Document:

Yayi International Inc.  - Exhibit 10.2 - Filed by newsfilecorp.com

Exhibit 10.2

MAKE GOOD ESCROW AGREEMENT 

          This
MAKE GOOD ESCROW AGREEMENT (the “Make Good Agreement”), effective
as of September 27, 2010, is entered into by and among Yayi International Inc.,
a Delaware corporation (the “Company”), Global Rock Stone Industrial Ltd,
a British Virgin Islands company (the “Make Good Pledgor”), Euro Pacific
Capital, Inc., as Investor agent (“Investor Agent”) and Escrow, LLC, as
escrow agent (“Escrow Agent”).

          WHEREAS,
each of the investors (the “Investors”) in the Company’s private offering
of securities (the “Offering”) has entered into a Securities Purchase
Agreement, dated as of the date of this Agreement (the “Securities
Purchase Agreement”), evidencing their participation in the Company’s
Offering; 

          WHEREAS,
pursuant to the terms of the Securities Purchase Agreement, the Investor Agent
has been duly appointed and has the power to act by and on behalf of the
Investors hereunder; 

          WHEREAS,
as an inducement to the Investors to participate in the Offering and as set
forth in the Securities Purchase Agreement, the Make Good Pledgor has agreed to
place certain shares of the Company’s common stock, par value $0.001 per share
(the “Common Stock”) held by the Make Good Pledgor into escrow for the
benefit of the Investors in the event the Company fails to satisfy certain
financial thresholds as set forth in this Make Good Agreement; 

          WHEREAS,
pursuant to the requirements of the Securities Purchase Agreement, the Company
and the Make Good Pledgor have agreed to establish an escrow on the terms and
conditions set forth in this Make Good Agreement;

          WHEREAS,
the Company, the Make Good Pledgor and the Investor Agent have requested that
the Escrow Agent hold the Escrow Shares (as defined below) and the Escrow Agent
has agreed to act as escrow agent pursuant to the terms and conditions of this
Make Good Agreement; and

          WHEREAS,
all capitalized terms used but not defined herein which are defined in the
Securities Purchase Agreement shall have the respective meanings given to such
terms in the Securities Purchase Agreement;

          NOW,
THEREFORE, in consideration of the mutual promises of the parties and the terms
and conditions hereof, the parties hereby agree as follows:

1.      
 Appointment of Escrow Agent. The Company, the Make
Good Pledgor and the Investor Agent hereby appoint Escrow Agent to act as Escrow
Agent in accordance with the terms and conditions set forth in this Make Good
Agreement, and Escrow Agent hereby accepts such appointment and agrees to act as
Escrow Agent in accordance with such terms and conditions.

2.       
Establishment of Escrow. Within five (5) Trading Days following
each Closing, the Make Good Pledgor shall deliver, or cause to be delivered, to
the Escrow Agent certificates evidencing an aggregate of 15% of the maximum
number of shares of Common Stock issuable upon conversion of the Notes sold at
such Closing (the “Escrow Shares”) pursuant to the Securities Purchase
Agreement, along with bank signature stamped stock powers executed in blank (or
such other signed instrument of transfer acceptable to the Company’s Transfer
Agent). As used in this Make Good Agreement, “Transfer Agent” means
American Registrar & Transfer Co., or such other entity hereafter retained
by the Company as its stock transfer agent as specified in a writing from the
Company to the Escrow Agent. The Make Good Pledgor understands and agrees that
the Investors’ rights to receive the Make Good Shares (as defined below)
pursuant to Section 4.11 of the Securities Purchase Agreement and this Make Good
Agreement shall not continue to run to the benefit of an Investor to the extent
such Investor shall have transferred or sold all or any portion of its Notes,
and that after any such transfer or sale such rights shall run to the Persons
receiving such Units. The Make Good Pledgor hereby irrevocably agrees that other
than in accordance with Section 4.11 of the Securities Purchase Agreement and
this Make Good Agreement, the Make Good Pledgor will not 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 to purchase or otherwise
transfer or dispose of, directly or indirectly, or announce the offering of any
of the Escrow Shares (including any securities convertible into, or exchangeable
for, or representing the rights to receive Escrow Shares). In furtherance
thereof, the Company and the Make Good Pledgor will (x) place a stop order on
all Escrow Shares which shall expire on the date the Escrow Shares are delivered
to the Investors or returned to the Make Good Pledgor, (y) notify the Transfer
Agent in writing of the stop order and the restrictions on such Escrow Shares
under this Make Good Agreement and direct the Transfer Agent not to process any
attempts to resell or transfer by the Make Good Pledgor or anyone else any
Escrow Shares before the date when such Escrow Shares are delivered to the
Investor Agent and Investors or returned to the Make Good Pledgor, or otherwise
in violation of Section 4.11 of the Securities Purchase Agreement and this Make
Good Agreement. The Company and the Make Good Pledgor shall notify the Investors
as soon as the Escrow Shares have been deposited with the Escrow Agent. 

3.      
Representations of the Make Good Pledgor. The Make Good Pledgor
hereby represents and warrants to the Investors as follows:

          (i) The
Make Good Pledgor is the record and beneficial owner of the Escrow Shares and
all of the Escrow Shares are validly issued, fully paid and nonassessable shares
of the Company, and free and clear of all Liens. There are no restrictions on
the ability of the Make Good Pledgor to transfer the Escrow Shares to the
Investors, except as stated herein. There are no restrictions on the ability of
the Make Good Pledgor to enter into this Make Good Agreement other than transfer
restrictions under applicable federal and state securities laws. Upon any
transfer of Escrow Shares to Investors hereunder, Investors will receive full
right, title and authority to such shares as holders of Common Stock of the
Company free and clear of all liens other than those imposed by US Federal
Securities laws.

2 

          (ii)
Performance of this Make Good Agreement and compliance with the provisions
hereof will not violate any provision of any applicable law and will not
conflict with or result in any breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any Lien
upon any of the properties or assets of the Company or the Make Good Pledgor
pursuant to the terms of any indenture, mortgage, deed of trust or other
agreement or instrument binding upon the Company or the Make Good Pledgor or
such properties or assets, other than such breaches, defaults or Liens which
would not have a material adverse effect taken as a whole. No notice to, filing
with, or authorization, registration, consent or approval of any governmental
authority or other person is necessary for the execution, delivery or
performance of this Make Good Agreement or the consummation of the transactions
contemplated hereby by the Make Good Pledgor. 

          (iii)
The Make Good Pledgor has carefully considered and understands its obligations
and rights under Section 4.11 of the Securities Purchase Agreement and this Make
Good Agreement, and in furtherance thereof (x) has consulted with its legal and
other advisors with respect thereto and (y) hereby forever waives and agrees
that it may not assert any equitable defenses in any Proceeding involving the
Escrow Shares. 

4. Disbursement of Escrow Shares.

         
a.           In the event that
the Combined Net Sales (as defined below) reported in the Annual Report of the
Company on Form 10-K (or such other form appropriate for such purpose as
promulgated by the Commission) for both of the fiscal years ending March 31,
2011 and 2012, as filed with the Commission (the “2011 Annual Report” and
“2012 Annual Report”), is less than $125,000,000 (the “Guaranteed
Amount”), the Escrow Agent (on behalf of the Make Good Pledgor) will,
without any further action on the part of the Investors or the Investor Agent,
transfer a number of Make Good Shares (as calculated below) to the Investor
Agent, as agent for the Investors, on a pro-rata basis (determined by dividing
each Investor’s Investment Amount by the aggregate of all Investment Amounts
delivered to the Company by the Investors under the Securities Purchase
Agreement) as specified in Exhibit A to this Agreement for no
consideration other than payment of their respective Investment Amount paid to
the Company at Closing. The “Make Good Shares” means a number of shares
of Common Stock equal to 15% of the maximum number of shares of Common Stock
issuable upon conversion of the Notes (measured as of the Final Closing Date).
The number of Make Good Shares transferable to Investors shall be equal to: 

[(the Guaranteed Amount – actual Combined Net Sales of the
Company for the fiscal years ending March 31, 2011 and 2012)/the Guaranteed
Amount]*aggregate number of Make Good Shares 

          b.          
For purposes hereof, “Combined Net Sales” shall mean the aggregate amount
of the Company’s net sales as for both of the fiscal years ending March 31, 2011
and 2012 in each case determined in accordance with GAAP as reported in each of
the 2011 Annual Report and 2012 Annual Report. Notwithstanding the foregoing or
anything else to the contrary herein, for purposes of determining whether or not
the Guaranteed Amount has been met, the Company may disregard any compensation
charge or expense required to be recognized by the Company under GAAP resulting
from the release of the Make Good Shares to the Make Good Pledgor if and to the
extent such charge or expense is specified in the Company’s independent
auditor’s report for the relevant year, as filed with the Commission. In determining
whether the Company has achieved the Guaranteed Amount, any liquidated damages
payable pursuant to the Transaction Documents shall not be included as expenses
of the Company.

3 

          c.          
In the event that the Combined Net Sales reported in both of the 2011 Annual
Report and 2012 Annual Report is equal to or greater than the Guaranteed Amount,
no transfer of the Make Good Shares shall be required by the Make Good Pledgor
to the Investors under this Section and such Make Good Shares shall be returned
to the Make Good Pledgor in accordance with this Make Good Agreement.

          d.          
Any required transfer of the Make Good Shares under this Section shall be made
to the Investors or the Make Good Pledgor, as applicable, within 20 calendar
days after the date which the 2012 Annual Report is filed with the Commission
and otherwise in accordance with this Make Good Agreement subject to return as
provided in the immediately preceding paragraph and, in the event that any of
the Make Good Shares are required to be distributed to the Investors in
accordance with the terms of this Make Good Agreement, the Escrow Agent will
deliver such shares to the Investors in accordance with Exhibit A. The
Investor Agent will deliver to the Escrow Agent (with a copy to the Company and
the Make Good Pledgor) a copy of the 2011 Annual Report and 2012 Annual Report,
together with the calculation of whether the Guaranteed Amount has been
achieved. Escrow Agent need only rely on such letters from the Investor Agent
and will disregard any contrary or further calculations or instructions in such
regard delivered by or on behalf of the Company or the Make Good Pledgor.

         
e.           Pursuant to
Section 4(a), if the Investor Agent delivers a notice to the Escrow Agent that
the Escrow Shares are to be transferred to the Investors, then the Escrow Agent
shall immediately forward the Make Good Shares to the Company’s Transfer Agent
for reissuance to the Investors in an amount to each Investor as set forth on
Exhibit A attached hereto and otherwise in accordance with this Make Good
Agreement. Each of the Company and the Make Good Pledgor covenants and agrees
that upon the transfer of Make Good Shares to the Investors in accordance with
this Make Good Agreement, the Company and the Make Good Pledgor shall promptly
instruct its Transfer Agent to reissue such Make Good Shares in the applicable
Investor’s name and deliver the same, or cause the same to be delivered as
directed by such Investor in an amount to each Investor as set forth on
Exhibit A attached hereto. If the Company and the Make Good Pledgor do
not promptly provide such instructions to the Transfer Agent of the Company,
then the Investor Agent is hereby irrevocably authorized and directed by the
Company and the Make Good Pledgor to give such re-issuance instruction to the
Transfer Agent of the Company. If a notice from the Investor Agent pursuant to
Section 4(a) indicates that the Escrow Shares are to be returned to the Make
Good Pledgor, then the Escrow Agent will promptly deliver the Make Good Shares
to the Make Good Pledgor in accordance with instructions provided by the Company
and the Make Good Pledgor at such time. 

         
f.           The Company and
the Make Good Pledgor covenant and agree to provide the Escrow Agent with
certified tax identification numbers by furnishing appropriate forms W-9 or W-8
and such other forms and documents that the Escrow Agent may request, including
appropriate W-9 or W-8 forms for each Investor. The Company and the Make Good
Pledgor understand that if such tax reporting documentation is not provided and
certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue
Code of 1986, as amended, and the Regulations promulgated thereunder, to
withhold a portion of any interest or other income earned on the investment of
the Escrow Shares. 

4 

         
g.           Notwithstanding
the foregoing or anything else to the contrary herein, any Investor that
exercises the right to convert such Investor’s Notes into shares of Common Stock
prior to the date on which the 2012 Annual Report is filed with the Commission
shall not receive the Make Good Shares to which such Investor would otherwise be
entitled pursuant to this Section 4 and the Securities Purchase Agreement, and
such Make Good Shares shall be returned to the Make Good Pledgor within 20
calendar days after the date on which the 2012 Annual Report is filed with the
Commission and otherwise handled in accordance with this Make Good Agreement.

         
h.           Notwithstanding
the foregoing or anything else to the contrary herein, at such time as the
aggregate principal amount (including accrued but unpaid interest) of
outstanding Notes is less than 15% of the Gross Proceeds, all Make Good Shares
shall be returned to the Make Good Pledgor within 20 calendar days after the
date on which the Investor Agent delivers a notice to the Escrow Agent to that
effect, and all obligations of the Make Good Pledgor hereunder to maintain funds
in escrow shall cease. 

5.       
Notice of Filings. The Company agrees to promptly provide the
Investor Agent written notice of the filing with the Commission of any financial
statements or reports referenced herein. 

6.       
Escrow Shares.

         
a.           If any Escrow
Shares are deliverable to the Investors in accordance with this Make Good
Agreement, (i) the Make Good Pledgor covenants and agrees to execute all such
instruments of transfer (including stock powers and assignment documents) as are
customarily executed to evidence and consummate the transfer of the Escrow
Shares from the Make Good Pledgor to the Investors, to the extent not done so in
accordance with Section 2, and (ii) following its receipt of the documents
referenced in Section 6(i), the Company and Escrow Agent covenant and agree to
cooperate with the Transfer Agent so that the Transfer Agent may promptly
reissue such Escrow Shares in the applicable Investor’s name and delivers the
same as provided herein or otherwise directed in writing by the applicable
Investors. Until such time as (if at all) the Escrow Shares are required to be
delivered pursuant to the Securities Purchase Agreement and in accordance with
this Make Good Agreement, (i) any dividends payable in respect of the Escrow
Shares and all voting rights applicable to the Escrow Shares shall be retained
by the Make Good Pledgor and (ii) should the Escrow Agent receive dividends or
voting materials, such items shall not be held by the Escrow Agent, but shall be
passed immediately on to the Make Good Pledgor and shall not be invested or held
for any time longer than is needed to effectively re-route such items to the
Make Good Pledgor. In the event that the Escrow Agent receives a communication
requiring the conversion of the Escrow Shares to cash or the exchange of the
Escrow Shares for that of an acquiring company, the Escrow Agent shall solicit
and follow the written instructions of the Make Good Pledgor; provided,
that the cash or exchanged shares are instructed to be redeposited into the
Escrow Account. If the Company shall at any time after the date hereof (A)
declare and pay a dividend or make a distribution on Common Stock, or (B) subdivide or split the outstanding shares of Common Stock into
a greater number of shares, or (C) combine or reclassify the outstanding shares
of Common Stock into a smaller number of shares, or (D) make any other similar
changes to its share capital, the Investors shall be entitled to receive the
proportionately adjusted number of Make Good Shares and all dividends and other
distributions made on the Make Good Shares that the Investors would have
received had the Investors received such Make Good Shares at their applicable
Closing. The Make Good Pledgor shall be responsible for all taxes of the
Company, the Make Good Pledgor, or any Investor resulting from any such
conversion, exchange or adjustment. 

5 

          b.          
Assuming the Make Good Pledgor provides good and valid title to the Escrow
Shares to be transferred and delivered on behalf of the Make Good Pledgor to the
Investors hereunder, free and clear of all liens, encumbrances, equities or
claims, the Escrow Agent will ensure that upon delivery of the Escrow Shares,
good and valid title to the Escrow Shares, free and clear of all liens,
encumbrances, equities or claims will pass to the Investors. The Escrow Agent
shall not take any action which could impair Investors’ rights in the Escrow
Shares. The Escrow Agent shall not sell, transfer, assign or otherwise dispose
of (by operation of law or otherwise) or grant any option with respect to any
Escrow Shares prior to the termination of this Agreement. 

7.       
Interpleader. Should any controversy arise among the parties
hereto with respect to this Make Good Agreement or with respect to the right to
receive the Escrow Shares, Escrow Agent and/or the Investor Agent shall have the
right to consult and hire counsel and/or to institute an appropriate
interpleader action to determine the rights of the parties. Escrow Agent and/or
the Investor Agent are also each hereby authorized to institute an appropriate
interpleader action upon receipt of a written letter of direction executed by
the parties so directing either Escrow Agent or the Investor Agent. If Escrow
Agent or the Investor Agent is directed to institute an appropriate interpleader
action, it shall institute such action not prior to thirty (30) days after
receipt of such letter of direction and not later than sixty (60) days after
such date. Any interpleader action instituted in accordance with this Section 7
shall be filed in the New York Courts (as defined below), and the Escrow Shares
in dispute shall be deposited with the court and in such event Escrow Agent and
the Investor Agent shall be relieved of and discharged from any and all
obligations and liabilities under and pursuant to this Make Good Agreement with
respect to the Escrow Shares and any other obligations hereunder.

8.       
Exculpation and Indemnification of Escrow Agent and the Investor
Agent.

         
a.          
Escrow Agent is not a party to, and is not bound by or charged with notice of
any agreement out of which this escrow may arise. Escrow Agent acts under this
Make Good Agreement as a depositary only and is not responsible or liable in any
manner whatsoever for the sufficiency, correctness, genuineness or validity of
the subject matter of the escrow, or any part thereof, or for the form or
execution of any notice given by any other party hereunder, or for the identity
or authority of any person executing any such notice. Escrow Agent will have no
duties or responsibilities other than those expressly set forth herein. Escrow
Agent will be under no liability to anyone by reason of any failure on the part
of any party hereto (other than Escrow Agent) or any maker, endorser or other
signatory of any document to perform such person’s or entity’s obligations
hereunder or under any such document. Except for this Make Good Agreement and instructions to Escrow Agent pursuant to the
terms of this Make Good Agreement, Escrow Agent will not be obligated to
recognize any agreement between or among any or all of the persons or entities
referred to herein, notwithstanding its knowledge thereof. The Investor Agent’s
sole obligation under this Make Good Agreement is to provide written instruction
to Escrow Agent (following such time as the Company files certain periodic
financial reports as specified in Section 4 hereof) directing the distribution
of the Escrow Shares. The Investor Agent will provide such written instructions
upon review of the relevant Combined Net Sales amount reported in such periodic
financial reports as specified in Section 4 hereof. The Investor Agent is not
charged with any obligation to conduct any investigation into the financial
reports or make any other investigation related thereto. In the event of any
actual or alleged mistake or fraud of the Company, its auditors or any other
person (other than the Investor Agent) in connection with such financial reports
of the Company, the Investor Agent shall have no obligation or liability to any
party hereunder. 

6 

          b.          
  Neither the Escrow Agent nor Investor Agent will be liable for any action taken
  or omitted by it, or any action suffered by it to be taken or omitted, absent
  gross negligence or willful misconduct. The Escrow Agent and Investor Agent
  may each rely conclusively on, and will be protected in acting upon, any order,
  notice, demand, certificate, or opinion or advice of counsel (including counsel
  chosen by Escrow Agent or Investor Agent, as applicable), statement, instrument,
  report or other paper or document (not only as to its due execution and the
  validity and effectiveness of its provisions, but also as to the truth and acceptability
  of any information therein contained) which is reasonably believed by Escrow
  Agent or Investor Agent, as applicable, to be genuine and to be signed or presented
  by the proper person or persons. The duties and responsibilities of the Escrow
  Agent and Investor Agent, as the case may be, hereunder shall be determined
  solely by the express provisions of this Make Good Agreement and no other or
  further duties or responsibilities shall be implied, including, but not limited
  to, any obligation under or imposed by any laws of the State of New York upon
  fiduciaries. NEITHER THE ESCROW AGENT NOR INVESTOR AGENT SHALL BE LIABLE, DIRECTLY
  OR INDIRECTLY, FOR ANY (I) DAMAGES, LOSSES OR EXPENSES ARISING OUT OF THE SERVICES
  PROVIDED HEREUNDER, OTHER THAN DAMAGES, LOSSES OR EXPENSES WHICH HAVE BEEN FINALLY
  ADJUDICATED TO HAVE DIRECTLY RESULTED FROM THE ESCROW AGENT’S OR INVESTOR
  AGENT'S, AS THE CASE MAY BE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (II)
  SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR LOSSES OF ANY KIND WHATSOEVER
  (INCLUDING, WITHOUT LIMITATION, LOST PROFITS), EVEN IF THE ESCROW AGENT OR INVESTOR
  AGENT, AS APPLICABLE, HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR
  DAMAGES AND REGARDLESS OF THE FORM OF ACTION. 

         
c.           The Company and
the Make Good Pledgor hereby indemnify and hold harmless each of Escrow Agent,
the Investor Agent and any of their principals, partners, agents, employees and
affiliates from and against any expenses, including reasonable attorneys’ fees
and disbursements, damages or losses suffered by Escrow Agent or the Investor
Agent in connection with any claim or demand, which, in any way, directly or
indirectly, arises out of or relates to this Make Good Agreement or the services
of Escrow Agent or the Investor Agent hereunder; except, that if Escrow Agent or
the Investor Agent is guilty of willful misconduct or gross negligence under this Make Good Agreement, then Escrow Agent or
the Investor Agent, as the case may be, will bear all losses, damages and
expenses arising as a result of its own willful misconduct or gross negligence.
Promptly after the receipt by Escrow Agent or the Investor Agent of notice of
any such demand or claim or the commencement of any action, suit or proceeding
relating to such demand or claim, Escrow Agent or the Investor Agent, as the
case may be, will notify the other parties hereto in writing. For the purposes
hereof, the terms “expense” and “loss” will include all amounts paid or payable
to satisfy any such claim or demand, or in settlement of any such claim, demand,
action, suit or proceeding settled with the express written consent of the
parties hereto, and all costs and expenses, including, but not limited to,
reasonable attorneys’ fees and disbursements, paid or incurred in investigating
or defending against any such claim, demand, action, suit or proceeding. The
provisions of this Section 8 shall survive the termination of this Make Good
Agreement, and the resignation or removal of the Escrow Agent. 

7 

9.         
Compensation of Escrow Agent. Escrow Agent shall be entitled to a fee of
$1,500.00 as compensation for its services, which compensation shall be paid by
the Company. The fee agreed upon for the services rendered hereunder is intended
as full compensation for Escrow Agent’s services as contemplated by this Make
Good Agreement; provided, however, that in the event that Escrow
Agent renders any material service not contemplated in this Make Good Agreement,
or there is any assignment of interest in the subject matter of this Make Good
Agreement, or any material modification hereof, or if any material controversy
arises hereunder, or Escrow Agent is made a party to any litigation pertaining
to this Make Good Agreement, or the subject matter hereof, then Escrow Agent
shall be reasonably compensated by the Company for such extraordinary services
and reimbursed for all costs and expenses, including reasonable attorney’s fees,
occasioned by any delay, controversy, litigation or event, and the same shall be
recoverable from the Company. Prior to incurring any costs and/or expenses in
connection with the foregoing sentence, Escrow Agent shall be required to
provide written notice to the Company of such costs and/or expenses and the
relevancy thereof and Escrow Agent shall not be permitted to incur any such
costs and/or expenses which are not related to litigation prior to receiving
written approval from the Company, which approval shall not be unreasonably
withheld. 

10.        Resignation of
Escrow Agent. At any time, upon ten (10) Business Days’ written notice to
the Company and the Investors, Escrow Agent may resign and be discharged from
its duties as Escrow Agent hereunder. As soon as practicable after its
resignation, Escrow Agent will promptly turn over to a successor escrow agent
appointed by the Company and the Investor Agent the Escrow Shares held hereunder
upon presentation of a document appointing the new escrow agent and evidencing
its acceptance thereof. If, by the end of the ten (10) Business Day period
following the giving of notice of resignation by Escrow Agent, the Company and
the Investor Agent shall have failed to appoint a successor escrow agent, Escrow
Agent shall deposit the Escrow Shares as directed by the Investor Agent with the
understanding that such Escrow Shares will continue to be subject to the
provisions of this Make Good Agreement. 

11.        Records.
Escrow Agent shall maintain accurate records of all transactions hereunder.
Promptly after the termination of this Make Good Agreement or as may reasonably
be requested by the parties hereto from time to time before such termination,
Escrow Agent shall provide the parties hereto, as the case may be, with a
complete copy of such records, certified by Escrow Agent to be a complete and accurate account of all such
transactions. The authorized representatives of each of the parties hereto shall
have access to such books and records at all reasonable times during normal
business hours upon reasonable notice to Escrow Agent and at the requesting
party’s expense.

8 

12.        Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via (i) facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section or (ii) electronic mail (i.e., Email) prior to
6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via (i)
facsimile at the facsimile number specified in this Section or (ii) electronic
mail (i.e., Email) on a day that is not a Trading Day or later than 6:30 p.m.
(New York City time) on any Trading Day, or (c) the Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given, if sent by any means other than facsimile or Email transmission.
The address for such notices and communications shall be as follows: 

	 	 If to the Company: 	Yayi International Inc. 
	 	  	No. 9 Xingguang Road 
	 	  	Northern Industrial Park of
      Zhongbei Town, 
	 	  	Xiqing District, Tianjin 300384,
      China 
	 	  	Attention: President 
	 	  	Facsimile: 86-22-2798-4358 
	 	  	  
	 	With a copy to: 	Pillsbury Winthrop Shaw Pittman
      LLP 
	 	  	2300 N Street NW 
	 	  	Washington, D.C. 20037 
	 	  	Attention: Louis A. Bevilacqua,
      Esq. 
	 	  	Facsimile: 202-663-8007 
	 	  	  
	 	 If to the Make 	  
	 	 Good Pledgor: 	c/o Tianjin Yayi Industrial Co.,
      Ltd. 
	 	  	No. 9 Xingguang Road 
	 	  	Northern Industrial Park of
      Zhongbei Town, 
	 	  	Xiqing District, Tianjin 300384,
      China 
	 	  	Attention: Mr. Fung Shek 
	 	  	Facsimile: 86-22-2798-4358 
	 	  	  
	 	If to the Investor 	  
	 	Agent: 	Euro Pacific Capital, Inc. 
	 	  	88 Post Road West, 3rd Floor
  
	 	  	Westport, CT 06880 
	 	  	Attention: Mr. Thomas Tan 
	 	  	Facsimile: (203) 662-9771
  

9 

	 	With a copy to: 	Ellenoff Grossman & Schole
      LLP 
	 	  	150 East 42nd Street,
      11th Floor 
	 	  	New York, NY 10017 
	 	  	Attention: Barry I. Grossman,
      Esq. 
	 	  	Facsimile: (212) 370-7889 
	 	  	  
	 	If to the Escrow 	  
	 	Agent: 	Escrow, LLC 
	 	  	215 Mockingbird Lane 
	 	  	Warrenton, VA 20186 
	 	  	Attention: Johnnie L. Zarecor
  
	 	  	Facsimile: (212) 370-7889
  

13.        Execution in
Counterparts. This Make Good Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimile or e-mail execution and delivery of this
Agreement is legal, valid and binding for all purposes. 

14.        Assignment and
Modification. This Make Good Agreement and the rights and obligations
hereunder of the Make Good Pledgor may not be assigned. This Make Good Agreement
and the rights and obligations hereunder of the Escrow Agent may be assigned by
the Escrow Agent only with the prior consent of the Company and the Investor
Agent. Subject to the requirements under federal and state securities laws, an
Investor may assign its rights under this Make Good Agreement without any
consent from any other party. This Make Good Agreement may not be changed orally
or modified, amended or supplemented without an express written agreement
executed by the Escrow Agent, the Company, the Make Good Pledgor and the
Investor Agent. This Make Good Agreement is binding upon and intended to be for
the sole benefit of the parties hereto and their respective successors, heirs
and permitted assigns, and none of the provisions of this Make Good Agreement
are intended to be, nor shall they be construed to be, for the benefit of any
third person, except for the Investors under the Securities Purchase Agreement.
No portion of the Escrow Shares shall be subject to interference or control by
any creditor of any party hereto, or be subject to being taken or reached by any
legal or equitable process in satisfaction of any debt or other liability of any
such party hereto prior to the disbursement thereof to such party hereto in
accordance with the provisions of this Make Good Agreement. 

15.        Applicable
Law. This Make Good Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without regard to
the conflicts of laws principles thereof. The representations and warranties
contained in this Make Good Agreement shall survive the execution and delivery
hereof and any investigations made by any party. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Make Good Agreement shall be commenced
exclusively in the state and federal courts sitting in the City of New York,
Borough of Manhattan (the “New York Courts”). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees
not to assert in any such proceeding, any claim that it is not personally
subject to the jurisdiction of any such New York Court, or that such proceeding
has been commenced in an improper or inconvenient forum. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Make Good Agreement and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. 

10 

16.        Headings.
The headings contained in this Make Good Agreement are for convenience of
reference only and shall not affect the construction of this Make Good
Agreement.

17.        Attorneys’
Fees. If any action at law or in equity, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this Make Good
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees from the other party (unless such other party is the Escrow
Agent), which fees may be set by the court in the trial of such action or may be
enforced in a separate action brought for that purpose, and which fees shall be
in addition to any other relief that may be awarded. 

18.        Merger or
Consolidation. Any entity into which the Escrow Agent may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer all or substantially all of its corporate trust business and assets as
a whole or substantially as a whole, or any corporation or association resulting
from any such conversion, sale, merger, consolidation or transfer to which the
Escrow Agent is a party, shall be and become the successor escrow agent under
this Make Good Agreement and shall have and succeed to the rights, powers,
duties, immunities and privileges as its predecessor, without the execution or
filing of any instrument or paper or the performance of any further act.

19.        Waiver. No
waiver of, or any breach of any covenant or provision herein contained shall be
deemed a waiver of any preceding or succeeding breach thereof, or of any other
covenant or provision herein contained. No extension of time for performance of
any obligation or act shall be deemed an extension of the time for performance
of any other obligation or act. 

20.        Entire
Agreement. This Make Good Agreement is the final expression of, and contains
the entire agreement between, the parties with respect to the subject matter
hereof and supersedes all prior understandings with respect thereto. This Make
Good Agreement may not be modified, changed, supplemented or terminated, nor may
any obligations hereunder be waived, except by written instrument signed by the
parties to be charged or by its agent duly authorized in writing or as otherwise
expressly permitted herein. 

21.       
Construction. Whenever required by the context of this Make Good Agreement,
the singular shall include the plural and masculine shall include the feminine.
This Make Good Agreement shall not be construed as if it had been prepared by
one of the parties, but rather as if all parties had prepared the same.

11 

22.        Further
Instruments. If this Make Good Agreement reasonably requires other or
further instruments in connection with this Make Good Agreement or obligations
in respect hereto, the necessary parties hereto shall use its best efforts to
join in furnishing such instruments. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

12 

          IN
WITNESS WHEREOF, the parties have duly executed this Make Good Agreement as of
the date set forth opposite their respective names. 

	 	COMPANY: 
	 	 
	 	YAYI INTERNATIONAL INC. 
	 	 
	 	 
	 	By: /s/ Li
      Liu                                                                      
       
	 	Name: Li Liu 
	 	Title: Chief Executive Officer and President
  
	 	 
	 	 
	 	MAKE GOOD PLEDGOR: 
	 	 
	 	GLOBAL ROCK STONE INDUSTRIAL LTD 
	 	 
	 	 
	 	By: /s/ Fung
      Shek                                                              
       
	 	Name: Fung Shek 
	 	Title: Director 
	 	 
	 	 
	 	ESCROW AGENT: 
	 	 
	 	ESCROW, LLC 
	 	 
	 	 
	 	By: /s/ Johnnie L.
      Zarecor                                               
       
	 	Name: Johnnie L. Zarecor 
	 	Title: Vice President 
	 	 
	 	 
	 	INVESTOR AGENT: 
	 	 
	 	EURO PACIFIC CAPITAL, INC. 
	 	 
	 	 
	 	By: /s/ Gordon
      McBean                                                 
       
	 	Name: Gordon McBean 
	 	Title: Head of Capital Markets

Yayi Make Good Escrow Agreement 

Exhibit A 

INVESTORS 

	
Investor’s Legal Name 	Investment 
Amount 
	AMY J STEFANIK TTEE AMY J STEFANIK REVOCABLE TRUST U/A
      2/6/01 	$100,000 
	ANDREW P COOK SUSAN R COOK 	$50,000 
	ARNOLD WILLIAM GOLDSCHLAGER NORA GOLDSCHLAGER TTEE THE
      GOLDSCHLAGER FAMILY TRUST U/A 6/24/04 	$50,000 
	ART KLEPPEN KIMBERLY KLEPPEN 	$100,000 
	BARBARA HEARST 	$100,000 
	BARBARA J PETERSON TTEE REV TR OF BARBARA J PETERSON U/A
      2/4/00 	$70,000 
	BARBARA S MEISTER TTEE THE MEISTER NON-EXEMPT MARITAL TR
      U/A 11/17/83 	$100,000 
	BARBARA SEIDEL TTEE BARBARA GALLUN SEIDEL RESIDUAL TRUST
      U/A 2/9/60 	$50,000 
	BARBARA SUE WILSON DAVID D WILSON TTEE THE BARBARA SUE
      WILSON U/A 8/23/94 	$50,000 
	BERT HUNTSINGER 	$50,000 
	BRENT PAULGER SHARISSA PAULGER 	$50,000 
	BRIAN S BEHAN 	$50,000 
	BRUCE WALKER RAVENEL III 	$300,000 
	BUCKTHORN LLC 	$50,000 
	CARLOS A MERINO TTEE CARLOS ALFONSO MERINO REV LIVING
      TRUST, U/A 12/04/96 	$50,000 
	CAROLYN R LONG 	$60,000 
	CHARLOTTE J BELASCO 	$50,000 
	CHRISTIANNA SEIDEL TTEE PROPERTY TRUST U/A 11/5/99 FBO
      CHRISTIANNA SEIDEL 	$50,000 
	CINDY J LEWIS TTEE CINDY J LEWIS DECL OF TRUST U/A 3/11/93
    	$50,000 
	COREY SHANNON MCNAMEE 	$50,000 
	CYNTHIA KESSLER & JAMES KESSLER 	$50,000 
	DAVID ALAN SCULLY 	$100,000 
	DAVID ARITA TOD 	$50,000 
	DAVID BRISBIN TTEE INNES/BRISBIN LIVING TRUST DATED 6/8/04
    	$100,000 
	DAVID W LARSON JENNIFER L LARSON 	$100,000 
	DEBORAH FOREMAN TTEE DEBORAH D FOREMAN TRUST U/A 9/29/94
	$50,000 
	DOUGLAS W JOHNSON TTEE DOUGLAS WILLIAM JOHNSON REV TRST U/A
      6/25/10 	$50,000 
	DR UZZI REISS MRS YAEL REISS TTEE THE REISS FAMILY TRUST
      U/A 12/29/88 	$50,000 
	EVA MARIE SALAS TTEE EVA M SALAS TRUST 	$50,000 
	GAYLE M & DEBORAH SANDERS TTEE THE GAYLE M SANDERS FAM
      TR REV TR, U/A 8/15/02 	$100,000 
	GEORGE FELDMAN 	$250,000 
	GILBERT DOMINGUEZ TTEE DOMINGUEZ TRUST U/A 3/3/05 	$350,000 
	HCR INVESTMENTS INC. 	$100,000 
	HEIDI W KIENE KEVIN KIENE 	$100,000 
	HEMANT KATHURIA P/ADM H KATHURIA INVESTMENTS II P PLAN 	$50,000 
	JACK ABRAMS MARGO ABRAMS TTEE JACK ABRAMS PENSION PLAN 1
	$50,000 
	JANET D RUSSELL TTEE JANET DICKINSON RUSSELL LIVING TR U/A
      1/20/10 	$50,000 
	JEAN A DAVIDS-OSTERHAUS TTEE JEAN A DAVIDS-OSTERHAUS REV
      U/A 10/03/07 	$50,000 
	JEFF ARCHIBALD 	$100,000 
	JERRY F MCWILLIAMS 	$50,000 
	JIM GRIFFIN CUST DANIEL J GRIFFIN UTMA OH 	$60,000 

	
Investor’s Legal Name 	Investment 
Amount 
	JIM GRIFFIN CUST MICHELLE E GRIFFIN UTMA OH 	$60,000 
	JIM ROBERT PUGH 	$50,000 
	JIMMIE C WEST CAROLYN E WEST 	$50,000 
	JOHN A RUPP TTEE JOHN A RUPP TRUST U/A 3/9/07 	$50,000 
	JOHN D SMEAD 	$50,000 
	JOSEPH MCCARTHY MIKI MCCARTHY TOD 	$50,000 
	JULIA L GRIFFIN 	$60,000 
	KENNETH H NASS & MAUREEN K NASS TTEE KENNETH H NASS
      & MAUREEN K NASS CHARITRUST U/A 6/7/05 	$100,000 
	KEVIN MOORE 	$50,000 
	KK SWOGGER ASSET MANAGEMENT, LP 	$80,000 
	LARRY GUAGLIARDO TOD 	$70,000 
	LAURA SMITH FORREST SMITH TTEE CONNELLY JOHNSON SMITH FAM
      TR U/A 4/2/09 	$50,000 
	MARC A PIERRE, P BARRAGAN P/ADM CENTER FOR PHYS HLTH 401K
      PSP MARC PIERRE 	$50,000 
	MARC BIENSTOCK JENNY I BIENSTOCK 	$50,000 
	MARC W LEVIN SUSAN G LEVIN 	$50,000 
	MARK A OSTERHAUS TTEE THE MARK A OSTERHAUS REV TR U/A
      10/31/07 	$50,000 
	MARK DUGGER P/ADM THE ALLSTATES DRYWALL INC EE ST 	$50,000 
	MARK EDWARD SMEAD TTEE MARK E SMEAD REVOC LIVING TRUST U/A
      11/17/95 	$100,000 
	MARK STERIN 	$70,000 
	MAUREEN K NASS KENNETH H NASS TTEE MAUREEN K NASS LIVING
      TRUST U/A 5/16/05 	$50,000 
	MICHAEL J HANRATTY LYNSAY F HANRATTY 	$100,000 
	MICHAEL SCULLY 	$100,000 
	MITCHELL MARTIN DEBORAH MARTIN 	$50,000 
	NANCY L BENSON TTEE THE NANCY L BENSON LIVING TRUST U/A
      11/11/02 	$50,000 
	N E APPERSON, P MCEACHERN TTEE NORMAN E APPERSON AND PAMELA
      MCEACHERN TR, U/A 7/22/96 	$100,000 
	NFS/FMTC IRA FBO DIANE D SPOLUM 	$200,000 
	NFS/FMTC IRA FBO HOWARD W WAHL 	$100,000 
	NFS/FMTC IRA FBO LEONARD SIEGEL 	$50,000 
	NFS/FMTC IRA FBO LYNN HAVLIK 	$50,000 
	NFS/FMTC IRA FBO ROYCE V JACKSON 	$100,000 
	NFS/FMTC IRA FBO ROBERT STEPHEN ADAMS 	$100,000 
	NFS/FMTC ROLLOVER IRA FBO ANDRES KEICHIAN 	$50,000 
	NFS/FMTC ROLLOVER IRA FBO BERTRAND BROOKS CARDER 	$50,000 
	NFS/FMTC ROLLOVER IRA FBO DONALD T GLASER JR 	$50,000 
	NFS/FMTC ROLLOVER IRA FBO EDWIN BRUNO KAEHLER 	$50,000 
	NFS/FMTC ROLLOVER IRA FBO JAMES A TAMBORELLO 	$100,000 
	NFS/FMTC ROLLOVER IRA FBO JERRY R SPEAKS 	$50,000 
	NFS/FMTC ROLLOVER IRA FBO LYNN ROLLINS STULL 	$50,000 
	NFS/FMTC ROLLOVER IRA FBO RALPH DALE EDSON 	$100,000 
	NFS/FMTC ROLLOVER IRA FBO RICHARD DAVIS MOORE 	$40,000 
	NFS/FMTC ROLLOVER IRA FBO ROBERT M WEISSBERG 	$50,000 
	NFS/FMTC ROLLOVER IRA FBO RONALD ALLEN MCCANN 	$50,000 
	NFS/FMTC ROLLOVER IRA FBO TODD HOWARD OVERGARD 	$50,000 
	NFS/FMTC ROTH IRA FBO HELEN ERSKINE 	$50,000 

	
Investor’s Legal Name 	Investment 
Amount 
	NFS/FMTC ROTH IRA FBO VIRGINIA C ADAMS 	$50,000 
	NFS/FMTC SEP IRA FBO CARTER LAREN 	$100,000 
	NFS/FMTC SEP IRA FBO GERALD E MANWILL 	$50,000 
	NFS/FMTC SEP IRA FBO GERALD MONA 	$50,000 
	NORMAN S KRAMER & LINDA L KRAMER 	$50,000 
	OLEKSANDR TUMKO OKSANA TUMKO 	$50,000 
	PETER D SCHIFF 	$200,000 
	POINT AUX CHENES, LLC 	$50,000 
	POM INVESTMENTS LLC 	$100,000 
	PRASAD REALTY CORP 	$50,000 
	QUINCY MURPHY INC 	$50,000 
	R STEVEN SMITH 	$100,000 
	RICHARD GRIFF JACKIE GRIFF 	$150,000 
	RICHARD P ANTHONY III & KIMBERLY J ANTHONY 	$50,000 
	RICHARD POTAPCHUK 	$300,000 
	ROBERT L BISHOP TOD FRANCINE BISHOP 	$50,000 
	ROBERT T FOSS MARGARET FOSS TTEE ROBERT T & MARGARET
      FOSS REV TR U/A 3/31/04 	$60,000 
	SCOTT & MISTY DAVIES TTEE THE SCOTT & MISTY DAVIES
      LIVING TR, U/A 6/28/07 	$80,000 
	SCOTT R GRIFFIN 	$60,000 
	SHELBY JORDAN, BECKY JORDAN 	$50,000 
	SKEE GOEDHART TTEE THE PARACELSUS REVOCABLE TRUST U/A
      7/25/97 	$50,000 
	STEPHEN RASKIN P/ADM DREW & RASKIN P/S PLAN FBO STEPHEN
      RASKIN 	$100,000 
	STEVE & COLLEEN HOKE TTEE HOKE LIVING TRUST U/A 4/19/02
    	$50,000 
	STEVEN JAY EPSTEIN 	$50,000 
	SUSAN C CULLEN 	$50,000 
	THOMAS L INGRAM CARISSA INGRAM TTEE INGRAM LIVING TRUST U/A
      11/2/05 	$50,000 
	TIMOTHY CRANE TTEE TIMOTHY R CRANE TRUST U/A 12/6/04 	$100,000 
	TRISHA L FRERES THEODORE KYLE FRERES TTEE TRISHA L FRERES
      LIVING TRUST U/A 12/20/04 	$50,000 
	WALTER FRIESEN 	$80,000 
	WILLIAM A KARGES JR TTEE KARGES REVOC INTERVIVOS TRUST U/A
      4/29/85 	$50,000 
	WILLIAM BRADLEY P/ADM BRADLEY ANESTHESIOLOGY PSP 	$50,000 
	WILLIAM J CYR 	$70,000 
	WILLIAM TEN BRINK TTEE TEN BRINK TRUST U/A 10/2/86 	$90,000 
	WILLIAM WILEY MARIANNE WILEY TTEE WILEY FAMILY LIVING TRUST
      U/A 7/19/95 	$60,000 
	TOTAL 	$8,920,000Yayi International Inc.  - Exhibit 10.3 - Filed by newsfilecorp.com

Exhibit 10.3

REGISTRATION RIGHTS AGREEMENT

          This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and
entered into as of September 27, 2010, by and among Yayi International Inc., a
Delaware corporation (the “Company”), the investors identified on
Schedule A hereto (each, including their respective successors and
assigns, an “Investor” and collectively, the “Investors”) and,
with respect to certain sections hereof, Euro Pacific Capital, Inc. (the
“Investor Representative”). 

          WHEREAS,
in connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the “Purchase Agreement”), the Company has
agreed, upon the terms and subject to the conditions set forth in the Purchase
Agreement, to issue and sell to each Investor units comprised of (i) one 9%
convertible promissory note in the aggregate principal amount of $10,000 and
(ii) one Series F Warrant to purchase 1,250 shares of the Company’s common
stock, $0.001 par value per share (the “Common Stock”) at an exercise
price of $2.50 per share; and 

          WHEREAS,
in accordance with the terms of the Purchase Agreement, the Company has agreed
to provide certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “Securities Act”), and applicable state
securities laws. 

          NOW,
THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the
Investors hereby agree as follows: 

          1.   
   Definitions. Capitalized terms used and not otherwise
defined herein that are defined in the Purchase Agreement will have the
respective meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms have the respective meanings set forth in this
Section 1:

                    “Advice”
has the meaning set forth in Section 8(e).

                    “Commission
Comments” means written comments pertaining solely to Rule 415 which
are received by the Company from the Commission to a filed Registration
Statement, which either (i) requires the Company to limit the number of
Registrable Securities which may be included therein to a number which is less
than the number sought to be included thereon as filed with the Commission or
(ii) requires the Company to either exclude Registrable Securities held by
specified Holders or deem such Holders to be underwriters with respect to
Registrable Securities they seek to include in such Registration Statement.

                    “Cut
Back Shares” has the meaning set forth in Section 2(b).

                    “Effective
Date” means, as to a Registration Statement, the date on which such
Registration Statement is first declared effective by the Commission. 

                    “Effectiveness
Date” means (a) with respect to the initial Registration Statement required
to be filed pursuant to Section 2(a), the earlier of: (i) the 180th
day following the Final Closing Date and (ii) the fifth Trading Day following the date
on which the Company is notified by the Commission that the initial Registration
Statement will not be reviewed or is no longer subject to further review and
comments; (b) with respect to any additional Registration Statements required to
be filed pursuant to Section 2(a), the earlier of: (i) the 180th day
following the applicable Filing Date for such additional Registration
Statement(s) and (ii) the fifth Trading Day following the date on which the
Company is notified by the Commission that such additional Registration
Statement(s) will not be reviewed or is no longer subject to further review; (c)
with respect to any additional Registration Statements required to be filed
solely due to SEC Restrictions, the earlier of: (i) the 180th day
following the applicable Restriction Termination Date and (ii) the fifth Trading
Day following the date on which the Company is notified by the Commission that
such Registration Statement will not be reviewed or is no longer subject to
further review and comments; (d) with respect to a Registration Statement
required to be filed under Section 2(c), the earlier of: (i) the
180th day following the date on which the Company becomes eligible to
utilize Form S-3 to register the resale of Common Stock; provided, that,
if the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (d)(i) shall
be the 180th day following the date on which the Company becomes
eligible to utilize Form S-3 to register the resale of Common Stock, and (ii)
the fifth Trading Day following the date on which the Company is notified by the
Commission that the Registration Statement will not be reviewed or is no longer
subject to further review and comments; (e) with respect to a Registration
Statement required to be filed under Section 2(d), the earlier of: (i) the
180th day following the Make Good Shares Delivery Date;
provided, that, if the Commission reviews and has written comments to
such filed Registration Statement that would require the filing of a
pre-effective amendment thereto with the Commission, then the Effectiveness Date
under this clause (e)(i) shall be the 180th day following the Make
Good Shares Delivery Date, and (ii) the fifth Trading Day following the date on
which the Company is notified by the Commission that the Registration Statement
will not be reviewed or is no longer subject to further review and comments. 

                    “Effectiveness
Period” means, as to any Registration Statement required to be filed
pursuant to this Agreement, the period commencing on the Effective Date of such
Registration Statement and ending on (a) the date that all of the Registrable
Securities covered by such Registration Statement have been publicly sold by the
Holders of the Registrable Securities included therein, or (b) such time as all
of the Registrable Securities covered by such Registration Statement may be sold
by the Holders without volume restrictions pursuant to Rule 144 as determined by
the counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company's transfer agent and the affected
Holders. 

                    “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

                    “Filing
Date” means (a) with respect to the initial Registration Statement required
to be filed pursuant to Section 2(a), the 30th day following the
Final Closing Date; (b) with respect to any additional Registration Statements
required to be filed pursuant to Section 2(a), the 30th day following
the Effective Date for the last Registration Statement filed pursuant to this
Agreement under Section 2(a); (c) with respect to any additional Registration
Statements required to be filed due to SEC Restrictions, the 30th day
following the applicable Restriction Termination Date; (d) with respect to a
Registration Statement required to be filed under Section 2(c), the 30th day following the date on which the
  Company becomes eligible to utilize Form S-3 to register the resale of Common
  Stock; (e) with respect to the Registration Statement required to be filed under
  Section 2(d), the 30th day following the Make Good Shares Delivery
  Date 

2

                    “FINRA”
means the Financial Industry Regulatory Authority, Inc.

                    “Holder”
or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities and, if other than an Investor, a Person to
whom the rights hereunder have been properly assigned pursuant to Section 7
hereof. 

                    “Indemnified
Party” has the meaning set forth in Section 5(c). 

                    “Indemnifying
Party” has the meaning set forth in Section 5(c).

                    “Investment
Amount” means, with respect to each Investor, the Investment Amount
indicated on such Investor’s signature page to this Agreement, which is also
reflected on the Schedule of Investors attached hereto as Schedule A.

                    “Losses”
has the meaning set forth in Section 5(a).

                    “Make
Good Shares Delivery Date” means the date on which the Make Good Shares are
required to be delivered to the Investors pursuant to the Make Good Escrow
Agreement. 

                    “New
York Courts” means the state and federal courts sitting in the City of New
York, Borough of Manhattan. 

                    “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened. 

                    “Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus. 

                    “Registrable
Securities” means: (i) any shares of Common Stock issuable upon the
conversion of the Notes issued to Investors pursuant to the Purchase Agreement,
(ii) the Make Good Shares, as applicable, (iii) any shares of Common Stock
issuable upon the exercise of Series F Warrants issued to the Investors pursuant
to the Purchase Agreement, (iv) any shares of Common Stock issuable upon the
exercise of warrants issued to any placement agent as compensation in connection
with the financing that is the subject of the Purchase Agreement (“Placement
Agent Warrant Shares”) and (v) any securities issued or issuable upon any
stock split, dividend or other distribution, recapitalization or similar event,
or any price adjustment as a result of such stock splits, reverse stock splits or similar
events with respect to any of the securities referenced in (i) – (iv) above.
Notwithstanding the foregoing, a security shall cease to be a Registrable
Security for purposes of this Agreement from and after such time as the Holder
of such security may resell such security without volume restrictions under Rule
144, as determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company’s transfer agent
and the affected Holders.

3

                    “Registration
Statement” means the initial registration statement required to be filed in
accordance with Section 2(a) and any additional registration statements required
to be filed under this Agreement, including in each case the Prospectus,
amendments and supplements to such registration statements or Prospectus,
including pre- and post- effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference
therein. 

                    “Required
Holders” means the Holders of at least a majority of the Registrable
Securities or the Investor Representative acting in accordance with the
authority granted under Section 2.8 of the Purchase Agreement. 

                    “Restriction
Termination Date” has the meaning set forth in Section 2(b).

                    “Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule. 

                    “Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule. 

                    “Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule. 

                    “SEC
Restrictions” has the meaning set forth in Section 2(b).

                    “Selling
Holder Questionnaire” means the selling security holder notice and
questionnaire attached as Annex B hereto. 

                    “Trading
Market” means any of the New York Stock Exchange, the NYSE AMEX, the NASDAQ
Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, the
OTCBB or any other market on which the Common Stock is listed or quoted for
trading on the date in question. 

4

          2.       
Registration. 

                    (a)      On
or prior to the applicable Filing Date, the Company shall prepare and file with
the Commission a Registration Statement covering the resale of all Registrable
Securities (other than in the case of the initial Registration Statement to be
filed under this Section 2(a), the Make Good Shares) not already covered by an
existing and effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415. Each Registration Statement required to
be filed under this Agreement shall be filed on Form S-1 (or on such other form
appropriate for such purpose) and contain (except if otherwise required pursuant
to written comments received from the Commission upon a review of such
Registration Statement, other than as to the characterization of any Holder as
an underwriter, which shall not occur unless such characterization is consistent
with written information provided by the Holder in the Selling Holder
Questionnaire) the “Plan of Distribution” attached hereto as Annex A. The
Company shall cause each Registration Statement required to be filed under this
Agreement to be declared effective under the Securities Act as soon as possible
but, in any event, no later than its Effectiveness Date, and shall use its
commercially reasonable best efforts to keep each such Registration Statement
continuously effective during its entire Effectiveness Period. By 5:00 p.m. (New
York City time) on the Business Day immediately following the Effective Date of
each Registration Statement, the Company shall file with the Commission in
accordance with Rule 424 under the Securities Act the final prospectus to be
used in connection with sales pursuant to such Registration Statement (whether
or not such filing is technically required under such Rule). If for any reason
other than due solely to SEC Restrictions, a Registration Statement is effective
but not all outstanding Registrable Securities are registered for resale
pursuant thereto, then the Company shall prepare and file by the applicable
Filing Date an additional Registration Statement to register the resale of all
such unregistered Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415. 

                    (b)      Notwithstanding
anything to the contrary contained in this Section 2, if the Company receives
Commission Comments, and following discussions with and responses to the
Commission in which the Company uses its commercially reasonable best efforts
and time to cause as many Registrable Securities (other than the Make Good
Shares, unless the Make Good Shares Delivery Date shall have occurred) for as
many Holders as possible to be included in the Registration Statement filed
pursuant to Section 2(a) without characterizing any Holder as an underwriter
unless such characterization is consistent with written information provided by
the Holder in the Selling Holder Questionnaire (and in such regard uses its
commercially reasonable best efforts to cause the Commission to permit the
Investor Representative or its counsel to participate in Commission
conversations on such issue together with the Company’s counsel, and timely
conveys relevant information concerning such issue with the Investor
Representative or its counsel) (the day that such discussions and responses are
concluded shall be referred to as the “Tolling Date”), the Company is
unable to cause the inclusion of all Registrable Securities, then the Company
may, following not less than three (3) Trading Days prior written notice to the
Investor Representative (i) remove from the Registration Statement such
Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such
restrictions and limitations on the registration and resale of the Registrable
Securities, in each case as the Commission may require in order for the
Commission to allow such Registration Statement to become effective;
provided, that in no event may the Company characterize any Holder as an
underwriter unless such characterization is consistent with written information
provided by the Holder in the Selling Holder Questionnaire (collectively, the
“SEC Restrictions”). Unless the SEC Restrictions otherwise require, any
cut-back imposed pursuant to this Section 2(b) shall be allocated: (i) first,
upon the holders of any other securities of the Company who have the right to
have such securities included in the Registration Statement, (ii) second, upon
the Placement Agent Warrant Shares, and (iii) lastly, among the remaining
Registrable Securities of the Holders on a pro rata basis. No liquidated damages
under Section 2(e) shall accrue on or as to any Cut Back Shares, and the required Effectiveness Date for such Registration Statement
will be tolled until such time as the Company is able to effect the registration
of the Cut Back Shares in accordance with any SEC Restrictions if such
Registrable Securities cannot at such time be resold by the Holders thereof
without volume limitations pursuant to Rule 144 (such date, the “Restriction
Termination Date”). From and after the Restriction Termination Date, all
provisions of this Section 2 shall again be applicable to the Cut Back Shares
(which, for avoidance of doubt, retain their character as “Registrable
Securities”) if such Registrable Securities cannot at such time be resold by the
Holders thereof without volume limitations pursuant to Rule 144 so that the
Company will be required to file with and cause to be declared effective by the
Commission such additional Registration Statements in the time frames set forth
herein as necessary to ultimately cause to be covered by effective Registration
Statements all Registrable Securities. For the avoidance of doubt, the time
period starting from the Tolling Date and ending with the Restriction
Termination Date shall be excluded in calculating the applicable Effectiveness
Date.

5

                    (c)     
Promptly following any date on which the Company becomes eligible to use a
registration statement on Form S-3 to register Registrable Securities for
resale, the Company shall file a Registration Statement on Form S-3 covering all
Registrable Securities (or a post-effective amendment on Form S-3 to the then
effective Registration Statement) and shall cause such Registration Statement to
be filed by the Filing Date for such Registration Statement and declared
effective under the Securities Act as soon as possible thereafter, but in any
event prior to the Effectiveness Date therefor. Such Registration Statement
shall contain (except if otherwise required pursuant to written comments
received from the Commission upon a review of such Registration Statement, other
than as to the characterization of any Holder as an underwriter, which shall not
occur unless such characterization is consistent with written information
provided by the Holder in the Selling Holder Questionnaire) the “Plan of
Distribution” attached hereto as Annex A. The Company shall use its
commercially reasonable best efforts to keep such Registration Statement
continuously effective under the Securities Act during the entire Effectiveness
Period. By 5:00 p.m. (New York City time) on the Business Day immediately
following the Effective Date of such Registration Statement, the Company shall
file with the Commission in accordance with Rule 424 under the Securities Act
the final prospectus to be used in connection with sales pursuant to such
Registration Statement (whether or not such filing is technically required under
such Rule). 

                    (d)     
On or prior to its Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of the Make Good Shares
on Form S-3 if the Company is then eligible to utilize such Form (or if the
Company is not then eligible to utilize such form of registration, it shall
utilize such other available form appropriate for such purpose) and shall cause
such Registration Statement to be filed by the Filing Date for such Registration
Statement and declared effective under the Securities Act as soon as possible
thereafter, but in any event prior to the Effectiveness Date therefore. Such
Registration Statement shall contain (except if otherwise required pursuant to
written comments received from the Commission upon a review of such Registration
Statement, other than as to the characterization of any Holder as an
underwriter, which shall not occur without such Holder’s consent) the “Plan of
Distribution” attached hereto as Annex A. The Company shall use its
commercially reasonable best efforts to keep such Registration Statement
continuously effective under the Securities Act during the entire Effectiveness
Period which is applicable to it. By 5:00 p.m. (New York City time) on the
Business Day immediately following the Effective Date of such Registration Statement, the Company shall file with the
Commission in accordance with Rule 424 under the Securities Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement (whether or not such filing is technically required under such Rule). 

6

                    (e)     
If: (i) a Registration Statement is not filed on or prior to its Filing Date
covering the Registrable Securities required under this Agreement to be included
therein), or (ii) a Registration Statement is not declared effective by the
Commission on or prior to its required Effectiveness Date or if by the Business
Day immediately following the Effective Date the Company shall not have filed a
“final” prospectus for the Registration Statement with the Commission under Rule
424(b) (whether or not such a prospectus is technically required by such Rule),
or (iii) after its Effective Date, without regard for the reason thereunder or
efforts therefore, such Registration Statement ceases for any reason to be
effective and available to the Investors as to the Registrable Securities to
which it is required to cover at any time prior to the expiration of its
Effectiveness Period for more than an aggregate of 30 Trading Days (which need
not be consecutive) (any such failure or breach being referred to as an
“Event,” and for purposes of clauses (i) or (ii) the date on which such
Event occurs, or for purposes of clause (iii) the date which such 30 Trading
Day-period is exceeded, being referred to as “Event Date”), then in
addition to any other rights the Investors may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of each
such Event Date (if the applicable Event shall not have been cured by such date)
until the applicable Event is cured, the Company shall pay to each Investor an
amount in cash, as partial liquidated damages and not as a penalty, equal to
1.0% of the aggregate Investment Amount paid by such Investor pursuant to the
Purchase Agreement. The parties agree that (1) the Company will not be liable
for liquidated damages under this Agreement with respect to any (i) warrants
issued to any placement agent as compensation in connection with the financing
that is the subject of the Purchase Agreement or (ii) Placement Agent Warrant
Shares and (2) in no event will the Company be liable for liquidated damages
under this Agreement in excess of 1.0% of the aggregate Investment Amount of the
Investors in any single month and the maximum aggregate liquidated damages
payable to a Investor under this Agreement shall be eight percent (8%) of the
aggregate Investment Amount paid by such Investor pursuant to the Purchase
Agreement. The partial liquidated damages pursuant to the terms hereof shall
apply on a daily pro-rata basis for any portion of a month prior to the cure of
an Event (except in the case of the first Event Date), and shall cease to accrue
(unless earlier cured) upon the expiration of the Effectiveness Period. 

                    (f)      Each
Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex B (a “Selling Holder
Questionnaire”). The Company shall not be required to include the
Registrable Securities of a Holder in a Registration Statement and shall not be
required to pay any liquidated or other damages under Section 2(e) to any Holder
who fails to furnish to the Company a fully completed Selling Holder
Questionnaire at least two Trading Days prior to the Filing Date (subject to the
requirements set forth in Section 3(a)). 

7

          3.      
Registration Procedures. In connection with the Company’s registration
obligations hereunder: 

                    (a)      The
Company shall not file a Registration Statement, any Prospectus or any
amendments or supplements thereto in which the “Selling Stockholder” section
thereof differs from the disclosure received from a Holder in its Selling Holder
Questionnaire (as amended or supplemented). The Company shall not file a
Registration Statement, any Prospectus or any amendments or supplements thereto
in which it (i) characterizes any Holder as an underwriter, unless such
characterization is consistent with written information provided by the Holder
in the Selling Holder Questionnaire, (ii) excludes a particular Holder due to
such Holder refusing to be named as an underwriter, or (iii) reduces the number
of Registrable Securities being registered on behalf of a Holder except pursuant
to, in the case of subsection (iii), the Commission Comments, without, in each
case, such Holder’s express written authorization, unless such reduction is made
pursuant to Section 2(b) hereof. The Company shall also ensure that each
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any 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 (in the case of prospectuses, in the
light of the circumstances in which they were made) not misleading.

                    (b)      The
Company shall (i) prepare and file with the Commission such amendments,
including post-effective amendments, to each Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the Commission
such additional Registration Statements in order to register for resale under
the Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible to any comments received from the
Commission with respect to each Registration Statement or any amendment thereto
and, as promptly as reasonably possible provide the Investor Representative true
and complete copies of all correspondence from and to the Commission relating to
such Registration Statement that would not result in the disclosure to the
Investor Representative of material and non-public information concerning the
Company; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the Registration
Statement(s) and the disposition of all Registrable Securities covered by each
Registration Statement. 

                    (c)     
The Company shall notify the Investor Representative as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than three Trading Days
prior to such filing and, in the case of (v) below, not less than three Trading
Days prior to the financial statements in any Registration Statement becoming
ineligible for inclusion therein) and (if requested by any such Person) confirm
such notice in writing no later than one Trading Day following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment to a
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a “review” of such Registration Statement and
whenever the Commission comments in writing on such Registration Statement (the
Company shall provide true and complete copies thereof and all written responses
thereto to the Investor Representative pertain to the Holders as a Selling
Stockholder or to the Plan of Distribution, but not information which the Company believes would constitute
material and non-public information); and (C) with respect to each Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental
authority for amendments or supplements to a Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. 

8

                    (d)      The
Company shall use its commercially reasonable best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify the Investor Representative of the
issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose. 

                    (e)      The
Company shall furnish to the Investor Representative, without charge and at the
option of the Company in electronic format, at least one conformed copy of each
Registration Statement and each amendment thereto and all exhibits to the extent
requested by the Investor Representative (including those previously furnished)
promptly after the filing of such documents with the Commission. 

                    (f)      The
Company shall promptly deliver to the Investor Representative, without charge,
as many copies of each Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as the Investor
Representative may reasonably request. The Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto. 

                    (g)      Prior
to any public offering of Registrable Securities, the Company shall register or
qualify such Registrable Securities for offer and sale under the securities or
Blue Sky laws of all jurisdictions within the United States as any Holder may
request, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statements; provided,

9

however, in connection with any such registration or
qualification, the Company shall not be required to (i) qualify to do business
in any jurisdiction where the Company would not otherwise be required to
qualify, (ii) subject itself to general taxation in any such jurisdiction, (iii)
file a general consent to service of process in any jurisdiction, or (iv) make
any change to the Company’s certificate of incorporation or bylaws. 

                    (h)      The
Company shall cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to the Registration Statement(s), which certificates
shall be free, to the extent permitted by the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request. 

                    (i)      Upon
the occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, the Company shall prepare a supplement or amendment,
including a post-effective amendment, to the affected Registration Statements or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
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, in
light of the circumstances under which they were made, not misleading. 

                    (j)     
The Company shall notify the Investor Representative in writing of the
happening of any event, as promptly as practicable after becoming aware of such
event, as a result of which the prospectus included in a Registration Statement,
as then in effect, includes an untrue statement of a material fact or omission
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission. The
Company shall also promptly notify the Investor Representative in writing when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective. 

                    (k)     
If any Holder is required under applicable securities laws to be described in
the Registration Statement as an underwriter, at the reasonable request of such
Holder, the Company shall furnish to such Holder, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as a Holder may reasonably request: (i) a letter, dated such date,
from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Holders, and
(ii) an opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance reasonably
acceptable to such counsel and as is customarily given in an underwritten public
offering, addressed to the Holders. 

10

                    (l)      The
Company shall hold in confidence and not make any disclosure of information
concerning a Holder provided to the Company unless: (i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Holder is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt written
notice to such Holder or the Investor Representative and allow such Holder, at
the Holder’s expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, such information. 

                    (m)     
The Company shall use its commercially reasonable best efforts to cause all of
the Registrable Securities covered by a Registration Statement to be listed on
each national securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange. The
Company shall pay all fees and expenses in connection with satisfying its
obligation under this Section 3(m). 

                    (n)     
The Company shall cooperate with the Holders who hold Registrable Securities
being offered and, to the extent applicable, facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legend to the extent
permitted by the Purchase Agreement) representing the Registrable Securities to
be offered pursuant to a Registration Statement and enable such certificates to
be in such denominations or amounts, as the case may be, as the Holders may
reasonably request and registered in such names as the Holders may request. 

                    (o)      If
requested by a Holder, the Company shall as soon as practicable: (i) incorporate
in a prospectus supplement or post-effective amendment such information as a
Holder reasonably requests to be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering; (ii) make
all required filings of such prospectus supplement or post-effective amendment
after being notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and (iii) supplement or make amendments
to any Registration Statement if reasonably requested by a Holder holding any
Registrable Securities. 

                    (p)     
The Company shall use its commercially reasonable best efforts to cause the
Registrable Securities covered by a Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities. 

11

          4.      
Registration Expenses. All fees and expenses incident to the performance
of or compliance with this Agreement by the Company shall be borne by the
Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with any Trading Market on which
the Common Stock is then listed for trading, (B) with respect to filings with
FINRA by the Investor Representative’s counsel for compensation review pursuant
to FINRA Rule 5110, but in no event shall the sum of such fees and expenses and
other transaction costs and legal fees incurred by the Investor Representative
to be reimbursed by the Company in connection with such FINRA filing be more
than $15,000, and (C) in compliance with applicable state securities or Blue Sky
laws), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is reasonably requested by the Investor
Representative), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder. In no
event shall the Company be responsible for any broker or similar commissions
incurred by any Holder or, except to the extent provided for in the Transaction
Documents, any legal fees or other cost of the Holders in connection with this
Agreement. 

          5.      
Indemnification. 

                    (a)     
Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, investment advisors, partners, members and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and reasonable attorneys' fees) and
expenses (collectively, “Losses”), as incurred, arising out of or
relating to any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus or any form of prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading, except to the
extent, but only to the extent, that (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that the Holder has approved Annex A hereto for this
purpose) or (2) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified the Investor Representative in writing
that the Prospectus is outdated or defective and prior to the
receipt by such Holder of an Advice or an amended or supplemented Prospectus,
but only if and to the extent that following the receipt of the Advice or the
amended or supplemented Prospectus the misstatement or omission giving rise to
such Loss would have been corrected. The Company shall notify the Investor
Representative promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement. 

12

                    (b)      Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising solely out of
or based solely upon: (x) such Holder's failure to comply with the prospectus
delivery requirements of the Securities Act or (y) any untrue statement of a
material fact contained in any Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or arising solely
out of or based solely upon any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading to the
extent, but only to the extent that, (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has approved Annex A hereto for this
purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (2) in the case of an occurrence of an event of the type
specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by such Holder
of an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation. 

                    (c)      Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have proximately and
materially adversely prejudiced the Indemnifying Party. 

13

                    An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Indemnifying Party);
provided, that, the Indemnifying Party shall pay for no more than two
separate sets of counsel for all Indemnified Parties and such legal counsel
shall be selected by the Investor Representative. The Indemnifying Party shall
not be liable for any settlement of any such Proceeding effected without its
written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding. 

                    All
fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to
defend such Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten Trading Days of written
notice thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such
Indemnified Party to undertake to reimburse all such fees and expenses to the
extent it is finally judicially determined that such Indemnified Party is not
entitled to indemnification hereunder). 

                    (d)      Contribution.
If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if
the indemnification provided for in this Section was available to such party in
accordance with its terms. 

14

                    The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), (i) no Person involved in
the sale of Registrable Securities which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) in
connection with such sale shall be entitled to contribution from any Person
involved in such sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) no Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the proceeds actually
received by such Holder from the sale of the Registrable Securities subject to
the Proceeding exceeds the amount of any damages that such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 

                    The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties. 

          6.      
Reports Under the Exchange Act. With a view to making available to the
Holders the benefits of Rule 144 or any other similar rule or regulation of the
SEC that may at any time permit the Holders to sell Registrable Securities of
the Company to the public without registration, the Company agrees, for so long
as Registrable Securities are outstanding and held by the Holders, to: 

                    (a)      make
and keep public information available, as those terms are understood, defined
and required in Rule 144;

                    (b)     
file with the SEC in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act so long as the Company
remains subject to such requirements and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and 

                    (c)      furnish
to each Holder so long as such Holder owns Registrable Securities, promptly upon
request, such information as may be reasonably and customarily requested to
permit the Holders to sell such securities pursuant to Rule 144 without
registration. 

          7.       Assignment
of Registration Rights. The rights under this Agreement shall be
automatically assignable by the Investors to any permitted transferee of all or
any portion of such Investor’s Registrable Securities if: (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within five (5) Business Days
after such assignment; (ii) the Company is, within five (5) Business Days after
such transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect to
which such registration rights are being transferred or assigned; (iii)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act or applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions contained herein; and (v) such transfer shall have been made
in accordance with the applicable requirements of the Purchase Agreement. 

15

          8.      
Miscellaneous. 

                    (a)      Third
Party Beneficiary. The Investor Representative is intended third party
beneficiary of this Agreement and have all of the rights of an “Investor” under
this Agreement and the shares of Common Stock issuable upon the exercise of the
warrants issued to the Placement Agent (and any capital stock of the Company
issued or issuable, with respect to the warrants issued to the Placement Agent
as a result of any stock split, stock dividend, recapitalization, exchange,
anti-dilution adjustment or similar event or otherwise, without regard to any
limitations on exercises of the warrants, if any) constitute Registrable
Securities for all purposes of this Agreement.

                    (b)     
Remedies. In the event of a breach by the Company or by a Holder, of any
of their obligations under this Agreement, each Holder or the Company, as the
case may be, in addition to being entitled to exercise all rights granted by law
and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate. 

                    (c)     
No Piggyback on Registrations. Except as and to the extent specified in
Schedule 8(c) to the Purchase Agreement, neither the Company nor any of
its security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in a Registration Statement other than the
Registrable Securities, and the Company shall not during the Effectiveness
Period enter into any agreement providing any such right to any of its security
holders.

                    (d)     
Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement. 

                    (e)     
Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder's receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the “Advice”) by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph. 

16

                    (f)     
Piggy-Back Registrations. If at any time during the Effectiveness Period
there is not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen calendar days after receipt of such notice,
any such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be registered, subject to customary underwriter cutbacks
applicable to all holders of registration rights. 

                    (g)      Amendments
and Waivers. Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Required Holders. Any amendment or waiver effected in accordance with
this Section 8(g) shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of
the Holders. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of this Agreement unless
the same consideration also is offered to all of the parties to this Agreement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
certain Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of at least a majority of the Registrable
Securities to which such waiver or consent relates. 

                    (h)     
Notices. Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered if delivered in accordance with
Section 6.3 of the Purchase Agreement. 

                    (i)     
Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The Company may not assign its rights
or obligations hereunder without the prior written consent of each Holder. Each
Holder may assign their respective rights hereunder in the manner and to the
Persons as permitted under the Purchase Agreement. 

                    (j)      Execution
and Counterparts. This Agreement may be executed in any number of
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. In
the event that any signature is delivered by facsimile or email transmission,
such signature shall create a valid binding obligation of the party executing
(or on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile or email signature were the original thereof. 

17

                    (k)      Governing
Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all
Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective Affiliates, employees or agents) will be commenced in
the New York Courts. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any New York Court, or that such Proceeding has been commenced
in an improper or inconvenient forum. Each party hereto hereby irrevocably
waives personal service of process and consents to process being served in any
such Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by
jury in any Proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a Proceeding to
enforce any provisions of this Agreement, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding. 

                    (l)     
Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. 

                    (m)     
Entire Agreement. This Agreement, the other Transaction Documents (as
defined in the Purchase Agreement) and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents and the instruments
referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

                    (n)     
Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable. 

                    (o)     
Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. 

18

                    (p)      Independent
Nature of Holders' Obligations and Rights. The obligations of each Holder under
this Agreement are several and not joint with the obligations of each other
Holder, and no Holder shall be responsible in any way for the performance of the
obligations of any other Holder under this Agreement. Nothing contained herein
or in any Transaction Document, and no action taken by any Holder pursuant
thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by this Agreement
or any other Transaction Document. Each Holder acknowledges that no other Holder
will be acting as agent of such Holder in enforcing its rights under this
Agreement. Each Holder shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any Proceeding for such purpose. The Company acknowledges
that each of the Holders has been provided with the same Registration Rights
Agreement for the purpose of closing a transaction with multiple Holders and not
because it was required or requested to do so by any Holder.

[Signature Page Follows]

19

          IN
WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above. 

COMPANY: 

YAYI INTERNATIONAL INC.

By:
_______________________________________
Name: Li Liu 
Title: Chief
Executive Officer and President

 

INVESTOR REPRESENTATIVE:

EURO PACIFIC CAPITAL,
INC.

By:
_______________________________________
Name: Gordon McBean 
Title: Head
of Capital Markets

INVESTORS: 

The Investors executing the Signature
Page in the form attached hereto as Annex C and delivering the same to
the Company or its agents shall be deemed to have executed this Agreement and
agreed to the terms hereof. 

Yayi Registration Rights Agreement

Annex A

Plan of Distribution

          The
Selling Stockholders and any of their pledgees, donees, transferees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of Common Stock on any stock exchange, market or trading facility on
which the shares are traded or quoted or in private transactions. These sales
may be at fixed or negotiated prices. The Selling Stockholders may use any one
or more of the following methods when selling shares: 

	
  ordinary brokerage transactions and transactions in which the broker-dealer
  solicits Investors; 

  
	
  block trades in which the broker-dealer will attempt to sell the shares as
  agent but may position and resell a portion of the block as principal to
  facilitate the transaction; 

  
	
  purchases by a broker-dealer as principal and resale by the broker-dealer
  for its account; 

  
	
  an exchange distribution in accordance with the rules of the applicable
  exchange; 

  
	
  privately negotiated transactions; 

  
	
  through the writing of options on the shares; 

  
	
  to cover short sales made after the date that this Registration Statement
  is declared effective by the Commission; 

  
	
  broker-dealers may agree with the Selling Stockholders to sell a specified
  number of such shares at a stipulated price per share; and 

  
	
  a combination of any such methods of sale. 

          The
selling stockholders may also sell shares under Rule 144 of the Securities Act
of 1933, as amended (the “Securities Act”), if available, rather than under this
prospectus. The selling stockholders shall have the sole and absolute discretion
not to accept any purchase offer or make any sale of shares if it deems the
purchase price to be unsatisfactory at any particular time. 

          The
selling stockholders or their respective pledgees, donees, transferees or other
successors in interest, may also sell the shares directly to market makers
acting as principals and/or broker-dealers acting as agents for themselves or
their customers. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. It is possible that a selling stockholder will attempt to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then existing market
price. We cannot assure that all or any of the shares offered in this
prospectus will be issued to, or sold by, the selling stockholders. The selling
stockholders and any brokers, dealers or agents, upon effecting the sale of any
of the shares offered in this prospectus, may be deemed to be “underwriters” as
that term is defined under the Securities Act, the Exchange Act and the rules
and regulations of such acts. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act. 

          We
are required to pay all fees and expenses incident to the registration of the
shares, including fees and disbursements of counsel to the selling stockholders,
but excluding brokerage commissions or underwriter discounts. 

          The
selling stockholders, alternatively, may sell all or any part of the shares
offered in this prospectus through an underwriter. The selling stockholders have
not entered into any agreement with a prospective underwriter and there is no
assurance that any such agreement will be entered into. 

          The
selling stockholders may pledge their shares to their brokers under the margin
provisions of customer agreements. If a selling stockholder defaults on a margin
loan, the broker may, from time to time, offer and sell the pledged shares. The
selling stockholders and any other persons participating in the sale or
distribution of the shares will be subject to applicable provisions of the
Exchange Act, and the rules and regulations under such act, including, without
limitation, Regulation M. These provisions may restrict certain activities of,
and limit the timing of purchases and sales of any of the shares by, the selling
stockholders or any other such person. In the event that any of the selling
stockholders are deemed an affiliated purchaser or distribution participant
within the meaning of Regulation M, then the selling stockholders will not be
permitted to engage in short sales of common stock. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distributions, subject to specified exceptions or
exemptions. In addition, if a short sale is deemed to be a stabilizing activity,
then the selling stockholders will not be permitted to engage in a short sale of
our common stock. All of these limitations may affect the marketability of the
shares. 

          If
a selling stockholder notifies us that it has a material arrangement with a
broker-dealer for the resale of the common stock, then we would be required to
amend the registration statement of which this prospectus is a part, and file a
prospectus supplement to describe the agreements between the selling stockholder
and the broker-dealer.

Annex B

YAYI INTERNATIONAL INC.

Selling Securityholder Notice and Questionnaire

The undersigned beneficial owner of common stock (the
“Common Stock”), of Yayi International Inc., a Delaware corporation (the
“Company”), understands that the Company has filed or intends to file
with the Securities and Exchange Commission (the “Commission”) a
Registration Statement for the registration and resale of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of _______________, 2010 (the “Registration Rights Agreement”),
among the Company and the Investors named therein. A copy of the Registration
Rights Agreement is available from the Company upon request at the address set
forth below. All capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in the Registration Rights Agreement. 

The undersigned hereby provides the following information to
the Company and represents and warrants that such information is accurate: 

QUESTIONNAIRE

	1. 	
      Name.

	 	 	 
		(a) 	
      Full Legal Name of Selling Securityholder

	 	 	 
	 	 	 
	 	 	 
		(b) 	
      Full Legal Name of Registered Holder (if not the same as
      (a) above) through which Registrable Securities Listed in Item 3 below are
      held:

	 	 	 
	 	 	 
	 	 	 
		(c) 	
      Full Legal Name of Natural Control Person (which means a
      natural person who directly or indirectly alone or with others has power
      to vote or dispose of the securities covered by the
  questionnaire):

	 	 	 
	 	 	 
	 	 	 
	2. 	
      Address for Notices to Selling
    Securityholder:

	 	 
	 	 
	 	 
	 	 

Telephone:
____________________________________________________________________________
Fax:
_________________________________________________________________________________
Contact
Person:_________________________________________________________________________

	3. 	
      Beneficial Ownership of Registrable
    Securities:

	 	Type and Principal Amount of
      Registrable Securities beneficially owned: 
	 	 
	 	 
	 	 
	 	 

	4. 	
      Broker-Dealer Status:

	 	(a) 	
      Are you a broker-dealer?

Yes       No 

		
      Note: 
	
      If yes, the Commission’s staff has indicated that you
      should be identified as an underwriter in the Registration Statement.
    

	 	(b) 	
      Are you an affiliate of a
broker-dealer?

Yes       No 

	 	(c) 	
      If you are an affiliate of a broker-dealer, do you
      certify that you bought the Registrable Securities in the ordinary course
      of business, and at the time of the purchase of the Registrable Securities
      to be resold, you had no agreements or understandings, directly or
      indirectly, with any person to distribute the Registrable
    Securities?

Yes       No 

	 	Note: 	
      If no, the Commission’s staff has indicated that you
      should be identified as an underwriter in the Registration Statement.
    

	5. 	
      Beneficial Ownership of Other Securities of the
      Company Owned by the Selling Securityholder.

Except as set forth below in this
Item 5, the undersigned is not the beneficial or registered owner of any
securities of the Company other than the Registrable Securities listed above in
Item 3. 

	 	Type and Amount of Other
      Securities beneficially owned by the Selling Securityholder: 
	 	 
	 	 
	 	

	6. 	
      Relationships with the
Company:

	 	Except as set forth below, neither the
      undersigned nor any of its affiliates, officers, directors or
      principal equity holders (owners of 5% of more of the equity securities of
      the undersigned) has held any position or office or has had any
      other material relationship with the Company (or its predecessors
      or affiliates) during the past three years. 
	 	  
	 	State any exceptions here: 
	 	 
	 	 
	 	 

7.      The Company has advised
each Selling Stockholder that it is the view of the Commission that it may not
use shares registered on the Registration Statement to cover short sales of
Common Stock made prior to the date on which the Registration Statement is
declared effective by the Commission, in accordance with 1997 Securities and
Exchange Commission Manual of Publicly Available Telephone Interpretations
Section A.65. If a Selling Stockholder uses the prospectus for any sale of the
Common Stock, it will be subject to the prospectus delivery requirements of the
Securities Act. The Selling Stockholders will be responsible to comply with the
applicable provisions of the Securities Act and Exchange Act, and the rules and
regulations thereunder promulgated, including, without limitation, Regulation M,
as applicable to such Selling Stockholders in connection with resales of their
respective shares under the Registration Statement. 

The undersigned agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof and prior to the Effective Date for the
Registration Statement. 

Certain legal consequences arise from being named as a Selling
Securityholder in the Registration Statement and related prospectus.
Accordingly, the undersigned is advised to consult their own securities law
counsel regarding the consequence of being named or not being named as a Selling
Securityholder in the Registration Statement and the related prospectus. 

By signing below, the undersigned consents to the disclosure of
the information contained herein in its answers to Items 1 through 6 and the
inclusion of such information in the Registration Statement and the related
prospectus. The undersigned understands that such information will be relied
upon by the Company in connection with the preparation or amendment of the
Registration Statement and the related prospectus. The undersigned hereby elects
to include the Registrable Securities owned by it and listed above in Item 3
(unless otherwise specified in Item 3) in the Registration Statement. 

IN WITNESS WHEREOF the undersigned, by authority duly given,
has caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent. 

	Dated: ____________________________	Beneficial Owner:
  ___________________________
	  	  
	  	By:
______________________________________
	  	         Name: 
	  	         Title:
  

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND

  QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 

Pillsbury Winthrop Shaw Pittman LLP 
2300 N Street NW

Washington, D.C. 20037 
Facsimile: 202.663.8007 

  Attn.: Qixiang Sun 

Annex C 

Registration Rights Agreement 

  Investor Counterpart Signature Page 

          The
undersigned, desiring to: (i) enter into this Registration Rights Agreement,
dated as of _________________, 2010 (the “Agreement”), between the
undersigned, Yayi International Inc., a Delaware corporation (the
“Company”), and the other parties thereto, in or substantially in the
form furnished to the undersigned and (ii) purchase the securities of the
Company appearing below, hereby agrees to purchase such securities from the
Company as of the Closing and further agrees to join the Agreement as a party
thereto, with all the rights and privileges appertaining thereto, and to be
bound in all respects by the terms and conditions thereof. 

          IN
WITNESS WHEREOF, the undersigned has executed the Agreement as of
_____________________, 2010. 

	 	Name and Address, Fax No. and Social
      Security No./EIN of Investor: 
	 	  
	 	  
	 	  
	 	 
	 	 
	 	
	 	 
	 	Fax No.:
  ___________________________________
	 	 
	 	Soc. Sec. No./EIN:
    ___________________________
	 	 
	 	If a partnership, corporation, trust or
      other business entity: 
	 	 
	 	By:  
      ______________________________________
	 	         Name: 
	 	         Title: 
	 	If an individual: 
	 	 
	 	 
	 	  
	 	Signature 
	 	 
	 	Investment Amount:
      ________________________
	 	 
	 	Amount of Units to be 
	 	Purchased:______________________
  

ADDRESS FOR NOTICE

 

c/o:_____________________________________________

Street:___________________________________________

City/State/Zip:_____________________________________

Attention:_________________________________________

Tel:______________________________________________

DELIVERY INSTRUCTIONS
(if
different from above) 

 

c/o:_____________________________________________

Street:___________________________________________

City/State/Zip:_____________________________________

Attention:_________________________________________

Tel:______________________________________________

Schedule A 

SCHEDULE OF INVESTORS 

  	

        

Name 	

        
Investment 
Amount
    	

        Principal 
Amount of
      
Notes 	Number of 

        Shares Subject
      
to Series F 
Warrants 
	AMY J STEFANIK TTEE AMY J STEFANIK REVOCABLE TRUST U/A
      2/6/01 	$100,000 	$100,000 	12,500 
	ANDREW P COOK SUSAN R COOK 	$50,000 	$50,000 	6,250 
	ARNOLD WILLIAM GOLDSCHLAGER NORA GOLDSCHLAGER TTEE THE
      GOLDSCHLAGER FAMILY TRUST U/A 6/24/04 	$50,000 	$50,000 	6,250 
	ART KLEPPEN KIMBERLY KLEPPEN 	$100,000 	$100,000 	12,500 
	BARBARA HEARST 	$100,000 	$100,000 	12,500 
	BARBARA J PETERSON TTEE REV TR OF BARBARA J PETERSON U/A
      2/4/00 	$70,000 	$70,000 	8,750 
	BARBARA S MEISTER TTEE THE MEISTER NON-EXEMPT MARITAL TR
      U/A 11/17/83 	$100,000 	$100,000 	12,500 
	BARBARA SEIDEL TTEE BARBARA GALLUN SEIDEL RESIDUAL TRUST
      U/A 2/9/60 	$50,000 	$50,000 	6,250 
	BARBARA SUE WILSON DAVID D WILSON TTEE THE BARBARA SUE
      WILSON U/A 8/23/94 	$50,000 	$50,000 	6,250 
	BERT HUNTSINGER 	$50,000 	$50,000 	6,250 
	BRENT PAULGER SHARISSA PAULGER 	$50,000 	$50,000 	6,250 
	BRIAN S BEHAN 	$50,000 	$50,000 	6,250 
	BRUCE WALKER RAVENEL III 	$300,000 	$300,000 	37,500 
	BUCKTHORN LLC 	$50,000 	$50,000 	6,250 
	CARLOS A MERINO TTEE CARLOS ALFONSO MERINO REV LIVING
      TRUST, U/A 12/04/96 	$50,000 	$50,000 	6,250 
	CAROLYN R LONG 	$60,000 	$60,000 	7,500 
	CHARLOTTE J BELASCO 	$50,000 	$50,000 	6,250 
	CHRISTIANNA SEIDEL TTEE PROPERTY TRUST U/A 11/5/99 FBO
      CHRISTIANNA SEIDEL 	$50,000 	$50,000 	6,250 
	CINDY J LEWIS TTEE CINDY J LEWIS DECL OF TRUST U/A 3/11/93
    	$50,000 	$50,000 	6,250 
	COREY SHANNON MCNAMEE 	$50,000 	$50,000 	6,250 
	CYNTHIA KESSLER & JAMES KESSLER 	$50,000 	$50,000 	6,250 
	DAVID ALAN SCULLY 	$100,000 	$100,000 	12,500 
	DAVID ARITA TOD 	$50,000 	$50,000 	6,250 
	DAVID BRISBIN TTEE INNES/BRISBIN LIVING TRUST DATED 6/8/04
    	$100,000 	$100,000 	12,500 
	DAVID W LARSON JENNIFER L LARSON 	$100,000 	$100,000 	12,500 
	DEBORAH FOREMAN TTEE DEBORAH D FOREMAN TRUST U/A 9/29/94
	$50,000 	$50,000 	6,250 
	DOUGLAS W JOHNSON TTEE DOUGLAS WILLIAM JOHNSON REV TRST U/A
      6/25/10 	$50,000 	$50,000 	6,250 
	DR UZZI REISS MRS YAEL REISS TTEE THE REISS FAMILY TRUST
      U/A 12/29/88 	$50,000 	$50,000 	6,250 
	EVA MARIE SALAS TTEE EVA M SALAS TRUST 	$50,000 	$50,000 	6,250 
	GAYLE M & DEBORAH SANDERS TTEE THE GAYLE M SANDERS FAM
      TR REV TR, U/A 8/15/02 	$100,000 	$100,000 	12,500 
	GEORGE FELDMAN 	$250,000 	$250,000 	31,250 
	GILBERT DOMINGUEZ TTEE DOMINGUEZ TRUST U/A 3/3/05 	$350,000 	$350,000 	43,750 
	HCR INVESTMENTS INC. 	$100,000 	$100,000 	12,500 
	HEIDI W KIENE KEVIN KIENE 	$100,000 	$100,000 	12,500 
	HEMANT KATHURIA P/ADM H KATHURIA INVESTMENTS II P PLAN 	$50,000 	$50,000 	6,250 

  	

        

Name 	

        
Investment 
Amount
    	

        Principal 
Amount of
      
Notes 	Number of 

        Shares Subject
      
to Series F 
Warrants 
	JACK ABRAMS MARGO ABRAMS TTEE JACK ABRAMS PENSION PLAN 1
	$50,000 	$50,000 	6,250 
	JANET D RUSSELL TTEE JANET DICKINSON RUSSELL LIVING TR U/A
      1/20/10 	$50,000 	$50,000 	6,250 
	JEAN A DAVIDS-OSTERHAUS TTEE JEAN A DAVIDS-OSTERHAUS REV
      U/A 10/03/07 	$50,000 	$50,000 	6,250 
	JEFF ARCHIBALD 	$100,000 	$100,000 	12,500 
	JERRY F MCWILLIAMS 	$50,000 	$50,000 	6,250 
	JIM GRIFFIN CUST DANIEL J GRIFFIN UTMA OH 	$60,000 	$60,000 	7,500 
	JIM GRIFFIN CUST MICHELLE E GRIFFIN UTMA OH 	$60,000 	$60,000 	7,500 
	JIM ROBERT PUGH 	$50,000 	$50,000 	6,250 
	JIMMIE C WEST CAROLYN E WEST 	$50,000 	$50,000 	6,250 
	JOHN A RUPP TTEE JOHN A RUPP TRUST U/A 3/9/07 	$50,000 	$50,000 	6,250 
	JOHN D SMEAD 	$50,000 	$50,000 	6,250 
	JOSEPH MCCARTHY MIKI MCCARTHY TOD 	$50,000 	$50,000 	6,250 
	JULIA L GRIFFIN 	$60,000 	$60,000 	7,500 
	KENNETH H NASS & MAUREEN K NASS TTEE KENNETH H NASS
      & MAUREEN K NASS CHARITRUST U/A 6/7/05 	$100,000 	$100,000 	12,500 
	KEVIN MOORE 	$50,000 	$50,000 	6,250 
	KK SWOGGER ASSET MANAGEMENT, LP 	$80,000 	$80,000 	10,000 
	LARRY GUAGLIARDO TOD 	$70,000 	$70,000 	8,750 
	LAURA SMITH FORREST SMITH TTEE CONNELLY JOHNSON SMITH FAM
      TR U/A 4/2/09 	$50,000 	$50,000 	6,250 
	MARC A PIERRE, P BARRAGAN P/ADM CENTER FOR PHYS HLTH 401K
      PSP MARC PIERRE 	$50,000 	$50,000 	6,250 
	MARC BIENSTOCK JENNY I BIENSTOCK 	$50,000 	$50,000 	6,250 
	MARC W LEVIN SUSAN G LEVIN 	$50,000 	$50,000 	6,250 
	MARK A OSTERHAUS TTEE THE MARK A OSTERHAUS REV TR U/A
      10/31/07 	$50,000 	$50,000 	6,250 
	MARK DUGGER P/ADM THE ALLSTATES DRYWALL INC EE ST 	$50,000 	$50,000 	6,250 
	MARK EDWARD SMEAD TTEE MARK E SMEAD REVOC LIVING TRUST U/A
      11/17/95 	$100,000 	$100,000 	12,500 
	MARK STERIN 	$70,000 	$70,000 	8,750 
	MAUREEN K NASS KENNETH H NASS TTEE MAUREEN K NASS LIVING
      TRUST U/A 5/16/05 	$50,000 	$50,000 	6,250 
	MICHAEL J HANRATTY LYNSAY F HANRATTY 	$100,000 	$100,000 	12,500 
	MICHAEL SCULLY 	$100,000 	$100,000 	12,500 
	MITCHELL MARTIN DEBORAH MARTIN 	$50,000 	$50,000 	6,250 
	NANCY L BENSON TTEE THE NANCY L BENSON LIVING TRUST U/A
      11/11/02 	$50,000 	$50,000 	6,250 
	N E APPERSON, P MCEACHERN TTEE NORMAN E APPERSON AND PAMELA
      MCEACHERN TR, U/A 7/22/96 	$100,000 	$100,000 	12,500 
	NFS/FMTC IRA FBO DIANE D SPOLUM 	$200,000 	$200,000 	25,000 
	NFS/FMTC IRA FBO HOWARD W WAHL 	$100,000 	$100,000 	12,500 
	NFS/FMTC IRA FBO LEONARD SIEGEL 	$50,000 	$50,000 	6,250 
	NFS/FMTC IRA FBO LYNN HAVLIK 	$50,000 	$50,000 	6,250 
	NFS/FMTC IRA FBO ROYCE V JACKSON 	$100,000 	$100,000 	12,500 
	NFS/FMTC IRA FBO ROBERT STEPHEN ADAMS 	$100,000 	$100,000 	12,500 
	NFS/FMTC ROLLOVER IRA FBO ANDRES KEICHIAN 	$50,000 	$50,000 	6,250 
	NFS/FMTC ROLLOVER IRA FBO BERTRAND BROOKS CARDER 	$50,000 	$50,000 	6,250 
	NFS/FMTC ROLLOVER IRA FBO DONALD T GLASER JR 	$50,000 	$50,000 	6,250 

  	

        

Name 	

        
Investment 
Amount
    	

        Principal 
Amount of
      
Notes 	Number of 

        Shares Subject
      
to Series F 
Warrants 
	NFS/FMTC ROLLOVER IRA FBO EDWIN BRUNO KAEHLER 	$50,000 	$50,000 	6,250 
	NFS/FMTC ROLLOVER IRA FBO JAMES A TAMBORELLO 	$100,000 	$100,000 	12,500 
	NFS/FMTC ROLLOVER IRA FBO JERRY R SPEAKS 	$50,000 	$50,000 	6,250 
	NFS/FMTC ROLLOVER IRA FBO LYNN ROLLINS STULL 	$50,000 	$50,000 	6,250 
	NFS/FMTC ROLLOVER IRA FBO RALPH DALE EDSON 	$100,000 	$100,000 	12,500 
	NFS/FMTC ROLLOVER IRA FBO RICHARD DAVIS MOORE 	$40,000 	$40,000 	5,000 
	NFS/FMTC ROLLOVER IRA FBO ROBERT M WEISSBERG 	$50,000 	$50,000 	6,250 
	NFS/FMTC ROLLOVER IRA FBO RONALD ALLEN MCCANN 	$50,000 	$50,000 	6,250 
	NFS/FMTC ROLLOVER IRA FBO TODD HOWARD OVERGARD 	$50,000 	$50,000 	6,250 
	NFS/FMTC ROTH IRA FBO HELEN ERSKINE 	$50,000 	$50,000 	6,250 
	NFS/FMTC ROTH IRA FBO VIRGINIA C ADAMS 	$50,000 	$50,000 	6,250 
	NFS/FMTC SEP IRA FBO CARTER LAREN 	$100,000 	$100,000 	12,500 
	NFS/FMTC SEP IRA FBO GERALD E MANWILL 	$50,000 	$50,000 	6,250 
	NFS/FMTC SEP IRA FBO GERALD MONA 	$50,000 	$50,000 	6,250 
	NORMAN S KRAMER & LINDA L KRAMER 	$50,000 	$50,000 	6,250 
	OLEKSANDR TUMKO OKSANA TUMKO 	$50,000 	$50,000 	6,250 
	PETER D SCHIFF 	$200,000 	$200,000 	25,000 
	POINT AUX CHENES, LLC 	$50,000 	$50,000 	6,250 
	POM INVESTMENTS LLC 	$100,000 	$100,000 	12,500 
	PRASAD REALTY CORP 	$50,000 	$50,000 	6,250 
	QUINCY MURPHY INC 	$50,000 	$50,000 	6,250 
	R STEVEN SMITH 	$100,000 	$100,000 	12,500 
	RICHARD GRIFF JACKIE GRIFF 	$150,000 	$150,000 	18,750 
	RICHARD P ANTHONY III & KIMBERLY J ANTHONY 	$50,000 	$50,000 	6,250 
	RICHARD POTAPCHUK 	$300,000 	$300,000 	37,500 
	ROBERT L BISHOP TOD FRANCINE BISHOP 	$50,000 	$50,000 	6,250 
	ROBERT T FOSS MARGARET FOSS TTEE ROBERT T & MARGARET
      FOSS REV TR U/A 3/31/04 	$60,000 	$60,000 	7,500 
	SCOTT & MISTY DAVIES TTEE THE SCOTT & MISTY DAVIES
      LIVING TR, U/A 6/28/07 	$80,000 	$80,000 	10,000 
	SCOTT R GRIFFIN 	$60,000 	$60,000 	7,500 
	SHELBY JORDAN, BECKY JORDAN 	$50,000 	$50,000 	6,250 
	SKEE GOEDHART TTEE THE PARACELSUS REVOCABLE TRUST U/A
      7/25/97 	$50,000 	$50,000 	6,250 
	STEPHEN RASKIN P/ADM DREW & RASKIN P/S PLAN FBO STEPHEN
      RASKIN 	$100,000 	$100,000 	12,500 
	STEVE & COLLEEN HOKE TTEE HOKE LIVING TRUST U/A 4/19/02
    	$50,000 	$50,000 	6,250 
	STEVEN JAY EPSTEIN 	$50,000 	$50,000 	6,250 
	SUSAN C CULLEN 	$50,000 	$50,000 	6,250 
	THOMAS L INGRAM CARISSA INGRAM TTEE INGRAM LIVING TRUST U/A
      11/2/05 	$50,000 	$50,000 	6,250 
	TIMOTHY CRANE TTEE TIMOTHY R CRANE TRUST U/A 12/6/04 	$100,000 	$100,000 	12,500 
	TRISHA L FRERES THEODORE KYLE FRERES TTEE TRISHA L FRERES
      LIVING TRUST U/A 12/20/04 	$50,000 	$50,000 	6,250 
	WALTER FRIESEN 	$80,000 	$80,000 	10,000 
	WILLIAM A KARGES JR TTEE KARGES REVOC INTERVIVOS TRUST U/A
      4/29/85 	$50,000 	$50,000 	6,250 
	WILLIAM BRADLEY P/ADM BRADLEY ANESTHESIOLOGY PSP 	$50,000 	$50,000 	6,250 
	WILLIAM J CYR 	$70,000 	$70,000 	8,750 
	WILLIAM TEN BRINK TTEE TEN BRINK TRUST U/A 10/2/86 	$90,000 	$90,000 	11,250 

  	

        

Name 	

        
Investment 
Amount
    	

        Principal 
Amount of
      
Notes 	Number of 

        Shares Subject
      
to Series F 
Warrants 
	WILLIAM WILEY MARIANNE WILEY TTEE WILEY FAMILY LIVING TRUST
      U/A 7/19/95 	$60,000 	$60,000 	7,500 
	TOTALS 	$8,920,000 	 $8,920,000 	1,115,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}]]