Since the Evaluation Date, there have been no significant changes in the
Company’s internal controls (as such term is defined in Item 308(c) of
Regulation S-B under the Exchange Act) or, to the Company’s knowledge, in other
factors that could significantly affect the Company’s internal controls.
 
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(t) Solvency. Based on the financial condition of the Company as of the Closing
Date (and assuming that the Closing shall have occurred), (i) the Company’s fair
saleable value of its assets exceeds the amount that will be required to be paid
on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s
assets do not constitute unreasonably small capital to carry on its business for
the current fiscal year as now conducted and as proposed to be conducted
including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).
 
(u) Certain Fees. Except as described in Schedule 3.1(u), no brokerage or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
this Agreement. The Investors shall have no obligation with respect to any fees
or with respect to any claims (other than such fees or commissions owed by an
Investor pursuant to written agreements executed by such Investor which fees or
commissions shall be the sole responsibility of such Investor) made by or on
behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by this Agreement.
 
(v) Certain Registration Matters. Assuming the accuracy of the Investors’
representations and warranties set forth in Section 3.2(b)-(e), no registration
under the Securities Act is required for the offer and sale of the Shares and
Warrants and the offer of the Warrant Shares by the Company and the Selling
Stockholder Shares (as applicable) by the Selling Stockholder to the Investors
under the Transaction Documents. The Company is eligible to register its Common
Stock for resale by the Investors under Form S-1 promulgated under the
Securities Act. Except as specified in Schedule 3.1(v), the Company has not
granted or agreed to grant to any Person any rights (including “piggy-back”
registration rights) to have any securities of the Company registered with the
Commission or any other governmental authority that have not been satisfied.
 
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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 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 Articles
of Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Investors as a result of
the Investors and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without limitation the
Company’s issuance of the Shares and the Investors’ ownership of the Securities.
 
(z) No Additional Agreements. The Company does not have any agreement or
understanding with any Investor with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction Documents.
 
(aa) Consultation with Auditors. The Company has consulted its independent
auditors concerning the accounting treatment of the transactions contemplated by
the Transaction Documents, and in connection therewith has furnished such
auditors complete copies of the Transaction Documents.
 
(bb) Make Good Shares. Make Good Pledgor is the sole record and beneficial owner
of the 2007 Investor Shares and 2008 Investor Shares, and to the knowledge of
the Company holds such shares free and clear of all Liens.
 
(cc) Company Policies. The sale of the Selling Stockholder Shares by the Selling
Stockholder does not violate any policies or procedures established by the
Company.
 
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(dd) Disclosure. The Company confirms that neither it nor any Person acting on
its behalf has provided any Investor or its respective agents or counsel with
any information that the Company believes constitutes material, non-public
information concerning the Company, the Subsidiaries or their respective
businesses, except insofar as the existence and terms of the proposed
transactions contemplated hereunder may constitute such information. The Company
understands and confirms that the Investors will rely on the foregoing
representations and covenants in effecting transactions in securities of the
Company. To the knowledge of the Company, the representations and warranties of
the Selling Stockholder are true and correct in all material respects. Except as
specified below, all disclosure provided to the Investors regarding the Company,
the Subsidiaries or their respective businesses and the transactions
contemplated hereby, furnished by or on behalf of the Company (including the
Company’s representations and warranties set forth in this Agreement) are true
and correct and do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. Notwithstanding the foregoing, any draft of the Registration
Statement to be filed on Form S-1 in connection with the transactions
contemplated hereby that was provided to the Investors prior to the date hereof
was incomplete in the form distributed, and such Investor is not relying on such
draft on Form S-1 in making its decision to enter into the transactions
contemplated hereby.
 
Each Investor acknowledges and agrees that the Company has not made nor makes
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.1.
 
3.2. Representations and Warranties of the Investors. Each Investor hereby, for
itself and for no other Investor, represents and warrants to the Company and the
Selling Stockholder as follows:
 
(a) Organization; Authority. Such Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the applicable
Transaction Documents and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by such Investor of the transactions
contemplated by this Agreement has been duly authorized by all necessary
corporate or, if such Investor is not a corporation, such partnership, limited
liability company or other applicable like action, on the part of such Investor.
Each of this Agreement and the Registration Rights Agreement has been duly
executed by such Investor, and when delivered by such Investor in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of such Investor, enforceable against it in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.
 
(b) Investment Intent. Such Investor is acquiring the Securities as principal
for its own account for investment purposes only and not with a view to or for
distributing or reselling such Securities or any part thereof, without
prejudice, however, to such Investor’s right at all times to sell or otherwise
dispose of all or any part of such Securities in compliance with applicable
federal and state securities laws. Subject to the immediately preceding
sentence, nothing contained herein shall be deemed a representation or warranty
by such Investor to hold the Securities for any period of time. Such Investor is
acquiring the Securities hereunder in the ordinary course of its business. Such
Investor does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Securities.
 
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(c) Investor Status. At the time such Investor was offered the Securities, it
was, and at the date hereof it is, an “accredited investor” as defined in Rule
501(a) under the Securities Act. Such Investor is not a registered broker-dealer
under Section 15 of the Exchange Act.
 
(d) General Solicitation. Such Investor is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
 
(e) Access to Information. Such Investor acknowledges that it has reviewed the
Disclosure Materials and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Subsidiaries
and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment. Neither such inquiries nor any other investigation conducted by or
on behalf of such Investor or its representatives or counsel shall modify, amend
or affect such Investor’s right to rely on the truth, accuracy and completeness
of the Disclosure Materials and the Company’s representations and warranties
contained in the Transaction Documents. Such Investor acknowledges that
notwithstanding the foregoing, any draft of the Registration Statement to be
filed on Form S-1 in connection with the transactions contemplated hereby that
was provided to such Investor prior to the date hereof was incomplete in the
form distributed, and such Investor is not relying on such draft on Form S-1 in
making its decision to enter into the transactions contemplated hereby.
 
(f) Certain Trading Activities. Such Investor has not directly or indirectly,
nor has any Person acting on behalf of or pursuant to any understanding with
such Investor, engaged in any transactions in the securities of the Company
(including, without limitations, any Short Sales involving the Company’s
securities) since the earlier to occur of (1) the time that such Investor was
first contacted by the Company or Roth Capital Partners, LLC regarding an
investment in the Company and (2) the 30th day prior to the date of this
Agreement. Such Investor covenants that neither it nor any Person acting on its
behalf or pursuant to any understanding with it will engage in any transactions
in the securities of the Company (including Short Sales) prior to the time that
the transactions contemplated by this Agreement are publicly disclosed.
 
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(g) Independent Investment Decision. Such Investor has independently evaluated
the merits of its decision to purchase the Securities pursuant to the
Transaction Documents, and such Investor confirms that it has not relied on the
advice of any other Investor’s business and/or legal counsel in making such
decision. Such Investor has not relied on the business or legal advice of Roth
Capital Partners, LLC or any of its agents, counsel or Affiliates in making its
investment decision hereunder, and confirms that none of such Persons has made
any representations or warranties to such Investor in connection with the
transactions contemplated by the Transaction Documents.
 
The Company acknowledges and agrees that no Investor has made or makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.
 
3.3. Representations and Warranties of the Selling Stockholder. The Selling
Stockholder hereby makes the following representations and warranties to each
Investor:
 
(a) Enforcement. This Agreement has been duly executed and delivered by the
Selling Stockholder and constitutes the valid and binding obligation of the
Selling Stockholder, enforceable against him in accordance with its terms except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.
 
(b) No Consents. No consent, approval, authorization or order of, or any filing
or declaration with, any United States or People’s Republic of China court or
governmental agency or body or other Person is required in connection with the
consummation by the Selling Stockholder of the transactions on its part
contemplated by the Transaction Documents, except (i) filings as may be required
under Sections 13(d) and 16(a) of the Exchange Act, and (ii) those that have
been made or obtained prior to the date of this Agreement.
 
(c) No Conflicts. The execution, delivery and performance by the Selling
Stockholder of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated thereby do not and will not result
in a breach or violation of, or constitute a default under (with or without
notice or lapse of time), any stockholders agreement, voting trust agreement,
pledge, registration rights agreement or other agreement or instrument to which
the Selling Stockholder or any of his properties are bound or affected, and will
not violate or conflict with any judgment, decree or order of any United States
or People’s Republic of China court or other governmental agency or any law,
rule or regulation applicable to the Selling Stockholder, in each case such as
could not have or result in a Material Adverse Effect.
 
(d) Certain Registration Matters. Assuming the accuracy of the Investors’
representations and warranties set forth in Sections 3.2(b)-(d), no registration
under the Securities Act is required for the purchase and sale of the Selling
Stockholder Shares to the Investors hereunder.
 
(e) Good and Marketable Title. The Selling Stockholder is the sole lawful record
and sole beneficial owner of all of the Selling Stockholder Shares to be sold by
it hereunder. The Selling Stockholder has good and marketable title to the
Selling Stockholder Shares to be sold by it hereunder, free and clear of any
Liens, except for restrictions on subsequent transfer imposed by United States
securities laws. Upon consummation of the Closing, the Investors will have good
and marketable title to the Selling Stockholder Shares purchased by them, free
and clear of all Liens created by or through the Selling Stockholder.
 
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(f) Certain Fees. Except as described in Schedule 3.3(f), no brokerage or
finder's fees or commissions are or will be payable by the Selling Stockholder
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.
 
(g) No Additional Agreements. The Selling Stockholder does not have any
agreement or understanding with any Investor or with the Company with respect to
the transactions contemplated by the Transaction Documents other than as
specified in the Transaction Documents.
 
(h) Company Policies. The sale of the Selling Stockholder Shares by the Selling
Stockholder does not violate any policies or procedures established by the
Company.
 
ARTICLE 4.
OTHER AGREEMENTS OF THE PARTIES
 
4.1. (a) Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of the Securities other than
pursuant to an effective registration statement, to the Company, to an Affiliate
of an Investor or in connection with a pledge as contemplated in Section 4.1(b),
the Company may require the transferor thereof to provide to the Company an
opinion of counsel selected by the transferor, the form and substance of which
opinion shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act.
 
(b) Certificates evidencing the Securities will contain the following legend,
until such time as they are not required under Section 4.1(c):
 
[NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED]
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION
OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. [THESE SECURITIES AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES] [THESE SECURITIES] MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
 
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The Company acknowledges and agrees that an Investor may from time to time
pledge, and/or grant a security interest in some or all of the Securities
pursuant to a bona fide margin agreement in connection with a bona fide margin
account and, if required under the terms of such agreement or account, such
Investor may transfer pledged or secured Securities to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval or consent
of the Company and no legal opinion of legal counsel to the pledgee, secured
party or pledgor shall be required in connection with the pledge, but such legal
opinion may be required in connection with a subsequent transfer following
default by the Investor transferee of the pledge. No notice shall be required of
such pledge. At the appropriate Investor’s expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of the
Securities including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of selling
stockholders thereunder. Except as otherwise provided in Section 4.1(c), any
Securities subject to a pledge or security interest as contemplated by this
Section 4.1(b) shall continue to bear the legend set forth in this Section
4.1(b) and be subject to the restrictions on transfer set forth in Section
4.1(a).
 
(c) Certificates evidencing Shares, Selling Stockholder Shares and Warrant
Shares shall not contain any legend (including the legend set forth in Section
4.1(b)): (i) following a sale or transfer of such Shares, Selling Stockholder
Shares or Warrant Shares pursuant to an effective registration statement
(including a Registration Statement), or (ii) following a sale or transfer of
such Shares, Selling Stockholder Shares or Warrant Shares pursuant to Rule 144
(assuming the transferee is not an Affiliate of the Company), or (iii) while
such Shares, Selling Stockholder Shares or Warrant Shares are eligible for sale
under Rule 144(k). If an Investor shall make a sale or transfer of Shares,
Selling Stockholder Shares or Warrant Shares either (x) pursuant to Rule 144 or
(y) pursuant to a registration statement and in each case shall have delivered
to the Company or the Company’s transfer agent the certificate representing
Shares, Selling Stockholder Shares or Warrant Shares containing a restrictive
legend which are the subject of such sale or transfer and a representation
letter in customary form (the date of such sale or transfer and Shares, Selling
Stockholder Shares or Warrant Shares delivery being the “Share Delivery Date”)
and (1) the Company shall fail to deliver or cause to be delivered to such
Investor a certificate representing such Shares, Selling Stockholder Shares or
Warrant Shares 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 Shares,
Selling Stockholder Shares or Warrant Shares are received free from restrictive
legends, the Investor, or any third party on behalf of such Investor, purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Investor of such Shares, Selling Stockholder
Shares or Warrant Shares (a "Buy-In"), then the Company shall pay in cash to the
Investor (for costs incurred either directly by such Investor or on behalf of a
third party) the amount by which the total purchase price paid for Common Stock
as a result of the Buy-In (including brokerage commissions, if any) exceed the
proceeds received by such Investor as a result of the sale to which such Buy-In
relates. The Investor shall provide the Company written notice indicating the
amounts payable to the Investor in respect of the Buy-In.
 
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4.2. Furnishing of Information. As long as any Investor owns the Securities, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act. As long as any
Investor owns Securities, if the Company is not required to file reports
pursuant to such laws, it will prepare and furnish to the Investors and make
publicly available in accordance with Rule 144(c) such information as is
required for the Investors to sell the Securities under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell the Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.
 
4.3. Integration. The Company shall not, and shall use its best efforts to
ensure that no Affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Investors, or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market in a manner that would require stockholder
approval of the sale of the Securities to the Investors.
 
4.4. Subsequent Registrations. Other than pursuant to the Registration
Statement, prior to the Effective Date, the Company may not file any
registration statement (other than on Form S-8) with the Commission with respect
to any securities of the Company.
 
4.5. Securities Laws Disclosure; Publicity. By 9:00 a.m. (New York time) on the
fourth Trading Day following the execution of this Agreement, and by 9:00 a.m.
(New York time) on the fourth Trading Day following any Closing Date, the
Company shall issue press releases disclosing the transactions contemplated
hereby and such Closing. On the fourth Trading Day following the execution of
this Agreement the Company will file a Current Report on Form 8-K disclosing the
material terms of the Transaction Documents (and attach as exhibits thereto the
Transaction Documents), and on the fourth Trading Day following any Closing Date
the Company will file an additional Current Report on Form 8-K to disclose such
Closing. In addition, the Company will make such other filings and notices in
the manner and time required by the Commission and the Trading Market on which
the Common Stock may be listed. Notwithstanding the foregoing, the Company shall
not publicly disclose the name of any Investor, or include the name of any
Investor in any filing with the Commission (other than the Registration
Statement and any exhibits to filings made in respect of this transaction in
accordance with periodic filing requirements under the Exchange Act) or any
regulatory agency or Trading Market upon which the Common Stock may be listed,
without the prior written consent of such Investor, except to the extent such
disclosure is required by law or applicable Trading Market regulations.
 
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4.6. Limitation on Issuance of Future Priced Securities. During the six months
following the Closing Date, the Company shall not issue any “Future Priced
Securities” as such term is described by NASD IM-4350-1.
 
4.7. Indemnification of Investors. In addition to the indemnity provided in the
Registration Rights Agreement, the Company and the Selling Stockholder hereby
agree to the following indemnification of the Investors:
 
(a) The Company will indemnify and hold the Investors and their respective
directors, officers, shareholders, partners, employees and agents (each, an
"Investor Party") harmless from any and all Losses that any such Investor Party
may suffer or incur as a result of or relating to any misrepresentation, breach
or inaccuracy of any representation, warranty, covenant or agreement made by the
Company in any Transaction Document. In addition to the indemnity contained
herein, the Company will reimburse each Investor Party for its reasonable legal
and other expenses (including the cost of any investigation, preparation and
travel in connection therewith) incurred in connection therewith, as such
expenses are incurred.
 
(b) The Selling Stockholder will indemnify and hold each of the Company and each
Investor Party harmless from any and all Losses that the Company or any such
Investor Party may suffer or incur as a result of or relating to any
misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the Selling Stockholder in any Transaction
Document. In addition, the Selling Stockholder will reimburse each of the
Company and 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.
 
(c) 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. Each of the Company and the Selling Stockholder
covenant and agree that neither they nor any other Person acting on 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. Each of the Company and the Selling
Stockholder understand and confirm that each Investor shall be relying on the
foregoing representations in effecting transactions in securities of the
Company.
 
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4.9. Listing of Securities. The Company agrees, (i) if the Company applies to
have the Common Stock traded on any other Trading Market, it will include in
such application the Securities, and will take such other action as is necessary
or desirable to cause the Securities to be listed on such other Trading Market
as promptly as possible, and (ii) it will take all action reasonably necessary
to continue the listing and trading of its Common Stock on a Trading Market and
will comply in all material respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of the Trading Market.
 
4.10. Use of Proceeds. The Company will use the net proceeds from the sale of
the Shares and Warrants hereunder for working capital purposes and not for the
satisfaction of any portion of the Company’s debt (other than payment of trade
payables and accrued expenses in the ordinary course of the Company’s business
and consistent with prior practices), or to redeem any Common Stock or Common
Stock Equivalents.
 
4.11. Make Good Shares.
 
(a) The Make Good Pledgor agrees that if the Company’s after tax net income
reported in the Company’s Annual Report on Form 10-K for the fiscal year ending
December 31, 2007, as filed with the Commission (the “2007 Annual Report”) is
less than $5,678,000 (the “2007 Guaranteed ATNI”), the Make Good Pledgor will
transfer to each Investor for no additional consideration a number of shares of
Common Stock equal to:
 
(such Investor’s Investment Amount / (7.144 x (2.14 / ($40,562,110 / actual
After-Tax Net Income reported in the 2007 Annual Report)))) - the number of
Shares issued in the transaction to such Investor
 
(the “2007 Investor Shares”). Should the preceding formula yield a number equal
to or less than zero, no transfer of 2007 Make Good Shares (as defined in the
Make Good Escrow Agreement) shall be made to Investors. In no event shall the
failure by the Company to achieve the 2007 Guaranteed ATNI result in the
delivery by the Make Good Pledgor to the Investors of a number of shares that is
in excess of the number of 2007 Make Good Shares pledged under the Make Good
Escrow Agreement. If the 2007 Annual Report indicates that the Company shall
have satisfied the 2007 Guaranteed ATNI test specified above for such period,
then no transfer to Investors of 2007 Make Good Shares shall be required by this
Section and all 2007 Make Good Shares deposited with the Make Good Escrow Agent
shall be returned to the Make Good Pledgor in accordance with the Make Good
Escrow Agreement. Transfers of 2007 Investor Shares required under this Section
shall be made to Investors within 7 Business Days after the date which the
Company’s 2007 Annual Report is filed with the Commission and otherwise in
accordance with the Make Good Escrow Agreement.
 
(b) The Make Good Pledgor agrees that if the Company’s after tax net income
reported in the Company’s Annual Report on Form 10-K for the fiscal year ending
December 31, 2008, as filed with the Commission (the “2008 Annual Report”) is
less than $8,200,000 (the “2008 Guaranteed ATNI”), the Make Good Pledgor will
transfer to each Investor for no additional consideration a number of shares of
Common Stock equal to:
 
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(such Investor’s Investment Amount / (4.986 x (2.14 / ($40,562,110 / actual
After-Tax Net Income reported in the 2008 Annual Report)))) - the number of
Shares issued in the transaction to such Investor
 
(the “2008 Investor Shares”). Should the preceding formula yield a number equal
to or less than zero, no transfer of 2008 Make Good Shares (as defined in the
Make Good Escrow Agreement) shall be made to Investors. In no event shall the
failure by the Company to achieve the 2008 Guaranteed ATNI result in the
delivery by the Make Good Pledgor to the Investors of a number of shares that is
in excess of the number of 2008 Make Good Shares pledged under the Make Good
Escrow Agreement. If the 2008 Annual Report indicates that the Company shall
have satisfied the 2008 Guaranteed ATNI test specified above for such period,
then no transfer to Investors of 2008 Make Good Shares shall be required by this
Section and all 2008 Make Good Shares deposited with the Make Good Escrow Agent
shall be returned to the Make Good Pledgor in accordance with the Make Good
Escrow Agreement. Transfers of 2008 Investor Shares required under this Section
shall be made to Investors within 7 Business Days after the date which the
Company’s 2008 Annual Report is filed with the Commission and otherwise in
accordance with the Make Good Escrow Agreement.
 
(c) In connection with the foregoing, Make Good Pledgor agrees that within three
Trading Days following the Closing, Make Good Pledgor will deposit all 2007 Make
Good Shares and 2008 Make Good Shares into escrow in accordance with the Make
Good Escrow Agreement along with bank signature stamped stock powers endorsed in
blank (or such other signed instrument of transfer acceptable to the Company’s
transfer agent), and the handling and disposition of the 2007 Make Good Shares
and 2008 Make Good Shares shall be governed by this Section 4.11 and such Make
Good Escrow Agreement. The Make Good Pledgor hereby agrees that its obligation
to transfer shares of Common Stock to Investors pursuant to this Section 4.11
shall continue to run to the benefit of an Investor who shall have transferred
or sold all or any portion of its Securities, and that Investors 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
Securities.
 
(d) The Company covenants and agrees that upon any transfer under this Section
of 2007 Investor Shares or 2008 Investor Shares to the Investors in accordance
with Section 4 of the Make Good Escrow Agreement, the Company shall instruct its
transfer agent to promptly reissue such 2007 Investor Shares or 2008 Investor
Shares in the applicable Investor’s name and deliver the same as directed by
such Investor.
 
(e) Notwithstanding the foregoing, the parties agree that for purposes of
determining whether or not the 2007 Guaranteed ATNI or the 2008 Guaranteed ATNI
have been achieved, the release of the 2007 Make Good Shares or the 2008 Make
Good Shares to the Make Good Pledgor as a result of the operation of this
Section 4.11 shall not be deemed to be an expense, charge or other deduction
from revenues even though GAAP may require contrary treatment and even though
the applicable annual report on Form 10-K may indicate otherwise.
 
4.12. Dividends. The Company covenants that it shall cause its Subsidiaries not
to declare or pay any form of dividend, or enter into any agreement to
effectuate the foregoing.
 
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4.13. Right of First Refusal.
 
(a) From the date hereof until the one year anniversary of the Closing Date (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 or its
Subsidiaries' 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 (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 4.13.
 
(b) The Company shall deliver to each Investor hereunder 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 (w) identify and describe the
Offered Securities, (x) describe the price and other terms upon which they are
to be issued, sold or exchanged, and the number or amount of the Offered
Securities to be issued, sold or exchanged, (y) identify the persons or entities
(if known) to which or with which the Offered Securities are to be offered,
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 Investors (a)
based on such Investor's pro rata portion of the total Investment Amount
hereunder (the "Basic Amount"), and (b) with respect to each Investor that
elects to purchase its Basic Amount, any additional portion of the Offered
Securities attributable to the Basic Amounts of other Investors as such Investor
shall indicate it will purchase or acquire should the other Investors subscribe
for less than their Basic Amounts (the "Undersubscription Amount"), which
process shall be repeated until the Investors shall have an opportunity to
subscribe for any remaining Undersubscription Amount.
 
(c) To accept an Offer, in whole or in part, such Investor must deliver a
written notice to the Company prior to the end of the fifth (5th) Business Day
after such Investor's receipt of the Offer Notice (the "Offer Period"), setting
forth the portion of such Investor's Basic Amount that such Investor elects to
purchase and, if such Investor shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Investor elects to purchase (in
either case, the "Notice of Acceptance"). If the Basic Amounts subscribed for by
all Investors are less than the total of all of the Basic Amounts, then each
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 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 Investors that have
subscribed for Undersubscription Amounts, subject to rounding by the Company to
the extent its deems reasonably necessary.
 
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(d) The Company shall have twenty (20) 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
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 twenty (20) Business Day period referred to in
this subsection (d), the Subsequent Placement shall be deemed to have been
abandoned and the 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 4.13), then each 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 Investor elected to purchase pursuant
to Section 4.13(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 4.14(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 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 Investors in accordance with Section 4.13(b) above.
 
(f) Upon the closing of the issuance, sale or exchange of all or less than all
of the Refused Securities, the Investors shall acquire from the Company, and the
Company shall issue to the Investors, the number or amount of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to Section 4.13(e)
above if the Investors have so elected, upon the terms and conditions specified
in the Offer. The purchase by the Investors of any Offered Securities is subject
in all cases to the preparation, execution and delivery by the Company and the
Investors of a purchase agreement relating to such Offered Securities reasonably
satisfactory in form and substance to the Investors and their respective counsel
(such agreement, the “Subsequent Placement Agreement”).
 
(g) Any Offered Securities not acquired by the Investors or other persons in
accordance with Section 4.13(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
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 4.13(d), or unless it
notifies the Company in writing that it no longer desires to receive Offer
Notices.
 
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(i) Notwithstanding the foregoing, this Section 4.13 shall not apply in respect
of an Exempt Issuance.
 
4.14. Board of Directors. The Company covenants and agrees that no later than
six months following the Closing Date, the Board of Directors of the Company
shall be comprised of a minimum of five members, a majority of which shall be
“independent directors” as such term is defined in NASDAQ Marketplace Rule
4200(a)(15). In the event the Company falls greater than 10% below After-Tax Net
Income of $5,678,000 for the fiscal year ended December 31, 2007, or falls
greater than 10% below After-Tax Net Income of $8,200,000 for the fiscal year
ended December 31, 2008, then Pope shall have the right to select one member of
the Board of Directors of the Company.
 
4.15. Listing. The Company covenants to use its reasonable best efforts to have
the Common Stock listed or quoted for trading on any of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Global Select Market, the
NASDAQ Global Market or the NASDAQ Capital Market within one year following the
Closing.
 
ARTICLE 5.
CONDITIONS PRECEDENT TO CLOSING
 
5.1. Conditions Precedent to the Obligations of the Investors to Purchase
Securities. The obligation of each Investor to acquire Securities at the Closing
is subject to the satisfaction or waiver by such Investor, at or before the
Closing, of each of the following conditions:
 
(a) Representations and Warranties. The representations and warranties of the
Company and the Selling Stockholder 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. Each of the Company and the Selling Stockholder 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
Subsidiaries;
 
(e) Ritar Financial Statements. Ritar shall have delivered audited financial
statements for the fiscal years ended December 31, 2005 and 2004 and unaudited
financial statements for the interim period (collectively, the “Ritar Financial
Statements”);
 
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(f) PRC Opinion. Ritar shall have received an opinion from its legal counsel in
the People's Republic of China that confirms the legality under Chinese law of
the restructuring being effected by Ritar in connection with the Exchange in
form and substance satisfactory to the Investors;
 
(g) Exchange Agreement Form 8-K. Concurrently with or immediately prior to the
Closing, the Company shall have acquired all of the outstanding capital stock of
Ritar pursuant to the Exchange Agreement, and the Company shall provide the
Investors with the Current Report on Form 8-K to be filed in accordance with the
Exchange Agreement, as amended, containing the audited financial statements of
Ritar and other required disclosure with respect to Ritar;
 
(h) Investor Relations. Prior to the Closing, the Company shall hire Heritage
Management Consultants, Inc. as the Company’s investor relations firm.
 
(i) Company Deliverables. The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a); and
 
(j) 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 and the Selling
Stockholder to Sell Securities. The obligation of the Company and the Selling
Stockholder to sell Securities at the Closing is subject to the satisfaction or
waiver by the Company, at or before the Closing, of each of the following
conditions:
 
(a) Representations and Warranties. The representations and warranties of each
Investor contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though made on and as of
such date;
 
(b) Performance. Each Investor shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by such
Investor at or prior to the Closing;
 
(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents;
 
(d) Investors Deliverables. Each Investor shall have delivered its Investors
Deliverables in accordance with Section 2.2(b); and
 
(e) Termination. This Agreement shall not have been terminated as to such
Investor in accordance with Section 6.5.
 
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ARTICLE 6.
MISCELLANEOUS
 
6.1. Fees and Expenses. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of the Transaction Documents. The Company shall pay all
stamp and other taxes and duties levied in connection with the sale of the
Securities.
 
6.2. Entire Agreement. The Transaction Documents, together with the Exhibits and
Schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.
 
6.3. Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile (provided the sender receives
a machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 6:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (c) upon actual receipt by the
party to whom such notice is required to be given, if sent by any means other
than facsimile transmission. The address for such notices and communications
shall be as follows:
 

 
 If to the Company:
 Concept Ventures Corporation      Room 2201 Tower A      Cyber Times Building  
   Tian’an Cyber Park, Futian District      Shenzhen, China 51804    
 Facsimile: 86-755-8347 5180      Attn.: Mr. Jiada Hu        
 With a copy to:
 Thelen Reid Brown Raysman & Steiner LLP      701 8th Street NW      Washington,
D.C. 20001      Facsimile: (202) 508-4321      Attn.: Louis A. Bevilacqua, Esq.
       
 If to the Selling Stockholder:
 To the address set forth on its signature page hereof;        
 If to an Investor:
 To the address set forth under such Investor’s name on the signature pages
hereof;      

 
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or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
 
6.4. Amendments; Waivers; No Additional Consideration. No provision of this
Agreement may be waived or amended except in a written instrument signed by the
Company and the Investors holding a majority of the Securities and, prior to
Closing, the Selling Stockholder. In addition, Sections 3.3, 4.7(b) and Article
VI may not be waived or amended except in a written instrument signed by the
Investors holding a majority of the Securities, the Company and the Selling
Stockholder. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right. No consideration shall be offered or paid to any Investor to
amend or consent to a waiver or modification of any provision of any Transaction
Document unless the same consideration is also offered to all Investors who then
hold Securities.
 
6.5. Termination. This Agreement may be terminated prior to Closing:
 
(a) by written agreement of the Investors and the Company; and
 
(b) by the Company, the Selling Stockholder, or an Investor (as to itself but no
other Investor) upon written notice to the other, if the Closing shall not have
taken place by 6:30 p.m. Eastern time on the Outside Date; provided, that the
right to terminate this Agreement under this Section 6.5(b) shall not be
available to any Person whose failure to comply with its obligations under this
Agreement has been the cause of or resulted in the failure of the Closing to
occur on or before such time.
 
In the event of a termination pursuant to this Section, the Company shall
promptly notify all non-terminating Investors. Upon a termination in accordance
with this Section 6.5, the Company, terminating Selling Stockholder and
terminating Investor(s) shall not have any further obligation or liability
(including as arising from such termination) to the other and no Investor will
have any liability to any other Investor under the Transaction Documents as a
result therefrom.
 
6.6. Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.
 
6.7. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. Neither
the Company nor the Selling Stockholder may assign this Agreement or any rights
or obligations hereunder without the prior written consent of the Investors. Any
Investor may assign any or all of its rights under this Agreement to any Person
to whom such Investor assigns or transfers any Securities, provided such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the “Investors.”
 
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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 Securities.
 
6.11. Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
 
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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 Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities. If a replacement
certificate or instrument evidencing any Securities is requested due to a
mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.
 
6.15. Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Investors,
the Company and the Selling Stockholder 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 or any Selling
Stockholder 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 or such Selling
Stockholder, a trustee, receiver or any other person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or
equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
 
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6.17. Independent Nature of Investors’ Obligations and Rights. The obligations
of each Investor under any Transaction Document are several and not joint with
the obligations of any other Investor, and no Investor shall be responsible in
any way for the performance of the obligations of any other Investor under any
Transaction Document. The decision of each Investor to purchase Securities
pursuant to the Transaction Documents has been made by such Investor
independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. Each of the Company and the Selling Stockholder
acknowledges that each of the Investors has been provided with the same
Transaction Documents for the purpose of closing a transaction with multiple
Investors and not because it was required or requested to do so by any Investor.
 
6.18. Limitation of Liability. Notwithstanding anything herein to the contrary,
each of the Company and the Selling Stockholder acknowledges and agrees that the
liability of an Investor arising directly or indirectly, under any Transaction
Document of any and every nature whatsoever shall be satisfied solely out of the
assets of such Investor, and that no trustee, officer, other investment vehicle
or any other Affiliate of such Investor or any investor, shareholder or holder
of shares of beneficial interest of such a Investor shall be personally liable
for any liabilities of such Investor.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 

        CONCEPT VENTURES CORPORATION  
   
   
    By:      

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Name:   Title: 

 

        Only as to Section 4.11 herein:  
   
        
     

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Mr. Jiada Hu      

 
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR SELLING STOCKHOLDER FOLLOWS]
 
 
 
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IN WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement
as of the date first written above.
 

   
NAME OF SELLING STOCKHOLDER
 
_________________________________________ 
Name: 
 
 
NUMBER OF SELLING STOCKHOLDER SHARES
 
_________________________________________ 
 
ADDRESS FOR NOTICE
 
c/o: ______________________________________
 
Street: ____________________________________
 
City/State/Zip: ______________________________
 
Attention: _________________________________
 
Tel: ______________________________________
 
Fax: ______________________________________
 
Email: _____________________________________

 

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

 
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