Document:

Registration Rights Agreement, dated as of July 15,2008

 Exhibit 4.2 
 FORM OF REGISTRATION RIGHTS AGREEMENT 
  
  
 REGISTRATION RIGHTS AGREEMENT 
 among 
 American Oriental Bioengineering, Inc.

 and 
 The Purchasers listed on
the signature pages hereto 
 Dated: July     , 2008 
  
  
  
  

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 REGISTRATION RIGHTS AGREEMENT 
 THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into this      day of July
        , 2008, among American Oriental Bioengineering, Inc., a Nevada corporation (the “Company”), and the purchasers listed on the signature pages hereto (collectively, the
“Purchasers”). 
 This Agreement is made pursuant to the Securities Purchase Agreement (the “Purchase
Agreement”), dated July 9, 2008, among the Company and the Purchasers, which provides for the sale by the Company to the Purchasers of $115,000,000 aggregate principal amount of the Company’s 5.00% Convertible Senior Notes due 2015
(the “Notes” and together with the shares of Common Stock of the Company into which the Notes are convertible, the “Securities”). In order to induce the Purchasers to enter into the Purchase Agreement, the Company
has agreed to provide to the Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Purchase Agreement. 
 In consideration of the foregoing, the parties hereto agree as follows: 
 1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings: 
 “1933 Act” shall mean the Securities Act of 1933, as amended from time to time. 
 “1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time to time. 
 “1939 Act” shall mean the Trust Indenture Act of 1939, as amended from time to time. 
 “Additional Interest” shall have the meaning set forth in Section 2.4 herein. 
 “Agreement” shall have the meaning set forth in the preamble. 
 “Closing Date” shall mean the Closing Time as such term is defined in the Purchase Agreement. 
 “Common Stock” shall mean any shares of common stock, par value $0.001 per share, of the Company and any other shares of
common stock as may constitute “Common Stock” for purposes of the Indenture. 
 “Company” shall
have the meaning set forth in the preamble and shall also include the Company’s successors. 
 “Depositary” shall mean The Depository Trust Company, or any other depositary appointed by the Company; provided, however, that such depositary must have an address in the Borough of Manhattan, in the City of
New York. 
 “Effectiveness Period” shall have the meaning set forth in Section 2.1(b) herein.

 “FINRA” shall mean the Financial Industry Regulatory Authority, Inc. (successor to the National
Association of Securities Dealers, Inc.). 
 “Freely Tradeable” means, with respect to a Security, a
Security that at any time of determination (i) may be sold to the public in accordance with Rule 144 under the 1933 Act (“Rule 144”) by a person that is not an “affiliate” (as defined in Rule 144 under the 1933 Act)
of the Company where no conditions of Rule 144 are then applicable (other than the holding period requirement of 

  

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paragraph (d) of Rule 144 so long as such holding period requirement is satisfied at such time of determination) and (ii) it does not bear any
restrictive legends relating to the 1933 Act. 
 “Holder” shall mean the Purchasers, for so long as they own
any Registrable Securities, and their successors, assigns and direct and indirect transferees who become owners, beneficial or otherwise, of Registrable Securities under the Indenture. 
 “Indenture” shall mean the Indenture relating to the Securities, dated as of the date hereof, between the Company and
Wells Fargo Bank, N.A., as Trustee, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof. 
 “Issuer Free Writing Prospectus” shall have the meaning set forth in Section 2.1(f) herein. 
 “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of outstanding Registrable
Securities; provided that, for purposes of this definition, (1) a Holder of shares of Common Stock that constitute Registrable Securities which were issued upon conversion of the Notes shall be deemed to hold an aggregate principal
amount at maturity of Registrable Securities (in addition to the principal amount at maturity of any Registrable Securities held by such Holder) equal to the principal amount at maturity of Registrable Securities which were converted into such
shares of Common Stock and (2) such Registrable Securities which were converted into such shares of Common Stock shall be deemed to be outstanding; provided further, that whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or any Affiliate (as defined in the Indenture) of the Company shall be disregarded in determining whether such consent or approval was given by
the Holders of such required percentage amount. 
 “Notes” shall have the meaning set forth in the preamble.

 “Person” shall mean an individual, partnership (general or limited), corporation, limited liability
company, trust or unincorporated organization, or a government or agency or political subdivision thereof. 
 “Private Placement Memorandum” shall mean the private placement memorandum of the Company, dated July 9, 2008, related to the Securities. 
 “Prospectus” shall mean the prospectus included in a Shelf Registration Statement, including any preliminary prospectus,
and any such prospectus as amended or supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all materials incorporated by reference therein. 
 “Public Information Failure” shall have the meaning set forth in Section 5.1(b). 
 “Public Information Failure Payments” shall have the meaning set forth in Section 5.1(b). 
 “Purchase Agreement” shall have the meaning set forth in the preamble. 
 “Purchasers” shall have the meaning set forth in the preamble. 
 “Questionnaire” shall have the meaning set forth in Section 2.1(d) herein. 
 “Registrable Securities” shall mean all or any of the Securities; provided, however, that any such
Securities shall cease to be Registrable Securities at the earliest of when (i) a Shelf Registration Statement with respect to such Securities shall have been declared effective or otherwise become effective under the 1933 Act and such
Securities shall have been disposed of pursuant to such Shelf 

  

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Registration Statement, (ii) such Securities are Freely Tradeable, or (iii) such Securities shall have ceased to be outstanding. 
 “Registration Default” shall have the meaning set forth in Section 2.4 herein. 
 “Registration Expenses” shall mean any and all expenses incident to performance of or compliance by the Company with
this Agreement, whether or not a Shelf Registration Statement becomes effective, including without limitation: (i) all SEC, stock exchange or FINRA registration and filing fees, including, if applicable, the reasonable and documented fees and
expenses of any “qualified independent underwriter” (and its counsel) that is required to be retained by any holder of Registrable Securities in accordance with the rules and regulations of FINRA, (ii) all fees and expenses incurred
by the Company in connection with compliance with state securities or blue sky laws and compliance with the rules of FINRA (including reasonable and documented fees and disbursements of counsel for any underwriters or Holders in connection with blue
sky qualification of any of the Registrable Securities and any filings with FINRA), (iii) all expenses of the Company in preparing or assisting in preparing, word processing, printing and distributing any Shelf Registration Statement, any
Prospectus, any amendments or supplements thereto, any securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all fees and expenses incurred by the Company in connection with the
listing, if any, of any of the Registrable Securities on any securities exchange or exchanges, (v) all rating agency fees incurred by the Company, if any, (vi) the fees and disbursements of counsel for the Company and of the independent
public accountants of the Company, including the expenses of any special audits or “comfort” letters required by or incident to such performance and compliance, (vii) the reasonable and documented fees and expenses of the Trustee, and
any escrow agent or custodian, (viii) the reasonable and documented fees and expenses of a single counsel to the Holders (the “Holders’ Counsel”) in connection with the Shelf Registration Statement up to a maximum amount
of $40,000, and (ix) any fees and expenses of any special experts retained by the Company in connection with any Shelf Registration Statement, but excluding any underwriting discounts and commissions and transfer taxes, if any, relating to the
sale or disposition of Registrable Securities by a Holder and the fees and expenses of any counsel to the Holders, except as provided for in clause (viii) above. 
 “SEC” shall mean the Securities and Exchange Commission or any successor agency or government body performing the
functions currently performed by the United States Securities and Exchange Commission. 
 “Securities” shall
have the meaning set forth in the preamble. 
 “Shelf Registration” shall mean a registration effected
pursuant to Section 2.1 hereof. 
 “Shelf Registration Statement” shall mean a “shelf”
registration statement (which may be an “automatic shelf registration statement,” as such term is defined in Rule 405 under the 1933 Act, if the Company is a Well-Known Seasoned Issuer) of the Company filed pursuant to the provisions of
Section 2.1 of this Agreement which covers all of the Registrable Securities on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all materials incorporated by reference therein. 
 “Suspension Period” shall have the meaning set forth in Section 2.5 herein. 
 “Trustee” shall mean the trustee with respect to the Securities under the Indenture. 
  

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 “Underwriter” shall have the meaning set forth in Section 4(a)
herein. 
 “Well-Known Seasoned Issuer” shall have the meaning given to such term under Section 405 of
the 1933 Act. 
 2. Registration Under the 1933 Act. 
 2.1 Shelf Registration. 
 (a)
To the extent the Securities are not Freely Tradeable as of the 366th day after the Closing Date, the Company shall, at its cost, use its
commercially reasonable efforts to cause to be declared effective as promptly as practicable but no later than 60 days after making such filing, a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the
Holders that have provided the information pursuant to Section 2.1(d). 
 (b) The Company shall, at its cost, use its
commercially reasonable efforts, subject to Section 2.5, to keep the Shelf Registration Statement continuously effective in order to permit the Prospectus forming part thereof to be usable by Holders for the period beginning upon the effective
date of the Shelf Registration Statement until the earliest of (i) the sale pursuant to the Shelf Registration Statement of the Registrable Securities, or (ii) the date which the Securities are Freely Tradeable (the “Effectiveness
Period”). 
 (c) Notwithstanding any other provisions hereof, the Company shall use its commercially reasonable
efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming part thereof and any supplement thereto complies in all material respects with the 1933 Act and the rules and regulations
thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any supplement to such Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 
 (d) Notwithstanding any other provision hereof, no Holder of Registrable Securities may include any of its Registrable Securities in the
Shelf Registration Statement pursuant to this Agreement unless the Holder furnishes to the Company a fully completed notice and questionnaire in the form attached as Annex A to the Private Placement Memorandum (the “Questionnaire”)
and such other information in writing as the Company may reasonably request in writing for use in connection with the Shelf Registration Statement or Prospectus included therein and in any application to be filed with or under state securities laws.
At least 30 days prior to the filing of the Shelf Registration Statement, the Company will provide notice to the Holders of its intention to file the Shelf Registration Statement. In order to be named as a selling securityholder in the Prospectus at
the time of effectiveness of the Shelf Registration Statement, each Holder must, before the filing of the Shelf Registration Statement and no later than the 20th day after being notified of the Company’s intention to file, furnish the completed
Questionnaire and such other information that the Company may reasonably request in writing, if any, to the Company in writing and the Company will include the information from the completed Questionnaire and such other information, if any, in the
Shelf Registration Statement and the Prospectus in a manner so that upon effectiveness of the Shelf Registration Statement the Holder will be permitted to deliver the Prospectus to purchasers of the Holder’s Registrable Securities. From and
after the date that the Shelf Registration Statement is first declared effective by the SEC or otherwise becomes effective, upon receipt of a completed Questionnaire and such other information that the Company may 

  

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reasonably request in writing, if any, the Company will use its commercially reasonable efforts to file (i) within 20 business days any amendments or
supplements to the Shelf Registration Statement or (ii) within 10 business days any report with the SEC under the 1934 Act, if the Company is permitted to do so pursuant to the 1933 Act and the regulations thereunder, necessary for such Holder
to be named as a selling securityholder in the Prospectus contained therein to permit such Holder to deliver the Prospectus to purchasers of the Holder’s Registrable Securities (subject to the Company’s right to suspend the Shelf
Registration Statement as described in Section 2.5 below); provided, however, that the Company shall not be required to file more than one such amendment or supplement to the Shelf Registration Statement pursuant to clause
(i) of this paragraph (d) in any calendar quarter for all such Holders. Holders that do not deliver a completed written Questionnaire and such other information, as provided for in this Section 2.1(d), will not be named as selling
securityholders in the Prospectus. Each Holder named as a selling securityholder in the Prospectus agrees to promptly furnish to the Company all information required to be disclosed in order to make information previously furnished to the Company by
the Holder not materially misleading and any other information regarding such Holder and the distribution of such Holder’s Registrable Securities as the Company may from time to time reasonably request in writing. 
 (e) During the Effectiveness Period, each Holder agrees not to sell any Registrable Securities pursuant to the Shelf Registration
Statement without delivering, or causing to be delivered, a Prospectus to the purchaser thereof. 
 (f) The Company
represents and agrees that, unless it obtains the prior consent of a majority of the Registrable Securities that are registered under the Shelf Registration Statement at such time or the approval of Holders’ counsel or the consent of the
managing underwriter in connection with any underwritten offering of Registrable Securities, and each Holder represents and agrees that, unless it obtains the prior consent of the Company and any such underwriter, it will not make any offer relating
to the Securities (which, for the avoidance of doubt, will not include any shares of Common Stock which are not Securities within the meaning of this Agreement) that would constitute an “issuer free writing prospectus,” as defined in Rule
433 under the 1933 Act (an “Issuer Free Writing Prospectus”), or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the 1933 Act, required to be filed with the SEC. The Company
represents that any Issuer Free Writing Prospectus will not include any information that conflicts with the information contained in the Shelf Registration Statement or Prospectus and that any Issuer Free Writing Prospectus, when taken together with
the information in the Shelf Registration Statement and the Prospectus, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. 
 The Company will not permit any securities other than Registrable Securities to be included in
the Shelf Registration Statement. The Company agrees to supplement or amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company if required by the 1933 Act,
or to the extent the Company does not reasonably object, as reasonably requested in writing by any Holder with respect to information relating to such Holder, and to furnish to the Holders of Registrable Securities that are covered under such Shelf
Registration Statement copies of any such supplement or amendment promptly after its being used or filed with the SEC in such amounts as they may reasonably request. 
 2.2 Expenses. The Company shall pay all Registration Expenses in connection with the registration pursuant to Section 2.1. Each Holder shall pay all underwriting discounts and commissions and transfer
taxes, if any, and the fees and expenses of such Holder’s counsel relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement other than those fees of Holder’s counsel
included in Registration Expenses. 
 2.3 Effectiveness. (a) The Company will be deemed not to have used its commercially
reasonable efforts to cause the Shelf Registration Statement to become, or to remain, effective during the requisite period (subject 

  

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to Section 2.5) if the Company voluntarily takes any action that would, or voluntarily omits to take any action which omission would, result in any such
Shelf Registration Statement not being declared effective or in the Holders of Registrable Securities covered thereby not being able to offer and sell such Registrable Securities during that period as and to the extent contemplated hereby, unless
such action or omission is required by applicable law. 
 (b) A Shelf Registration Statement pursuant to Section 2.1 hereof will not be
deemed to have become effective unless it has been declared effective by the SEC or has become automatically effective under the 1933 Act; provided, however, that if, after it has been declared or become effective, the offering of
Registrable Securities pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Shelf Registration Statement will be deemed
not to have become effective during the period of such interference, until the offering of Registrable Securities pursuant to such Shelf Registration Statement may legally resume. 
 2.4 Interest. In the event that (a) the Shelf Registration Statement has not been
filed with the SEC by the 366th day after the Closing Date and the Securities are not Freely Tradeable, (b) a Shelf Registration Statement is
not declared effective or otherwise becomes effective on or prior to the 60th calendar day following the making of such filing, (c) after effectiveness, subject to Section 2.5, the Shelf Registration Statement ceases to be effective or
fails to be usable by the Holders without being succeeded within seven business days by a post-effective amendment or a report filed with the SEC pursuant to the 1934 Act that cures the failure to be effective or usable, or (d) the Prospectus
is unusable by the Holders for any reason, and the Suspension Period (as defined in Section 2.5 hereof) exceeds the number of days set forth in Section 2.5 (each such event being a “Registration Default”), additional
interest (“Additional Interest”) will accrue at a rate per annum of one-quarter of one percent (0.25%) of the principal amount of the Notes for the first 90-day period from the day following the Registration Default, and thereafter
at a rate per annum of one-half of one percent (0.50%) of the principal amount of the Notes; provided that in no event shall Additional Interest accrue at a rate per annum exceeding one half of one percent (0.50%) of the issue price of the
Notes. Upon the cure of all Registration Defaults then continuing, the accrual of Additional Interest will automatically cease and the interest rate borne by the Notes will revert to the original interest rate at such time. Additional Interest shall
be computed based on the actual number of days elapsed in each 90-day period in which the Shelf Registration Statement or the Prospectus is not effective or is unusable. Holders who have converted Notes into Common Stock will not be entitled to
receive any Additional Interest with respect to such Common Stock or the issue price of the Notes converted. 
 The Company shall notify the
Trustee within five business days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid. Additional Interest shall be paid by depositing with the Trustee, in trust, for the benefit of the
Holders of Registrable Securities, on or before the applicable semiannual interest payment date, in immediately available funds in sums sufficient to pay the Additional Interest then due. The Additional Interest due shall be payable in arrears on
each interest payment date to the record Holder of Registrable Securities entitled to receive the interest payment to be paid on such date as set forth in the Indenture. Each obligation to pay Additional Interest shall be deemed to accrue from and
including the day following the Registration Default to but excluding the day on which the Registration Default is cured. 
 A Registration
Default under clause (a) above shall be cured on the date that the Shelf Registration Statement is filed with the SEC. A Registration Default under clause (b) above shall be cured on the date that the Shelf Registration Statement is
declared effective by the SEC or deemed to become automatically effective under the 1933 Act. A Registration Default under clauses (c) or (d) above shall be cured on the date an amended Shelf Registration Statement is declared effective by
the SEC or deemed to become automatically effective under the 1933 Act, or the Company otherwise declares the Shelf Registration Statement and the Prospectus useable, as 

  

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applicable. The Company will have no liabilities for monetary damages other than Additional Interest with respect to any Registration Default. 
 2.5 Suspension. Notwithstanding any other provision hereof (other than Section 5.1), the Company may suspend the use of any Prospectus, without
incurring or accruing any obligation to pay Additional Interest pursuant to Section 2.4 hereof or being deemed in violation of any other provision hereof, for a period or periods not to exceed 45 calendar days in any three-month period, or an
aggregate of 180 calendar days in any twelve-month period (each, a “Suspension Period”), if management of the Company shall have determined in good faith that because of valid business reasons (not including avoidance of the
Company’s obligations hereunder), including without limitation proposed or pending corporate developments and similar events or because of filings with the SEC, it is in the best interests of the Company to suspend such use, and prior to
suspending such use the Company provides the Holders with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension. Each Holder shall keep confidential any communications received by it
from the Company regarding the suspension of the use of the Prospectus, except as required by applicable law. 
 3. Registration
Procedures. 
 In connection with the obligations of the Company with respect to the Shelf Registration, and, during the Effectiveness
Period, subject to the rights of the Company to invoke and maintain a Suspension Period in accordance with Section 2.5 without being in violation of any of the provisions hereunder, the Company shall: 
 (a) prepare and file with the SEC a Shelf Registration Statement, within the relevant time period specified in Section 2 hereof, on
the appropriate form under the 1933 Act, which form (i) shall be selected by the Company, (ii) shall be available for the sale of the Registrable Securities by the selling Holders thereof, (iii) shall comply as to form in all material
respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein, and (iv) shall comply in all respects with
the applicable requirements of Regulation S-T under the 1933 Act, if any, and use commercially reasonable efforts to cause such Shelf Registration Statement to become effective and remain effective in accordance with Section 2 hereof;

 (b) prepare and file with the SEC such amendments and post-effective amendments to the Shelf Registration Statement as may
be necessary under applicable law to keep the Shelf Registration Statement effective for the Effectiveness Period, subject to Section 2.5; and cause each Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the 1933 Act and comply during the Effectiveness Period with the provisions of the 1933 Act, the 1934 Act and the rules and regulations thereunder required
to enable the disposition of all Registrable Securities covered by the Shelf Registration Statement in accordance with the intended method or methods of distribution by the selling Holders thereof; 
 (c) (i) notify each Holder of Registrable Securities of the filing of a Shelf Registration Statement with respect to the Registrable
Securities; (ii) furnish to each Holder of Registrable Securities that has provided the information required by Section 2.1(d) and to each underwriter of an underwritten offering of Registrable Securities, if any, without charge,
electronic copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, including financial statements and schedules and, if
the Holder so requests, all exhibits in order to facilitate the unrestricted sale or other disposition of the Registrable Securities; and (iii) subject to Section 2.5 hereof and to any notice by the Company in accordance with
Section 3(e) hereof of the existence of any fact of the kind described in Sections 3(e)(ii), (iii), (iv), (v) and (vi) hereof, hereby consent to the use of the Prospectus or any amendment or 

  

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supplement thereto by each of the selling Holders of Registrable Securities that has provided the information required by Section 2.1(d) in connection
with the offering and sale of the Registrable Securities; 
 (d) use commercially reasonable efforts to register or qualify
the Registrable Securities for exemptions under all applicable state securities or “blue sky” laws of such jurisdictions as any Holder of Registrable Securities covered by a Shelf Registration Statement and each underwriter of an
underwritten offering of Registrable Securities shall reasonably request, and do any and all other acts and things which may be reasonably necessary or advisable to enable each such Holder and underwriter to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder; provided, however, that the Company shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3(d), or (ii) take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject; 
 (e) notify promptly each Holder of Registrable Securities under a Shelf Registration Statement that has provided the information required
by Section 2.1(d) and, if requested by such Holder, confirm such advice in writing promptly (i) when a Shelf Registration Statement has become effective and when any post-effective amendments thereto have become effective, (ii) of any
request by the SEC or any state securities authority for post-effective amendments and supplements to a Shelf Registration Statement and Prospectus or for additional information relating thereto after the Shelf Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Shelf Registration Statement or the initiation of any proceedings for that purpose, (iv) of the happening of
any event or the discovery of any facts during the period a Shelf Registration Statement is effective which makes any statement made in such Shelf Registration Statement or the related Prospectus untrue in any material respect or which requires the
making of any changes in such Shelf Registration Statement or Prospectus in order to make the statements therein (in the case of the Prospectus in light of the circumstances under which they were made) not misleading, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (vi) of any determination by the
Company that a post-effective amendment to such Shelf Registration Statement would be appropriate, other than a post-effective amendment solely to add selling Holders; 
 (f) furnish to Holders’ counsel on behalf of the Holders of Registrable Securities (i) copies of any comment letters received
from the SEC with respect to a Shelf Registration Statement, and, if requested, with respect to any documents incorporated therein and (ii) any other request by the SEC or any state securities authority for amendments or supplements to a Shelf
Registration Statement and Prospectus or for additional information with respect to the Shelf Registration Statement and Prospectus; 
 (g) use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Shelf Registration Statement at the earliest practicable moment and provide prompt notice to each Holder
of the withdrawal of such order; 
 (h) furnish, upon request, to each Holder of Registrable Securities that has provided the
information required by Section 2.1(d), and each underwriter, if any, without charge, at least one conformed copy of each Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules
(without documents incorporated therein by reference and all exhibits thereto, unless requested); 
  

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 (i) if electronic global certificates for the Registrable Securities are not then
available, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends (other than as required
by applicable law); and enable such Registrable Securities to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as the selling Holders or the underwriters, if any, may reasonably request at least
three business days prior to the closing of any sale of Registrable Securities; 
 (j) upon the occurrence of any event or
the discovery of any facts, each as contemplated by Sections 3(e)(ii), (iii), (iv), (v) and (vi) hereof, as promptly as practicable after the occurrence of such an event, use commercially reasonable efforts to prepare a supplement or
post-effective amendment to the Shelf Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading. At such time as such public disclosure is otherwise made or the Company determines that such disclosure is not necessary, in each case to correct any misstatement of a material fact or to include any omitted material fact, the
Company agrees promptly to notify each Holder of Registrable Securities covered by such Shelf Registration Statement of such determination and to furnish each Holder such number of copies of the Prospectus as amended or supplemented, as such Holder
may reasonably request; 
 (k) no less than three business days after the filing of any Shelf Registration Statement, any
Prospectus, any amendment to a Shelf Registration Statement or amendment or supplement to a Prospectus (other than amendments and supplements that do nothing more than name Holders and provide information with respect thereto), provide copies of
such document to the Trustee on behalf of such Holders, and make representatives of the Company, as shall be reasonably requested by the Holders’ counsel, available for discussion of such document; 
 (l) obtain CUSIP numbers for all Registrable Securities not later than the effective date of the Shelf Registration Statement and provide
the Trustee with printed certificates for the Registrable Securities in a form eligible for deposit with the Depositary; 
 (m) (i) cause the Indenture to be qualified under the 1939 Act in connection with the registration of the Registrable Securities, (ii) cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be
required for the Indenture to be so qualified in accordance with the terms of the 1939 Act, and (iii) execute, and use commercially reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner; 
 (n) subject to the last paragraph of this Section 3(n), enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all other customary and appropriate actions, if any, as the
Majority Holders shall reasonably request in writing in order to expedite or facilitate the disposition of such Registrable Securities, including, but not limited to: 
 (i) obtain opinions of counsel to the Company and updates thereof addressed to each selling Holder and the underwriters, if any,
covering the matters set forth in the opinions of such counsel delivered at the Closing Date as are customarily covered in legal opinions in connection with an underwritten offering of securities; 
 (ii) obtain “comfort” letters and updates thereof from the Company’s independent certified public accountants (and, if
necessary, any other independent certified public accountants of the subsidiary of the Company or of any business acquired by the Company for 

  

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which financial statements are, or are required to be, included in the Shelf Registration Statement) addressed to the underwriters, if any, and use
reasonable efforts to have such letter addressed to the selling Holders of Registrable Securities (to the extent consistent with Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accounts); 
 (iii) if an underwriting agreement is entered into, cause the same to set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth in Section 4 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of transactions; and 
 (iv) deliver such documents and
certificates as may be reasonably requested and as are customarily delivered in similar offerings to the Holders of a majority in principal amount of the Registrable Securities being sold and the managing underwriters, if any. 
 The above shall be done only in connection with a single firmly-underwritten offering of not less than one-half of the Registrable Securities using such
Shelf Registration Statement pursuant to an underwriting or similar agreement as and to the extent required thereunder, and as reasonably requested by the Majority Holders thereto. Anything herein to the contrary notwithstanding, the Company will
not be required to pay the costs and expenses of, or to participate in the marketing or “road show” presentations of, more than one underwritten offering of Registrable Securities every 12 months commencing on the Closing Date. The Company
will not be required to pay the costs and expenses of, or to participate in the marketing or “road show” presentations of, an underwritten offering of Registrable Securities unless requested by the Majority Holders; 
 (o) if reasonably requested by the Majority Holders in connection with a disposition of Registrable Securities and reasonably necessary
to complete such disposition, upon reasonable advance notice, make available for inspection during business hours by representatives of the Holders of the Registrable Securities, any underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any counsel or accountant retained by any of the foregoing, all appropriate financial and other records, pertinent corporate documents and properties of the Company reasonably requested in writing by any such persons, and
cause the respective officers, directors, employees, and any other agents of the Company to supply all information reasonably requested by any such representative, underwriter, special counsel or accountant in connection with a Shelf Registration
Statement, and make such representatives of the Company available for discussion of such documents as shall be reasonably requested by the Purchasers, in each case as is customary for “due diligence” investigations; provided that,
to the extent the Company, in its reasonable discretion, agrees to disclose material non-public information, such persons shall first agree in writing with the Company that any such non-public information shall be kept confidential by such persons
and shall be used solely for the purposes of exercising rights under this Agreement and such person shall not engage in trading any securities of the Company until such material non-public information becomes properly publicly available, unless
(i) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) disclosure of such information is required by law (including any disclosure
requirements pursuant to federal securities laws in connection with the filing of any Shelf Registration Statement or the use of any Prospectus referred to in this Agreement upon a customary opinion of counsel for such persons delivered and
reasonably satisfactory to the Company), (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by any such person, (iv) such information becomes available to any
such person from a source other than the Company and such source is not bound by a confidentiality agreement, or (v) such non-public information ceases to be material; provided further, that the foregoing inspection and information
gathering shall, to the greatest extent possible, be coordinated on behalf of all the Holders and the other parties entitled thereto by Holders’ counsel; 
  

 11 

 (p) if requested in writing by any selling Holder of Registrable Securities that has
provided the information required by Section 2.1(d), a reasonable time prior to filing the Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to the Shelf Registration Statement or amendment or supplement to such
Prospectus (other than amendments and supplements that do nothing more than name Holders and provide information with respect thereto), (i) provide copies of such document to the Holders of Registrable Securities that have provided the
information required by Section 2.1(d), to Holders’ counsel and to the underwriter or underwriters of an underwritten offering of Registrable Securities, if any, (ii) make such changes in any such document prior to the filing thereof
as Holders’ counsel or the underwriter or underwriters reasonably agree should be included therein and provide to the Company in writing for inclusion therein within three business days of delivery of such copies, (iii) if requested by any
selling Holder of Registrable Securities that has provided the information required by Section 2.1(d), not file any such document in a form (A) to which the Majority Holders, Holders’ counsel or any underwriter shall not have
previously been advised and furnished a copy of or (B) to which the Majority Holders, Holders’ Counsel or any underwriter shall reasonably object within three business days of delivery of such copies, and (iv) make the representatives
of the Company available for discussion of such document as shall be reasonably requested in writing by the Holders of Registrable Securities, Holders’ counsel or any underwriter; provided, however, that the foregoing discussion
shall be coordinated on behalf of the parties entitled thereto by the Holders’ counsel; 
 (q) if requested by any
selling Holder or the underwriters, if any, incorporate in the Shelf Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holder or underwriter, if any, may
reasonably request in writing to have included therein with respect to the name or names of such selling Holder, the number of shares of Common Stock or principal amount of Securities owned by such Holder, the plan of distribution of the Registrable
Securities (as required by Item 508 of Regulation S-K), the principal amount of Securities or number of shares of Common Stock being sold, the purchase price being paid therefor, and any other terms of the offering of the Registrable Securities
to be sold in such offering; 
 (r) use its commercially reasonable efforts to cause all Registrable Securities to be listed
on any securities exchange or inter-dealer quotation system on which similar debt securities issued by the Company are then listed if requested by the Majority Holders, or if requested by the underwriter or underwriters of an underwritten offering
of Registrable Securities, if any; 
 (s) otherwise comply with all applicable rules and regulations of the SEC and make
available to its security holders, as soon as reasonably practicable, an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder; and 
 (t) cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any
underwriter and its counsel (including any “qualified independent underwriter” that is required to be retained in accordance with the rules and regulations of FINRA). 
 Without limiting the provisions of Section 2.1(d), the Company may (as a condition to such Holder’s participation in the Shelf Registration)
require each Holder of Registrable Securities to furnish to the Company such information regarding the Holder and the proposed distribution by such Holder of such Registrable Securities as the Company may from time to time reasonably request in
writing. 
 Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event or the discovery of any facts,
each of the kind described in Section 3(e)(ii), (iii), (iv), (v) and (vi) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Prospectus included in the Shelf Registration Statement
until such Holder’s receipt of the copies of the supplemented or amended 

  

 12 

 
Prospectus contemplated by Section 3(j) hereof or written notice from the Company that the Shelf Registration Statement is again effective and no
amendment or supplement is needed, and, if so directed by the Company, such Holder will deliver to the Company (at its expense) all copies in such Holder’s possession, other than permanent file copies then in such Holder’s possession, of
the Prospectus covering such Registrable Securities current at the time of receipt of such notice. 
 If any of the Registrable Securities
covered by any Shelf Registration Statement are to be sold in an underwritten offering, the underwriter or underwriters and manager or managers that will manage such offering will be selected by the Majority Holders of such Registrable Securities
included in such offering and shall be acceptable to the Company. No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on
the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other
documents required under the terms of such underwriting arrangements. 
 4. Indemnification; Contribution. 
 (a) The Company agrees to indemnify and hold harmless, each Holder who has provided information to the Company in accordance with
Section 2.1(d) hereof, each Person who participates as an underwriter, if any (any such Person being an “Underwriter”) and each Person, if any, who controls any such Holder or Underwriter within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act in connection with sale of Securities pursuant to the Shelf Registration Statement under the terms of this Agreement during the Effectiveness Period as follows: 
 (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Shelf Registration Statement (or any amendment or supplement thereto) pursuant to which Registrable Securities were registered under the 1933 Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, not misleading, or arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (or any amendment or supplement thereto) or any Issuer Free Writing Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were made, not misleading; 
 (ii) against any
and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 4(d) below) any such settlement is effected with the written consent of the
Company; and 
 (iii) against any and all expenses whatsoever, as incurred (including the reasonable and documented fees and
disbursements of counsel chosen by any indemnified party), reasonably incurred and documented in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; 
  

 13 

 provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of (A) any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Holder or
Underwriter, if any, expressly for use in a Shelf Registration Statement (or any amendment thereto), any Prospectus (or any amendment or supplement thereto) or any Issuer Free Writing Prospectus (or any amendment or supplement thereto), (B) use
of a Prospectus during a Suspension Period, provided that such Holder has received prior notice of such suspension, (C) failure of such Holder to deliver a prospectus, as then amended or supplemented, as required by applicable laws, provided
that the Company shall have delivered to such Holder such Prospectus, as then amended or supplemented, or (D) the gross negligence, willful misconduct or bad faith of any such party seeking indemnification. 
 (b) Each Holder who has provided information to the Company in accordance with Section 2.1(d) hereof, severally, but not jointly,
agrees to indemnify and hold harmless the Company, and each of its directors and officers, and each Person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and
all loss, liability, claim, damage and expense described in the indemnity contained in Section 4(a) hereof, as incurred and documented, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in
the Shelf Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto) or any Issuer Free Writing Prospectus in reliance upon and in conformity with written information with respect to
such Holder furnished to the Company by or on behalf of such Holder expressly for use in the Shelf Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto) or any issuer Free Writing Prospectus;
provided, however, that no such Holder shall be liable for any claims hereunder (i) in excess of the amount of net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Shelf Registration
Statement or (ii) to the extent arising out of the gross negligence, willful misconduct or the bad faith of the Company. 
 (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify
an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. In case any such action, claim, suit, investigation or proceeding shall be brought against any indemnified party and the indemnified party shall notify the Company of the commencement thereof, the Company
shall be entitled to participate therein and to assume the defense thereof; provided, however, that in the event that any such action, claim, suit, investigation or proceeding includes both an indemnified party and the Company, and
such indemnified party reasonably concludes that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the Company, or if the Company fails to assume the defense of the
action, claim, suit, investigation or proceeding, in either case in a timely manner, then such indemnified party may employ separate counsel to represent or defend it in any such action, claim, suit, investigation or proceeding and the Company will
pay the reasonable fees and disbursements of such counsel; provided, further, that the Company will not be required to pay the fees and disbursements of more than one separate counsel for all indemnified parties (and one separate
counsel local counsel). In any action, claim, suit, investigation or proceeding the defense of which the Company assumes, the indemnified party will have the right to participate in such litigation and to retain its own counsel at such indemnified
party’s own expense. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect
to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 4 (whether or not
the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or 

  

 14 

 
consent (A) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or
claim and (B) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party or (ii) be liable for any settlement of any such action effected without its prior written
consent (which consent shall not be unreasonably withheld). 
 (d) Notwithstanding clause (ii) of Section 4(c), if
at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by
Section 4(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being entered into, and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such
settlement. 
 (e) If the indemnification provided for in this Section 4 is for any reason unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the Holders on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. 
 The
relative fault of the Company on the one hand and the Holders on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by the Company, or by the Holders and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 
 The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4. The aggregate amount of losses, liabilities, claims, damages and expenses incurred and documented
by an indemnified party and referred to above in this Section 4 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. 
 No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. 
 For purposes of this Section 4, each Person, if any, who controls any
Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Holder, and each director of the Company, and each Person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The obligations of the Company and the Holders pursuant to this Section 4 shall be in addition to any
liability that such party may otherwise have. 
  

 15 

 5. Miscellaneous. 
 5.1 Rule 144 and Rule 144A. 
 (a) During the Effectiveness Period, for so long as the
Company is subject to the reporting requirements of Section 13 or 15(d) of the 1934 Act, the Company covenants that it will file the reports required to be filed by it under Section 13 or 15(d) of the 1934 Act and the rules and regulations
adopted by the SEC thereunder. If during the Effectiveness Period the Company ceases to be so required to file such reports, the Company covenants that it will upon the request of any Holder of Registrable Securities (a) make publicly available
such information as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, as such Rule may be amended from time to time, (b) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule
144A under the 1933 Act, as such Rule may be amended from time to time, and it will take such further action as any Holder of Registrable Securities may reasonably request for such purpose, and (c) take such further action that is reasonable in
the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Securities without registration under the 1933 Act within the limitation of the exemptions provided by (i) Rule 144 under
the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or (iii) any similar rules or regulations hereafter adopted by the SEC. During the Effectiveness
Period, upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. 
 (b) At any time during the period commencing from the six month anniversary of the Closing Date and ending at such time that all of the
Securities, if a registration statement is not available for the resale of all of the Securities, may be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1), if the Company
shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (a “Public Information Failure”) then, as partial relief for the damages to any Holder of Securities by reason of any such delay in or
reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to each such Holder an amount in cash equal to one and one-half percent (1.5%) of the
aggregate Purchase Price of such Holder’s Securities on the day of a Public Information Failure and on every 30th day (pro rated for periods totaling less than 30 days) thereafter until the earlier of (i) the date such Public Information
Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule 144. The payments to which a holder shall be entitled pursuant to this Section 5.1(b) are referred to herein as “Public Information Failure
Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third business day after the event or failure
giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per
month (prorated for partial months) until paid in full. 
 5.2 No Inconsistent Agreements. The Company has not entered into and the
Company will not after the date of this Agreement enter into any agreement which is inconsistent in any material respect with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not and will not for the term of this Agreement in any way conflict with the rights granted to the holders of any of the Company’s other issued and outstanding securities under any such
agreements. 
 5.3 No Adverse Actions Affecting Registration Rights. Subject to the rights of the Company expressly set forth in this
Agreement, including the right to invoke and maintain a Suspension Period, the Company shall not, directly or indirectly, intentionally take any action with respect to the Registrable Securities as a class that would adversely affect the ability of
the Holders of Registrable Securities to include such Registrable Securities in a registration undertaken pursuant to this Agreement. 
  

 16 

 5.4 Amendments and Waivers. The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of at least a majority in aggregate principal
amount of the outstanding Registrable Securities (with Holders of Securities deemed to be the Holders, for purposes of this Section 5.4, of the number of outstanding shares of Common Stock into which such Registrable Securities are or could be
convertible on the date that consent would be required) affected by such amendment, modification, supplement, waiver or departure. Each Holder of Registrable Securities outstanding at the time of any amendment, modification, waiver or consent
pursuant to this Section 5.4, shall be bound by such amendment, modification, waiver or consent, whether or not any notice or writing indicating such amendment, modification, waiver or consent is delivered to such Holder. 
 5.5 Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, facsimile, or any courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Company in a Questionnaire or by means of a notice given in accordance with the provisions
of this Section 5.5, which address initially is the address set forth in the Purchase Agreement with respect to the Purchasers; and (b) if to the Company, initially at the Company’s address set forth in the Purchase Agreement, and
thereafter at such other address of which notice is given in accordance with the provisions of this Section 5.5. 
 All such notices and
communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; two business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if sent by facsimile; and
on the next business day if timely delivered to an overnight courier. 
 Copies of all such notices, demands, or other communications shall
be concurrently delivered by the person giving the same to the Trustee under the Indenture, at the address specified in such Indenture. 
 5.6 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such
Registrable Securities such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the
Purchase Agreement, and such person shall be entitled to receive the benefits hereof. 
 5.7 Third Party Beneficiaries. Each Holder of
Registrable Securities shall be a third party beneficiary to the agreements made hereunder between the Company, on the one hand, and the Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it
deems such enforcement necessary or advisable to protect its rights hereunder. 
 5.8 Specific Enforcement. Without limiting the
remedies available to the Purchasers and the Holders, the Company acknowledges that any failure by the Company to comply with its obligations under Section 2.1 hereof may result in material irreparable injury to the Purchasers or the Holders
for which there is no adequate remedy at law, that it may not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Purchasers or any Holder may seek such relief as may be required to specifically
enforce the Company’s obligations under Section 2.1 hereof. 
 5.9 Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 
  

 17 

 5.10 Headings. The headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. 
 5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The Company hereby submits to the nonexclusive jurisdiction of the federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement. The Company irrevocably and unconditionally waives any objection to the laying of venue of any suit or proceeding arising out of or relating to this Agreement in federal and state courts in the Borough of Manhattan in The
City of New York and irrevocably and unconditionally waive and agrees not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum. The Company and the Purchasers irrevocably
agree to waive trial by jury in any action, proceeding, claim or counterclaim brought by or on behalf of either party related to or arising out of this Agreement. 
 5.12 Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 
 5.13 Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect
to the Registrable Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 
 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. 
 AMERICAN ORIENTAL BIOENGINEERING, INC. 
  

			
	 By:
	 	 /s/ Tony Liu

	 Name:
	 	Tony Liu
	 Title:
	 	Chairman and Chief Executive Officer

 Confirmed and accepted as 
 of the date first above written: 
 [PURCHASER] 
  

			
	BY:	 	  

	Name:	 	
	Title:	 	

  

 18Securities Purchase Agreement dated July 9,2008

 Exhibit 10.1 
 FORM OF SECURITIES PURCHASE AGREEMENT 
  
  
 AMERICAN ORIENTAL BIOENGINEERING, INC. 

 (a Nevada corporation) 
 5.00%
Convertible Senior Notes due 2015 
 SECURITIES PURCHASE AGREEMENT 
 Dated: July 9, 2008 
  
  
  
  

 1 

 American Oriental Bioengineering, Inc. 
 (a Nevada corporation) 
 $115,000,000 
 5.00% Convertible Senior Notes due 2015 
 SECURITIES PURCHASE AGREEMENT 
 July 9, 2008 
 Ladies and Gentlemen: 
 American Oriental Bioengineering, Inc., a Nevada corporation (the “Company”), and the several purchasers named on the signature pages hereto (each a “Purchaser” and together the
“Purchasers”) agree that each Purchaser will purchase from the Company and the Company will issue and sell to such Purchaser, subject to the terms and conditions set forth herein, the aggregate principal amount of the Company’s
5.00% Convertible Senior Notes due 2015 (the “Securities”) set forth on such Purchaser’s signature page attached hereto. The Securities are to be issued pursuant to an indenture to be dated as of July 15, 2008 (the
“Indenture”) between the Company and Wells Fargo Bank, N.A., as trustee (the “Trustee”). The Securities will be delivered through the book-entry facilities of The Depository Trust Company (“DTC”),
to an account specified by each Purchaser on its signature page and will be released by Wells Fargo Bank, N.A. (the “Escrow Agent”) to such Purchaser at the Closing (as defined in Section 2(b)). 
 The Securities are convertible prior to maturity into shares of common stock, par value $0.001 per share, of the Company (the “Common
Stock”) in accordance with the terms of the Securities and the Indenture. 
 The Securities are being offered to qualified
institutional buyers (“QIBs”) within the meaning of Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “1933 Act”), pursuant to a private placement exemption
from registration under the 1933 Act. On or prior to the Closing Time (as defined in Section 2(b)), the Company will enter into a registration rights agreement with the Purchasers (the “Registration Rights Agreement”),
pursuant to which, subject to the conditions set forth therein, the Company will be required to file and use its commercially reasonable efforts to have declared effective a registration statement (the “Registration Statement”)
under the 1933 Act to register resales of the Securities and the shares of Common Stock issuable upon conversion thereof. 
 The Company has
(a) prepared and delivered to each Purchaser copies of a preliminary private placement memorandum dated July 7, 2008 (the “Preliminary Private Placement Memorandum”) and (b) has prepared and will deliver to each Purchaser, as
promptly as possible prior to the Closing Time, copies of a final private placement memorandum dated July 9, 2008 (the “Final Private Placement Memorandum”). “Private Placement Memorandum” means, with respect to any
date or time referred to in this Agreement, the most recent private placement memorandum (whether the Preliminary Private Placement Memorandum or the Final Private Placement Memorandum, or any amendment or supplement to either such document),
including exhibits thereto, if any, and any documents incorporated therein by reference, which has been prepared and delivered by the Company to the Purchasers. 
 All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Private Placement Memorandum (or other
references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference in the Private Placement Memorandum; and all references in this Agreement to
amendments or supplements to the Private Placement Memorandum shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended (the “1934 Act”) which is incorporated by
reference in the Private Placement Memorandum. 
  

 2 

 The preliminary private placement memorandum dated July 7, 2008, as amended and supplemented, including
any documents filed under the 1934 Act prior to the date hereof and incorporated by reference therein, is referred to herein as the “Preliminary Private Placement Memorandum.” 
 SECTION 1. Representations and Warranties by the Company. 
 (a) Representations and Warranties. The Company represents and warrants to each Purchaser as of the date hereof and as of Closing Time referred to in Section 2(b) hereof, and agrees with each Purchaser, as
follows: 
 (1) Preliminary Private Placement Memorandum and Final Private Placement Memorandum. Neither the
Preliminary Private Placement Memorandum, as of the date of this agreement (exclusive of any pricing terms and related information), nor the Final Private Placement Memorandum, as of its date and as of the Closing Time, includes or will include any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
 (2) Incorporated Documents. The Private Placement Memorandum as delivered from time to time shall incorporate by reference the
most recent Annual Report of the Company on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) and each Quarterly Report of the Company on Form 10-Q and each Current Report of the Company on
Form 8-K filed with the Commission since the end of the fiscal year to which such Annual Report relates. The documents incorporated by reference in the Private Placement Memorandum at the time they were filed with the Commission complied in all
material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”), and none of such documents contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
 (3) Independent Accountants. The accountants who expressed their opinion with respect to the financial statements and supporting schedules included in the Private Placement Memorandum are a registered public
accounting firm and independent public accountants with respect to the Company and its subsidiaries within the meaning of the 1933 Act and the rules and regulations thereunder (the “1933 Act Regulations”). 
 (4) Financial Statements. The financial statements, together with the related schedules and notes, included in the Private
Placement Memorandum, present fairly in all material respects the financial position of the Company and its subsidiaries at the dates indicated and the statement of operations, shareholders’ equity and cash flows of the Company and its
subsidiaries for the periods specified, except as noted in the notes thereto; said financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a
consistent basis throughout the periods involved. The selected financial data included in the Private Placement Memorandum present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that
of the audited financial statements included in the Private Placement Memorandum. 
 (5) No Material Adverse Change in
Business. Except as disclosed in the Private Placement Memorandum, since the respective dates as of which information is given in the Private Placement Memorandum, (i) there has been no material adverse change in the condition, financial or
otherwise, management, properties, business operations or in the earnings, business affairs or business prospects (with respect to business prospects as disclosed in the Private Placement Memorandum) of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”) (ii) there have been no material changes in short-term or long- term debt or any transactions entered into by the
Company or its subsidiaries, which are material with 

  

 3 

 
respect to the Company and its subsidiaries considered as one enterprise, and (iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock. 
 (6) Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its organization, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Private Placement Memorandum and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. Except as otherwise disclosed in the Private Placement
Memorandum, all of the issued and outstanding capital stock of each subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any subsidiary was issued in violation of any preemptive or similar rights of any securityholder of such subsidiary.

 (7) Capitalization and Other Capital Stock Matters. The total shareholders’ equity of the Company is as set
forth in the Private Placement Memorandum in the column entitled “Actual” under the caption “Capitalization” as of the respective dates set forth therein, and the actual, authorized, issued and outstanding number of shares of
capital stock of the Company is as set forth in the section entitled “Description of Capital Stock” in the Private Placement Memorandum as of the date set forth therein, and there have been no changes to such amounts (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements, employee benefit plans referred to in the Private Placement Memorandum or pursuant to the exercise of convertible securities or options referred to in the Private
Placement Memorandum). The capital stock conforms in all material respects to the description thereof set forth in the Private Placement Memorandum. All of the outstanding shares of capital stock have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance with federal and state securities laws. Upon issuance and delivery of the Securities in accordance with this Agreement and the Indenture, the Securities will be convertible at the
option of the holder thereof into shares of Common Stock in accordance with the terms of the Securities and the Indenture; the shares of Common Stock issuable upon conversion of the Securities have been duly authorized and reserved for issuance upon
such conversion by all necessary corporate action and such shares, when issued upon such conversion in accordance with the terms of the Securities, will be validly issued and will be fully paid and non-assessable; no holder of such shares will be
subject to personal liability by reason of being such a holder; and the issuance of such shares upon such conversion will not be subject to the preemptive rights, rights of first refusal or other similar rights of any securityholder of the Company.
None of the outstanding shares of Common Stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or its subsidiaries other than those described in
the Private Placement Memorandum (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements, employee benefit plans referred to in the Private Placement Memorandum or pursuant to the exercise of
convertible securities or options referred to in the Private Placement Memorandum). The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth
or incorporated by reference in the Private Placement Memorandum, accurately and fairly describes such plans, arrangements, options and rights in all material respects. 
  

 4 

 (8) Stock Exchange Listing. The Common Stock is registered pursuant to
Section 12(b) of the 1934 Act and is listed on The New York Stock Exchange (the “NYSE”), and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under
the 1934 Act or delisting the Common Stock from the NYSE, nor has the Company received any notification that the Commission or the NYSE is contemplating terminating such registration or listing. The Company has complied in all material respects
with the applicable requirements of the NYSE for maintenance of inclusion of the Common Stock thereon. 
 (9) Corporate
Power. The Company has corporate right, power and authority to execute and deliver this Agreement, the Securities, the Indenture, the Escrow Agreement and the Registration Rights Agreement (collectively, the “Transaction
Documents”) and to perform its obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby has been duly and validly taken. 
 (10) Authorization of Agreement. This Agreement
has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement
is considered in a proceeding in equity or at law). 
 (11) Authorization of the Indenture. The Indenture has been
duly authorized by the Company and, when executed and delivered by the Company and the Trustee, will constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally
and by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 
 (12) Authorization of the Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by the Company and, at the Closing Time, will be duly executed and delivered by, and will constitute a valid and
binding agreement of, the Company, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally, by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and, as to rights of
indemnification, by principles of public policy. 
 (13) Authorization of the Securities. The Securities have been
duly authorized and, at Closing Time, will have been duly executed by the Company and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in
this Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers) reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture. 
 (14) Description of Transaction Documents. The description of the Transaction Documents and the rights, preferences and privileges of the capital stock of the Company, including the Securities and the shares of Common Stock issuable
upon conversion of the Securities, contained in the Final Private Placement Memorandum, are accurate in all material respects. 
  

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 (15) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its articles of incorporation or by-laws or in breach of or otherwise in default, and no event has occurred which, with notice or lapse of time or both, would constitute such a default in the performance or observance
of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or
by which any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (collectively, “Agreements and Instruments”) except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of the Transaction Documents and any other agreement or instrument entered into or issued or to be entered into or issued by the Company in connection with the transactions
contemplated hereby or thereby or in the Private Placement Memorandum and the consummation of the transactions contemplated herein and in the Private Placement Memorandum (including the issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Private Placement Memorandum under the caption “Use of Proceeds”) and compliance by the Company with its obligations hereunder do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company
or any subsidiary pursuant to, the Agreements and Instruments except for such conflicts, breaches or defaults or Repayment Events or liens, charges or encumbrances that, singly or in the aggregate, would not result in a Material Adverse Effect, nor
will such action result in any violation of the provisions of the articles of incorporation or by-laws of the Company or its subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the Company or any subsidiary or any of their assets, properties or operations. As used herein, a “Repayment Event” means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any
subsidiary. 
 (16) Absence of Proceedings. Except as otherwise disclosed in the Private Placement Memorandum, there
is no action, suit or proceeding before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or its subsidiaries which would
reasonably be expected to result in a Material Adverse Effect, or which would reasonably be expected to materially and adversely affect the consummation of the transactions contemplated by this Agreement or the performance by the Company of its
obligations hereunder. 
 (17) Absence of Manipulation. Neither the Company nor to its knowledge any affiliate, as
such term is defined in Rule 501(b) under the 1933 Act (“Affiliate”), of the Company has taken, nor will take, directly or indirectly, any action which is designed to or which has constituted or which would reasonably be expected to cause
or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. 
 (18) Possession of Intellectual Property. Except as otherwise disclosed in the Private Placement Memorandum, the Company and each of its subsidiaries owns, possesses, or can acquire on reasonable terms, all
Intellectual Property (as defined below) necessary for the conduct of the Company’s and it subsidiaries’ business as now conducted or as described in the Private Placement Memorandum to be conducted, except as such failure to own, possess,
or acquire such rights would not result in a Material Adverse Effect. Furthermore, (i) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any such Intellectual Property, except as such
infringement, misappropriation or violation would not result in a Material Adverse Effect; (ii) there is no pending or, to the knowledge of the Company, threatened, action, suit, proceeding or claim by others 

  

 6 

 
challenging the Company’s or any of its subsidiaries’ rights in or to any such Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (iii) the Intellectual Property owned by the Company and its subsidiaries, and to the knowledge of the Company, the Intellectual Property licensed to the Company and its subsidiaries, has not
been adjudged invalid or unenforceable, in whole or in part, and there is no pending or threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; (iv) there is no pending or threatened action, suit, proceeding or claim by others that the Company or any of its subsidiaries infringes, misappropriates or otherwise violates any
Intellectual Property or other proprietary rights of others, neither the Company or any of its subsidiaries has received any written notice of such claim and the Company is unaware of any other fact which would form a reasonable basis for any such
claim; and (v) to the Company’s knowledge, no employee of the Company or any of its subsidiaries is in or has ever been in violation of any term of any employment contract, patent disclosure agreement, invention assignment agreement,
non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company nor any of its
subsidiaries or actions undertaken by the employee while employed with the Company or any of its subsidiaries, except as such violation would not result in a Material Adverse Effect. “Intellectual Property” shall mean all patents,
patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, domain names, technology, know how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) and other intellectual property. Notwithstanding anything to the contrary contained on product labels or advertisements for the Company’s soybean peptide based products, the
Company possesses all Intellectual Property necessary for the manufacturing and marketing of such products. 
 (19)
Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the
Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by the Transaction Documents or for the due execution, delivery or performance
of the Transaction Documents by the Company, except (i) such as have been already obtained or will be made on or prior to the Closing Time, (ii) as may be required under the securities or blue sky laws of the various states in which the
Securities will be offered or sold and the 1933 Act and 1933 Act Regulations with respect to the registration of the resale of the Securities under the 1933 Act pursuant to the Registration Rights Agreement and the Trust Indenture Act of 1939, and
(iii) the listing requirements of the NYSE, except those which, singly or in the aggregate, if not made would not result in a Material Adverse Effect or would have a material effect on the consummation of the transactions contemplated by the
Transaction Documents. 
 (20) Possession of Licenses and Permits. The Company and each of its subsidiaries holds, and
is operating in compliance in all material respects with, all franchises, grants, authorizations, approvals, licenses, permits, easements, consents, certificates and orders (collectively, “Government Licenses”) of any applicable
national, provincial, governmental or local or foreign self regulatory agency or body required for the conduct of its business and all such franchises, grants, authorizations, licenses, permits, easements, consents, certifications and orders are
valid and in full force and effect; and neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such Government License or has reason to believe that any such Government License will not be
renewed in the ordinary course; and the Company and each of its subsidiaries is in compliance in all material respects with all applicable national, provincial, federal, state, local and foreign laws, regulations, orders and decrees. The Company has
no reason to believe that any National Final Production Standard (as defined below) for its products, where application for such standard is currently pending, will not be granted or obtained, free from any condition or requirement.
“National Final Production Standard” 

  

 7 

 
means the final state production standard for a medicine required under the Administrative Measures of Medicine Registration dated February 28, 2005
issued by the State Food and Drugs Administration of China (the “SFDA”). 
 (21) SAFE Rules and
Regulations. The Company has taken all steps to comply with, and to cause all of the Company’s stockholders who beneficially own 5% or more of the Company’s outstanding Common Stock and who are known to the Company to be Chinese
residents or Chinese citizens, to comply with any applicable rules and regulations of the State Administration of Foreign Exchange (the “SAFE Rules and Regulations”), including, without limitation, taking reasonable steps to require
each such stockholder that is, or is directly or indirectly owned or controlled by, a Chinese resident or Chinese citizen to complete any registration and other procedures required under applicable SAFE Rules and Regulations. 
 (22) Preclinical Tests and Clinical Trials. The preclinical tests and clinical trials that are described in, or the results of
which are referred to in, the Private Placement Memorandum were or, if still ongoing, are being conducted in all material respects in accordance with protocols filed with the appropriate regulatory authorities for each such test or trial, as the
case may be, and with standard medical and scientific research procedures; each description of the results of such tests and trials contained in the Private Placement Memorandum is accurate and complete in all material respects and fairly presents
the data derived from such tests and trials, and the Company and its subsidiaries have no knowledge of any other studies or tests authorized or conducted by the Company or its subsidiaries the results of which are inconsistent with, or otherwise
call into question, the results described or referred to in the Private Placement Memorandum; neither the Company nor its subsidiaries has received any notices or other correspondence from the SFDA or from any other Chinese, United States or other
government or drug or medical device regulatory agency (collectively, the “Regulatory Agencies”) requiring the termination, suspension or modification of any clinical trials that are described or referred to in the Private Placement
Memorandum; and the Company and its subsidiaries have each operated and currently are in compliance in all material respects with all applicable rules, regulations and policies of the Regulatory Agencies. 
 (23) Product Mislabeling. Except as described in the Private Placement Memorandum, the Company does not have any product labeling
or advertising that contains any incorrect or misleading statements, including without limitation any incorrect or misleading statements regarding the product’s attributes, active or other ingredients, method of action, regulatory status or the
Intellectual Property associated with such product. The Private Placement Memorandum contains a full and complete list of existing product mislabeling, the consequences of which have been, and are expected to remain, immaterial. 
 (24) Title to Property. The Company and each of its subsidiaries has good and marketable title to all the properties and assets
reflected as owned in the financial statements referred to in Section 1(a)(4) above (or elsewhere in the Private Placement Memorandum), in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except (i) for liens for taxes not yet due or payable, (ii) as otherwise disclosed in the Private Placement Memorandum or (iii) as would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The real property, improvements, equipment and personal property held under lease by the Company or any subsidiary are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere
with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary. 
 (25) Environmental Laws. Except as described in the Private Placement Memorandum and except such matters as would not, singly or in the aggregate, result in a Material Adverse Effect, 

  

 8 

 
(i) neither the Company nor its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or mold (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (iii) there are no administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, or proceedings relating to any
Environmental Law pending or, to the Company’s knowledge, threatened against the Company or its subsidiaries and (iv) there are no events or circumstances that would reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or its subsidiaries relating to Hazardous Materials or Environmental Laws. 
 (26) Occupational Laws. The Company and each of its subsidiaries (i) is in compliance, in all material respects, with any and
all applicable national, provincial, foreign, federal, state and local laws, rules, regulations, treaties, statutes and codes promulgated by any and all governmental authorities and local or foreign regulatory agencies or bodies (including pursuant
to the Occupational Health and Safety Act) relating to the protection of human health and safety in the workplace (“Occupational Laws”); (ii) has received all material permits, licenses, approvals, consents and other approvals
required of it under applicable Occupational Laws to conduct its business as currently conducted; and (iii) is in compliance, in all material respects, with all terms and conditions of such permit, license or approval. No action, proceeding,
revocation proceeding, writ, injunction or claim is pending or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries relating to Occupational Laws, and the Company does not have knowledge of any facts,
circumstances or developments relating to its operations or cost accounting practices that could reasonably be expected to form the basis for or give rise to such actions, suits, investigations or proceedings. 
 (27) Labor Disputes. No labor dispute with the employees of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, which would result in a Material Adverse Effect. 
 (28) Accounting Controls and Disclosure
Controls. The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (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. Since the end of
the Company’s most recent audited fiscal year, there has been (A) no material weakness in the Company’s internal control over financial reporting (as defined in Rules 13a-15 and l5d-15 under the 1934 Act Regulations) (whether or
not remediated), and (B) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting, and (c)
no fraud involving management or other employees who have a significant role in internal controls that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls. The Company and each of its
subsidiaries employ disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the 1934 Act Regulations) that are designed to ensure that information 

  

 9 

 
required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as
appropriate, to allow timely decisions regarding disclosure. The Company has used such disclosure controls and procedures in preparing and evaluating the disclosures in the Private Placement Memorandum. 
 (29) Compliance with the Sarbanes-Oxley Act. The Company and its officers and directors are in compliance in all material respects
with applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”) that, with respect to the Company, are effective as of the date hereof.

 (30) Payment of Taxes. The Company and its consolidated subsidiaries (as determined for financial accounting
purposes) have filed all necessary federal, state, national, provincial, local and foreign income and franchise tax returns required to be filed and have paid all taxes required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them, except such taxes that are being contested in good faith and as to which adequate reserves have been provided as set forth in the following sentence and except where the failure to file
or failure to pay would not, individually or in the aggregate, have a Material Adverse Effect. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1(a)(4) above in respect
of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its consolidated subsidiaries has not been finally determined. There is no pending dispute with any taxing authority
relating to any of such tax returns, and the Company has no knowledge of any proposed liability for any tax to be imposed upon the properties or assets of the Company for which there is not an adequate reserve reflected in the Company’s
financial statements included in the Private Placement Memorandum. Except as disclosed in the Private Placement Memorandum, no transaction, stamp, capital or other issuance, registration, transaction, transfer or withholding taxes or duties are
payable in China by or on behalf of the Company or the Purchasers to any Chinese taxing authority in connection with (i) the issuance, sale and delivery of the Securities by the Company (ii) the issuance and delivery by the Company of the
shares of Common Stock issuable upon conversion of the Securities or (iii) the execution and delivery of this Agreement. 
 (31) Insurance. The Company and its subsidiaries carry or are entitled to the benefits of insurance in such amounts and covering such risks as is generally deemed adequate and customary for the businesses in which they are currently
engaged and the value of their properties and as is customary for companies in China engaged in similar businesses and in similar industries and all such insurance is in full force and effect, except in each case as would not reasonably be expected
to have a Material Adverse Effect. The Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects; there are no claims by the Company or any of its subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; and neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for. The Company has
no reason to believe that it or its subsidiaries will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change. 
 (32) Investment Company Act. The Company is not required, and after giving effect to the issuance and sale of the offered Securities and the application of the net proceeds therefrom as described in the Private Placement Memorandum
under “Use of Proceeds,” will not be required, to register as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”). 
  

 10 

 (33) Passive Foreign Investment Company. The Company does not expect to be a
Passive Foreign Investment Company (“PFIC”) within the meaning of Section 1297(a) of the United States Internal Revenue Code of 1986, as amended and the regulations and published interpretations thereunder (the
“Code”), for the taxable year ending December 31, 2008, and has no plan or intention to conduct its business in a manner that would be reasonably expected to result in the Company becoming a PFIC in the future under current
laws and regulations. 
 (34) Registration Rights. There are no persons with registration rights or other similar
rights to have any securities registered by the Company under the 1933 Act, other than with respect to the registration of the resale of the Securities under the 1933 Act pursuant to the Registration Rights Agreement. 
 (35) Similar Offerings. Neither the Company nor to its knowledge any of its Affiliates has, directly or indirectly, solicited any
offer to buy, sold or offered to sell or otherwise negotiated in respect of, or will solicit any offer to buy, sell or offer to sell or otherwise negotiate in respect of, in the United States or to any United States citizen or resident, any security
which is or would be integrated with the sale of the Securities in a manner that would require the offered Securities to be registered under the 1933 Act. 
 (36) Rule 144A Eligibility. The Securities are eligible for resale pursuant to Rule 144A and will not be, at Closing
Time, of the same class as securities listed on a national securities exchange registered under Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer quotation system. 
 (37) No General Solicitation. Subject to compliance by Merrill Lynch, Pierce, Fenner & Smith Incorporated, CRT Capital
Group LLC, Oppenheimer & Co. Inc. and Collins Stewart LLC (the “Placement Agents”) with their representations and warranties in the Private Placement Agency Agreement dated July 8, 2008 (“Placement Agency
Agreement”), none of the Company, to its knowledge, its Affiliates or any person acting on its or any of their behalf has engaged or will engage, in connection with the offering of the offered Securities, in any form of general solicitation
or general advertising within the meaning of Rule 502(c) under the 1933 Act. 
 (38) No Registration Required.
Subject to compliance by the Purchasers with the representations and warranties of the Purchasers and the procedures set forth in Section 6 hereof and the Placement Agents with their representations and warranties in the Placement Agency
Agreement, it is not necessary in connection with the offer, sale and delivery of the offered Securities to the Purchasers in the manner contemplated by this Agreement and the Private Placement Memorandum to register the Securities under the 1933
Act or, until the Registration Statement is declared effective by the Commission, to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the “1939 Act”). 
 (39) ERISA Compliance. The Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established, administered, contributed to or maintained by the Company, its subsidiaries or
their ERISA Affiliates (as defined below) for employees or former employees of the Company and its affiliates are in compliance in all material respects with ERISA, the Internal Revenue Code of 1986, as amended (the “Code”) and any
other applicable statutes, orders, rules and regulations to the extent applicable to the “employee benefit plans” of the Company. No prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code,
to the extent applicable to the Company, has occurred with respect to any such plan, excluding transactions effected pursuant to a statutory or administrative exemption; and for each such plan that is subject to the funding rules of Section 412
of the Code or Section 302 of ERISA, no “accumulated funding deficiency,” as defined in Section 412 of the Code, has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for
these purposes 

  

 11 

 
accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.
“ERISA Affiliate” means, with respect to the Company or its subsidiaries, any member of any group of organizations described in Section 414 of the Code, of which the Company or its subsidiaries is a member. No “reportable
event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates. No “employee
benefit plan” subject to Title IV of ERISA established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA). Neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401 of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification. 
 (40) Regulatory Matters. Except as described in the Private Placement Memorandum, the Company and each of its subsidiaries:
(i) is and at all times has been in material compliance with all statutes, rules or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale,
offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company or such subsidiary (“Applicable Laws”); (ii) has not received any notice of adverse finding, warning letter, untitled
letter or other correspondence or notice from the SFDA or any other Regulatory Agency alleging or asserting noncompliance with any Applicable Laws or any Governmental Licenses; (iii) has not received notice of any claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action from any Regulatory Agency or third party alleging that any product operation or activity is in violation of any Applicable Laws or Government Licenses and has no knowledge
that any such Regulatory Agency or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (iv) has not received notice that any Regulatory Agency has taken, is taking or intends to take
action to materially limit, suspend, materially modify or revoke any Government Licenses and has no knowledge that any such Regulatory Agency is considering such action; and (v) has filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Government Licenses and that all such reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were complete and correct on the date filed in all material respects (or were corrected or supplemented by a subsequent submission). The statements in the Private Placement Memorandum, or incorporated by
reference into the Private Placement Memorandum from the Company’s Form 10-K for the period ended December 31, 2007, under the captions “Risk Factors—There could be changes in government regulations toward the pharmaceutical and
nutraceutical industries that may adversely affect our business,” “Risk Factors—Our business may be affected by unexpected changes in regulatory requirements in the jurisdictions in which we operate,” “Risk Factors—Our
international operations require us to comply with a number of U.S. and international regulations,” “Risk Factors—We may be unable to secure the government licenses that are necessary for us to engage in the sale of analgesic
pharmaceuticals,” “Risk Factors—Some of our TCM products and technologies potentially could be restricted from foreign ownership” and “Business—Regulation of Our Industry” (collectively, the “Regulatory
Sections”) fairly present in all material respects any Applicable Laws, and all pending or to the Company’s knowledge threatened legal or governmental proceedings relating to such Applicable Laws that are material to the Company’s
business in light of the applicable disclosure requirements under the 1934 Act. 
 (41) Public Officials. Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its 

  

 12 

 
subsidiaries is aware of or has taken any action directly or indirectly, that would result in a violation by such persons of the FCPA (as defined below),
including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “Foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company and its subsidiaries have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith. “FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder. 
 (42) Money Laundering Laws. The operations of the Company and its subsidiaries have complied in all material respects with
applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened. 
 (43) U.S. Sanctions. Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer
or employee of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury. 
 (44) Enforceability. The Transaction Documents are in proper form under the laws of China for the enforcement thereof against the
Company in accordance with the laws of China and to ensure the legality, validity, enforceability or admissibility into evidence in China of the Transaction Documents; it is not necessary that the Transaction Documents, the Private Placement
Memorandum or any other document be filed or recorded with any court or other authority in China or that any Chinese stamp duty or similar tax be paid on or in respect of the Transaction Documents or any other document to be furnished thereunder.

 (45) Choice of Law. The choice of the law of the State of New York as the governing law of the Transaction
Documents is a valid choice of law under the laws of China and will be honored by courts in China, subject to compliance with relevant civil procedural requirements (which do not involve a reexamination of the merits of the claim) in China.

 (46) Immunity. Neither the Company or any subsidiary nor any of their respective properties, assets or revenues has
any right of immunity under Chinese, New York or U.S. federal law, from any legal action, suit or proceeding, from the giving of any relief in any such legal action, suit or proceeding, from setoff or counterclaim, from the jurisdiction of any
Chinese, New York or U.S. federal court, from service of process, attachment upon or prior to judgment, or attachment in aid of execution of judgment, or from execution of a judgment, or other legal process or proceeding for the giving of any relief
or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Transaction Documents or the offered Securities; and, to the extent that the
Company, or any subsidiary or any of their respective properties, assets or revenues may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings may at any time be commenced, each of the Company and
the subsidiaries waives or will waive such right to the extent permitted by law. 
  

 13 

 (47) Enforceability of Judgments. Any final judgment for a fixed sum of money
rendered by a New York Court having jurisdiction under New York law in respect of any suit, action or proceeding against the Company based upon the Transaction Documents would be recognized and enforced against the Company by Chinese courts without
reexamining the merits of the case under the common law doctrine of obligation; provided that (i) adequate service of process has been effected and the defendant has had a reasonable opportunity to be heard, (ii) such judgments or
the enforcement thereof are not contrary to the law, public policy, security or sovereignty of China, (iii) such judgments were not obtained by fraudulent means and do not conflict with any other valid judgment in the same matter between the
same parties, and (iv) an action between the same parties in the same matter is not pending in any Chinese court at the time the lawsuit is instituted in the foreign court. 
 (48) Solvency. As of the date hereof and immediately prior to, and immediately following, the issuance of the Securities, and
immediately after the application of the proceeds from the offering and sale of the Securities, the Company and each of its subsidiaries is, and will be, Solvent (as defined below); neither the Company nor any of its subsidiaries is contemplating
either the filing of a petition by it under any bankruptcy or insolvency laws or the liquidating of all or a substantial portion of its property, and neither the Company nor any of its subsidiaries has knowledge of any person contemplating the
filing of any such petition against the Company or any of its subsidiaries. As used herein, “Solvent” means, for any person on a particular date, that, on such date, (i) the fair value of the property of such person is greater than the
total amount of liabilities, including, without limitation, contingent liabilities, of such person, (ii) the present fair salable value of the assets of such person is not less than the amount that will be required to pay the probable liability of
such person on its debts as they become absolute and matured, (iii) such person does not intend to, and does not believe that it will, incur debts and liabilities beyond such person’s ability to pay as such debts and liabilities mature, (iv)
such person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such person’s property would constitute unreasonably small capital and (v) such person is able to pay its debts as
they become due and payable. 
 (49) Registration. The Company satisfies (A) all conditions for the use of a
registration statement on Form S-3 under the 1933 Act, including without limitation, (i) the registrant requirements of General Instruction I.A of Form S-3 under the 1933 Act and the transaction requirements of General Instructions I.B.1 of Form S-3
under the 1933 Act and (ii) to register the Securities, and the Common Stock issuable upon conversion of the Securities, for resale in the manner contemplated by the Transaction Documents; and (B) the conditions set forth in Rules 415(a)(1)(i) and
430B(b) under the 1933 Act. 
 (50) Rule 144 Eligibility. The Company is subject to the reporting requirements of the
Exchange Act, has filed all required reports under Section 13 of the Exchange Act during the last 12 months and has filed current “Form 10 Information” (as that phrase is defined in Rule 144(i)(3) of the 1933 Act) with the SEC reflecting
its status as an entity that is no longer subject to Rule 144(i)(1)(i) of the 1933 Act, and accordingly restricted securities of the Company are currently eligible to be sold in accordance with Rule 144 of the 1933 Act. 
 (51) No Material Non-Public Information. The Company confirms that neither it nor its officers or directors or to its knowledge
any person acting on its behalf has provided any Purchaser or its respective agents or counsel (other than any Purchaser that has executed a confidentiality agreement with respect to such information) with any information that the Company believes
constitutes material, non-public information, except insofar as the existence and terms of the transactions contemplated herein may constitute such information. The Company understands and confirms that the Purchasers will rely on the foregoing
representations and covenants in effecting transactions in securities of the Company. 
 (b) Officer’s Certificates. Any certificate
signed by any officer of the Company or its subsidiaries delivered to Latham & Watkins LLP (the “Designated Investor’s Counsel”) shall be deemed a representation and warranty by the Company to each Purchaser as to the
matters covered thereby. 
  

 14 

 SECTION 2. Sale and Delivery to the Purchasers; Closing. 
 (a) Securities. On the basis of the representations, warranties and agreements herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Purchaser, severally and not jointly, and each Purchaser, severally and not jointly, agrees to purchase from the Company, up to the aggregate principal amount of Securities set forth on such Purchaser’s
signature page hereto, at a price of 100% of the principal amount thereof. Each Purchaser acknowledges that, in accordance with the provisions of this Section 2, the Company may sell to the Purchaser, and the Purchaser will purchase, less than
all of the aggregate principal amount of Securities set forth on such Purchaser’s signature page hereto. 
 (b) Payment. The
completion of the purchase and sale of the Securities (the “Closing”) shall occur at the offices of the Company’s counsel, Loeb & Loeb LLP, on July 15, 2008, (the “Scheduled Closing Date”) at 10:00 a.m.
(Eastern time), unless the Closing is delayed by the Company pursuant to the following paragraph (the time at which the Closing occurs being the “Closing Time”). At the Closing, (1) the Company shall cause the Escrow Agent
to deliver to the Purchasers the Securities registered in the name of the applicable Purchasers, and (2) the aggregate purchase price for the Securities shall be delivered by the Escrow Agent on behalf of the Purchasers to the Company.

 The Closing shall occur at the Scheduled Closing Date (1) if the aggregate amount of funds deposited by the Purchasers with the
Escrow Agent is at least $115.0 million on such date and (2) the conditions set forth in Section 5 are satisfied. If the aggregate amount of funds deposited by the Purchasers with the Escrow Agent is less than $115.0 million on
the Scheduled Closing Date, the Company may delay the Closing until a date that is no later than July 21, 2008 (the “Delayed Closing Date”), at which time the Closing shall occur if, at such time, at least $115.0 million in
aggregate amount of funds shall have been deposited by the Purchasers with the Escrow Agent. If the Closing is delayed pursuant to the preceding sentence and the aggregate amount of funds deposited by the Purchasers with the Escrow Agent remains
less than $115.0 million on the Delayed Closing Date, the Company may terminate this Agreement on the Delayed Closing Date without liability on the part of the non-defaulting Purchasers or on the part of the Company, except for the Company’s
obligation to pay Purchaser’s fees and expenses in accordance with Section 4 hereof. Nothing contained herein shall relieve a defaulting Purchaser of any liability it may have to the Company or any non-defaulting Purchaser for damages
caused by its default. The aggregate principal amount of Securities that may be sold pursuant to this Agreement is $115.0 million. 
 If,
(1) on the Scheduled Closing Date or (2) on the Delayed Closing Date, any Purchaser defaults on its obligation to purchase the Securities that it has agreed to purchase, the Company and the non-defaulting Purchasers may in their discretion
arrange for the purchase of such Securities by any Purchaser on the terms contained in this Agreement, which purchase shall occur (i) if the Closing occurs on the Scheduled Closing Date, on the Scheduled Closing Date or at any time thereafter
until the Delayed Closing Date or (ii) if the Closing occurs on the Delayed Closing Date, on the Delayed Closing Date, or (iii) with respect to defaults that occur on the Delayed Closing Date, as soon as practicable after the Delayed
Closing Date. 
 If the Company accepts the Purchaser’s offer to buy Securities in whole or in part, the Company or its representatives
shall notify each Purchaser at the telephone number provided on such Purchaser’s signature page thereto of the precise amount of Securities that the Company shall sell to such Purchaser and such Purchaser shall buy. Payment by a Purchaser for
the Securities shall be made by wire transfer of immediately available funds to the Escrow Agent in accordance with instructions below. Upon receipt by the Escrow Agent of a joint notice as required under the terms of the Escrow Agreement (as
hereinafter defined) that the conditions to the Closing are satisfied, it shall deliver each Purchaser’s payment to the Company and the corresponding Securities to the DTC account specified in the Purchaser signature pages hereto. If such
conditions to the Closing are not satisfied as of the Delayed Closing Date, this Agreement shall terminate and, the Escrow Agent shall return each Purchaser’s funds to the applicable Purchaser promptly, but in any event not later than the
business day following the Delayed Closing Date. 
  

 15 

 Subject to the provisions of the second and third preceding paragraphs, the Company’s obligation to
issue and sell the Securities to the Purchasers shall be subject only to the accuracy of the representations and warranties made by the Purchasers and the fulfillment of those undertakings of the Purchasers to be fulfilled prior to the Closing. The
Purchasers’ respective obligations to purchase the accepted Securities shall be subject to the conditions set forth in Section 5 hereof. 
 Promptly after the Company notifies each Purchaser of the Securities that the Company shall sell to such Purchaser, but in any event no later than one business day prior to the Scheduled Closing Date, such Purchaser shall remit by wire
transfer the amount of funds equal to the aggregate purchase price for the Securities being purchased by such Purchaser to the following account designated by the Company pursuant to the terms of the Escrow Agreement (the “Escrow
Agreement”) a copy of which is attached hereto as Exhibit C relating to the offering of the Securities and entered into by and among the Company and the Escrow Agent: 
  

			
	 Bank Name: Wells Fargo Bank, N.A.
	  	
	 Bank ABA: 121000248
	  	
	 BNF Acct.: Corporate Trust Clearing Account

	 BNF A/C: 0001038377
	  	
	 Ref Acct. Name:   AOB Escrow
                               American Oriental Bioengineering, Inc.

		
	 Attn: Angie Knoll
	  	
	 Tel. No.: (215) 861-9413
	  	

 Such funds shall be held in escrow until the Closing and delivered by the Escrow Agent on behalf
of the Purchasers to the Company upon the satisfaction of the conditions to the obligations of the Purchasers set forth in Section 5 hereof and the Escrow Agent’s receipt of the joint notice required for release of funds as specified in
this Section 2(b). 
 (c) Settlement. Prior to or promptly after the execution of this Agreement by the Purchasers and the Company,
each Purchaser shall direct the broker-dealer at which the account or accounts to be credited with its Securities are maintained (which broker/dealer shall be a DTC participant) to set up a Deposit Withdrawal at Custodian (“DWAC”)
instructing the Escrow Agent to credit such account or accounts with the Securities by means of an electronic book-entry delivery. Such DWAC shall indicate the settlement date for the deposit of the Securities, which date shall be provided to the
Purchasers. Simultaneously with the delivery to the Company by the Escrow Agent of the funds held in escrow described in Section 2(b), the Company shall direct the Escrow Agent to credit each Purchaser’s account or accounts with the
Securities pursuant to the information contained in the DWAC. 
 SECTION 3. Covenants of the Company. The Company covenants with
each Purchaser as follows: 
 (a) Qualification of Securities for Offer and Sale. The Company will use its reasonable best efforts, in
cooperation with the Purchasers, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions as the Purchasers may designate and to maintain such qualifications in effect as long as
required for the sale of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities business in any jurisdiction in
which it is not otherwise so subject in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing so. 
 (b) Restriction on Sale of Securities. Except as otherwise contemplated by the Private Placement Memorandum and the Transaction Documents, during a period of 90 days from the date of the Final Private Placement Memorandum (the
“Lock-up Period”), the Company shall not, without the prior written consent of each Purchaser that acquires $30.0 million or more in aggregate principal amount of Securities pursuant to this 

  

 16 

 
Agreement, directly or indirectly, (1) issue, sell, offer or agree to sell, grant any option for the sale of, or otherwise transfer or dispose of, any
other debt securities of the Company, or securities of the Company that are convertible into, or exchangeable for, the Securities or such other debt securities, (2) offer, pledge, announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, lend or otherwise transfer or dispose of any shares of Common Stock or securities convertible into or exchangeable or
exercisable for or repayable with Common Stock or (3) enter into any swap or other agreement or any transaction that transfers, in whole or in part, the economic consequences of ownership of the Common Stock, or any securities convertible into
or exchangeable or exercisable for or repayable with Common Stock, whether any such swap or transaction described in clause (2) or (3) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise;
provided, however, that the Company may offer, issue and sell shares of Common Stock or securities convertible into or exchangeable or exercisable for shares of Common Stock, or debt securities (i) pursuant to any employee, officer or director
stock or benefit plan disclosed in the Private Placement Memorandum, (ii) upon the conversion or exercise of the Securities or securities outstanding on the date hereof disclosed in the Private Placement Memorandum, (iii) issued or to be
issued by the Company in connection with an acquisition, provided that (A) in the case of an acquisition of a private company, the recipient of such shares or securities shall enter into a lock-up agreement for the balance of the Lock-up Period
and (B) in the case of an acquisition of a public company, such shares or securities shall not be issued until the expiration of the Lock-up Period. 
 (c) PORTAL Designation. The Company will use its reasonable best efforts to permit the Securities to be designated PORTAL securities in accordance with the rules and regulations adopted by the Financial
Industry Regulatory Authority (“FINRA”) relating to trading in The PORTAL Market. 
 (d) Listing on Securities
Exchange. The Company will use its reasonable best efforts to cause all shares of Common Stock issuable upon conversion of the Securities to be listed on the NYSE or listed on another “national securities exchange” registered under
Section 6 of the 1934 Act on which shares of its Common Stock are then listed. 
 (e) Reservation of Shares of Common Stock. The
Company shall reserve and keep available at all times, free of preemptive rights, shares of Common Stock for the purpose of enabling the Company to satisfy any obligations to issue shares of Common Stock upon conversion of the Securities.

 (f) DTC. The Company will use its reasonable best efforts to permit the Securities to be eligible for clearance and settlement
through the facilities of DTC and (ii) comply with all of its obligations set forth in the representations letter of the Company to DTC relating to approval of the securities by DTC for “book entry” transfer. 
 (g) Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities to be sold by it hereunder for the purposes
set forth in the Private Placement Memorandum. 
 (h) Equal Treatment of Purchasers. No consideration shall be offered
or paid to any Purchaser to amend or consent to a waiver or modification of any provision of any of the Transaction Documents or in consideration of the exchange, redemption or repurchase of any Security unless the same consideration is also offered
to all of the Purchasers to the Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise. 
 (i) Press Release. By 9:30 a.m. (New York City time) on July 9, 2008, the Company shall issue a press release disclosing the transactions
contemplated by this Agreement and any information in the Private 

  

 17 

 
Placement Memorandum that is material non-public information. In addition, the Company will make such other filings and notices relating to the Transaction
Agreements and the transactions contemplated thereby in the manner and time required by the SEC or the NYSE. 
 SECTION 4. Payment of
Expenses. 
 (a) Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement,
whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, including (1) the preparation, printing, and delivery to the Purchasers of the Private Placement Memorandum (including financial statements
and any schedules or exhibits and any document incorporated therein by reference) and of each amendment or supplement thereto, (2) the preparation, printing and delivery to the Purchasers of this Agreement, any agreement among the Purchasers,
the Indenture, any other Transaction Documents and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Securities, (3) the preparation, issuance and delivery of the certificates
for the Securities to the Purchasers and the certificates for the Common Stock issuable upon conversion thereof, including any transfer taxes, any stamp or other duties payable upon the sale, issuance and delivery of the Securities to the
Purchasers, the issuance and delivery of the Common Stock issuable upon conversion thereof and any charges of DTC in connection therewith, (4) the fees and disbursements of the Company’s counsel, accountants and other advisors,
(5) the qualification of the Securities and the shares of Common Stock issuable upon conversion thereof under securities laws in accordance with the provisions of Section 3(a) hereof, (6) the fees and expenses of the Trustee,
including the reasonable and documented fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities, (7) the costs and expenses of the Company relating to investor presentations on any “road
show” undertaken in connection with the marketing of the Securities including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the
road show presentations, travel and lodging expenses of the representatives and officers of the Company and any such consultants, (8) any fees payable in connection with the rating of the Securities, (9) any fees and expenses payable in
connection with the initial and continued designation of the Securities as PORTAL securities, (10) any fees of FINRA in connection with the Securities, and (11) the fees and expenses of any transfer agent or registrar for the Common Stock.
The fees and expenses of the Designated Investor’s Counsel shall be shared equally between the Company and Merrill Lynch & Co up to an aggregate maximum amount of $175,000. 
 SECTION 5. Conditions of Purchasers’ Obligations. The obligations of the Purchasers hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof as of the date hereof and as of the Closing Time or in certificates of any officer of the Company or its subsidiaries delivered pursuant to the provisions hereof, to
the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions: 
 (a) Opinions
of Counsel for Company. At Closing Time, the Purchasers shall have received the favorable opinions, dated as of Closing Time, of (1) Loeb & Loeb LLP, counsel for the Company, to the effect set forth in Exhibit A-1 hereto,
(2) Lewis & Roca LLP, special counsel for the Company, to the effect set forth in Exhibit A-2 hereto and (3) Heilongjiang Oriental Law Firm, Chinese counsel for the Company, to the effect set forth in Exhibit A-3 hereto. Such
counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. 
 (b) Officers’ Certificate. At Closing Time, there shall not have been, since the date hereof or since the respective dates as of which
information is given in the Private Placement Memorandum (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), any material adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Designated Investor’s Counsel shall have received a certificate of the
President of the Company and of the 

  

 18 

 
chief accounting officer of the Company, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct in all material respects with the same force and effect as though expressly made at and as of Closing Time, and (iii) the Company has complied in all material respects
with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to Closing Time. 
 (c) PORTAL
and DTC. At the Closing Time, the Securities shall have been designated for trading on PORTAL and included in the book-entry settlement system of the DTC. 
 (d) Lock-up Letter. On or prior to the date of this Agreement, Merrill Lynch (as defined in Exhibit B attached hereto) shall have received an agreement substantially in the form of Exhibit B attached
hereto signed by the persons listed in Schedule A attached hereto. 
 (e) Indenture, Registration Rights Agreement and Escrow
Agreement. At or prior to the Closing Time, each of the Company and the Trustee shall have executed and delivered the Indenture; the Company and the Purchasers shall have executed and delivered the Registration Rights Agreement and the Company,
the Escrow Agent and the Designated Purchaser Representative shall have executed and delivered the Escrow Agreement. 
 (f) Stop
orders. No stop order suspension of trading shall have been imposed by the NYSE, the SEC or any governmental regulatory body with respect to public trading in the Common Stock. 
 (g) Additional Documents. On or before the Scheduled Closing Date, the Company shall have delivered to the Designated Investor’s Counsel, for
the benefit of the Purchasers, such further documents, certificates, letters and schedules or instruments relating to the business, corporate, legal and financial affairs of the Company and its subsidiaries as the Purchasers shall have reasonably
requested from the Company reasonably in advance of the Scheduled Closing Date so long as such further documents, certificates, letters and schedules or instruments are reasonable and customary for the transactions contemplated by this Agreement.
Delivery of any such documents, certificates, letters and schedules or instruments to the Designated Investor’s Counsel shall be deemed to constitute delivery to the applicable Purchasers for all purposes hereunder. 
 All such documents, opinions, certificates, letters, schedules or instruments delivered pursuant to this Agreement will comply with the provisions hereof
only if they are reasonably satisfactory in all material respects to the Designated Investor’s Counsel. The Company shall furnish to the Purchasers such conformed copies of such documents, certificates, letters, schedules and instruments in
such quantities as the Purchasers shall reasonably request. 
 SECTION 6. Additional Covenants and Representations. 

(a) Covenants of the Company. The Company covenants with each Purchaser as follows: 
 (1) Offers and Sales. Offers and sales of the Securities shall be made only to such persons and in such manner as is contemplated
by the Private Placement Memorandum. 
 (2) No General Solicitation. No general solicitation or general advertising
(within the meaning of Rule 502(c) under the 1933 Act) will be used in the United States in connection with the offering or sale of the Securities. 
 (3) Integration. The Company agrees that it will not and will cause its Affiliates not to, directly or indirectly, solicit any offer to buy, sell or make any offer or sale of, or otherwise negotiate in respect
of, securities of the Company of any class if, as a result of the doctrine of “integration” referred to in Rule 502 under the 1933 Act, such offer or sale would render invalid the exemption from the 

  

 19 

 
registration requirements of the 1933 Act provided by Section 4(2) thereof or by Rule 144A thereunder or otherwise. 
 (4) Rule 144A Information. The Company agrees that, in order to render the offered Securities eligible for resale pursuant to
Rule 144A under the 1933 Act, while any of the offered Securities remain outstanding, it will make available, upon request, to any holder of offered Securities or prospective purchasers of Securities (or to any holders or prospective purchasers
of the Common Stock issuable upon conversion of the Securities) the information specified in Rule 144A(d)(4), unless the Company furnishes information to the Commission pursuant to Section 13 or 15(d) of the 1934 Act. 
 (5) Restriction on Resales. The Company will not, and will cause its Affiliates not to, resell any offered Securities which are
“restricted securities” (as such term is defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial owner or otherwise (except as agent acting as a securities broker on behalf of and for the account of customers in the
ordinary course of business in unsolicited broker’s transactions) that have been reacquired by any of them and shall immediately upon any purchase of any such Securities submit such Securities to the Trustee for cancellation. 
 (b) Representations, Warranties and Covenants of the Purchasers. Each Purchaser severally, and not jointly, hereby represents and warrants to, and
covenants with, the Company, that: 
 (1) The Purchaser is (i) a QIB, (ii) aware that the sale to it is being made
in reliance on a private placement exemption from registration under the 1933 Act and (iii) acquiring the Securities for its own account or for the account of a QIB and not with a view to the distribution thereof, except as permitted under
Rule 144A or other applicable securities laws. 
 (2) The Purchaser understands that the Securities and the Common Stock
issuable upon conversion of the Securities are being offered in a transaction not involving any public offering within the meaning of the 1933 Act, that the Securities and the Common Stock issuable upon conversion of the Securities have not been
and, except as described in the Private Placement Memorandum, will not be registered under the 1933 Act and agrees that (i) the Purchaser will offer, resell, pledge or otherwise transfer such Securities and Common Stock only (A) to a
person whom the seller reasonably believes is a QIB and to whom notice is given that the transfer is being made reliance on Rule 144A, (B) pursuant to an exemption from registration under the 1933 Act provided by Rule 144 thereunder
(if available), (C) pursuant to an effective registration statement under the 1933 Act or (D) to the Company or one of its subsidiaries, in each of cases (A) through (D) in accordance with any applicable securities laws of any
state of the United States, and (ii) the Purchaser will, and each subsequent holder of the Securities will be required to, notify any subsequent purchaser of the Securities or the Common Stock issued upon conversion of the Securities of the
resale restrictions referred to in clause (i) above and will provide the Company and the transfer agent such certificates and other information as they may reasonably require to confirm that the transfer by it complies with the foregoing
restrictions, if applicable. 
 (3) The Purchaser understands that the Securities and the Common Stock issuable upon
conversion of the Securities will, until the Securities can be sold to the public in accordance with Rule 144 under the 1933 Act, unless sold pursuant to a registration statement that has been declared effective under the 1933 Act or in
compliance with Rule 144, bear a legend substantially to the following effect: 
 THIS SECURITY AND THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, 

  

 20 

 
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, REGISTRATION UNDER THE SECURITIES ACT. 
 BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT IT WILL OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO AMERICAN ORIENTAL BIOENGINEERING, INC. OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) UPON RULE 144 BECOMING AVAILABLE TO SUCH PERSON, PURSUANT TO RULE 144 OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF CERTIFICATIONS AND/OR OTHER INFORMATION
REASONABLY SATISFACTORY TO EACH OF THEM OR PURSUANT TO CLAUSE (E) TO ALSO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THEM, AND IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. 
 (4) The
Purchaser (i) is able to fend for itself in the transactions contemplated by the Private Placement Memorandum, (ii) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of
its prospective investment in the Securities and (iii) has the ability to bear the economic risks of its prospective investment in the Securities and can afford the complete loss of such investment. 
 (5) The Purchaser has received a copy of the Preliminary Private Placement Memorandum and upon delivery by the Company prior to Closing
of the Final Private Placement Memorandum will have received a copy of the Final Private Placement Memorandum and acknowledges that (i) it has conducted its own investigation of the Company and the terms of the Securities and, in conducting its
examination, it has not relied on, and will not rely on, the Placement Agents, any statements or other information provided by the Placement Agents concerning the Company or the terms of this offering or any due diligence investigation that the
Placement Agents or their affiliates, or any person acting on behalf of any of them, may conduct or may have conducted with respect to the Securities or the Company, (ii) it has had access to the Company’s public filings with the
Securities and Exchange Commission and to such financial and other information as it deems necessary to make its decision to purchase the Securities, (iii) it has been offered the opportunity to ask questions of the Company and, if asked
questions, received answers thereto, as it deemed necessary in connection with the decision to purchase the Securities and (iv) it is aware that there may be additional non-public information with respect to the Securities, the Company and
developments relating to the Company, that the Company has agreed to make available to or discuss with the Purchaser upon execution by such Purchaser of a confidentiality agreement, and that the Purchaser has either executed such confidentiality
agreement and received such information or participated in such discussions as are satisfactory to it or has elected in its sole discretion not to request such information or discussions. 
 (6) The Purchaser, its affiliates and any of its and their directors, officers, employees, agents, advisors and controlling persons are
aware that the U.S. securities laws prohibit any person that has 

  

 21 

 
material non-public information about a company from purchasing or selling, directly or indirectly, securities of such company (including entering into
hedging transactions involving such securities) or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such other person is likely to purchase or sell securities. 
 (7) The Purchaser understands that the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements
and agreements and agrees that if any of the representations and acknowledgements deemed to have been made by it by its purchase of the Securities are no longer accurate, the Purchaser shall promptly notify the Company and each Placement Agent. The
Purchaser hereby consents to such reliance. If the Purchaser is acquiring the Securities as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and it has
full power to make the foregoing representations, acknowledgements and agreements on behalf of such account. 
 (8) The
Purchaser has not solicited offers for, or offered or sold, and will not solicit offers for, or offer to sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D
under the 1933 Act or in any manner involving a public offering within the meaning of Section 4(2) of the 1933 Act. 
 (9) The Purchaser acknowledges that no action has been or will be taken in any jurisdiction outside the United States by the Company or any Placement Agent that would permit an offering of the Securities, or possession or distribution of
offering materials in connection with the issue of the Securities, in any jurisdiction outside the United States where action for that purpose is required. Each Purchaser outside the United States will comply with all applicable laws and regulations
in each foreign jurisdiction in which it purchases, offers, sells or delivers Securities or has in its possession or distributes any offering material, in all cases at its own expense. 
 (10) The Purchaser further represents and warrants to, and covenants with, the Company that the Purchaser has full right, power,
authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement. 
 (11) The Purchaser acknowledges and agrees that that nothing in the Private Placement Memorandum, this Agreement, the Company’s
public filings with the Commission or any other materials presented to the Purchaser in connection with the purchase and sale of the Securities constitutes legal, tax or investment advice. The Purchaser has consulted such legal, tax and investment
advisors and made its own assessments as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of Securities. 
 The Purchasers understand that the Company, and for purposes of the opinions to be delivered to it pursuant to Section 5 hereof, counsel to the Company will rely upon the accuracy and truth of the foregoing
representations, and the Purchasers hereby consent to such reliance. 
 SECTION 7. Indemnity. In consideration of each
Purchaser’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless each Purchaser and each other holder of the Securities and all of their stockholders, partners, members, managers, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or
other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”), as incurred, from and against any and all actions, causes of
action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is 

  

 22 

 
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result
of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any
other certificate, instrument or document contemplated hereby, or thereby or (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as
otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 7 shall be the same as those set forth in Section 4 of the Registration Rights Agreement. 
 SECTION 8. Representations, Warranties and Agreements to Survive. All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company or its subsidiaries submitted pursuant hereto shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of any Purchaser or its Affiliates or
selling agents, any person controlling any Purchaser, its officers or directors or any person controlling the Company and (b) delivery of and payment for the Securities. 
 SECTION 9. Tax Disclosure. Notwithstanding any other provision of this Agreement, immediately upon commencement of discussions with respect
to the transactions contemplated hereby, the Company (and each employee, representative or other agent of the Company) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure. For purposes of the foregoing, the term “tax
treatment” is the purported or claimed federal income tax treatment of the transactions contemplated hereby, and the term “tax structure” includes any fact that may be relevant to understanding the purported or claimed federal income
tax treatment of the transactions contemplated hereby. 
 SECTION 10.
Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Purchasers shall be directed to the
address of such Purchaser as set forth on the signature page hereto; and notices to the Company shall be directed to it at American Oriental
Bioengineering, Inc., 330 Madison Avenue, 9th Floor, New York, New York, 10017, attention of Yangchun Li (Facsimile: (212) 786-7569), with
a copy to Loeb & Loeb LLP, 345 Park Avenue, New York, New York 10154, attention of Mitchell S. Nussbaum (Facsimile: (212) 504-3013). 
 SECTION 11. Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Purchasers, or any of them, with respect to the subject matter hereof. 

SECTION 12. Parties. This Agreement shall inure to the benefit of and be binding upon the Purchasers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Purchasers and the Company and their respective successors and the controlling persons and
officers and directors and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Purchasers and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no 

  

 23 

 
other person, firm or corporation, except that the Placement Agents may rely on the representations, warranties and covenants of the Company and the
Purchasers set forth in Section 6 hereof. No purchaser of Securities from any Purchaser shall be deemed to be a successor by reason merely of such purchase. 
 SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The Company hereby submits to the nonexclusive jurisdiction of the federal
and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The Company irrevocably and unconditionally waives any objection to
the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in federal and state courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally
waive and agrees not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum. The Company and the Purchasers irrevocably agree to waive trial by jury in any action, proceeding,
claim or counterclaim brought by or on behalf of either party related to or arising out of this Agreement. 
 SECTION 14. TIME.
TIME SHALL BE OF THE ESSENCE IN THE PERFORMANCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. 
 SECTION 15. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same
agreement. 
 SECTION 16. Effect of Headings. The section headings herein are for convenience only and shall not affect the
construction hereof. 
 SECTION 17. Severability. In case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 
 SECTION 18. Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser,
and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser
pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges that the Purchasers are not acting in concert or as a group, and the Company will not assert any such claim, with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each Purchaser confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each
Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. 
 SECTION 19. Appointment of Designated Purchaser
Representative. Each Purchaser by its signature hereto hereby irrevocably appoints Latham & Watkins LLP as the Designated Purchaser Representative under the Escrow Agreement. In addition each Purchaser agrees that: 
 (a) the Designated Purchaser Representative shall be entitled to rely upon any order, judgment, certification, instruction, notice, opinion or other
writing delivered to it without being required to determine the 

  

 24 

 
authenticity or the correctness of any fact stated therein or the propriety or validity of service thereof, notwithstanding any such order or judgment being
subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction; 
 (b) the Designated
Purchaser Representative may act in reliance upon any instrument or signature believed by it to be genuine and may assume that any person purporting to give notice or receipt or advice or make any statement or execute any document in connection with
the provisions of the Escrow Agreement has been duly authorized to do so; 
 (c) in the event the Designated Purchaser Representative
reasonably believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Designated Purchaser Representative under the Escrow Agreement, the
Designated Purchaser Representative may, in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to any Purchaser or other person for refraining from taking such action, unless the
Designated Purchaser Representative received written instructions signed by the Purchaser that eliminates such ambiguity or uncertainty to the satisfaction of the Designated Purchaser Representative; 
 (d) the Designated Purchaser Representative shall not be liable for any error of judgment, or any action taken, suffered or omitted to be taken, under the
Escrow Agreement except in the case of its gross or willful misconduct, and no implied covenants or obligations shall be inferred from the Escrow Agreement against the Designated Purchase Representative. 
  

 25 

 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the
Company a counterpart hereof, whereupon this Agreement, along with all counterparts, will become a binding agreement between the Purchaser and the Company in accordance with its terms. 
 Very truly yours, 
 AMERICAN ORIENTAL BIOENGINEERING, INC. 
  

			
	By: 	 	 /s/ Tony Liu

	Name:	 	Tony Liu
	Title:	 	Chairman and Chief Executive Officer

 Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space
provided below for that purpose. 
  

			
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 Aggregate principal amount of Securities allocated to Purchaser: 
  

 26 

 SCHEDULE A 
 LIST OF DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY 
 SUBJECT TO LOCK-UP 
 Tony Liu 
 Jun Min 
 Yanchun “Lily” Li 
 Li Binsheng 
 Cosimo J. Patti 
 Xianmin Wang 
 Eileen Bridget Brody 
 Lawrence S. Wizel 
 Baiqing Zhang 
 Wilfred Chow 
  

 Sch A-1 

 EXHIBIT A-1 
 FORM OF OPINION OF COMPANY’S COUNSEL 
 TO BE DELIVERED PURSUANT TO 
 SECTION 5(a) 
 (A) The execution,
delivery and performance of the Securities Purchase Agreement, the Indenture and the Registration Rights Agreement and the consummation of the transactions contemplated in the Securities Purchase Agreement do not and will not: 
 (i) violate or constitute a breach of, or default under any agreement or instrument, known to us, that is governed by United States
federal law or the laws of the State of New York and to which the Company or its subsidiaries is a party (except for such violation, breaches, defaults that would not have a Material Adverse Effect); 
 (ii) violate any applicable United States federal or New York State law, statute, rule, regulation, judgment, order, writ or decree, known
to us; or 
 (iii) require any consent, approval, authorization or order of, or filing with, any court or governmental agency
or body under any United States federal or New York State statute, rule or regulation applicable to the Company on or prior to the date hereof that has not been obtained or made. 
 (B) The documents incorporated by reference in the Private Placement Memorandum (other than the financial statements and supporting schedules and other
financial data derived from the financial statements, as to which no opinion need be rendered), when they were filed with the Commission complied as to form in all material respects with the requirements of the 1934 Act and the rules and regulations
of the Commission thereunder. 
 (C) The information included in the Private Placement Memorandum under the caption “Description of
Notes,” to the extent that it constitutes matters of law, summaries of legal matters, documents referred to therein or legal conclusions, has been reviewed by us and fairly summarizes the matters set forth therein in all material respects.

 (D) The Securities and the Indenture conform in all material respects to the descriptions thereof contained in the Private Placement
Memorandum. 
 (E) The Securities are in the form contemplated by the Indenture. 
 (F) To our knowledge, except as disclosed or incorporated by reference into the Private Placement Memorandum, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or its subsidiaries is a party, or to which the property of the Company or its subsidiaries is subject, before or brought by any court or governmental agency or body, domestic
or foreign, which would reasonably be expected to result in a Material Adverse Effect, or which would reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in
the Securities Purchase Agreement or the performance by the Company of its obligations thereunder or the transactions contemplated by the Private Placement Memorandum. 
 (G) The statements set forth in the Private Placement Memorandum under the caption “Certain U.S. Federal Income Tax Considerations,” insofar as they purport to describe provisions of the U.S. federal income
tax laws referred to therein, and subject to the limitations, qualifications and assumptions set forth therein and herein, fairly summarize, in all material respects, such laws. 
  

 A-1 

 (H) Assuming the accuracy of the representations and warranties of the Company and the Purchasers in the
Securities Purchase Agreement and assuming compliance with the agreements set forth in the Securities Purchase Agreement and the Private Placement Memorandum, it is not necessary in connection with the offer, sale and delivery of the Securities to
the Purchasers or in connection with the initial resale of the Securities by the Purchasers to register the Securities under the 1933 Act or to qualify the Indenture under the 1939 Act, it being understood that no opinion is expressed by us as to
any resale of Securities subsequent to the resale thereof by the Purchasers. 
 (I) The Company is not required, and after giving effect to
the issuance and sale of the Securities and the application of the net proceeds therefrom as described in the Private Placement Memorandum will not be required to, register as “investment company” under the 1940 Act. 
 (J) Assuming due authorization, execution and delivery by the parties thereto, each of the Indenture and the Registration Rights Agreement constitutes a
valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms. 
 (K) Assuming due
authorization, execution and delivery of the Indenture by the parties thereto and when authenticated and issued in accordance with the provisions of the Indenture and paid for by the Purchasers pursuant to the Securities Purchase Agreement, the
Securities will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture. 
  

 A-2 

 EXHIBIT A-2 
 FORM OF OPINION OF COMPANY’S COUNSEL 
 TO BE DELIVERED PURSUANT TO 
 SECTION 5(a) 
 (i) The Company has been
duly incorporated and is validly existing as a corporation in good standing under the laws of Nevada, with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Private Placement
Memorandum and to enter into and perform its obligations under the Securities Purchase Agreement. 
 (ii) The authorized, issued and
outstanding capital stock of the Company is as set forth in the Private Placement Memorandum in the column entitled “Actual” under the caption “Capitalization” (except for subsequent issuances, if any, pursuant to the Securities
Purchase Agreement or pursuant to reservations, agreements, employee benefit plans or the exercise of convertible securities or options referred to in the Private Placement Memorandum); the shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and non-assessable; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of
the Company under the Nevada Revised Statutes (the “NRS”) or the Company’s amendment and restatement or articles of incorporation (the “Articles of Incorporation”) or, to such counsel’s knowledge, contractual preemptive
or similar rights. 
 (iii) The Securities Purchase Agreement has been duly authorized, executed and delivered by the Company. 
 (iv) The Indenture has been duly authorized, executed and delivered by the Company. 
 (v) The Registration Rights Agreement has been duly authorized, executed and delivered by the Company. 
 (vi) The issuance of the Securities has been duly authorized by the Company. 
 (vii) Upon issuance and delivery of the Securities in accordance with the Securities Purchase Agreement and the Indenture, the Securities shall be
convertible at the option of the holder thereof for shares of Common Stock in accordance with the terms of the Securities and the Indenture; the shares of Common Stock issuable upon conversion of the Securities have been duly authorized and, as of
the Closing Time, reserved for issuance upon such conversion by all necessary corporate action; such shares, when issued upon such conversion and assuming that at the time of such issuance the Company has a sufficient number of authorized and
unissued shares of Common Stock available therefor, will be validly issued and will be fully paid and non-assessable. 
 (viii) The issuance
of the shares of Common Stock upon conversion of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company under the NRS, the Articles of Incorporation or, to such counsel’s knowledge,
contractual preemptive or similar rights. 
 (ix) The information included in the Preliminary Private Placement Memorandum and Final Private
Placement Memorandum under the caption “Description Of Capital Stock,” to the extent that it constitutes matters of Nevada law, summaries of Nevada legal matters, documents referred to therein or legal conclusions concerning Nevada law,
has been reviewed by us and fairly summarizes the matters set forth therein in all material respects. 
 (x) The information included in the
Preliminary Private Placement Memorandum and Final Private Placement Memorandum of Nevada statutes, regulations, legal and governmental proceedings, contracts and other documents are accurate and fairly present the information provided. 

 

 A-1 

 (xi) The execution, delivery and performance of the Securities Purchase Agreement, the Indenture, the
Registration Rights Agreement and the Securities and the consummation of the transactions contemplated in the Securities Purchase Agreement and in the Private Placement Memorandum (including the use of the proceeds from the sale of the Securities as
described in the Private Placement Memorandum under the caption “Use Of Proceeds”) and compliance by the Company with its obligations under the Securities Purchase Agreement, the Indenture, the Registration Rights Agreement and the
Securities do not and will not, whether with or without the giving of notice or lapse of time or both: 
 (1) result in a
breach or violation of any of the terms and provisions of, or constitute a default under, any agreement or instrument known to such counsel which is governed by the laws of the State of Nevada and to which the Company is a party; 
 (2) violate any Nevada statute, rule or regulation, applicable to the Company; or 
 (3) require any consent, approval, authorization or order of, or filing with, any court or governmental agency or body under any Nevada
statute, rule or regulation applicable to the Company on or prior to the date hereof that have not been obtained or made. 
  

 A-2 

 EXHIBIT A-3 
 FORM OF OPINION OF COMPANY’S PRC COUNSEL 
 TO BE DELIVERED PURSUANT TO 
 SECTION 5(a) 
 Each of American Oriental
Bioengineering Limited, Harbin Three Happiness Bioengineering Co. Ltd., Heilongjiang Songhuajiang Pharmaceutical Limited, Heilongjiang Qitai Pharmaceutical Limited, Guangxi Ling Feng Pharmaceutical Company Limited, Guangxi Boke Pharmaceutical
Limited, and Changchun Xinan Pharmaceutical Group Company Limited is referred to as a “Chinese Subsidiary” and collectively as the “Chinese Subsidiaries” 
 Capitalized terms which are undefined herein shall have the meaning ascribed to them in the Securities Purchase Agreement dated July 9, 2008 by and among
American Oriental Bioengineering, Inc. and the Purchasers signatory thereto. 
 (A) Each of the Chinese Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation. 
 (B) Each
Chinese Subsidiary has full legal right, power and authority (corporate and other) to own, use, lease and operate its assets and to conduct its business in the manner presently conducted and as described in the Private Placement Memorandum and is
duly qualified to transact business in each jurisdiction in which it owns or uses or leases properties, conducts any business or in which such qualification is required. Except as disclosed in the Private Placement Memorandum, each Chinese
Subsidiary has all necessary Governmental Licenses with any governmental or regulatory agency or any court in China to own, lease, license and use its properties, assets and conduct its business in the manner described in the Private Placement
Memorandum and such licenses, consents, authorizations, approvals, orders, certificates or permits contain no materially burdensome restrictions or conditions not described in the Private Placement Memorandum. Except as described in the Private
Placement Memorandum, no Chinese Subsidiary has any reason to believe that any Regulatory Agency is considering modifying, suspending or revoking any such licenses, consents, authorizations, approvals, orders, certificates or permits. Further, each
Chinese Subsidiary is in compliance with the provisions of all such licenses, consents, authorizations, approvals, orders, certificates or permits in all material respects. Following due inquiry, such counsel has no reason to believe that any
National Final Production Standard for the Company’s products, where application for such standard is currently pending, will not be granted or obtained, free from any condition or requirement compliance with which could reasonably be expected
to have a Material Adverse Effect on the Company or which the Company could not reasonably be expected to be able to satisfy. 
 (C) All of
the issued and outstanding shares of capital stock of each of the Chinese Subsidiaries have been duly and validly authorized and issued and are fully paid and nonassessable, and, to such counsel’s knowledge, the Company owns of record and
beneficially, free and clear of any security interests, claims, liens, proxies, equities or other encumbrances, all of the issued and outstanding shares of such stock. To such counsel’s knowledge, except as described in the Private Placement
Memorandum, there are no options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Chinese Subsidiaries any shares of the capital stock of the Chinese Subsidiaries. 
 (D) The application of the net proceeds to be received by the Company from the offering as contemplated by the Private Placement Memorandum, will not
contravene any provision of applicable Chinese law, rule or regulation, or the articles of association, other constitutive documents or the business license or other constitutive documents of any Chinese Subsidiary or contravene the terms or
provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement, note, lease or other agreement or instrument binding upon any Chinese Subsidiary, or any judgment, order or decree of any governmental
agency in China. 
  

 A-1 

 (E) To the best of such counsel’s knowledge, each Chinese Subsidiary has valid title to all of its
properties and assets, in each case, free and clear of all liens, charges, encumbrances, equities, claims, defects, options or restrictions; each lease agreement to which such Chinese Subsidiary is a party is legally executed; except as described in
the Private Placement Memorandum, the leasehold interests of each Chinese Subsidiary are fully protected by the terms of the lease agreements, which are valid, binding and enforceable in accordance with their respective terms under Chinese law; and,
to the best of such counsel’s knowledge, neither the Company nor any Chinese Subsidiary owns, operates, manages or has any other right or interest in any other material real property of any kind, except as described in the Private Placement
Memorandum. 
 (F) To the best of such counsel’s knowledge, there are no outstanding guarantees or contingent payment obligations of any
Chinese Subsidiary in respect of indebtedness of third parties except as disclosed in the Private Placement Memorandum. 
 (G) To the best of
such counsel’s knowledge, no Chinese Subsidiary or any of its subsidiaries is in breach or violation of or in default, as the case may be, under (1) its articles of association, business licenses or any other constituent documents,
(2) any material obligation, indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness governed by Chinese law, (3) any material obligation, license, lease, contract or other agreement or
instrument governed by Chinese law to which the Company or any of the subsidiaries is a party or by which any of them or any of their respective properties may be bound or affected, except for such breach or violation or default as would not
reasonably be expected to have a Material Adverse Effect, or (4) any law, regulation or rule of China, or any decree, judgment or order of any court in China, applicable to the Company or any of the subsidiaries (nor has any event occurred
which with notice, lapse of time, or both would result in any breach of, or constitute a default under or give the holder of any indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a part of such indebtedness). 
 (H) Each Chinese Subsidiary owns or otherwise has the legal right to use, or can acquire
on reasonable terms, trademarks, service marks and trade names currently employed by it in connection with the business currently operated by it; except as described in the Private Placement Memorandum, to the best of such counsel’s knowledge
after due inquiry, no Chinese Subsidiary has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing which, individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in any Material Adverse Effect; 
 (I) There are no legal, governmental, administrative or arbitrative
proceedings before any court of China or before or by any governmental agency pending or, to the best of such counsel’s knowledge, threatened against, or involving the properties or business of, the Company or any Chinese Subsidiary or to which
any of the properties of any Chinese Subsidiary is subject which will have a Material Adverse Effect. 
 (J) The execution, delivery and
performance of the Purchase Agreement and the consummation of the transactions herein contemplated (including the issuance or sale of the Securities by the Company and the obligation of the Company to issue Common Stock upon the conversion of the
Securities, except such as may be required under the Securities Act or state securities laws) will not: 
  

	 	(1)	 	result in a breach or violation of any of the terms and provisions of, or constitute a default under, any agreement or instrument known to such counsel which is governed by the laws
of China and to which any of the Chinese Subsidiaries are a party; or 

  

	 	(2)	 	require any consent, approval, authorization or order of, or filing with, any court or governmental agency or body under any Chinese statute, rule or regulation applicable to any
Chinese Subsidiary on or prior to the date hereof that have not been obtained or made. 

 (K) Such counsel has advised the
Company as to the content of the SAFE Rules and Regulations, in particular the relevant provisions thereof that purport to require offshore special purpose vehicles formed for the 

  

 A-2 

 
purpose of obtaining a stock exchange listing outside of China and controlled directly or indirectly by Chinese companies or natural persons, to obtain the
approval of the Chinese Securities Regulatory Commission prior to the listing and trading of their securities on stock exchange located outside of China. The issuance and sale of the Securities, the listing and trading of the Common Stock on the
NYSE or the consummation of the transactions contemplated by the Purchase Agreement is not and will not be affected by the SAFE Rules and Regulations or any SAFE Rule and Related Clarifications. As of the date hereof, the SAFE Rules and Related
Clarifications did not and do not require the Company to obtain the approval of the Chinese Securities Regulatory Commission prior to the issuance and sale of the Securities, the listing and trading of the Common Stock on the NYSE or the
consummation of the transactions contemplated by the Purchase Agreement. 
 (L) Under Chinese law, there are no reporting obligations on
non-Chinese holders of the Securities. 
 (M) As a matter of Chinese law, no holder of the Securities who is not a Chinese resident will be
subject to any personal liability, or be subject to a requirement to be licensed or otherwise qualified to do business or be deemed domiciled or resident in China, by virtue only of holding such Securities. There are no limitations under Chinese law
on the rights of holders of the Securities who are not Chinese residents to hold, vote or transfer their securities nor any statutory preemptive rights or transfer restrictions applicable to the Securities. 
 (N) The descriptions in the Private Placement Memorandum of Chinese statutes, regulations, legal and governmental proceedings, contracts and other
documents are accurate and fairly present the information required to be shown; and such counsel does not know of any statutes, regulations, legal or governmental proceedings or contracts or other documents that would be required to be described in
a registration statement under the Securities Act if the offering contemplated in the Agreement was made to the public (or required to be filed under the Exchange Act if upon such filing they would be incorporated in whole or in part in such
registration statement by reference therein). 
 (O) To the best of such counsel’s knowledge after due inquiry, none of the Chinese
Subsidiaries possesses any registered intellectual property except as described in the Private Placement Memorandum, and each of the Chinese Subsidiaries possesses valid licenses in full force and effect or otherwise has the legal right to use, or
can acquire on reasonable terms, all material patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by them in the ordinary course of business, and to the best of such counsel’s knowledge, none of the Chinese Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing. 
 (P) The submission of the Company to the non-exclusive jurisdiction of the
New York Courts, the waiver by the Company of any objection to the venue of a proceeding in a New York Court, the waiver and agreement of the Company not to plead an inconvenient forum, and the agreement of the Company that the Purchase Agreement be
construed in accordance with and governed by the law of the State of New York will be recognized by Chinese courts; service of process effected in the manner set forth in the Purchase Agreement will be effective to confer jurisdiction over the
subsidiaries, assets and property of the Company in China, subject to compliance with relevant civil procedural requirements (which do not involve a re-examination of the merits of the claim) in China; and any judgment obtained in a New York Court
arising out of or in relation to the obligations of the Company under the Purchase Agreement will be recognized by Chinese courts, subject to compliance with relevant civil procedural requirements (which do not involve a re-examination of the merits
of the claim) in China. 
 (Q) The indemnification and contribution provisions set forth in the Purchase Agreement do not contravene the
public policy or law of China, and insofar as matters of Chinese law are concerned, constitute the legal, valid and binding obligations of the Company, enforceable in accordance with the terms therein, subject, as 

  

 A-3 

 
to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights; the
Purchase Agreement is in proper legal form under Chinese law for the enforcement thereof against the Company, subject to compliance with relevant civil procedural requirements; and to ensure the legality, validity, enforceability or admissibility in
evidence of the Purchase Agreement, it is not necessary that any such document be filed or recorded with any court or other authority in China or that any stamp or similar tax be paid on or in respect of any such document. 
 (R) No stamp or other issuance or transfer taxes or duties and no capital gains, income, withholding or other taxes are payable by or on behalf of the
Company, any of the Chinese Subsidiaries, or any Purchaser to the Chinese government or any political subdivision or taxing authority thereof or therein in connection with (1) the creation, issuance, sale and delivery of the Securities,
(2) the sale and delivery by the Company of the Securities to or for the accounts of any Purchaser in the manner contemplated in the Purchase Agreement, (3) the execution, delivery and performance of the Purchase Agreement by the Company,
or (4) the sale and delivery by the Purchasers of the Securities in the manner contemplated in the Private Placement Memorandum. 
 (S)
The entry into, and performance or enforcement of the Purchase Agreement in accordance with its terms will not subject any Purchaser to any requirement to be licensed or otherwise qualified to do business in China, nor will any Purchaser be deemed
to be resident, domiciled, carrying on business through an establishment or place in China or in breach of any laws or regulations in China by reason of entry into, performance or enforcement of the Purchase Agreement. 
 (T) Under the laws of China, none of the Company or the Chinese Subsidiaries, or any of their respective properties, assets or revenues, is entitled to
any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding, set-off or counterclaim, the jurisdiction of any court in China, service of process, attachment prior to or in aid of execution of judgment,
or other legal process or proceeding for the granting of any relief or the enforcement of any judgment. 
 (U) To the best of such
counsel’s knowledge following due inquiry, each of the Company and the Chinese Subsidiaries is currently in compliance with all applicable Chinese laws and regulations, and the issuance, sale and delivery of the Securities by the Company as
described in the Private Placement Memorandum will not conflict with or result in a breach or violation of, the provisions of any applicable Chinese laws and the regulations. 
  

 A-4 

 Form Opinion of Special Patent Counsel (Chinese Counsel) 
 (A) Exhibit A hereof accurately reflects the patents, patent applications, trademarks and trademark applications, and copyrights and copyright
applications of the Company registered with any foreign agency. 
 (B) The statements (i) under the Private Placement Memorandum captions
“Risk Factors—We may have difficulty defending our intellectual property rights from infringement which may undermine our competitive position;” and (ii) incorporated by reference in the Private Placement Memorandum from the
Company’s Form 10-K for the period ended December 31, 2007 under the caption “Business—Intellectual Property” (collectively, the “Intellectual Property Portion”) and any amendment or supplement
thereto, insofar as such statements constitute a summary of the Company's Intellectual Property fairly, accurately and completely summarize in all material respects the legal matters, documents and proceedings relating to such Patents, Applications
and Chinese patent law described therein. 
 (C) Such counsel has no knowledge of any facts that the Company lacks any rights to use all
Intellectual Property necessary to the conduct of its business as now or proposed to be conducted by the Company as described in the Private Placement Memorandum. Such counsel is not aware of any facts that (i) would preclude the Company from
having clear title to the Patents and Applications, or (ii) would lead such counsel to conclude that any of the Patents are invalid or unenforceable or that any patent issued in respect of an Application would be invalid or unenforceable.

 (D) Such counsel is not aware that any valid patent is infringed by the activities of the Company described in the Private Placement
Memorandum or by the manufacture, use or sale of any product, device, instrument, drug or other material made and used according to the Applications or the Patents. 
 (E) Such counsel is not aware of any material defects of form in the preparation or filing of the Applications on behalf of the Company. Such counsel is unaware of any facts which would preclude the grant of a patent
from each of the Applications. The Applications are being diligently pursued by the Company. 
 (F) Such counsel knows of no pending or
threatened action, suit, proceeding or claim by governmental authorities or others that the Company is infringing or otherwise violating any patents, copyrights, trade secrets, know-how or other proprietary rights of a third party. 
 (G) Such counsel is not aware of any pending or threatened actions, suits, proceedings or claim by governmental authorities or others challenging the
validity or scope of the Applications or the Patents. 
 (H) Such counsel is not aware of any infringement on the part of any third party of
the Patents, Applications, trade secrets, know-how or other proprietary rights of the Company. 
 (I) Such counsel has no knowledge of any
patent rights of others which are or would be infringed by the Company's products or applications of the Company's products referred to in the Private Placement Memorandum. 
 (J) To such counsel's knowledge, there are no contracts or other documents relating to the Company's Intellectual Property of a character required to be
described in the Private Placement Memorandum that are not described as required. 
  

 A-5 

 Form of Opinion of Special Regulatory Counsel (Chinese Counsel) 
 (A) To such counsel’s knowledge, there are no rulemaking or similar proceedings before the SFDA or comparable federal, state, local or foreign
government bodies which involve or affect the Company or any of its subsidiaries, which, if the subject of an action unfavorable to the Company or the Subsidiary could involve a prospective Material Adverse Change. 
 (B) The Company’s business, as currently conducted and as described in the Private Placement Memorandum, does not violate the SFDA or any SFDA rule
or regulation, and counsel is not aware of any lawsuit or regulatory proceeding, pending or threatened, brought by or before the SFDA, in which the Company or any of its officers or directors, in their capacity as such, is or would be the defendant
or respondent, except as described in the Private Placement Memorandum, and without an independent inquiry, such counsel is not aware of any lawsuit or regulatory proceeding, pending or threatened, brought by or before any other federal regulatory
authority in which the Company or any of its officers or directors, in their capacity as such, is or would be the defendant or respondent, except as described in the Private Placement Memorandum. 
 (C) The statements in the Private Placement Memorandum, under the captions “Risk Factors—There could be changes in government regulations
toward the pharmaceutical and nutraceutical industries that may adversely affect our business,” “Risk Factors—Our business may be affected by unexpected changes in regulatory requirements in the jurisdictions in which we
operate,” “Risk Factors—Our international operations require us to comply with a number of U.S. and international regulations.” “Business—Overview,” “Business—Manufacturing,”
“Business—Environmental Matters,” “Business—Regulation of Our Industry” (collectively, the “Regulatory Sections”), insofar as such statements purport to describe or summarize provisions of the
rules and regulations promulgated by the SFDA and any other Governmental Authority (collectively, the “Regulatory Laws”) applicable to the Company or its products, are accurate and complete in all material respects and fairly
present the information purported to be described therein, and based upon the description of the Company’s business contained in the Private Placement Memorandum, the Regulatory Sections summarize the provisions of the Regulatory Laws that are
material to the Company’s business. 
 (D) To such counsel’s knowledge, the Company has such permits, licenses, approvals,
consents, clearances, certificates, supplier numbers and other authorizations (collectively, “Governmental Licenses”) of any federal, state, local or foreign regulatory agencies or bodies or contractors thereof that are
necessary and material to conduct their business in the manner described in the Regulatory Sections, subject to such exceptions and qualifications as may be set forth in the Regulatory Sections; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses; all of the Governmental Licenses are valid and in full force and effect; and neither the Company nor any of its subsidiaries has received, and has no reason to believe it will receive,
any notice of proceedings relating to the suspension, revocation or modification of any such Governmental Licenses. 
  

 A-6 

 EXHIBIT B 
 FORM OF LOCK-UP 
 The undersigned, an executive officer or director of American Oriental
Bioengineering, Inc., a Nevada corporation (the “Company”), understands that the purchasers (“Purchasers”) propose to enter into a Securities Purchase Agreement (the “Purchase Agreement”) with the
Company, providing for the offering (the “Offering”), pursuant to private placement exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), of Convertible Senior Notes
due 2015 of the Company. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Purchase Agreement. 
 In recognition of the benefit that the Offering will confer upon the undersigned as an executive officer or director of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned hereby agrees that, during a period of 90 days from the date of the Final Private Placement Memorandum (the “Lock-up Period”), the undersigned will not, for the benefit of the Purchasers, without the
prior written consent of Merrill Lynch & Co. (“Merrill Lynch”), directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise lend or dispose of or transfer any shares of Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”), or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise.

 Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer the Lock-Up Securities without the prior
written consent of Merrill Lynch, provided that (1) the Purchasers receive a signed lock-up agreement for the balance of the Lock-up Period from each donee, trustee, distributee, or transferee, as the case may be and (2) any such transfer
shall not involve a disposition for value: 
 (i) as a bona fide gift or gifts; or 
 (ii) to any trust the beneficiaries of which are exclusively the undersigned or a member of the immediate family of the undersigned,
including grandchildren (to the extent consistent with the Securities Act and state securities laws); or 
 (iii) the
transfer of Lock-Up Securities in satisfaction of the exercise of stock options outstanding on the date hereof; or 
 (iv)
bona fide estate or tax planning purposes. 
 The undersigned also agrees and consents to the entry of stop transfer instructions with
the Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in compliance with the foregoing restrictions. 
  

			
	By:	 	 
	Name:	 	

  

 B-1

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