Document:

PLACEMENT
AGENT WARRANT

    

    Warrant
No.: YBI PA – 003

    

    NEITHER
THIS WARRANT NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A)
UNDER THE SECURITIES ACT.

     

    COMMON
STOCK PURCHASE WARRANT

     

    YONGYE
BIOTECHNOLOGY INTERNATIONAL, INC.

     

    
      
        	
                Warrant
      Shares 246,224

              	
                 Initial
      Exercise Date: May 8,
2009

              

      

    

     

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”)
certifies that, for value received, ROTH Capital Partners, LLC or its registered
assigns (the “Holder”),
is entitled, at any time and from time to time, on or after the date hereof (the
“Initial
Exercise Date”) and on or prior to the close of business on the five-year
anniversary of the Initial Exercise Date (the “Expiration
Date”) but not thereafter, to subscribe for and purchase from Yongye
Biotechnology International, Inc., a Nevada corporation (the “Company”)
up to 246,224 shares (each such share, a “Warrant
Share” and all
such shares, the “Warrant
Shares”) of Common Stock, subject to the following terms, conditions and
limitations:

     

    1.           Definitions.  As
used in this Warrant, the following terms shall have the respective definitions
set forth in this Section
1.  Capitalized terms that are used but not defined in this
Warrant that are defined in the Securities Purchase Agreement (as defined below)
shall have the respective definitions set forth in the Securities Purchase
Agreement.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    “Business
Day” means any day except Saturday, Sunday and any day that is a federal
legal holiday in the United States or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

     

    “Common
Stock” means the common stock of the Company, par value $0.001 per share,
and any securities into which such common stock may hereafter be
reclassified.

     

    “Exercise
Price” means $1.848, subject to adjustment in accordance with Section
9.

     

    “Fundamental
Transaction” means any of the following: (1) the Company effects any
merger or consolidation of the Company with or into another Person, (2) the
Company effects any sale of all or substantially all of its assets in one or a
series of related transactions, (3) any tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, or (4) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property.

     

    “Original Issue
Date” means the Initial Exercise Date first set forth on the first page
of this Warrant.

     

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

     

    “Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

     

    “Securities
Purchase Agreement” means the Securities Purchase Agreement, dated as of
the date of this Warrant, to which the Company and the original holder of the
Warrant are parties.

     

    “Trading
Day” means (i) a day on which the Common Stock is traded on a Trading
Market, or (ii) if the Common Stock is not quoted or listed on any Trading
Market, a day on which the Common Stock is quoted in the over-the-counter
market; provided, that in the event that the Common Stock is not listed or
quoted as set forth in (i) and (ii) hereof, then Trading Day shall mean a
Business Day.

     

    “Trading
Market” means whichever of the New York Stock Exchange, NYSE Amex, the
Nasdaq National Market, the Nasdaq SmallCap Market or the OTC Bulletin Board on
which the Common Stock is listed or quoted for trading on the date in
question.

    
      
         

      

      
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    “VWAP”
shall mean, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. New York City time to 4:02 p.m. New York City time);
(b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date)
on the OTC Bulletin Board; (c) if the Common Stock is not then listed or quoted
for trading on the OTC Bulletin Board and if prices for the Common Stock are
then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Purchasers of a
majority in interest of the Securities then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the
Company

     

    2.           Registration of
Warrant.  The Company shall register this Warrant upon records
to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to
time.  The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or
any distribution to the Holder, and for all other purposes, absent actual notice
to the contrary.

     

    3.           Registration of
Transfers.  The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of this Warrant,
with the Form of Assignment attached hereto duly completed and signed, to the
Company at its address specified herein.  Upon any such registration
or transfer, a new Warrant to purchase Common Stock, in substantially the form
of this Warrant (any such new Warrant, a “New
Warrant”), evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the transferring
Holder.  The acceptance of the New Warrant by the transferee thereof
shall be deemed the acceptance by such transferee of all of the rights and
obligations of a holder of a Warrant. The rights of the original Holder under
the Registration Rights Agreement shall be transferred with such transfer of
Warrant.

     

    4.           Exercise and Duration of
Warrants.  This Warrant shall be exercisable by the registered
Holder at any time and from time to time through and including the Expiration
Date.  At 6:30 p.m., New York City time on the Expiration Date, the
portion of this Warrant not exercised prior thereto shall be and become void and
of no value.  The Company may not call or redeem any portion of this
Warrant without the prior written consent of the Holder.

     

    5.           Delivery of Warrant
Shares.

     

    (a)           To
effect exercises hereunder, the Holder shall not be required to physically
surrender this Warrant unless the aggregate Warrant Shares represented by this
Warrant is being exercised.  Upon delivery of the Exercise Notice (in
the form attached hereto) to the Company (with the attached Warrant Shares
Exercise Log) at its address for notice set forth herein and upon payment of the
Exercise Price multiplied by the number of Warrant Shares that the Holder
intends to purchase hereunder, the Company shall promptly (but in no event later
than three Trading Days after the Date of Exercise (as defined herein)) issue
and deliver to the Holder, a certificate for the Warrant Shares issuable upon
such exercise.  A “Date of
Exercise” means the date on which the Holder shall have delivered to the
Company: (i) the Exercise Notice (with the Warrant Shares Exercise Log attached
to it), appropriately completed and duly signed and (ii) if such Holder is not
utilizing the cashless exercise provisions set forth in this Warrant, payment of
the Exercise Price for the number of Warrant Shares so indicated by the Holder
to be purchased.

    
      
         

      

      
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    (b)           If
by the third Trading Day after a Date of Exercise the Company fails to deliver
the required number of Warrant Shares in the manner required pursuant to Section 5(a), then
the Holder will have the right to rescind such exercise.

     

    (c)           If
by the third Trading Day after a Date of Exercise the Company fails to deliver
the required number of Warrant Shares in the manner required pursuant to Section 5(a), and if
after such third Trading Day and prior to the receipt of such Warrant Shares,
the Holder purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (i) pay in cash to the Holder the amount by which (A) the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (B) the amount obtained by
multiplying (1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue by (2) the
closing bid price of the Common Stock on the Date of Exercise and (ii) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder.  The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In.

     

    (d)           The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of
law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares.  Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing Warrant Shares upon exercise
of the Warrant as required pursuant to the terms hereof.

     

    6.           Charges, Taxes and
Expenses.  Issuance and delivery of Warrant Shares upon
exercise of this Warrant shall be made without charge to the Holder for any
issue or transfer tax, withholding tax, transfer agent fee or other incidental
tax or expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder.  The Holder shall
be responsible for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.

    
      
         

      

      
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    7.           Replacement of
Warrant.  If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which shall not include a surety bond), if
requested.  Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs as the Company may
prescribe.  If a New Warrant is requested as a result of a mutilation
of this Warrant, then the Holder shall deliver such mutilated Warrant to the
Company as a condition precedent to the Company’s obligation to issue the New
Warrant.

     

    8.           Reservation of Warrant
Shares.  The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of Persons other than the Holder (taking into account
the adjustments and restrictions of Section 9). The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.

     

    9.           Certain
Adjustments.  The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section
9.

     

    (a)           Stock Dividends and
Splits.  If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then, in each such case, the Exercise Price shall be adjusted
by multiplying the Exercise Price in effect immediately prior to such event by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event
and the product so obtained shall thereafter be the Exercise Price then in
effect.  Any adjustment made pursuant to clause (i) of this paragraph
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

    
      
         

      

      
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    (b)           Fundamental
Transactions.  If, at any time while this Warrant is
outstanding there is a Fundamental Transaction, then the Holder shall have the
right thereafter to receive, upon exercise of this Warrant, the same amount and
kind of securities, cash or property as it would have been entitled to receive
upon the occurrence of such Fundamental Transaction if it had been, immediately
prior to such Fundamental Transaction, the holder of the number of Warrant
Shares then issuable upon exercise in full of this Warrant (the “Alternate
Consideration”).  For purposes of
any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction. In the event of a Fundamental Change, the Company or the successor
or purchasing Person, as the case may be, shall execute with the Holder a
written agreement providing that:

    

    (x)           this
Warrant shall thereafter entitle the Holder to purchase the Alternate
Consideration in accordance with this section 9(b),

    

    (y)           in
the case of any such successor or purchasing Person, upon such consolidation,
merger, statutory exchange, combination, sale or conveyance such successor or
purchasing Person shall be jointly and severally liable with the Company for the
performance of all of the Company's obligations under this Warrant, the
Securities Purchase Agreement and the Registration Rights Agreement,
and

    

    (z)           if
registration or qualification is required under the Exchange Act or applicable
state law for the public  resale by the Holder of shares of stock and
other securities so issuable upon exercise of this Warrant, such registration or
qualification shall be completed prior to such reclassification, change,
consolidation, merger, statutory exchange, combination or sale.

    

    If, in
the case of any Fundamental Change, the Alternate Consideration includes shares
of stock, other securities, other property or assets of a Person other than the
Company or any such successor or purchasing Person, as the case may be, in such
Fundamental Change, then such written agreement shall also be executed by such
other Person and shall contain such additional provisions to protect the
interests of the Holder as the Board of Directors of the Company shall
reasonably consider necessary by reason of the foregoing.  At the
Holder’s option and request, any successor to the Company or surviving entity in
such Fundamental Transaction shall, either (i) issue to the Holder a new warrant
substantially in the form of this Warrant and consistent with the foregoing
provisions and evidencing the Holder’s right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof, or (ii)
purchase the Warrant from the Holder for a purchase price, payable in cash
within five Trading Days after such request (or, if later, on the effective date
of the Fundamental Transaction), equal to the Black Scholes value of the
remaining unexercised portion of this Warrant on the date of such
request.  The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph (b) and
insuring that the Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

    
      
         

      

      
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    (c)           Number of Warrant
Shares.  Simultaneously with any adjustment to the Exercise
Price pursuant to this Section 9, the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant
Shares shall be the same as the aggregate Exercise Price in effect immediately
prior to such adjustment.

     

    (d)           Calculations.  All
calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a
share, as applicable.  The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.

     

    (e)           Notice of
Adjustments.  Upon the occurrence of each adjustment pursuant
to this Section
9, the Company at its expense will promptly compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and
adjusted number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant (as applicable), describing the transactions giving
rise to such adjustments and showing in detail the facts upon which such
adjustment is based.  Upon written request, the Company will promptly
deliver a copy of each such certificate to the Holder and to the Company’s
Transfer Agent.

     

    (f)           Notice of Corporate
Events.  If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common
Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Transaction or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company,
then the Company shall deliver to the Holder a notice describing the material
terms and conditions of such transaction (but only to the extent such disclosure
would not result in the dissemination of material, non-public information to the
Holder) at least 10 calendar days prior to the applicable record or effective
date on which a Person would need to hold Common Stock in order to participate
in or vote with respect to such transaction, and the Company will take all steps
reasonably necessary in order to insure that the Holder is given the practical
opportunity to exercise this Warrant prior to such time so as to participate in
or vote with respect to such transaction; provided, however, that the failure to
deliver such notice or any defect therein shall not affect the validity of the
corporate action required to be described in such notice.

    
      
         

      

      
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    (g)           Subsequent Equity
Sales. If the Company or any Subsidiary thereof, as applicable, at any
time while this Warrant is outstanding, shall sell or grant any option to
purchase, or sell or grant any right to reprice, or otherwise dispose of or
issue (or announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents entitling any Person
to acquire shares of Common Stock, at an effective price per share less than the
then Exercise Price (such lower price, the “Base Share
Price” and such issuances collectively, a “Dilutive
Issuance”) (if the holder of the Common Stock or Common Stock Equivalents
so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock at an
effective price per share which is less than the Exercise Price, such issuance
shall be deemed to have occurred for less than the Exercise Price on such date
of the Dilutive Issuance), then the Exercise Price shall be reduced to a price
equal to the Base Share Price. Such adjustment shall be made whenever such
Common Stock or Common Stock Equivalents are issued.  Notwithstanding
the foregoing, no adjustments shall be made, paid or issued under this Section
3(g) in respect of an Exempt Issuance.  The Company shall notify the
Holder, in writing, no later than the Trading Day following the issuance of any
Common Stock or Common Stock Equivalents subject to this Section 3(g),
indicating therein the applicable issuance price, or applicable reset price,
exchange price, conversion price and other pricing terms (such notice, the
“Dilutive
Issuance Notice”).

     

    10.           Payment
of Exercise Price. The Holder may
pay the Exercise Price in one of the following manners:

     

    (a)           Cash
Exercise.  The Holder may deliver immediately available funds;
or

     

    (b)           Cashless
Exercise.  If an Exercise Notice is delivered at a time when
the Fair Market Value (as defined below) is greater than the Exercise Price,
then the Holder may notify the Company in an Exercise Notice of its election to
utilize cashless exercise, in which event the Company shall issue to the Holder
the number of Warrant Shares determined as follows:

     

    X = Y [(A
– B)/A]

     

    where:

     

    X = the
number of Warrant Shares to be issued to the Holder.

     

    Y = the
number of Warrant Shares with respect to which this Warrant is being
exercised.

     

    A = the
Fair Market Value

     

    B = the
Exercise Price.

     

    “Fair Market
Value” shall equal the VWAP for the Trading Day immediately prior to (but
not including) the Exercise Date.  For purposes of Rule 144
promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction
shall be deemed to have been acquired by the Holder, and the holding period for
the Warrant Shares shall be deemed to have commenced, on the date this Warrant
was originally issued.

    
      
         

      

      
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    11.           Limitations on
Exercise.

     

    (a)           Notwithstanding
anything to the contrary contained herein, the number of Warrant Shares that may
be acquired by the Holder upon any exercise of this Warrant (or otherwise in
respect hereof) shall be limited to the extent necessary to insure that,
following such exercise (or other issuance), the total number of shares of
Common Stock then beneficially owned by such Holder and its affiliates and any
other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act of 1934, as
amended (the “Exchange
Act”), does not exceed 4.99% (the “Maximum
Percentage”) of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise).  For such purposes, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder.  This provision shall not
restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this
Warrant.

     

    (b)           Notwithstanding
anything to the contrary contained herein, by written notice to the Company, the
Holder shall have the right (i) at any time and from time to time to reduce its
maximum percentage immediately upon notice to the Company in the event and only
to the extent that Section 16 of the Exchange Act or the rules promulgated
thereunder (or any successor statute or rules) is changed to reduce the
beneficial ownership percentage threshold thereunder to a percentage less than
4.99% and (ii) at any time and from time to time, to waive the provisions of
this Section insofar as they relate to the Maximum Percentage or to increase its
Maximum Percentage unless the Holder shall have, by written instrument delivered
to the Company, irrevocably waived its rights to so increase its Maximum
Percentage, but (A) any such waiver or increase will not be effective until 61
days after such notice is delivered to the Company, and (B) any such waiver or
increase or decrease will apply only to the Holder and not to any other holder
of Warrants.

     

    12.           No Fractional
Shares.  No fractional shares of Warrant Shares will be issued
in connection with any exercise of this Warrant.  In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing price of one
Warrant Share as reported by the applicable Trading Market on the date of
exercise.

     

    13.           Notices.  Any
and all notices or other communications or deliveries hereunder (including,
without limitation, any Exercise Notice) shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this section prior to 6:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service, (d) the
fifth day after such notice is deposited in the U.S. mail, certified, return
receipt requested and postage prepaid, or (e) upon actual receipt by the party
to whom such notice is required to be given.  The addresses for such
communications shall be:  (i) if to the Company, to Yongye
Biotechnology International, Inc., 6th Floor,
Xue Yuan International Tower, No.1 Zhi Chu Road, Hai Dian District, Beijing,
PRC, with a copy to: Loeb & Loeb LLP, 345 Park Avenue, New York, NY
10154,  Attn: Mitchell S. Nussbaum, Esq.  (or such other
address as the Company shall indicate in writing in accordance with this
section), or (ii) if to the Holder, to the address set forth in the Purchase
Agreement (or the address or facsimile number appearing on the Warrant Register
or such other address or facsimile number as the Holder may provide to the
Company in accordance with this section).

    
      
         

      

      
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    14.           Warrant
Agent.  The Company shall serve as warrant agent under this
Warrant.  Upon 10 calendar days’ notice to the Holder, the Company may
appoint a new warrant agent.  Any corporation into which the Company
or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or
any corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further
act.  Any such successor warrant agent shall promptly cause notice of
its succession as warrant agent to be mailed (by first class mail, postage
prepaid) to the Holder at the Holder’s last address as shown on the Warrant
Register.

     

    15.           Compliance with Securities
Laws.  The Holder of this Warrant, by acceptance hereof,
acknowledges and agrees as follows:

     

    (a)           Holder
is familiar with the definition of “accredited investor” in Rule 501 of
Regulation D promulgated under the Securities Act and certifies that Holder is
an accredited investor as defined in such rule.

     

    (b)           Holder
understands that neither this Warrant nor the Warrant Shares have been
registered under the Securities Act, and therefore they may not be sold,
assigned or transferred unless (i) a registration statement under the Securities
Act is in effect with respect thereto or (ii) an exemption from registration is
found to be available to the satisfaction of the Company.

     

    16.           Miscellaneous.

     

    (a)           This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns.  Subject to the preceding
sentence, nothing in this Warrant shall be construed to give to any Person other
than the Company and the Holder any legal or equitable right, remedy or cause of
action under this Warrant.  This Warrant may be amended only in
writing signed by the Company and the Holder and their successors and
assigns.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (b)           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
actions, claims, suits, investigations or proceedings (including, without
limitation, an investigation or partial proceeding, such as a deposition)
(“Proceedings”),
whether commenced or, to the knowledge of the Company, threatened concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the New York Courts.  Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of the any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any such New York Court, or
that such Proceeding has been commenced in an improper or inconvenient
forum.  Each party hereto hereby irrevocably waives personal service
of process and consents to process being served in any such Proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.  If either party
shall commence a Proceeding to enforce any provisions of a Transaction Document,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such
Proceeding.

     

    (c)           The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

     

    (d)           In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

     

    (e)           Prior
to exercise of this Warrant, the Holder hereof shall not, by reason of being a
Holder, be entitled to any rights of a stockholder with respect to the Warrant
Shares.

     

    [SIGNATURE
PAGE FOLLOWS]

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.

     

    
      
        
          	
                  YONGYE
      BIOTECHNOLOGY

                   INTERNATIONAL,
      INC.

                
	 
	
                  By:

                	
                    /s/ Zishen Wu

                
	 
      	
                  Name:
      Zishen Wu

                
	 
      	
                  Title:  CEO

                

        

      

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    YONGYE
BIOTECHNOLOGY INTERNATIONAL, INC.

     

    WARRANT
DATED MAY 8, 2009

    

    EXERCISE
NOTICE

    

    The
undersigned Holder hereby irrevocably elects to purchase _____________ shares of
Common Stock of Yongye Biotechnology International, Inc. (the “Company”)
pursuant to the above referenced Warrant.  Capitalized terms used
herein and not otherwise defined have the respective meanings set forth in the
Warrant.

     

    (1)           The
undersigned Holder hereby exercises its right to purchase _________________
Warrant Shares pursuant to the Warrant.

     

    (2)           The
Holder intends that payment of the Exercise Price shall be made as (check
one):

     

    
      	
               
      

            	
               ̈

            	
              Cash
      Exercise.  The
      undersigned has paid or delivered to the Company $__________, the
      aggregate Exercise Price for ___________ shares of the Company’s Common
      Stock purchased herewith, in full in cash or by certified or official bank
      check or wire transfer.

            

    

     

    
      	
               
      

            	
               ̈

            	
              Cashless
      Exercise.  In exchange for the issuance of _______ shares
      of the Company’s Common Stock, the undersigned hereby agrees to surrender
      the right to purchase _______ shares of Common Stock pursuant to the
      cashless exercise provisions set forth in Section 10(b)
      the Warrant.

            

    

     

    (3)           Please
deliver to the undersigned Holder _______________ Warrant Shares in accordance
with the terms of the Warrant.

     

    (4)           By
its delivery of this Exercise Notice, the undersigned represents and warrants to
the Company that (a) it is an “accredited investor” as defined in Regulation D
under the Securities Act of 1933, as amended, and (b) in giving effect to the
exercise evidenced hereby the Holder will not beneficially own in excess of the
number of shares of Common Stock (determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended) permitted to be owned under
Section 11 of
this Warrant to which this notice relates.

    
      
        
          
            
              
                
                  
                    
                      
                        
                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	Dated:                                      ,              
      	 	Name of Holder:	 
	 	 	 	
                                        (Print)

                                      
	 	 	 	 
	 
      	 
      	
                                        Signature:

                                      	 
      
	 
      	 
      	 
      	
                                        (Signature must conform in all respects to name of 

                                        holder as specified on the face of the Warrant)

                                      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                        Print Name:

                                      	  
	 	 	Title:	 

                              

                               

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
          
            
            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    YONGYE
BIOTECHNOLOGY INTERNATIONAL, INC.

    

    WARRANT
DATED MAY 8, 2009

    WARRANT
NO. YBI PA – 003

     

    WARRANT SHARES EXERCISE
LOG

     

    
      
        
          
            
              
                
                  	
                          Date

                        	 	
                          Number of Warrant 

                          Shares Available to 

                          be Exercised

                        	 	
                          Number of Warrant

                           Shares Exercised

                        	 	
                          Number of Warrant 

                          Shares Remaining to 

                          be Exercised

                        
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      

                

              

            

          

        

      

    

     

    [continue
as necessary]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    YONGYE
BIOTECHNOLOGY INTERNATIONAL, INC.

     

    WARRANT
ORIGINALLY ISSUED MAY 8, 2009

    WARRANT
NO. YBI PA – 003

     

    FORM OF
ASSIGNMENT

     

    [To be
completed and signed only upon transfer of Warrant]

     

    FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto the
transferee indicated below the right represented by the above-captioned Warrant
to purchase ____________ shares of Common Stock of Yongye Biotechnology
International, Inc. (the “Company”)
to which such Warrant relates and appoints _____________________ attorney to
transfer said right on the books of the Company with full power of substitution
in the premises.

     

    Dated: _______________,
____

     

    
      
        
          
            
              	
                      Holder:

                    	 
      
	 
      	
                      (Print
      Name)

                    
	 
      	 
      
	
                      Signature:

                    	 
      
	 
      	
                      (Signature
      must conform in all respects to name

                      of
      holder as specified on the face of the Warrant.

                      Indicate
      title if signing on behalf of an
entity.)

                    

            

          

        

      

    

    

    
      
        
          
            
              
                
                  
                    
                      	
                              Transferee
      Information:

                            
	 
      	 
      
	
                              Name:

                            	 
      
	 
      	 
      
	
                              Address:

                            	 
      
	 
      	 
      
	 
      	 
      
	
                              Fax
      No.:SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated as of May 8, 2009, by
and among Yongye Biotechnology International, Inc., a Nevada corporation (the
“Company”),  Inner Mongolia Yongye Nong Feng Biotechnology Co., Ltd.,
a cooperative joint venture organized under the laws of the People’s Republic of
China (“CJV”), and the investors listed on the Schedule of Investors attached
hereto as Appendix
A (each, an “Investor” and collectively, the “Investors”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
exemptions from registration under the Securities Act (as defined below), the
Company desires to issue and sell to each Investor, and each Investor, severally
and not jointly, desires to purchase from the Company, shares of the Company’s
Common Stock (as defined below), as more fully described in this
Agreement.

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and the Investors agree as
follows:

     

    ARTICLE
1.

    DEFINITIONS

     

    1.1           Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms shall have the meanings indicated in this
Section 1.1:

     

    “Action” as to any
Person, means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending
or threatened in writing against or affecting such Person, any of such Person’s
Subsidiaries or any of such Person’s or such Subsidiaries’ respective
properties, before or by any court, arbitrator, governmental or administrative
agency, regulatory authority (federal, state, county, local or foreign), stock
market, stock exchange or trading facility.

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 144.

     

    “Agreement” has the
meaning set forth in the preamble to this Agreement.

     

    “Available Undersubscription
Amount” has the meaning set forth in Section 4.12(c).

     

    “Basic Amount” has the
meaning set forth in Section 4.12(b).

     

    “Business Day” means
any day except Saturday, Sunday and any day which is a federal legal holiday or
a day on which banking institutions in the State of New York or State of Nevada
are authorized or required by law or other governmental action to
close.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “Buy-In” has the meaning set
forth in Section 4.1(c).

     

    “BVI” means Fullmax
Pacific Limited, an international business company incorporated in the British
Virgin Islands.

     

    “CJV” has the meaning
set forth in the recitals to this Agreement.

     

    “Closing” means the
closing of the purchase and sale of the Shares pursuant to Article
II.

     

    “Closing Date” means
the Business Day on which all of the conditions set forth in Sections 5.1 and
5.2 hereof are satisfied, or such other date as the parties may
agree.

     

    “Closing Escrow
Agreement” means the Closing Escrow Agreement, dated as of the date
hereof, among the Company, the ROTH Capital Partners, LLC, the Investors and the
Escrow Agent (defined below), in the form of Exhibit A hereto, as
may be amended from time to time pursuant to Section 6.4 of this
Agreement.

     

    “Commission” means the
Securities and Exchange Commission.

     

    “Common Stock” means
the common stock of the Company, par value $0.001 per share, and any securities
into which such common stock may hereafter be reclassified or for which it may
be exchanged as a class.

     

    “Company” has the meaning set
forth in the recitals to this Agreement.

     

    “Company Deliverables”
has the meaning set forth in Section 2.2(a).

     

    “Company Entities”
means the Company, BVI, CJV and all existing Subsidiaries of any such entities
and any other entities which hereafter become Subsidiaries of any such
entities.

     

    “Common Stock
Equivalents” means any securities of the Company or any Subsidiary which
entitle the holder thereof to acquire Common Stock at any time, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.

     

    “Company NY Counsel”
means Loeb & Loeb LLP, having an address at 345 Park Avenue, New York, NY
10154, Attention: Mitchell S. Nussbaum, Esq., with a Fax No. of (212)
407-4990.

     

    “Disclosure Materials”
has the meaning set forth in Section 3.1(h).

     

    “Effective Date” means
the date that the Registration Statement required by Section 2(a) of the
Registration Rights Agreement is first declared effective by the
Commission.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Escrow Agent” means
Loeb & Loeb LLP with an address at 345 Park Avenue, New York, NY
10154-1895.

     

    “Evaluation Date” has the meaning set
forth in Section 3.1(s).

     

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

     

    “Existing Company
Entities” means the Company and CJV and their respective
Subsidiaries.

     

    “Full Alliance” means
Full Alliance International Limited, a company incorporated in the British
Virgin Islands.

     

    “GAAP” means U.S.
generally accepted accounting principles.

     

    “IMGYY” has the
meaning set forth in Section 6.7.

     

    “Intellectual Property
Rights” has the meaning set forth in Section 3.1(p).

     

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

     

    “Investor” has the
meaning set forth in the preamble.

     

    “Investor
Deliverables” has the meaning set forth in Section 2.2(b).

     

    “Investor Party” has
the meaning set forth in Section 4.7.

     

    “Lien” means any lien,
charge, encumbrance, security interest, right of first refusal, right of
participation or other restrictions of any kind.

     

    “Losses” has the
meaning set forth in Section 4.7.

     

    “Material Adverse
Effect” means any of (i) a material and adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material and
adverse effect on the results of operations, assets, properties, prospects,
business or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material and adverse impairment to
the Company’s ability to perform on a timely basis its obligations under any
Transaction Document.

     

    “Money Laundering
Laws” has the meaning set forth in Section 3.1(ee).

     

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

     

    “Notice of Acceptance”
has the meaning set forth in Section 4.12(c).

     

    “Offer” has the
meaning set forth in Section 4.12(b).

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Offer Notice” has the
meaning set forth in Section 4.12(b).

     

    “Offer Period” has the
meaning set forth in Section 4.12(c).

     

    “Offered Securities”
has the meaning set forth in Section 4.12(b).

     

    “OFAC” has the meaning
set forth in Section 3.1(dd).

     

    “Outside Date” means
the fifteenth calendar day (if such calendar day is a Trading Day and if not,
then the first Trading Day following such fifteenth calendar day) following the
date of this Agreement.

     

    “Per Share Purchase
Price” equals $1.54.

     

    “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

     

    “Placement Agent
Warrant” shall mean the warrant certificate issued to ROTH Capital
Partners, LLC in the form of Exhibit C, attached
hereto and made a part hereof, representing the warrant holder’s right to
purchase 246,224 shares of Common Stock at a price per share of
$1.848.

     

    “PRC” means, for the
purpose of this Agreement, the People’s Republic of China, not including Taiwan,
Hong Kong and Macau.

     

    “PRC Escrow Agreement”
has the meaning set forth in Section 2.2.

     

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

     

    “Refused Securities”
has the meaning set forth in Section 4.12(d).

     

    “Registrable
Securities” shall mean the Shares and the Warrant Shares.

     

    “Registration Rights
Agreement” means the Registration Rights Agreement, dated as of the date
hereof, among the Company and the Investors, in the form of Exhibit B
hereto.

     

    “Registration
Statement” means a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale by the
Investors of the Shares.

     

    “Responding Investor”
has the meaning set forth in Section 4.12(a).

     

    “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.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “SEC Reports” has the
meaning set forth in Section 3.1(h).

     

    “Securities” has the
meaning set forth in Section 4.1(c).

     

    “Securities Act” means
the Securities Act of 1933, as amended.

     

    “Share Delivery Date”
has the meaning set forth in Section 4.1(c).

     

    “Shares” means the
5,834,083 shares of Common Stock being issued and sold to the Investors by the
Company hereunder.

     

    “Short Sales” include,
without limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, swaps and similar
arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated
brokers.

     

    “Subsequent Placement”
has the meaning set forth in Section 4.12(a).

     

    “Subsequent Placement
Agreement” has the meaning set forth in Section 4.12(f).

     

    “Subsidiary” of any
Person means any “subsidiary” as defined in Rule 1-02(x) of the Regulation S-X
promulgated by the Commission under the Exchange Act of such
Person.  Notwithstanding anything to the contrary set forth in any
Transaction Document, BVI, CJV and their respective subsidiaries are each
considered a Subsidiary of the Company.

     

    “Trading Day” means
(i) a day on which the Common Stock is traded on a Trading Market or (ii) if the
Common Stock is not listed or quoted on any Trading Market, a day on which the
Common Stock is quoted in the over-the-counter market as reported by the Pink
Sheets LLC (or any similar organization or agency succeeding to its functions of
reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall mean
a Business Day.

     

    “Trading Market” means
whichever of the New York Stock Exchange, NYSE Amex, the NASDAQ Global Select
Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin
Board on which the Common Stock is listed or quoted for trading on the date in
question.

     

    “Transaction
Documents” means this Agreement, the Registration Rights Agreement, the
Closing Escrow Agreement and any other documents or agreements executed in
connection with the transactions contemplated hereunder.

     

    “Transfer Agent” means
Empire Stock Transfer Inc., the current transfer agent of the Company with a
mailing address of 2470 Saint Rose Parkway, Suite 304, Henderson, NV 89074 and a
facsimile number of (702) 974-1444, and any successor transfer agent of the
Company.

     

    “Trigger Date” has the
meaning set forth in Section 4.12(a).

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Undersubscription
Amount” has the meaning set forth in Section 4.12(a).

     

    “Warrant Shares” shall
mean the Common Stock to be issued under the Placement Agent
Warrant.

     

    ARTICLE
2.

    PURCHASE
AND SALE

     

    2.1           Closing.  Subject
to the terms and conditions set forth in this Agreement, at the Closing the
Company shall issue and sell to each Investor, and each Investor shall,
severally and not jointly, purchase from the Company, the Shares representing
such Investor’s Investment Amount, calculated as the quotient of such Investor’s
Investment Amount divided by the Per Share Purchase Price.  The
Closing shall take place at the offices of Loeb & Loeb LLP on the Closing
Date or at such other location or time as the parties may agree.

     

    2.2           Closing
Deliveries.  (a)  At the Closing, the Company shall
deliver or cause to be delivered to each Investor the following (the “Company
Deliverables”):

     

    (i)           a
single certificate, dated the Closing Date, issued to each Investor,
respectively, representing that number of aggregate Shares to be issued and sold
at Closing to such Investor, determined under Section 2.1, registered in the
name of such Investor;

     

    (ii)         
the Placement Agent Warrant, dated the Closing Date;

     

    (iii) 
       the Closing Escrow Agreement, dated
the Closing Date;

     

    (iv)        the
legal opinion of Company NY Counsel, in agreed form, addressed to the
Investors;

     

    (v)         the
legal opinion of Company Nevada counsel, in agreed form, addressed to the
Investors; and

     

    (vi)        the
legal opinion of special PRC counsel to CJV, in agreed form, addressed to the
Investors; and

     

    (vii)       the
PRC Escrow Agreement, dated as of May 6, 2009, by and among the Company, the CJV
and China Citic Bank, substantially in the form attached hereto as Exhibit
D.

     

    (b)           By
the Closing, each Investor shall deliver or cause to be delivered the agreements
specified in Section 5.2(d), each duly signed by such Investor (collectively,
the “Investor Deliverables”).

     

    (c)           Within
two (2) Trading Days following the date of this Agreement, other than in the
case of Full Alliance, each Investor shall deliver to the Escrow Agent for
deposit and disbursement in accordance with the Closing Escrow Agreement, its
Investment Amount, in United States Dollars and in immediately available funds,
by wire transfer to an account designated in writing by the Company for such
purpose, and, in the case of Full Alliance, make arrangements to fund the Full
Alliance Investment Amount to the account of the CJV as contemplated by Section
6.7 herein.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    ARTICLE
3.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1           Representations and
Warranties of the Company.  The Company and CJV hereby jointly
and severally make the following representations and warranties to each
Investor:

     

    (a)           Subsidiaries.  None
of the Existing Company Entities have any direct or indirect Subsidiaries other
than as disclosed in Schedule 3.1(a)
hereto.  Except as disclosed in Schedule 3.1(a)
hereto, (i) the Company owns, directly or indirectly, all of the capital stock
of each other Existing Company Entity, and each other Existing Company Entity
alone or together with other Existing Company Entities owns, directly or
indirectly, all of the capital stock of its respective Subsidiaries, in each
case free and clear of any and all Liens, and (ii) all the issued and
outstanding shares of capital stock of each Existing Company Entity and each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights.

     

    (b)           Organization and
Qualification.  Each Existing Company Entity is duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
respective properties and assets and to carry on its respective business as
currently conducted.  No Existing Company Entity is in violation of
any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each Existing Company Entity is duly qualified to conduct
its respective businesses and is in good standing as a foreign corporation or
other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.

     

    (c)           Authorization;
Enforcement.  Each Existing Company Entity which is or is to
become party to any Transaction Document has the requisite corporate and other
power and authority to enter into and to consummate the transactions
contemplated by each such Transaction Document to which it is a party and
otherwise to carry out its obligations thereunder.  The execution and
delivery of the Transaction Documents by each Existing Company Entity to be
party thereto and the consummation by each of them of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of such Existing Company Entity, and no further action is required by any
of them in connection with such authorization.  Each Transaction
Document has been (or upon delivery will have been) duly executed by the Company
and each other Existing Company Entity required to execute the same and each
Subsidiary (to the extent any of them is a party thereto) and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company, such Existing Company Entity, and such Subsidiary,
enforceable against the Company, the Existing Company Entity, and the
Subsidiary, as the case may be, each in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (d)           No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company, and each other Existing Company Entity and
Subsidiary and the consummation by the Company, and such other Existing Company
Entities and Subsidiaries, of the transactions contemplated thereby do not and
will not (i) conflict with or violate any provision of the Company’s, such
Existing Company Entity’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing an Existing Company Entity or Subsidiary debt or
otherwise) or other understanding to which any Existing Company Entity or any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any United States or PRC court or governmental authority to which the Company or
a Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect.

     

    (e)           Filings, Consents and
Approvals.  No Existing Company Entity is required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any United States or PRC court or other federal,
state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company, and each Subsidiary, to
the extent such Subsidiary is a party thereto, of the Transaction Documents,
other than (i) the filing with the Commission of one or more Registration
Statements in accordance with the requirements of the Registration Rights
Agreement, (ii) filings required by state securities laws, (iii) the filing of a
Notice of Sale of Securities on Form D with the Commission under Regulation D of
the Securities Act, (iv) the filings required in accordance with Section 4.5,
(v) filings, consents and approvals required by the rules and regulations of the
applicable Trading Market, (vi) those that have been made or obtained prior to
the date of this Agreement, (vii) registrations, notices or filings required to
be made in order to comply with the currency and exchange control requirements
imposed by the Chinese government and/or Chinese law, if any, and (vii) other
post closing securities filings or notifications required to be made under
federal or state securities laws.

     

    (f)           Issuance of the
Shares.  The Shares and the Warrant Shares have been duly
authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens.  As of the Closing, the Company has reserved
from its duly authorized capital stock the shares of Common Stock issuable
pursuant to this Agreement in order to issue the Shares and the Warrant
Shares.

    
      
         

      

      
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    (g)           Capitalization.  The
number of shares and type of all authorized, issued and outstanding capital
stock of the Company, and all shares of Common Stock reserved for issuance under
the Company’s various option and incentive plans, is specified in Schedule
3.1(g).  Except as specified in Schedule 3.1(g), no
securities of any Existing Company Entity are entitled to preemptive or similar
rights, and no Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.  Except as specified in
Schedule
3.1(g), there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock.  The issue and sale of the Shares hereunder will not,
immediately or with the passage of time, obligate the Company or any Subsidiary
to issue shares of Common Stock or other securities to any Person (other than
the Investors) and will not result in a right of any holder of Company or
Subsidiary securities to adjust the exercise, conversion, exchange or reset
price under such securities.  Except as set forth in Schedule 3.1(g), no
Existing Company Entity has issued any capital stock in a private placement
transaction, including, without limitation, in a transaction commonly referred
to in the PRC as a “1 1⁄2 transaction.”

     

    (h)           SEC Reports; Financial
Statements.  The Company has filed all reports required to be
filed by it under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof
(or such shorter period as the Company was required by law to file such
reports), (the foregoing materials being collectively referred to herein as the
“SEC Reports” and, together with Appendix B hereto and
the schedules to this Agreement, the “Disclosure Materials”) on a timely basis
or has timely filed a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension.  As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  The financial statements of the
Company and each Subsidiary included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of
filing.  Such financial statements have been prepared in accordance
with GAAP applied on a consistent basis during the periods involved, except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.

     

    (i)           Press
Releases.  To the knowledge of the Company, the press releases
disseminated by the Company during the twelve months preceding the date of this
Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made and when made, not misleading.

    
      
         

      

      
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    (j)           Material
Changes.  Except as specified on Schedule 3.1(j) or in
the Disclosure Materials, since December 31, 2008 (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) no Existing Company Entity has
incurred any liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses and other liabilities incurred in the ordinary course
of business consistent with past practice, and (B) liabilities not in excess of
$100,000 in the aggregate not required to be reflected in the Company’s or its
Subsidiaries’ financial statements pursuant to GAAP or required to be disclosed
in filings made with the Commission, (iii) no Existing Company Entity has
altered its method of accounting or the identity of its auditors, (iv) no
Existing Company Entity has declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) no
Existing Company Entity has issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option
plans.  The Company does not have pending before the Commission any
request for confidential treatment of information.

     

    (k)           Litigation.  There
is no Action which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or (ii) if
there were an unfavorable decision, individually or in the aggregate, result in
a loss or liability in an amount in excess of $10,000 or have or reasonably be
expected to result in a Material Adverse Effect.  No Existing Company
Entity, nor any director or officer thereof (in his or her capacity as such), is
or has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty, except as specifically disclosed in the SEC
Reports.  There has not been, and to the knowledge of the Company,
there is not pending any investigation by the Commission involving any Existing
Company Entity or any of their respective current or former directors or
officers (in his or her capacity as such).  The Commission has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.

     

    (l)           Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
any Existing Company Entity.  No Existing Company Entity has any
employment or labor contracts, agreements or other understandings with any
Person.

     

    (m)           Indebtedness;
Compliance.  Except as disclosed on Schedule 3.1(m), no
Existing Company Entity is a party to any indenture, debt, capital lease
obligations, mortgage, loan or credit agreement by which it or any of its
properties is bound.  No Existing Company Entity is (i) in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by such
entity under), nor has any Existing Company Entity received notice of a claim
that it is in default under or that it is in violation of, any indenture, loan
or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) in violation of any order of any court,
arbitrator or governmental body, or (iii) in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and
employment and labor matters, except in each case as could not, individually or
in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.  The Company is in compliance with all effective requirements
of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
thereunder that are applicable to it, except where such noncompliance could not
have or reasonably be expected to result in a Material Adverse
Effect.

    
      
         

      

      
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    (n)           Regulatory
Permits.  The Existing Company Entities possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, and no Existing
Company Entity has received any notice of proceedings relating to the revocation
or modification of any such permits.

     

    (o)           Title to
Assets.  There is no real property that is material to the
respective businesses of the Existing Company Entities, except as disclosed in
the Disclosure Materials.  The Existing Entities have good and
marketable title in all personal property owned by them that is material to
their respective businesses, in each case free and clear of all Liens, except
for Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by such Existing Company Entity. Any real property and facilities held under
lease by any Existing Company Entity are held by them under valid, subsisting
and enforceable leases of which such Existing Company Entity is in compliance,
except as could not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect.

     

    (p)           Patents and
Trademarks.  Set forth on Schedule 3.1(p) is a
list of patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and other similar rights that
the Existing Company Entities own or have the rights to use (collectively, the
“Intellectual Property Rights”).  The Intellectual Property Rights
constitute all of the patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary and material to the business of the Existing Company
Entities in connection with their respective businesses as described in the
Disclosure Materials. No Existing Company Entity has received a written notice
that the Intellectual Property Rights used by any of them violates or infringes
upon the rights of any Person.  Except as otherwise disclosed in the
Disclosure Materials, to the knowledge of the Existing Company Entities, all
such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property
Rights.  To the knowledge of the Existing Company Entities, no former
or current employee, no former or current consultant, and no third-party joint
developer of any Existing Company Entity has any Intellectual Property Rights
that are necessary and material to the business of the Existing Company Entities
made, developed, conceived, created or written by the aforesaid employee,
consultant or third-party joint developer during the period of his or her
retention by, or joint venture with, such Existing Company Entity which has been
asserted against any Existing Company Entity. The Intellectual Property Rights
and the owner thereof or agreement through which they are licensed to any of the
Existing Company Entities are set forth in the Disclosure
Materials.

    
      
         

      

      
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    (q)           Insurance.  Each
Existing Company Entity is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses it is engaged and in the country in which the
Existing Company Entities operate.  The Company has no reason to
believe that it or any Existing Company Entity will not be able to renew its
existing respective insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business on terms consistent with market for the Company’s and such other
Existing Company Entity’s respective lines of business.

     

    (r)           Transactions With Affiliates
and Employees; Customers.  Except as set forth in the
Disclosure Materials, none of the officers, directors or 5% or more shareholders
of any Existing Company Entity, and, to the knowledge of the Company, none of
the employees of any Existing Company Entity, is presently a party to any
transaction with any Existing Company Entity (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any such Person or, to the knowledge of the Company, any entity in
which any officer, director, or such employee or 5% or more shareholder has a
substantial interest or is an officer, director, trustee or
partner.  None of the Existing Company Entities owes any money or
other compensation to any of their respective officers or directors or
shareholders, except to extent of contracts and ordinary course compensation
arrangements specified in Schedule
3.1(r).  No material customer of any Existing Company Entity
has indicated their intention to diminish their relationship with such Existing
Company Entity and no Existing Company Entity has any knowledge from which it
could reasonably conclude that any such customer relationship may be adversely
affected.

     

    (s)           Internal Accounting
Controls.  The Existing Company Entities maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.  The Company is establishing disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company Entities and designed such disclosure controls and procedures to ensure
that material information relating to the Company Entities is made known to the
certifying officers by others within those entities, particularly during the
period in which the Company’s Form 10-K or 10-Q, as the case may be, is being
prepared.  The Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures in accordance with Item
307 of Regulation S-K under the Exchange Act for the Company’s most recently
ended fiscal quarter or fiscal year-end (such date, the “Evaluation
Date”).  The Company presented in its most recently filed Form 10-K or
Form 10-Q the conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations as of the
Evaluation Date.

     

    (t)           Solvency.  Based
on the financial condition of the Company, including the Existing Company
Entities, as of the Closing Date (and assuming that the Closing shall have
occurred), (i) each Existing Company Entity’s assets do not constitute
unreasonably small capital to carry on their respective business for the current
fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by such Existing Company Entity, and projected capital
requirements and capital availability thereof and (ii) the current cash flow of
such Existing Company Entity, together with the proceeds such Existing Company
Entities would receive, were they to liquidate all of their respective assets,
after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its debt when such amounts are required
to be paid.  The Existing Company Entities do not intend to incur
debts beyond their respective ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be payable on or in respect of
its debt).

    
      
         

      

      
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    (u)           Certain
Fees.  Except as described in Schedule 3.1(u), no
brokerage or finder’s fees or commissions are or will be payable by any Existing
Company Entity to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.  The Investors shall have no
obligation with respect to any fees or with respect to any claims (other than
such fees or commissions owed by an Investor pursuant to written agreements
executed by such Investor which fees or commissions shall be the sole
responsibility of such Investor) made by or on behalf of other Persons for fees
of a type contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement.

     

    (v)           Certain Registration
Matters. Assuming the accuracy of the Investors’ representations and
warranties set forth in Sections 3.2(b)-(e), no registration under the
Securities Act is required for the offer and sale of the Shares by the Company
to the Investors under the Transaction Documents.  The Company is
eligible to register its Common Stock for resale by the Investors under Form S-1
promulgated under the Securities Act.  Except as specified in Schedule 3.1(v), no
Existing Company Entity has granted or agreed to grant to any Person other than
the Investors pursuant to the Registration Rights Agreement any rights
(including “piggy-back” registration rights) to have any securities of the
Company registered with the Commission or any other governmental authority that
have not been satisfied.

     

    (w)           Listing and Maintenance
Requirements.  Except as specified in the SEC Reports, the
Company has not, in the two years preceding the date hereof, received notice
from any Trading Market to the effect that the Company is not in compliance with
the listing or maintenance requirements thereof.  The Company is, and
has no reason to believe that it will not in the foreseeable future continue to
be, in compliance with the listing and maintenance requirements for continued
listing of the Common Stock on the Trading Market on which the Common Stock is
currently listed or quoted.  The issuance and sale of the Shares under
the Transaction Documents does not contravene the rules and regulations of the
Trading Market on which the Common Stock is currently listed or quoted, and no
approval of the stockholders of the Company thereunder is required for the
Company to issue and deliver to the Investors the Shares as contemplated by the
Transaction Documents.

     

    (x)           Investment
Company.  The Company is not, and is not an Affiliate of, and
immediately following the Closing will not have become, an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.

    
      
         

      

      
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    (y)           Application of Takeover
Protections.  The Company has taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Certificate of
Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Investors as a result of
the Investors and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including, without limitation, the
Company’s issuance of the Shares and the Investors’ ownership of the
Shares.

     

    (z)           No Additional
Agreements.  No Existing Company Entity has any agreement or
understanding with any Investor with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction
Documents.

     

    (aa)           Consultation with
Auditors.  The Company has consulted its independent auditors
concerning the accounting treatment of the transactions contemplated by the
Transaction Documents, and in connection therewith has furnished such auditors
complete copies of the Transaction Documents.

     

    (bb)           Foreign Corrupt Practices
Act.  No Existing Company Entity, nor to the knowledge of the
Company, any agent or other person acting on behalf of any Existing Company
Entity, has, directly or indirectly, (i) used any funds, or will use any
proceeds from the sale of the Shares, for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company or any such Existing Company Entity (or made by
any Person acting on their behalf of which the Company is aware) which is in
violation of law, or (iv) has violated in any material respect any provision of
the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.

     

    (cc)           PFIC.  The
Company is not, and does not intend to become a “passive foreign investment
company” within the meaning of Section 1297 of the U.S. Internal Revenue Code of
1986, as amended.

     

    (dd)           OFAC. No Existing
Company Entity nor, to the knowledge of the Company, any director, officer,
agent, employee, Affiliate or Person acting on behalf of any Existing Company
Entity, is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company
will not directly or indirectly use the proceeds of the sale of the Shares, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other Person or entity, towards any sales or operations
in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or
for the purpose of financing the activities of any Person currently subject to
any U.S. sanctions administered by OFAC.

     

    (ee)           Money Laundering
Laws. The operations of each Existing Company Entity are and have been
conducted at all times in compliance with the money laundering statutes of
applicable jurisdictions, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered or enforced by
any applicable governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving any Existing Company Entity with
respect to the Money Laundering Laws is pending or, to the best knowledge of the
Company, threatened.

    
      
         

      

      
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    (ff)           Other Representations and
Warranties Relating to CJV.

     

    (i)           All
material consents, approvals, authorizations or licenses requisite under PRC law
for the due and proper establishment and operation of CJV have been duly
obtained from the relevant PRC governmental authorities and are in full force
and effect.

     

    (ii)           All
filings and registrations with the PRC governmental authorities required in
respect of CJV and its capital structure and operations including, without
limitation, the registration with the Ministry of Commerce, the China Securities
Regulatory Commission, the State Administration of Industry and or their
respective local divisions of Commerce, the State Administration of Foreign
Exchange, tax bureau and customs authorities have been duly completed in
accordance with the relevant PRC rules and regulations, except where, the
failure to complete such filings and registrations does not, and would not,
individually or in the aggregate, have a Material Adverse Effect.

     

    (iii)           CJV
has complied with all relevant PRC laws and regulations regarding the
contribution and payment of its registered share capital, the payment schedule
of which has been approved by the relevant PRC governmental
authorities.  There are no outstanding commitments made by the Company
or any Subsidiary to sell any equity interest in CJV.

     

    (iv)           CJV
has not received any letter or notice from any relevant PRC governmental
authority notifying it of revocation of any licenses or qualifications issued to
it or any subsidy granted to it by any PRC governmental authority for
non-compliance with the terms thereof or with applicable PRC laws, or the lack
of compliance or remedial actions in respect of the activities carried out by
CJV, except such revocation as does not, and would not, individually or in the
aggregate, have a Material Adverse Effect.

     

    (v)           CJV
has conducted its business activities within the permitted scope of business or
has otherwise operated its business in compliance with all relevant legal
requirements and with all requisite licenses and approvals granted by competent
PRC governmental authorities other than such non-compliance that do not, and
would not, individually or in the aggregate, have a Material Adverse
Effect.  As to licenses, approvals and government grants and
concessions requisite or material for the conduct of any material part of CJV’s
business which is subject to periodic renewal, the Company has no knowledge of
any reasons related to the CJV for which such requisite renewals will not be
granted by the relevant PRC governmental authorities.

     

    (vi)           With
regard to employment and staff or labor, CJV has complied with all applicable
PRC laws and regulations in all material respects, including without limitation,
laws and regulations pertaining to welfare funds, social benefits, medical
benefits, insurance, retirement benefits, pensions or the like, other than such
non-compliance that do not, and would not, individually or in the aggregate,
have a Material Adverse Effect.

    
      
         

      

      
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    (vii)           All
agreements to which CJV is a party, and that are material to the business of
CJV, are valid, enforceable and free of defaults on the part of all parties
thereto except for defaults as are of a nonmaterial nature not entitling any
party to terminate such agreement(s).

     

    (gg)           Disclosure.  Neither
any Company Entity nor any Person acting on its behalf has provided any Investor
or its respective agents or counsel with any information that any Company Entity
believes constitutes material, non-public information concerning the Company,
the Subsidiaries or their respective businesses, except insofar as the existence
and terms of the proposed transactions contemplated hereunder may constitute
such information. The Company understands and confirms that the Investors will
rely on the foregoing representations and covenants in effecting transactions in
securities of the Company.  All disclosure provided to the Investors
regarding the Company Entities and their respective businesses and the
transactions contemplated hereby, furnished by or on behalf of the Company
Entities (including their respective representations and warranties set forth in
this Agreement and the disclosure set forth in any diligence report or business
plan provided by any Company Entity or any Person acting on such Company
Entity’s behalf) are true and correct and do not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading.

     

    3.2.           Representations and
Warranties of the Investors.  Each Investor hereby, for itself
and for no other Investor, represents and warrants to the Company as
follows:

     

    (a)           Organization;
Authority.  Such Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents to which it is a party or a signatory and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by such Investor
of the transactions contemplated by this Agreement has been duly authorized by
all necessary corporate or, if such Investor is not a corporation, such
partnership, limited liability company or other applicable like action, on the
part of such Investor.  Each Transaction Document executed by such
Investor has been duly executed by such Investor, and when delivered by such
Investor in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Investor, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
application.

     

    (b)           Investment
Intent.  Such Investor is acquiring the Shares as principal for
its own account and not with a view to or for distributing or reselling such
Shares or any part thereof, without prejudice, however, to such Investor’s right
at all times to sell or otherwise dispose of all or any part of such Shares in
compliance with applicable federal and state securities laws.  Subject
to the immediately preceding sentence, nothing contained herein shall be deemed
a representation or warranty by such Investor to hold the Shares for any period
of time.  Such Investor is acquiring the Shares hereunder in the
ordinary course of its business. Such Investor does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Shares.

    
      
         

      

      
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    (c)           Investor
Status.  At the time such Investor was offered the Shares, it
was either, and at the date hereof it is, a “qualified institutional buyer” as
defined in Rule 144A under the Securities Act, or an “accredited investor”
within the meaning of Regulation D under the Securities Act.  Such
Investor is not a registered broker-dealer under Section 15 of the Exchange
Act.  Such Investor has such experience in business and financial
matters that it is capable of evaluating the merits and risks of an investment
in the Shares.  Such Investor acknowledges that an investment in the
Shares is speculative and involves a high degree of risk.

     

    (d)           General
Solicitation.  Such Investor is not purchasing the Shares as a
result of any advertisement, article, notice, meeting, or other communication
regarding the Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

     

    (e)           Access to
Information.  Such Investor acknowledges that it has reviewed
the Disclosure Materials and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Shares and the merits and risks of investing in the Shares; (ii)
access to information about the Company and the Subsidiaries and their
respective financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment; and
(iii) the opportunity to obtain such additional information that the Company
possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the
investment.  Neither such inquiries nor any other investigation
conducted by or on behalf of such Investor or its representatives or counsel
shall modify, amend or affect such Investor’s right to rely on the truth,
accuracy and completeness of the Disclosure Materials and the Existing Company
Entities’ representations and warranties contained in the Transaction
Documents.

     

    (f)           Certain Trading
Activities.  Such Investor has not directly or indirectly, nor
has any Person acting on behalf of or pursuant to any understanding with such
Investor, engaged in any transactions in the securities of the Company
(including, without limitations, any Short Sales involving the Company’s
securities) since the earlier to occur of (1) the time that such Investor was
first contacted by the Company or Roth Capital Partners, LLC regarding an
investment in the Company and (2) the 30th day
prior to the date of this Agreement.  Such Investor covenants that
neither it nor any Person acting on its behalf or pursuant to any understanding
with it will engage in any transactions in the securities of the Company
(including Short Sales) prior to the time that the transactions contemplated by
this Agreement are publicly disclosed.

     

    (g)           Independent Investment
Decision.  Such Investor has independently evaluated the merits
of its decision to purchase the Shares pursuant to the Transaction Documents,
and such Investor confirms that it has not relied on the advice of any other
Investor’s business and/or legal counsel in making such
decision.  Such Investor has not relied on the business or legal
advice of ROTH Capital Partners, LLC or any of its agents, counsel or Affiliates
in making its investment decision hereunder, and confirms that none of such
Persons has made any representations or warranties to such Investor in
connection with the transactions contemplated by the Transaction
Documents.

    
      
         

      

      
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    (h)           Rule 144.  Such
Investor understands that the Securities must be held indefinitely unless such
Securities are registered under the Securities Act or an exemption from
registration is available.  Such Investor acknowledges that it is
familiar with Rule 144 and that such Investor has been advised that
Rule 144 permits resales only under certain circumstances.  Such
Investor understands that to the extent that Rule 144 is not available,
such Investor will be unable to sell any Securities without either registration
under the Securities Act or the existence of another exemption from such
registration requirement.

     

    (i)           General.  Such
Investor understands that the Securities are being offered and sold in reliance
on a transactional exemption from the registration requirements of federal and
state securities laws and the Company is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understandings
of such Investor set forth herein in order to determine the applicability of
such exemptions and the suitability of such Investor to acquire the
Securities.  Such Investor understands that no United States federal
or state agency or any government or governmental agency has passed upon or made
any recommendation or endorsement of the Securities.

     

    The
Existing Company Entities acknowledge and agree that no Investor has made or
makes any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section
3.2.

     

    ARTICLE
4.

    OTHER
AGREEMENTS OF THE PARTIES

     

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

     

    (b)           Certificates
evidencing Securities (as defined in Section 4.1(c)) will contain the following
legend, until such time as they are not required under Section
4.1(c):

     

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH
SECURITIES.

    
      
         

      

      
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    The
Company acknowledges and agrees that an Investor may from time to time pledge,
and/or grant a security interest in some or all of the Securities pursuant to a
bona fide margin agreement in connection with a bona fide margin account and, if
required under the terms of such agreement or account, such Investor may
transfer pledged or secured Shares to the pledgees or secured
parties.  Such a pledge or transfer would not be subject to approval
or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but
such legal opinion may be required in connection with a subsequent transfer
following default by the Investor transferee of the pledge.  No notice
shall be required of such pledge.  At the appropriate Investor’s
expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request in connection with
a pledge or transfer thereof including the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) of the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders thereunder.  Except as otherwise provided in
Section 4.1(c), any Securities subject to a pledge or security interest as
contemplated by this Section 4.1(b) shall continue to bear the legend set forth
in this Section 4.1(b) and be subject to the restrictions on transfer set forth
in Section 4.1(a).

     

    (c)           Certificates
evidencing Shares due to be delivered pursuant to the Transaction Documents (the
“Securities”), shall not contain any legend (including the legend set forth in
Section 4.1(b)): (i) while a registration statement (including the Registration
Statement) covering such Securities is then effective, or (ii) following a sale
or transfer of such Securities pursuant to Rule 144 (assuming the transferee is
not an Affiliate of the Company), or (iii) while such Securities are eligible
for sale by the selling Investor without volume restrictions under Rule
144.  The Company agrees that following the Effective Date or such
other time as legends are no longer required to be set forth on certificates
representing Securities under this Section 4.1(c), it will, no longer than three
(3) Trading Days following the delivery by an Investor to the Company or the
Transfer Agent of a certificate representing such Securities containing a
restrictive legend, deliver or instruct the Transfer Agent to deliver to such
Investor, Securities which are free of all restrictive and other
legends.  If the Company is then eligible, certificates for Securities
subject to legend removal hereunder shall be transmitted by the Transfer Agent
to an Investor by crediting the prime brokerage account of such Investor with
the Depository Trust Company System as directed by such Investor.  If
an Investor shall make a sale or transfer of Securities either (x) pursuant to
Rule 144 or (y) pursuant to a registration statement and in each case shall have
delivered to the Company or the Company’s transfer agent the certificate
representing the applicable Securities containing a restrictive legend which are
the subject of such sale or transfer and a representation letter in customary
form (the date of such sale or transfer and Securities delivery being the “Share
Delivery Date”) and (1) the Company shall fail to deliver or cause to be
delivered to such Investor a certificate representing such Securities that is
free from all restrictive or other legends by the third Trading Day following
the Share Delivery Date and (2) following such third Trading Day after the Share
Delivery Date and prior to the time such Securities are received free from
restrictive legends, the Investor, or any third party on behalf of such
Investor, purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Investor of such
Securities (a “Buy-In”), then, in addition to any other rights available to the
Investor under the Transaction Documents and applicable law, the Company shall
pay in cash to the Investor (for costs incurred either directly by such Investor
or on behalf of a third party) the amount by which the total purchase price paid
for Common Stock as a result of the Buy-In (including brokerage commissions, if
any) exceed the proceeds received by such Investor as a result of the sale to
which such Buy-In relates.  The Investor shall provide the Company
written notice indicating the amounts payable to the Investor in respect of the
Buy-In.  The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section.

    
      
         

      

      
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    4.2           Furnishing of
Information.  As long as any Investor owns any Securities, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act.  As long
as any Investor owns Securities, if the Company is not required to file reports
pursuant to such laws, it will prepare and furnish to the Investors and make
publicly available in accordance with Rule 144(c) such information as is
required for the Investors to sell the Securities under Rule 144.  The
Company further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell the Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule
144.

     

    4.3           Integration.  The
Company shall not, and shall use its best efforts to ensure that no Affiliate of
the Company shall, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Shares in a manner
that would require the registration under the Securities Act of the sale of the
Shares to the Investors, or that would be integrated with the offer or sale of
the Shares for purposes of the rules and regulations of any Trading Market in a
manner that would require stockholder approval of the sale of the Shares to the
Investors.

     

    4.4           Subsequent
Registrations.  The Company may not file any registration
statement with the Commission with respect to any securities of the Company
prior to the time that all Registrable Shares are registered pursuant to one or
more effective Registration Statement(s), and the prospectuses forming a portion
of such Registration Statement(s) is available for the resale of all Registrable
Shares.

     

    4.5
    Securities Laws
Disclosure; Publicity.  By 5:00 p.m. (New York time) on the Trading Day
following the Closing Date, (a) the Company shall issue a press release,
disclosing the transactions contemplated by the Transaction Documents and the
Closing and (b) the Company will file a Form 8-K disclosing the material terms
of the Transaction Documents (and attach as exhibits thereto all existing
Transaction Documents) and the Closing.  The Company covenants that following
such disclosure, the Investors shall no longer be in possession of any material,
non-public information with respect to any of the Existing Company Entities.  In
addition, the Company will make such other filings and notices in the manner and
time required by the Commission and the Trading Market on which the Common Stock
is listed.  Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Investor, or include the name of any Investor in any
filing with the Commission (other than the Registration Statement and any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the Exchange Act) or any regulatory agency or
Trading Market, without the prior written consent of such Investor, except to
the extent such disclosure is required by law or Trading Market
regulations.

    
      
         

      

      
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    4.6
          Limitation on Issuance of
Future Priced Securities.  During the twelve months following
the Closing Date, the Company shall not issue any “Future Priced Securities” as
such term is described by NASD IM-4350-1.

     

    4.7           Indemnification of
Investors.  In addition to the indemnity provided in the
Registration Rights Agreement, the Company Entities will jointly and severally
indemnify and hold the Investors and their directors, officers, shareholders,
partners, employees and agents (each, an “Investor Party”) harmless from any and
all losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys’ fees and costs of investigation in respect thereof
(collectively, “Losses”) that any such Investor Party may suffer or incur as a
result of or relating to any misrepresentation, breach or inaccuracy of any
representation, warranty, covenant or agreement made by any of the Company
Entities in any Transaction Document.  In addition to the indemnity
contained herein, the Company will reimburse each Investor Party for its
reasonable legal and other expenses (including the cost of any investigation,
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred.  Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 4.7 shall be the same as those set forth in
Section 5 of the Registration Rights Agreement.

     

    4.8           Non-Public
Information.  The Company covenants and agrees that neither it,
any Company Entity nor any other Person acting on its or their behalf will
provide any Investor or its agents or counsel with any information that the
Company believes constitutes material non-public information, unless prior
thereto such Investor shall have executed a written agreement regarding the
confidentiality and use of such information.  The Company understands
and confirms that each Investor shall be relying on the foregoing
representations in effecting transactions in securities of the
Company.

     

    4.9           Listing of
Shares.  The Company agrees, (i) if the Company applies to have
the Common Stock traded on any other Trading Market, it will include in such
application the Shares, and will take such other action as is necessary or
desirable to cause the Shares to be listed on such other Trading Market as
promptly as possible, and (ii) the Company will take all action reasonably
necessary to continue the listing and trading of its Common Stock on a Trading
Market and will comply in all material respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading
Market.

     

    4.10           Use of
Proceeds.  The Company will use the net proceeds from the sale
of the Shares hereunder for the purchase of inventory.

    
      
         

      

      
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    4.11           Further
Assurances.  The Company will, and will cause all of the
Company Entities and their management to, use their best efforts to satisfy all
of the closing conditions under Section 5.1, and will not take any action which
could frustrate or delay the satisfaction of such conditions.

     

    4.12           Right of First
Refusal.  (a)  From the date hereof until the one
year anniversary of the Effective Date (plus one additional day for each Trading
Day following the Effective Date of any Registration Statement during which
either (1) the Registration Statement is not effective or (2) the
prospectus forming a portion of the Registration Statement is not available for
the resale of all Registrable Securities (as defined in the Registration Rights
Agreement)) (the “Trigger Date”), the Company will not, directly or indirectly,
offer, sell, grant any option to purchase, or otherwise dispose of (or announce
any offer, sale, grant or any option to purchase or other disposition of) any of
its equity or equity equivalent securities, including, without limitation, any
debt, preferred stock or other instrument or security that is, at any time
during its life and under any circumstances, convertible into or exchangeable or
exercisable for shares of Common Stock or Common Stock Equivalents, or if the
Company shall receive an offer regarding the purchase of the Company’s
securities and desires to offer securities consistent with or otherwise in
connection with or in furtherance of such offer (any such offer, sale, grant,
disposition or announcement being referred to as a “Subsequent Placement”)
unless the Company shall have first complied with this Section
4.12.  If the Company desires to engage in a Subsequent Placement it
shall deliver to each of the Investors a written notice requesting their written
approval to receive nonpublic information regarding the Company.  The
Investors shall have ten (10) days to deliver to the Company such
approval.  Any Investor failing to deliver timely to the Company such
written approval, or who shall have delivered to the Company a written notice
withholding such approval, shall be deemed to have waived its rights under this
Section 4.12 with regard to such Subsequent Placement.  The Investors
who, in response to such request from the Company, shall have delivered timely
to the Company a written approval to receive nonpublic information regarding the
Company (collectively, the “Responding Investors” and each a “Responding
Investor”), shall receive a written notice that the Company desires to engage in
a Subsequent Placement specifying the general terms of the offering the Company
desires to make (including, without limitation, all information relating to
price, structure and amount of such offering, but not including the identity of
any potential investors therein) and for a period of at least twenty (20)
Business Days after the giving of such notice the Company agrees to negotiate in
good faith with the Responding Investors the terms of a sale of the Company’s
securities to the Responding Investors.

     

    (b)           In
the event that a Subsequent Placement contemplated in the last sentence of
Section 4.12(a) shall not have closed by the 30th
Business Day following the delivery to the Responding Investors of the written
notice for such Subsequent Placement, and in any event prior to such Subsequent
Placement, the Company shall deliver to the Responding  Investors a
written notice (the “Offer Notice”) of any proposed or intended issuance or
sale or exchange (the “Offer”) of the securities being offered (the
“Offered Securities”) in a Subsequent Placement, which Offer Notice shall (v)
identify and describe the Offered Securities, (x) include the final form of
documents and agreements governing the Subsequent Placement, (y) specify
the price and other terms upon which the Offered Securities are to be issued,
sold or exchanged, and the number or amount of the Offered Securities to be
issued, sold or exchanged, and (z) offer to issue and sell to or exchange with
such Investors all of the Offered Securities, allocated among such Responding
Investors (a) based on such Responding Investor’s pro rata portion of the total
Investment Amount hereunder attributable to such Responding Investors (the
“Basic Amount”), and (b) with respect to each of the Responding Investors that
elects to purchase its Basic Amount, any additional portion of the Offered
Securities attributable to the Basic Amounts of other Responding Investors as
such Responding Investor shall indicate it will purchase or acquire should the
other Responding Investors subscribe for less than their Basic Amounts (the
“Undersubscription Amount”), which process shall be repeated until the
Responding Investors shall have an opportunity to subscribe for any remaining
Undersubscription Amount.

    
      
         

      

      
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    (c)           To
accept an Offer, in whole or in part, such Responding Investor must deliver a
written notice to the Company prior to the end of the fifth Business Day after
such Responding Investor’s receipt of the Offer Notice (the “Offer Period”),
setting forth the portion of such Responding Investor’s Basic Amount that such
Responding Investor elects to purchase and, if such Responding Investor shall
elect to purchase all of its Basic Amount, the Undersubscription Amount, if any,
that such Responding Investor elects to purchase (in either case, the “Notice of
Acceptance”).  If the Basic Amounts subscribed for by all Responding
Investors are less than the total of all of the Basic Amounts, then each
Responding Investor who has set forth an Undersubscription Amount in its Notice
of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the
Undersubscription Amounts subscribed for exceed the difference between the total
of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), each Responding Investor who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Basic Amount of such Investor bears to
the total Basic Amounts of all Responding Investors that have subscribed for
Undersubscription Amounts, subject to rounding by the Company to the extent its
deems reasonably necessary.

     

    (d)           The
Company shall have sixty (60) Business Days from the expiration of the Offer
Period above to (i) offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Responding Investors (the “Refused Securities”), but only to the offerees
described in the Offer Notice (if so described therein) and only upon terms and
conditions (including, without limitation, unit prices and interest rates) that
are not more favorable to the acquiring person or persons or less favorable to
the Company than those set forth in the Offer Notice and (ii) to publicly
announce (a) the execution of such Subsequent Placement Agreement (as defined
below), and (b) either (x) the consummation of the transactions contemplated by
such Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which shall be filed with the Commission on a Current
Report on Form 8-K with such Subsequent Placement Agreement and any documents
contemplated therein filed as exhibits thereto.  If no disclosure has
been made by the Company by the end of the sixty (60) Business Day period
referred to in this subsection (d), the Subsequent Placement shall be deemed to
have been abandoned and the Responding Investors shall no longer be deemed to be
in possession of any non-public information with respect to the
Company.

    
      
         

      

      
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    (e)           In
the event the Company shall propose to sell less than all the Refused Securities
(any such sale to be in the manner and on the terms specified in this Section
4.12), then each Responding Investor may, at its sole option and in its sole
discretion, reduce the number or amount of the Offered Securities specified in
its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that such Responding Investor elected to
purchase pursuant to Section 4.12(c) above multiplied by a fraction, (i) the
numerator of which shall be the number or amount of Offered Securities the
Company actually proposes to issue, sell or exchange (including Offered
Securities to be issued or sold to Investors pursuant to Section 4.12(c) above
prior to such reduction) and (ii) the denominator of which shall be the original
amount of the Offered Securities.  In the event that any Responding
Investor so elects to reduce the number or amount of Offered Securities
specified in its Notice of Acceptance, the Company may not issue, sell or
exchange more than the reduced number or amount of the Offered Securities unless
and until such securities have again been offered to the Responding Investors in
accordance with Section 4.12(b) above.

     

    (f)           Upon
the closing of the issuance, sale or exchange of all or less than all of the
Refused Securities, the Responding Investors shall acquire from the Company, and
the Company shall issue to the Responding Investors, the number or amount of
Offered Securities specified in the Notices of Acceptance, as reduced pursuant
to Section 4.12(e) above if the Responding Investors have so elected, upon the
terms and conditions specified in the Offer.  The purchase by the
Responding Investors of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Responding Investors
of a purchase agreement relating to such Offered Securities substantially the
same in form and substance as the agreement disclosed above in Section
4.12(b)(x) and otherwise reasonably satisfactory to Responding Investors’
counsel (such agreement, the “Subsequent Placement Agreement”).

     

    (g)           Any
Offered Securities not acquired by the Responding Investors or other persons in
accordance with Section 4.12(f) above may not be issued, sold or exchanged until
they are again offered to the Investors under the procedures specified in this
Agreement.

     

    (h)           In
exchange for the Company’s willingness to agree to these procedures, each
Responding Investor hereby irrevocably agrees that it will hold in strict
confidence any and all Offer Notices, the information contained therein, and the
fact that the Company is contemplating a Subsequent Placement, until such time
as the Company is obligated to make the disclosures required by Section 4.12(d),
or unless it notifies the Company in writing that it no longer desires to
receive Offer Notices.

     

    (i)           The
rights contained in this Section 4.12 shall not apply to the issuance and sale
by the Company of shares of Common Stock or Common Stock Equivalents issued as
consideration for the acquisition of another company or business in which the
shareholders of the Company do not have an ownership interest, and where the
primary purpose is not to raise capital for the Company or Subsidiary, which
acquisition has been approved by the Board of Directors of the
Company.

     

    ARTICLE
5.

    CONDITIONS
PRECEDENT TO CLOSING

     

    5.1.           Conditions Precedent to the
Obligations of the Investors to Purchase Shares.  The
obligation of each Investor to acquire Shares at the Closing is subject to the
satisfaction or waiver by such Investor, at or before the Closing, of each of
the following conditions:

    
      
         

      

      
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    (a)           Representations and
Warranties.  The representations and warranties of the Existing
Company Entities contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing as though made on and as
of such date;

     

    (b)           Performance.  The
Existing Company Entities shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by it at or
prior to the Closing;

     

    (c)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

     

    (d)           Adverse
Changes.  Since the date of execution of this Agreement, no
event or series of events shall have occurred that reasonably could have or
result in a Material Adverse Effect or a material adverse change with respect to
the Company or the Subsidiaries;

     

    (e)           Closing Officer’s
Certificate.  At the Closing, the Company shall have delivered
to each Investor an officer’s certificate to the effect that each of the
conditions specified in Sections 5.1(a) - 5.1(d) is satisfied in all
respects;

     

    (f)           Company
Agreements.  The Company shall have delivered or cause to be
delivered:

     

    (i)           This
Agreement, duly executed by the Company and CJV;

     

    (ii)           The
Closing Escrow Agreement, duly executed by the Company and the Escrow
Agent;

     

    (iii)           The
Registration Rights Agreement, duly executed by the Company;

     

    (g)           Company
Deliverables.  The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a); and

     

    (h)           Termination.  This
Agreement shall not have been terminated as to such Investor in accordance with
Section 6.5.

     

    5.2           Conditions Precedent to the
Obligations of the Company to Sell Shares.  The obligation of
the Company to sell Shares at the Closing is subject to the satisfaction or
waiver by the Company, at or before the Closing, of each of the following
conditions:

     

    (a)           Representations and
Warranties.  The representations and warranties of each
Investor contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though made on and as of
such date;

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    (b)           Performance.  Each
Investor shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Investor at or
prior to the Closing;

     

    (c)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

     

    (d)           Investor
Deliverables.  Each Investor shall have delivered the
Registration Rights Agreement and the Closing Escrow Agreement, each duly
executed by such Investor and a completed Selling Holder Questionnaire (as
defined in the Registration Rights Agreement); and

     

    (e)           Termination.  This
Agreement shall not have been terminated as to such Investor in accordance with
Section 6.5.

     

    ARTICLE
6.

    MISCELLANEOUS

     

    6.1           Fees and
Expenses.  Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of the Transaction Documents.  The Company
shall pay all stamp and other taxes and duties levied in connection with the
sale of the Shares.

     

    6.2           Entire
Agreement.  The Transaction Documents, together with the Exhibits, Appendix A and Appendix B, and
Schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.

     

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

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    
      	 
      	
              If
      to the Company:

            	
              Yongye
      Biotechnology International, Inc.

              6th
      Floor, Suite 608 Xue Yuan International Tower

              No.
      1 Zhichun Road

              Haidian
      District

              Beijing
      100083

              PR
      China

              Facsimile:  +86
      10.8231.1797

              Email:
      wzs@china-yongye.com

              Attn.:  CEO

            
	 
      	 
      	 
      
	 
      	
              With
      a copy to:

            	
              Loeb
      & Loeb LLP

              345
      Park Avenue

              New
      York, NY 10154

              Facsimile:
      (212) 407-4000

              Email:
      mnussbaum@loeb.com

              Attention:
      Mitchell S. Nussbaum, Esq.

            
	 
      	 
      	 
      
	 
      	
              If
      to an Investor:

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

            

    

     

    or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

     

    6.4           Amendments; Waivers; No
Additional Consideration.  No provision of this Agreement may
be waived or amended except in a written instrument signed by the Company and
the Investors holding a majority of the Shares at the time of the waiver or
amendment.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.  No consideration shall be offered or
paid to any Investor to amend or consent to a waiver or modification of any
provision of any Transaction Document unless the same consideration is also
offered to all Investors who then hold Shares.

     

    6.5           Termination.  This
Agreement may be terminated prior to Closing:

     

    (a)           by
written agreement of the Investors and the Company, a copy of which shall be
provided to the Escrow Agent; and

     

    (b)           by
the Company or an Investor (as to itself but no other Investor) upon written
notice to the other, with a copy to the Escrow Agent, if the Closing shall not
have taken place by 6:30 p.m. Eastern time on the Outside Date; provided, that
the right to terminate this Agreement under this Section 6.5(b) shall not
be available to any Person whose failure to comply with its obligations under
this Agreement has been the cause of or resulted in the failure of the Closing
to occur on or before such time.

     

    In the
event of a termination pursuant to Section 6.5(a) or 6.5(b), each Investor shall
have the right to a return of up to its entire Investment Amount deposited with
the Escrow Agent pursuant to Section 2.2(c), without interest or
deduction.  The Company covenants and agrees to cooperate with such
Investor in obtaining the return of its Investment Amount, and shall not
communicate any instructions to the contrary to the Escrow
Agent.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    In the
event of a termination pursuant to this Section 6.5, the Company shall promptly
notify all non-terminating Investors. Upon a termination in accordance with this
Section 6.5, the Company and the terminating Investor(s) shall not have any
further obligation or liability (including as arising from such termination) to
the other and no Investor will have any liability to any other Investor under
the Transaction Documents as a result therefrom.

     

    6.6           Construction.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.  This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.

     

    6.7           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the
Investors.  Any Investor may assign any or all of its rights under
this Agreement to any Person to whom such Investor assigns or transfers any
Shares, provided such transferee agrees in writing to be bound, with respect to
the transferred Shares, by the provisions hereof that apply to the
“Investors.”  Notwithstanding the foregoing, Full Alliance may assign
its rights and delegate its duties hereunder regarding the purchase and sale
contemplated by Article 2 to Inner Mongolia Biotechnology Co., Ltd. (“IMGYY”),
in which case (a) the obligation in Section 2.2(c) to deliver such Investor’s
Investment Amount in United States Dollars shall be replaced by an obligation to
deliver such IMGYY’s Investment Amount in Renminbi calculated at the prevailing
Bank of China exchange rate on the date of this Agreement to the CJV, and (b)
the rights and duties of the Company hereunder will, solely with respect to such
Investor, in addition to delivering that number of Shares as shall equal the
Investment Amount for such Investor divided by the Per Share Purchase Price to
such Investor, include the further obligation (which shall automatically be
assigned or delegated (as the case may be) to, the CJV together with the right
to receive such Investment Amount as described in clause (a) above) to register
such capital investment represented by the Investment Amount but without
adjusting or reallocating any of IMGYY’s ownership rights in the CJV, including
to distributions of profits or in dissolution.  Any such assignment by
Full Alliance shall not relieve it of any obligations hereunder.

     

    6.8           No Third-Party
Beneficiaries.  Except as otherwise contemplated by Section
6.7, this Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.7 (as to each Investor Party).

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

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

     

    6.10           Survival.  The
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Shares.

     

    6.11           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

     

    6.12           Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

     

    6.13           Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) the Transaction Documents,
whenever any Investor exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Investor may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    6.14           Replacement of
Shares.  If any certificate or instrument evidencing any Shares
is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation thereof, or in
lieu of and substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and customary and reasonable indemnity, if
requested.  The applicants for a new certificate or instrument under
such circumstances shall also pay any reasonable third-party costs associated
with the issuance of such replacement Shares.  If a replacement
certificate or instrument evidencing any Shares is requested due to a mutilation
thereof, the Company may require delivery of such mutilated certificate or
instrument as a condition precedent to any issuance of a
replacement.

     

    6.15           Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Investors and the Company will
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

     

    6.16           Payment Set
Aside.  To the extent that the Company makes a payment or
payments to any Investor pursuant to any Transaction Document or an Investor
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

     

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

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    6.18           Limitation of
Liability.  Notwithstanding anything herein to the contrary,
the Company acknowledges and agrees that the liability of an Investor arising
directly or indirectly, under any Transaction Document of any and every nature
whatsoever shall be satisfied solely out of the assets of such Investor, and
that no trustee, officer, other investment vehicle or any other Affiliate of
such Investor or any investor, shareholder or holder of shares of beneficial
interest of such a Investor shall be personally liable for any liabilities of
such Investor.

     

    [THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

    [SIGNATURE
PAGES TO FOLLOW]

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

    

    
      
        
          
            
              
                
                  	 
      	
                          YONGYE
      BIOTECHNOLOGY INTERNATIONAL, INC.

                           

                        
	 
      	
                          By:

                        	

                          /s/
      Zishen Wu

                        	
                           

                        
	 
      	
                          Name:
      Zishen Wu

                        
	 
      	
                          Title:   CEO

                        
	 
      	 
      
	 
      	
                          INNER
      MONGOLIA YONGYE NONG FENG

                          BIOTECHNOLOGY
      CO., LTD.

                           

                        
	 
      	
                          By:

                        	

                          /s/
      Zishen Wu

                        	
                           

                        
	 
      	
                          Name:
      Zishen Wu

                        
	 
      	
                          Title:  CEO

                        

                

              

            

          

        

      

    

     

    [THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

    [SIGNATURE
PAGES FOR INVESTORS TO FOLLOW]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
       IN
WITNESS WHEREOF, the parties hereto have caused the Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

       

      
        	
                NAME
      OF INVESTOR

                 

                LAKE
      UNION CAPITAL FUND, LP

                 

              
	
                By:

              	
                /s/  Michael
      Self

              
	
                Name:

              	
                Michael
      Self

              
	
                Title:

              	
                Managing
      Member & Portfolio Manager

              
	
                Investment
      Amount:

              	
                $3,080,000

              
	
                Tax
      ID No.:

              	
                20-0061043

              
	 
      
	
                ADDRESS
      FOR NOTICE

              
	 
	
                c/o:

              	
                Lake
      Union Capital Management

              
	
                Street:

              	
                600
      University Street, Suite 1520

              
	
                City/State/Zip:

              	
                Seattle,
      WA 98101

              
	
                Attention:

              	
                Amber
      Bosch

              
	
                Tel:

              	
                206-838-3277

              
	
                Fax:

              	
                206-859-5188

              
	
                 

                DELIVERY
      INSTRUCTIONS

                (if
      different from above)

                 

              
	
                c/o:

              	 
      
	
                Street:

              	 
      
	
                City/State/Zip:

              	 
      
	
                Attention:

              	 
      
	
                Tel:

              	 
      
	
                Fax:

              	 
      

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      IN
WITNESS WHEREOF, the parties hereto have caused the Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    SPECIAL
      SITUATIONS FUND III QP, LP

                     

                  
	
                    By:

                  	
                    /s/  David
      Greenhouse

                  
	
                    Name:

                  	
                    David
      Greenhouse

                  
	
                    Title:

                  	
                    Managing
      Director

                  
	
                    Investment
      Amount:

                  	
                    $1,500,000.04

                  
	
                    Tax
      ID No.:

                  	
                    13-3737427

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	 
      
	
                    Street:

                  	
                    527
      Madison Avenue, Suite 2600

                  
	
                    City/State/Zip:

                  	
                    New
      York, NY 10022

                  
	
                    Attention:

                  	
                    Marianne
      Kelly

                  
	
                    Tel:

                  	
                    212-319-6625

                  
	
                    Fax:

                  	
                    212-319-6670

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	 
      
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    SPECIAL
      SITUATIONS PRIVATE EQUITY

                    FUND,
      L.P.

                     

                  
	
                    By:

                  	
                    /s/  David
      Greenhouse

                  
	
                    Name:

                  	
                    David
      Greenhouse

                  
	
                    Title:

                  	
                    Managing
      Director

                  
	
                    Investment
      Amount:

                  	
                    $500,001.04

                  
	
                    Tax
      ID No.:

                  	
                    13-3916551

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	 
      
	
                    Street:

                  	
                    527
      Madison Avenue, Suite 2600

                  
	
                    City/State/Zip:

                  	
                    New
      York, NY 10022

                  
	
                    Attention:

                  	
                    Marianne
      Kelly

                  
	
                    Tel:

                  	
                    212-319-6625

                  
	
                    Fax:

                  	
                    212-319-6670

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	 
      
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    GUERILLA
      PARTNERS, LP

                     

                  
	
                    By:

                  	
                    /s/  Leigh
      S. Curry

                  
	
                    Name:

                  	
                    Leigh
      S. Curry

                  
	
                    Title:

                  	
                    Managing
      Director

                  
	
                    Investment
      Amount:

                  	
                    $192,500   $125,000
      x $1.54

                  
	
                    Tax
      ID No.:

                  	
                    52-2141646

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	
                    Guerilla
      Capital Management, LLC

                  
	
                    Street:

                  	
                    237
      Park Avenue, 9th
      Floor

                  
	
                    City/State/Zip:

                  	
                    New
      York, NY 10017

                  
	
                    Attention:

                  	
                    Peter
      Siris

                  
	
                    Tel:

                  	
                    212-692-7692

                  
	
                    Fax:

                  	
                    212-692-7624

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	 
      
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    HUA-MEI
      21st
      CENTURY PARTNERS, LP

                     

                  
	
                    By:

                  	
                    /s/
      Leigh S. Curry

                  
	
                    Name:

                  	
                    Leigh
      S. Curry

                  
	
                    Title:

                  	
                    Managing
      Director

                  
	
                    Investment
      Amount:

                  	
                    $308,000    $200,000
      x $1.54

                  
	
                    Tax
      ID No.:

                  	
                    20-8026466

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	
                    Guerilla
      Capital Management, LLC

                  
	
                    Street:

                  	
                    237
      Park Avenue, 9th
      Floor

                  
	
                    City/State/Zip:

                  	
                    New
      York, NY 10017

                  
	
                    Attention:

                  	
                    Peter
      Siris

                  
	
                    Tel:

                  	
                    212-692-7692

                  
	
                    Fax:

                  	
                    212-692-7624

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	 
      
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    LAKE
      STREET FUND, L.P.

                     

                  
	
                    By:

                  	
                    /s/  Scott
      Hood

                  
	
                    Name:

                  	
                    Scott
      Hood

                  
	
                    Title:

                  	
                    Managing
      Director

                  
	
                    Investment
      Amount:

                  	
                    $399,999.60

                  
	
                    Tax
      ID No.:

                  	
                    02-0638508

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	
                    First
      Wilshire Securities Management, Inc.

                  
	
                    Street:

                  	
                    1224
      East Green Street, Suite 200

                  
	
                    City/State/Zip:

                  	
                    Pasadena,
      California 91106

                  
	
                    Attention:

                  	
                    Scott
      Hood

                  
	
                    Tel:

                  	
                    (626)
      796-6622

                  
	
                    Fax:

                  	
                    (626)
      796-8990

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	
                    Same
      as above

                  
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    Fred
      L. Astman Wedbush Securities Inc. CTDN IRA

                    R/O
      Holding 10/13/92

                     

                  
	
                    By:

                  	
                    /s/  Fred
      L. Astman

                  
	
                    Name:

                  	
                    Fred
      L. Astman

                  
	
                    Title:

                  	
                    Account
      Owner

                  
	
                    Investment
      Amount:

                  	
                    $299,999.70

                  
	
                    Tax
      ID No.:

                  	
                    ###-##-####

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	
                    First
      Wilshire Securities Management, Inc.

                  
	
                    Street:

                  	
                    1224
      East Green Street, Suite 200

                  
	
                    City/State/Zip:

                  	
                    Pasadena,
      California 91106

                  
	
                    Attention:

                  	
                    Fred
      L. Astman

                  
	
                    Tel:

                  	
                    (626)
      796-6622

                  
	
                    Fax:

                  	
                    (626)
      796-8990

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	
                    Same
      as above

                  
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    The
      Hood Family Trust DTD 11/27/07

                     

                  
	
                    By:

                  	
                    /s/  Scott
      W. Hood       /s/ Heidi J.
      Hood

                  
	
                    Name:

                  	
                    Scott
      W. Hood    Heidi J. Hood

                  
	
                    Title:

                  	
                    Trustee

                  
	
                    Investment
      Amount:

                  	
                    $25,000.36

                  
	
                    Tax
      ID No.:

                  	
                    ###-##-####

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	
                    First
      Wilshire Securities Management, Inc.

                  
	
                    Street:

                  	
                    1224
      East Green Street, Suite 200

                  
	
                    City/State/Zip:

                  	
                    Pasadena,
      California 91106

                  
	
                    Attention:

                  	
                    Scott
      Hood

                  
	
                    Tel:

                  	
                    (626)
      796-6622

                  
	
                    Fax:

                  	
                    (626)
      796-8990

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	
                    Same
      as above

                  
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    John
      Peter Selda

                    Wedbush
      Securities Inc. CTDN

                    IRA
      Cont 08/27/96

                     

                  
	
                    By:

                  	
                    /s/
      John Peter Selda

                  
	
                    Name:

                  	
                    John
      Peter Selda

                  
	
                    Title:

                  	
                    Account
      Owner

                  
	
                    Investment
      Amount:

                  	
                    $74,999.54

                  
	
                    Tax
      ID No.:

                  	
                    ###-##-####

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	 
      
	
                    Street:

                  	
                    2832
      NW Cumberland Road

                  
	
                    City/State/Zip:

                  	
                    Portland,
      OR 97210

                  
	
                    Attention:

                  	
                    John
      Peter Selda

                  
	
                    Tel:

                  	
                     
      

                  
	
                    Fax:

                  	 
      
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	
                    First
      Wilshire Securities Management, Inc.

                  
	
                    Street:

                  	
                    1224
      East Green Street, Suite 200

                  
	
                    City/State/Zip:

                  	
                    Pasadena,
      California 91106

                  
	
                    Attention:

                  	
                    Mitchell
      Howard

                  
	
                    Tel:

                  	
                    (626)
      796-6622

                  
	
                    Fax:

                  	
                    (626)
      796-8990

                  

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    Gregory
      Cook Wedbush Morgan Sec Inc. CTDN

                    IRA
      Contributory 1/16/02

                     

                  
	
                    By:

                  	
                    /s/  Gregory
      Cook

                  
	
                    Name:

                  	
                    Gregory
      Cook

                  
	
                    Title:

                  	
                    Account
      Owner

                  
	
                    Investment
      Amount:

                  	
                    $49,999.18

                  
	
                    Tax
      ID No.:

                  	
                    ###-##-####

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	
                    Gregory
      Cook

                  
	
                    Street:

                  	
                    5132
      Jessen Drive

                  
	
                    City/State/Zip:

                  	
                    La
      Canada Flintridge, CA 91011

                  
	
                    Attention:

                  	
                    Gregory
      Cook

                  
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	
                    First
      Wilshire Securities Management, Inc.

                  
	
                    Street:

                  	
                    1224
      East Green Street, Suite 200

                  
	
                    City/State/Zip:

                  	
                    Pasadena,
      California 91106

                  
	
                    Attention:

                  	
                    Mitchell
      Howard

                  
	
                    Tel:

                  	
                    (626)
      796-6622

                  
	
                    Fax:

                  	
                    (626)
      796-8990

                  

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          	
                  NAME
      OF INVESTOR

                   

                  Straus
      Partners, L.P.

                   

                  by:  Melville
      Straus

                   

                
	
                  By:

                	
                  /s/  Melville
      Straus

                
	
                  Name:

                	
                  Melville
      Straus

                
	
                  Title:

                	
                  Managing
      Principal

                
	
                  Investment
      Amount:

                	
                  $240,240

                
	
                  Tax
      ID No.:

                	
                  13-3976076

                
	 
      
	
                  ADDRESS
      FOR NOTICE

                   

                
	
                  c/o:

                	
                  Straus
      Asset Management

                
	
                  Street:

                	
                  320
      Park Avenue, 10th
      Floor

                
	
                  City/State/Zip:

                	
                  New
      York, NY 10022

                
	
                  Attention:

                	
                  Andrew
      Marks

                
	
                  Tel:

                	
                  212-415-7274

                
	
                  Fax:

                	
                  212-415-7256

                
	
                   

                  DELIVERY
      INSTRUCTIONS

                  (if
      different from above)

                   

                
	
                  c/o:

                	 
      
	
                  Street:

                	 
      
	
                  City/State/Zip:

                	 
      
	
                  Attention:

                	 
      
	
                  Tel:

                	 
      
	
                  Fax:

                	 
      

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    Straus-GEPT
      Partners, L.P.

                     

                    by:  Melville
      Straus

                     

                  
	
                    By:

                  	
                    /s/  Melville
      Straus

                  
	
                    Name:

                  	
                    Melville
      Straus

                  
	
                    Title:

                  	
                    Managing
      Principal

                  
	
                    Investment
      Amount:

                  	
                    $160,160

                  
	
                    Tax
      ID No.:

                  	
                    13-4054804

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	
                    Straus
      Asset Management

                  
	
                    Street:

                  	
                    320
      Park Avenue, 10th
      Floor

                  
	
                    City/State/Zip:

                  	
                    New
      York, NY 10022

                  
	
                    Attention:

                  	
                    Andrew
      Marks

                  
	
                    Tel:

                  	
                    212-415-7274

                  
	
                    Fax:

                  	
                    212-415-7256

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	 
      
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    Chestnut
      Ridge Partners, LP

                     

                  
	
                    By:

                  	
                    /s/  Kenneth
      Holz

                  
	
                    Name:

                  	
                    Kenneth
      Holz

                  
	
                    Title:

                  	
                    C.F.O.

                  
	
                    Investment
      Amount:

                  	
                    $308,000.00

                  
	
                    Tax
      ID No.:

                  	
                    03-0404154

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                     

                  
	
                    c/o:

                  	 
      
	
                    Street:

                  	
                    10
      Forest Avenue

                  
	
                    City/State/Zip:

                  	
                    Paramus,
      NJ 07652

                  
	
                    Attention:

                  	
                    Ken
      Holz

                  
	
                    Tel:

                  	
                    201-845-2203

                  
	
                    Fax:

                  	
                    201-843-1721

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	 
      
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          
            	
                    NAME
      OF INVESTOR

                     

                    Jayhawk
      Private Equity Fund, L.P.

                     

                  
	
                    By:

                  	
                    /s/  Michael
      D. Schmitz

                  
	
                    Name:

                  	
                    Michael
      D. Schmitz

                  
	
                    Title:

                  	
                    CFO
      of G.P. of L.P.

                  
	
                    Investment
      Amount:

                  	
                    $235,190.34

                  
	
                    Tax
      ID No.:

                  	
                    20-5004931

                  
	 
      
	
                    ADDRESS
      FOR NOTICE

                  
	 
	
                    c/o:

                  	
                    Jayhawk
      Capital Management

                  
	
                    Street:

                  	
                    5410
      West 61st
      Place, Suite 100

                  
	
                    City/State/Zip:

                  	
                    Mission,
      KS 66205

                  
	
                    Attention:

                  	
                    Michael
      D. Schmitz

                  
	
                    Tel:

                  	
                    913-642-2611

                  
	
                    Fax:

                  	
                    913-642-8661

                  
	
                     

                    DELIVERY
      INSTRUCTIONS

                    (if
      different from above)

                     

                  
	
                    c/o:

                  	 
      
	
                    Street:

                  	 
      
	
                    City/State/Zip:

                  	 
      
	
                    Attention:

                  	 
      
	
                    Tel:

                  	 
      
	
                    Fax:

                  	 
      

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

      
 

      
        
          	
                  NAME
      OF INVESTOR

                   

                  Jayhawk
      Private Equity Lo-Invest Fund, L.P.

                   

                  by:  Jayhawk Private
      Equity GP, L.P.

                   

                
	
                  By:

                	
                  /s/  Michael
      D. Schmitz

                
	
                  Name:

                	
                  Michael
      D. Schmitz

                
	
                  Title:

                	
                  CFO
      of G.P. of L.P.

                
	
                  Investment
      Amount:

                	
                  $14,808.64

                
	
                  Tax
      ID No.:

                	
                  20-5249125

                
	 
      
	
                  ADDRESS
      FOR NOTICE

                   

                
	
                  c/o:

                	
                  Jayhawk
      Capital Management

                
	
                  Street:

                	
                  5410
      West 61st
      Place, Suite 100

                
	
                  City/State/Zip:

                	
                  Mission,
      KS 66205

                
	
                  Attention:

                	
                  Michael
      D. Schmitz

                
	
                  Tel:

                	
                  913-642-2611

                
	
                  Fax:

                	
                  913-642-8661

                
	
                   

                  DELIVERY
      INSTRUCTIONS

                  (if
      different from above)

                   

                
	
                  c/o:

                	 
      
	
                  Street:

                	 
      
	
                  City/State/Zip:

                	 
      
	
                  Attention:

                	 
      
	
                  Tel:

                	 
      
	
                  Fax:

                	 
      

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          	
                  NAME
      OF INVESTOR

                   

                  FULL
      ALLIANCE INTERNATIONAL LIMITED

                   

                
	
                  By:

                	
                  /s/  Xingmei
      Zhong

                
	
                  Name:

                	
                  Xingmei
      Zhong

                
	
                  Title:

                	
                  Director

                
	
                  Investment
      Amount:

                	
                  $1,400,779.69

                
	
                  Tax
      ID No.:

                	 
      
	 
      
	
                  ADDRESS
      FOR NOTICE

                   

                
	
                  c/o:

                	
                  Rm
      1701, Wing Tuck Commercial Centre

                
	
                  Street:

                	
                  183
      Wing Lok Street, Sheung Wan

                
	
                  City/State/Zip:

                	
                  Hong
      Kong

                
	
                  Attention:

                	
                  Teresa
      Pang

                
	
                  Tel:

                	
                  (852)
      2572-3986

                
	
                  Fax:

                	
                  (852)
      2572-1926

                
	
                   

                  DELIVERY
      INSTRUCTIONS

                  (if
      different from above)

                   

                
	
                  c/o:

                	 
      
	
                  Street:

                	 
      
	
                  City/State/Zip:

                	 
      
	
                  Attention:

                	 
      
	
                  Tel:

                	 
      
	
                  Fax:

                	 
      

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties hereto
have caused the Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      
        
          	
                  NAME
      OF INVESTOR

                   

                  BTG
      Investments, LLC

                   

                  by:  Gordon J.
      Roth

                   

                
	
                  By:

                	
                  /s/  Gordon
      J. Roth

                
	
                  Name:

                	
                  Gordon
      J. Roth

                
	
                  Title:

                	
                  Manager

                
	
                  Investment
      Amount:

                	
                  $194,810.00
      (126,500 shares)

                
	
                  Tax
      ID No.:

                	
                  20-0306951

                
	 
      
	
                  ADDRESS
      FOR NOTICE

                   

                
	
                  c/o:

                	
                  Roth
      Capital Partners, LLC

                
	
                  Street:

                	
                  24
      Corporate Plaza

                
	
                  City/State/Zip:

                	
                  Newport
      Beach, CA 92660

                
	
                  Attention:

                	
                  Gordon
      J. Roth

                
	
                  Tel:

                	
                  (949)
      720-5574

                
	
                  Fax:

                	
                  (949)
      720-7241

                
	
                   

                  DELIVERY
      INSTRUCTIONS

                  (if
      different from above)

                   

                
	
                  c/o:

                	 
      
	
                  Street:

                	 
      
	
                  City/State/Zip:

                	 
      
	
                  Attention:

                	 
      
	
                  Tel:

                	 
      
	
                  Fax:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}]]