PURCHASE AGREEMENT
 
This Purchase Agreement (this “Agreement”) is made as of May 19, 2009 by and
among Ms. Yan Li (the “Seller”), the purchasers set forth on the signature pages
hereto (each, a “Purchaser” and collectively, the “Purchasers”) and
China-Biotics, Inc., a Delaware corporation (the “Company”).
 
WHEREAS, Seller desires to sell certain of her shares of the Company’s common
stock, par value $0.0001 per share (the “Common Stock”), to the Purchasers and
the Purchasers desire to purchase such shares.
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Sections 4(1) and 4(2) of the Securities Act of 1933, as amended
(the “Securities Act”), Seller desires to sell and transfer to each Purchaser
the number of shares of Common Stock set forth on such Purchaser’s signature
page hereto, which such shares of Common Stock were originally issued to the
Seller by the Company (the “Shares”) and each Purchaser desires to purchase the
Shares from the Seller.
 
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 Seller, the Company and the Purchasers
hereby agree as follows:
 
Section 1. Agreement to Purchase.  Each Purchaser hereby agrees to purchase, and
the Seller hereby agrees to sell, the Shares set forth on each such Purchaser’s
signature page pursuant to the conditions set forth herein.  The purchase price
per Share being sold to the Purchasers hereunder is $8.60 (the “Purchase
Price”).
 
Section 2. Closing; Delivery.
 
a.           The closing under this Agreement shall occur upon delivery of
executed signature pages to this Agreement and all other documents, instruments
and writings required to be delivered pursuant to this Agreement as provided in
Sections 2(b) and 2(c) to the offices of Winston & Strawn LLP, 200 Park Avenue,
New York, NY 10166 (the “Closing”) at 10:00 a.m. (eastern time) on such date as
the Purchasers and Seller may agree upon (the “Closing Date”).
 
b.           Following the execution of this Agreement, the Seller will deliver,
or cause to be delivered, to the Company’s transfer agent the certificate
representing the Shares together with all executed stock power and assignment
documents which may be relevant in order to effectuate the transfer of the
Shares to the Purchasers.
 
c.           At the Closing, (i) the Seller will deliver, or cause to be
delivered, to each Purchaser or its designee a facsimile copy of the certificate
representing the Shares being purchased by such Purchaser in the name of each
such Purchaser, and thereupon, (ii) each Purchaser will deliver to the Seller by
wire transfer of immediately available funds to such account as designated by
Seller, a United States dollar amount equal to the product of the Purchase Price
multiplied by the number of Shares set forth on such Purchaser’s signature page
hereto.
 
 
 

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d.           Within three (3) Trading Days following the Closing Date, Seller
will deliver, or cause to be delivered, to each Purchaser or its designee an
original certificate representing the Shares being purchased by such Purchaser
in the name of each such Purchaser.  For purposes of this Agreement, “Trading
Day” shall mean any day on which The NASDAQ Stock Market, LLC is open for
trading.
 
Section 3. Representations and Warranties of each Purchaser.  Each Purchaser,
severally and not jointly, hereby represents and warrants to the Seller and the
Company as follows:
 
a.           Intent.  Such Purchaser is acquiring the Shares as principal for
its own account and not with a current view to or for distributing or reselling
such Shares, without prejudice, however, to such Purchaser’s right, at all
times, to sell or otherwise dispose of all or any part of such Shares pursuant
to an effective registration statement under the Securities Act or under an
exemption from such registration and in compliance with applicable federal and
state securities laws.  Nothing contained herein shall be deemed a
representation or warranty by any Purchaser to hold the Shares for any period of
time.  Such Purchaser is acquiring the Shares hereunder in the ordinary course
of its business and does not have any agreement or understanding, directly or
indirectly, with any person to distribute any of the Shares.
 
b.           Organization; Authority.  Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite partnership power and
authority to enter into and to consummate the transactions contemplated hereby
and otherwise to carry out its obligations hereunder. The purchase by each such
Purchaser of the Shares hereunder has been duly authorized by all necessary
action on the part of such Purchaser.  This Agreement has been duly executed by
each such Purchaser, and when delivered by such Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors’ rights generally.
 
c.           Purchaser Status.  Such Purchaser is an “accredited investor” as
defined in Rule 501(a) under the Securities Act.  Such Purchaser is not a
registered broker-dealer under Section 15 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”).
 
d.           Experience of such Purchaser.  Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares, and has so
evaluated the merits and risks of such investment.  Such Purchaser is able to
bear the economic risk of an investment in the Shares and, at the present time,
is able to afford a complete loss of such investment.
 
e.           General Solicitation.  Such Purchaser is not purchasing the Shares
as a result of any advertisement, article, notice or other communication
regarding the Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
 
 
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f.           Independent Investment Decision.  Such Purchaser has independently
evaluated the merits of its decision to purchase the Shares pursuant to this
Agreement, and such Purchaser confirms that it has not relied on the advice of
any other Purchaser’s business and/or legal counsel in making such
decision.  Such Purchaser 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 Purchaser in connection with the
transactions contemplated by this Agreement.  Such Purchaser has had the
opportunity to conduct its own due diligence and have its questions regarding
the Company and the Shares answered to its satisfaction.
 
g.           Non-Public Information.  Such Purchaser acknowledges that the
Seller may be an "affiliate" of the Company as such term is defined in the
Securities Act and the rules and regulations promulgated thereunder, and that
the Seller may have non-public information (which may or may not be relevant to
such Purchaser’s consideration of an investment in the Shares) with respect to
the Company which each Purchaser agrees need not be provided to him or her.
 
h.           Restricted Securities.  Such Purchaser acknowledges that the Shares
are “restricted securities” as defined in Rule 144 under the Securities Act.
 
Section 4. Representations and Warranties of the Company.  The Company hereby
represents and warrants to each Purchaser as follows:
 
a.           Authority.  This Agreement has been duly executed by the Company,
and when delivered by the Company in accordance with the terms hereof, will
constitute the valid and legally binding obligation of the Company, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors’
rights generally.
 
Section 5. Representations and Warranties of the Seller.  The Seller hereby
represents and warrants to each Purchaser and the Company as follows:
 
a.           Power and Authority.  Such Seller has full authority and power to
execute and deliver this Agreement and perform its obligations arising
thereunder and to sell and transfer the Shares to the Purchasers as provided
herein.  This Agreement has been duly executed and delivered by such Seller and
constitutes the valid and binding obligation of such Seller enforceable against
such Seller in accordance with its respective terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors’ rights generally.
 
b.           Ownership.  Seller is the sole and exclusive owner, beneficially
and of record, of the Shares, free and clear of any lien, encumbrance or pledge
and, except for restrictions on transfer imposed by applicable securities laws,
has the unconditional right to sell the Shares as contemplated by this
Agreement.  At the Closing, upon payment of the Purchase Price, the Purchasers
will acquire all right, title and interest in the Shares, free and clear of any
lien, restriction on transfer, option, warrant, purchase right, encumbrance or
pledge other than restrictions on transfer in accordance with applicable
securities laws.  The Seller is not a party to any option, warrant, purchase
right or other contract or commitment that could require the Seller to sell or
transfer the Shares (other than as set forth in this Agreement).  Such Seller is
not aware of any third party claims with respect to the Shares.
 
 
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c.           Solicitation.  At no time did such Seller present or solicit, by
means of any publicly issued or circulated newspaper, mail, radio, television or
other form of general advertising or solicitation, in connection with the offer,
sale and purchase of the Shares.
 
d.           No Conflicts.  The execution and delivery of this Agreement and the
performance of its respective terms and the consummation of the transactions
contemplated hereby will not, with or without the giving of notice or the
passage of time, contravene, conflict with, constitute a violation or breach of
or result in a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel or require any notice or
consent under (a) any contract, security interest, or other arrangement to which
such Seller is a party or by which such Seller or its property is bound or to
which any of such Seller’s assets are subject, (b) any order, writ, injunction,
award, decree, decision or ruling of any court, arbitrator or governmental or
regulatory body against or binding such Seller or its property, or (c) any
statute, law, rule or regulation of any jurisdiction to which Seller or its
property may be subject.
 
e.           Consents.  No governmental authorization is required to be obtained
by the Seller from, and no filing with a governmental entity is required to be
made by the Seller in connection with, the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
 
f.            No Other Broker.  Except for Roth Capital Partners, LLC, the
Seller (i) has not engaged or made any arrangements with any broker-dealer,
placement agent, financial advisor or consultant, finder, investment banker or
bank to of­fer or sell the Shares and (ii) has not incurred any brokers, finders
or similar fee in connection with the transactions contemplated by this
Agreement.  The Seller hereby agrees to indemnify and hold harmless each
Purchaser against any claim, cost, loss, liability or expense (including,
without limitation, attorneys’ fees and out-of-pocket expenses) arising in
connection with any claim for any such fees or commissions.
 
g.           Legal Proceedings.  There are no legal or administrative
proceedings pending or threatened against the Seller other than those in respect
of the Seller that would not impair the ability of the Seller to perform its
obligations under this Agreement or the enforceability against the Seller of
this Agreement.
 
Section 6. Certain Obligations of the Parties.  The Seller covenants and agrees
to provide to the Purchasers and the Company any and all documents which may be
reasonably required in order to effectuate the transactions contemplated by this
Agreement, including, without limitation, an opinion of counsel if required by
the Company's transfer agent to transfer the Shares to the Purchasers.  The
Company will use its reasonable best efforts to prepare and file with the
Securities and Exchange Commission a registration statement (or include such
Shares in an existing registration statement through the use of an amendment to
such registration statement), including the prospectus, for an offering to be
made on a continuous basis pursuant to Rule 415 of the Securities Act, on Form
S-1 (or on such other form appropriate for such purpose) (collectively, the
“Registration Statement”) by the 30th day following the Closing Date covering
the resale by the Purchasers of the Shares and naming the Purchasers as selling
stockholders therein.  Each Purchaser shall cooperate with the Company in
providing any required or advisable information regarding such Purchaser for
inclusion in the Registration Statement and shall be solely responsible for all
such information provided by it for inclusion.  The Company will use its
reasonable best efforts to cause the Registration Statement to be declared
effective under the Securities Act as soon as possible but, in any event, no
later than the 120th day following the Closing Date, and shall use its
reasonable best efforts to keep the Registration Statement continuously
effective during the entire Effectiveness Period.  For purposes hereof,
“Effectiveness Period” shall mean the period commencing on the date on which the
Registration Statement is first declared effective by the Securities and
Exchange Commission (the “Effective Date”) and ending on the earliest to occur
of (a) the second anniversary of such Effective Date, (b) such time as all of
the Shares covered by the Registration Statement have been publicly sold by the
Purchasers pursuant to the Registration Statement, or (c) such time as all of
the Shares covered by the Registration Statement may be sold by the Purchasers
without volume restrictions pursuant to Rule 144 of the Securities Act, in each
case as determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company's transfer agent
and the affected Purchasers.  Each Purchaser covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with such Purchaser's sales of Shares pursuant to
the Registration Statement.  Each Purchaser covenants and agrees that it will
comply with federal and state securities laws applicable to it in connection
with such Purchaser's sales of Shares pursuant to the Registration Statement.
 
 
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Section 7. Conditions Precedent to the Obligation of the Seller to Sell the
Shares on the Closing Date.  The obligation hereunder of the Seller to sell the
Shares to each Purchaser is subject to the satisfaction or waiver, on or before
the Closing, of each of the conditions set forth below.
 
a.           This Agreement shall have been executed by such Purchaser and the
Company and delivered to the Seller;
 
b.           The representations and warranties of such Purchaser shall be true
and correct in all material respects as of the date when made and as of the
Closing Date; and
 
c.           No statute, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.
 
Section 8. Conditions Precedent to the Obligation of each Purchaser to Purchase
the Shares on the Closing Date.  The obligation hereunder of each Purchaser to
purchase the Shares from the Seller is subject to the satisfaction or waiver, on
or before the Closing, of each of the conditions set forth below.
 
a.           This Agreement shall have been executed by the Seller and the
Company and delivered to each Purchaser;
 
 
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b.           The representations and warranties of the Seller and the Company
shall be true and correct in all material respects as of the date when made and
as of the Closing Date;
 
c.           No statute, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement; and
 
d.           The Seller shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by it at or prior to the
Closing.
 
Section 9. Indemnification.
 
a.           The Seller hereby agrees to indemnify and hold harmless each
Purchaser and its respective officers, directors, shareholders, employees,
affiliates, advisors, agents and attorneys against any and all losses, claims,
damages, liabilities and expenses incurred by each such person insofar as such
losses, claims, demands, liabilities and expenses arise out of or are based upon
any breach of any representation, warranty or agreement made by the Seller in
this Agreement; provided, however, in no event shall the maximum aggregate
liability of the Seller to each Purchaser pursuant to this Section 9 be in
excess of the product of the Purchase Price multiplied by the aggregate number
of Shares purchased by such Purchaser hereunder.
 
b.           The Seller hereby agrees to indemnify and hold harmless the Company
and its respective officers, directors, shareholders, employees, agents and
attorneys against any and all losses, claims, damages, liabilities and expenses
incurred by each such person insofar as such losses, claims, demands,
liabilities and expenses arise out of or are based upon (i) any breach of any
representation, warranty or agreement made by the Seller in this Agreement; (ii)
any violation or alleged violation by the Seller of the Securities Act, Exchange
Act or any state securities law or any rule or regulation thereunder, in
connection with the performance of her obligations under this Agreement; or
(iii) any untrue or alleged untrue statement of a material fact made by the
Seller in the Registration Statement or in any amendment or supplement thereto,
or arising out of or relating to any of the Seller’s omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, in no event shall
the maximum aggregate liability of the Seller to the Company pursuant to this
Section 9 be in excess of the funds received by Seller in connection with the
sale of Shares pursuant to this Agreement.
 
c.           Each Purchaser, severally and not jointly, hereby agrees to
indemnify and hold harmless the Seller and the Company and each of their
directors, officers, agents, advisors and affiliates against any and all losses,
claims, damages, liabilities and expenses incurred by each such person insofar
as such losses, claims, demands, liabilities and expenses arise out of or are
based upon any breach of any representation, warranty or agreement made by such
Purchaser in this Agreement, and to indemnify and hold harmless the Company and
each of its directors, officers, agents, advisors and affiliates against any and
all costs and liabilities incurred by any of them arising from or relating to
any untrue statement or omission of material facts relating to such Purchaser
provided by or omitted by such Purchaser with respect to information that such
Purchaser provided to the Company specifically for use in the Registration
Statement; provided, however, in no event shall the maximum aggregate liability
of such Purchaser to the Seller pursuant to this Section 9 be in excess of the
product of the Purchase Price multiplied by the aggregate number of Shares
purchased by such Purchaser hereunder.
 
 
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d.           Subject to Section 9b. and Section 9c. and the final sentence of
this Section 9.d., in the event of any registration of any of the Shares under
the Securities Act pursuant to this Agreement, the Company will indemnify and
hold harmless the seller of such Shares (“Selling Stockholder’), and its
directors and officers, each underwriter of such Shares, and each other person,
if any, who controls such seller or underwriter within the meaning of the
Securities Act or the Exchange Act (collectively, “Indemnitees”), against any
losses, claims, damages or liabilities, joint or several, to which such
Indemnitee may become subject (“Losses”) under the Securities Act, the Exchange
Act, state securities or Blue Sky laws or otherwise, in so far as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, and any document incorporated therein
by reference, or arise out of or are based upon the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such
Indemnitee, for any legal or any other expenses reasonably incurred by such
Indemnitee in connection with investigating or defending any such loss, claim,
damage, liability or action.  Notwithstanding the aforesaid, the company shall
have no liability to the Indemnitees, and shall not be required to indemnify
such Indemnitees pursuant to this Section 9.d. or otherwise, to the extent that
such Losses arose because of an untrue statement of material fact or omission to
state a material fact contained in any information provided to the Company by
the Selling Stockholder specifically for use in the Registration Statement.
 
Section 10. Entire Agreement.  This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, with respect to such
matters.  This Agreement may not be amended or any provision hereof waived in
whole or in part, except by a written instrument signed by the parties hereto.
 
Section 11. Governing Law.  This Agreement shall be governed and interpreted 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 legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (each, a “Proceeding”) shall be
commenced exclusively in the state and federal courts sitting in the City of New
York, Borough of Manhattan (the “New York Courts”).  Each party hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the
adjudication of all Proceedings, 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 New York Court, or that any such New York Court is an
inconvenient or improper forum for such Proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address set forth on the signature page hereto 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 hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any Proceeding. If there shall be commenced a Proceeding, then
the prevailing party in such Proceeding shall be reimbursed by the adverse party
or parties for its reasonable attorneys fees and other expenses incurred in
connection therewith.
 
 
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Section 12. 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 parties, it being understood that all
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) the same with the same force and effect as if such facsimile signature
page were an original thereof.
 
Section 13. Further Assurances.  From time to time after the Closing Date, the
parties hereto shall execute and deliver, or cause to be executed and delivered,
such documents to the other parties hereto and take such further action as such
other parties hereto shall reasonably request to consummate and make effective
the transactions contemplated by this Agreement.
 
Section 14. Transaction Costs.  Each party to this Agreement shall be
responsible for its own costs attendant to the transactions contemplated by this
Agreement, whether or not the Closing occurs.
 
Section 15. Cumulative Remedies.  The remedies of the parties hereunder shall be
cumulative, and the exercise by a party of any of its remedies at law or in
equity to recover any damages shall not affect any other remedy available to
such party.
 
Section 16. Survival of Representations and Warranties.  The respective
representations, war­ranties and covenants of the parties set forth in this
Agreement shall survive the Closing notwithstanding any investigation made by or
on behalf of any such party.
 
Section 17. Amendments.  This Agreement may be amended only by a written
instrument exe­cuted by the parties hereto.
 
Section 18. Terms; Headings; References.  The definitions set forth in this
Agreement apply equally to both the singular and the plural forms of such
terms.  Whenever the context may re­quire, any pronoun shall be deemed to
include the corresponding masculine, feminine and neuter forms.  The words
“include,” “includes,” and “including” shall be interpreted as if followed by
the phrase “without limitation.”  The words “hereby,” ”herein,” “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any
particular Section or clause of this Agreement.  All references herein to
Sections shall be deemed refer­ences to Sections of this Agreement unless the
context shall otherwise require.  The Section and paragraph headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
 
 
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Section 19. Successors; Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors.  The
rights and obligations of the parties under this Agreement shall not be assigned
by any party without the prior written con­sent of the other party.
 
Section 20. Severability; Enforcement.  Whenever possible, each provision of
this Agreement will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable under any applicable law or rule in any
jurisdiction, such provision will be ineffective only to the extent of such
inva­lidity, illegality or unenforceability in such jurisdiction, without
invalidating the remainder of this Agreement in such jurisdiction or any
provision hereof in any other jurisdiction.
 
Section 21. Waiver.  None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever unless in writing
duly signed by each of the parties.
 
Section 22. Third-Party Beneficiaries.  This Agreement is made solely and
specifically between and for the benefit of the parties hereto and no other
person shall have or be entitled to any rights hereunder on account of or as a
third-party beneficiary or otherwise.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE TO FOLLOW]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
 

 
SELLER
 
________________________________________
Ms. Yan Li

Address:

Facsimile:

PURCHASER
 
________________________________________
 
By:_____________________________________
      Name:
      Title:
 
Address:

Facsimile:
Attn:
 
Number of Shares being purchased:_____________

CHINA-BIOTICS, INC. (FOR THE PURPOSE OF SECTIONS 3 - 6, 9(b), 9(c), 9(d) and 10
- 22 ONLY)
 
By:_____________________________________
      Name:
      Title:
 
Address:

Facsimile:
Attn: Chief Executive Officer