Document:

FORM OF PLACEMENT
      AGENT WARRANT

    

     

    Warrant
      No.: YBI _

    

    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 ______	
               Initial
                Exercise Date: September 8,
                2008

            

    

     

    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
      ______ 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, the American Stock Exchange, 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.

     

    “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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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.

     

    (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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (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.

     

    (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 (i) a registration statement
      covering the issuance and sale of all of the Warrant Shares issuable under
      this
      Warrant (without giving effect to any restrictions on such exercise contained
      herein) is not effective and available for such issuance and sale and (ii)
      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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (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]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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:  	 
	 	
              

              Name:
                Zishen Wu

            
	 	Title: CEO 

    

    

 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    YONGYE
      BIOTECHNOLOGY INTERNATIONAL, INC.

     

    WARRANT
      DATED SEPTEMBER ___, 2008

    

    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):

     

    
      	 	
              o

            	
              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.

            

    

     

    
      	 	
              
                o

              

            	
              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 ____, 2008

    WARRANT
      NO. ___

     

    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 ___, 2008

    WARRANT
      NO. ___

     

    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 September 5,
      2008, 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,
      the Company has previously entered into a Securities Purchase Agreement dated
      as
      of April 17, 2008 by and among the Company, Fullmax Pacific Limited (“Fullmax”),
      an international business company incorporated in the British Virgin Islands
      (“BVI”) , the CJV and the Investors listed on the Schedule of Investors attached
      thereto as Appendix A (the “April Agreement” and the transactions contemplated
      thereby, the “April Financing”).

     

    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 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:

     

    “2008
      Annual Report” means
      the
      Annual Report of the Company for the fiscal year ending December 31, 2008,
      as
      filed with the Commission on Form 10-K (or such other form appropriate for
      such
      purpose as promulgated by the Commission).

     

    “2008
      Guaranteed ATNI” has
      the
      meaning set forth in Section 4.11.

     

    “2009
      Annual Report”
means
      the Annual Report of the Company for the fiscal year ending December 31, 2009,
      as filed with the Commission on Form 10-K (or such other form appropriate for
      such purpose as promulgated by the Commission).

     

    “2009
      Guaranteed ATNI”
has
      the
      meaning set forth in Section 4.12.

     

    “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.

     

    “After
      Tax Net Income”
shall
      have the meaning set forth in Section 4.11.

     

    “Available
      Undersubscription Amount”
has
      the
      meaning set forth in Section 4.15.

     

    “Basic
      Amount”
has
      the
      meaning set forth in Section 4.15(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.

     

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

     

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

     

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

     

    “CJV
      Founder”
means
      Mr. Zishen Wu.

     

    “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 Placement Agent (defined below), 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.
      

     

    “CJV
      Bank Loan”
means
      a
      bank loan or loans for at least the RMB equivalent of US$6.0 million granted
      to
      the CJV, and secured against the acquired Yong Ye Assets.

     

    “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.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “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
      U.S. 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.

     

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

     

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

     

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

     

    “Escrow
      Agent”
means
      Kramer Levin Naftalis & Frankel LLP with an address at 1177 Avenue of the
      Americas, New York, NY 10036.

     

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

     

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

     

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

     

    “Exchange
      Agreement”
means
      the Share Exchange Agreement, dated as of April 17, 2008 among the Company,
      Fullmax and the shareholder of Fullmax pursuant to which the Company acquired,
      subject to the terms and conditions thereof, all of the equity interest of
      Fullmax and, indirectly, all of Fullmax’s subsidiaries, in exchange for at least
      84.7% of the total outstanding shares of Common Stock on a fully diluted
      basis.

     

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

     

    “Existing
      Make Good Shares”
means
      an aggregate of 2,000,000 shares of Common Stock held by the Make Good Escrow
      Agent pursuant to the Make Good Escrow Agreement entered into in connection
      with
      the April Financing.

     

    “Full
      Alliance”
means
      Full Alliance International Limited, an international business company
      incorporated under the laws of the British Virgin Islands.

     

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

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Independent
      Valuer”
means
      an independent valuer appointed by the CJV and acceptable to the Investors,
      for
      the purposes of the Yong Ye Assets Acquisition.

     

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

     

    “Intellectual
      Property Rights Licensing Agreements”
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
      Deliverables”
has
      the
      meaning set forth in Section 2.2(b).

     

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

     

    “Investor
      Warrants”
shall
      mean the warrant certificates in the form of Exhibit
      B-1,
      attached hereto and made a part hereof, respecting the holders’ rights to
      purchase 1,518,253 shares of Common Stock in the aggregate, at a price per
      share
      of $1.848.

     

    “License”
      means
      the
      fertilizer license to be issued to the CJV by the relevant governmental
      authority.

     

    “License
      Grant Date”
has
      the
      meaning set forth in Section 4.13(a).

     

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

     

    “Lockup
      Agreement”
means
      the Lockup Agreement, dated as of the date of the April Agreement, by and
      between the Company and each person listed as a signatory thereto, in the form
      attached as Exhibit
      E
      hereto.

     

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

     

    “Make
      Good Escrow Agreement” means
      the
      Make Good Escrow Agreement, dated as of the date hereof, among the Company,
      Tri-State Title & Escrow, LLC, as escrow agent (the “Make Good Escrow
      Agent”), the Make Good Pledgor (defined below) and the Investors, in the form of
      Exhibit
      C
      hereto,
      as may be amended from time to time pursuant to Section 6.4 of this
      Agreement.

     

    “Make
      Good Pledgor”
means,
      Full Alliance International Limited, an international business company
      incorporated under the laws of the British Virgin Islands.

     

    “Make
      Good Shares”
has
      the
      meaning set forth in Section 4.11.

     

    “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, or
      the
      Exchange Agreement.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    “Notice” has
      the
      meaning set forth in Section 4.13.

     

    “Notice
      of Acceptance”
has
      the
      meaning set forth in Section 4.15.

     

    “Offer”
has
      the
      meaning set forth in Section 4.15.

     

    “Offer
      Notice”
has
      the
      meaning set forth in Section 4.15.

     

    “Offer
      Period”
has
      the
      meaning set forth in Section 4.15.

     

    “Offered
      Securities”
has
      the
      meaning set forth in Section 4.15.

     

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

     

    “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
      $1.5396.

     

    “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
      B-2,
      attached hereto and made a part hereof, representing the warrant holder’s right
      to purchase 607,301 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.

     

    “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 4.15.

     

    “Registrable
      Securities”
shall
      mean, collectively, the Shares, the Make Good Shares and the Warrant
      Shares.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “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
      D
      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.

     

    “Restructuring”
means
      (a) the consummation of the Yong Ye Assets Acquisition through completion of
      Items 1 through 12 of Schedule 4.18, and (b) the draw down of the CJV Bank
      Loan
      through completion of Items 13 and 14 of Schedule 4.18.. 

     

    “Restructuring
      Completion Date”
has
      the
      meaning set forth in Section 4.13.

     

    “Restructuring
      Make Good Shares”
has
      the
      meaning set forth in Section 4.13.

     

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

     

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

     

    “Securities”
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 6,073,006 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 4.15.

     

    “Subsequent
      Placement Agreement”
has
      the
      meaning set forth in Section 4.15.

     

    “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.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

     

    “Transaction
      Documents”
means
      this Agreement, the Registration Rights Agreement, the Closing Escrow Agreement,
      the Make Good Escrow Agreement, the Lockup 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 4.15.

     

    “Undersubscription
      Amount”
has
      the
      meaning set forth in Section 4.15.

     

    “Warrant
      Shares”
shall
      mean, collectively, the Common Stock to be issued under the Investor Warrants
      together with the Common Stock to be issued under the Placement Agent
      Warrant.

     

    “Yong
      Ye”
means
      Inner Mongolia Yong Ye Biotechnology Co., Ltd.

     

    “Yong
      Ye Assets”
means
      the assets of Yong Ye related to the manufacture of fulvic acid products,
      including but not limited to the assets listed on Schedule 4.13. 

     

    “Yong
      Ye Assets Acquisition”
means
      the acquisition of the Yong Ye Assets by the CJV at the Yong Ye Assets
      Consideration in accordance with Items 1 through 12 of Schedule 4.18, pursuant
      to which (a) the CJV will pay Yong Ye 50% of the Yong Ye Assets Consideration
      in
      cash, up to the amount of US $6 million, and the balance of the Yong Ye Assets
      Consideration will be satisfied by the issue to Yong Ye of ownership interests
      in the CJV, and (b) notwithstanding that Yong Ye’s ownership interest in the CJV
      exceeds 5%, the joint venture agreement and articles of association of the
      CJV
      will be amended to enable the CJV to distribute 95% of its distributable profits
      to Asia Standard Oil Ltd, and 5% of its distributable profits to Yong
      Ye.

     

    “Yong
      Ye Assets Consideration”
means
      the aggregate consideration payable to Yong Ye by the CJV for the acquisition
      of
      the Yong Ye Assets, which shall not exceed the valuation of the Yong Ye Assets,
      as determined by the Independent Valuer, and which shall be payable in cash
      (not
      to exceed US$ 6 million) and ownership interests in the CJV.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    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) an
      Investor Warrant, dated the Closing Date, issued to each Investor, respectively,
      representing the Investor’s right to purchase its pro rata portion of 1,518,253
      aggregate Shares at a per Share price of $1.848;

     

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

     

    (iv) the
      legal
      opinion of Company U.S. Counsel, in agreed form, addressed to the Investors;
      and

     

    (v) the
      legal
      opinion of special PRC counsel to CJV , in agreed form, addressed to the
      Investors.

     

    (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, 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.

     

    ARTICLE
      3.

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 Representations
      and Warranties of the Company.
      The
      Company, BVI 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.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (b) Organization
      and Qualification.
      Each
      Existing Company Entity, and the Make Good Pledgor, 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 and as
      to
      be conducted as specified in the Exchange Agreement or otherwise in the Current
      Report on Form 8-K filed in connection with the Exchange Agreement. No Existing
      Company Entity is, and neither is the Make Good Pledgor, 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, and the Make Good Pledgor, 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 and the Exchange Agreement, and the Make Good Pledgor, has the
      requisite corporate and other power and authority to enter into and to
      consummate the transactions contemplated by each such Transaction Document
      and
      the Exchange Agreement 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, and by the Make Good Pledgor, 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, or the Make Good Pledgor, as the case may be, and
      no
      further action is required by any of them in connection with such authorization.
      Each Transaction Document and the Exchange Agreement has been (or upon delivery
      will have been) duly executed by the Company, each other Existing Company Entity
      and the Make Good Pledgor, 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, the Make Good Pledgor and such
      Subsidiary, enforceable against the Company, the Existing Company Entity, the
      Make Good Pledgor 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. The execution
      and delivery of the Exchange Agreement by each 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 each such party thereto,
      and no further action is required by any of them in connection with such
      authorization. The Exchange Agreement has been duly executed by each party
      thereto and will constitute the valid and binding obligation of each party
      thereto enforceable against each party thereto 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.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (d) No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents and the
      Exchange Agreement by the Company, and each other Existing Company Entity and
      Subsidiary, and the Make Good Pledgor (to the extent a party thereto) and the
      consummation by the Company, and such other Existing Company Entities and
      Subsidiaries, and the Make Good Pledgor, 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 or the Make Good
      Pledgor’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 or Make Good Pledgor debt or otherwise) or other
      understanding to which any Existing Company Entity or any Subsidiary, or the
      Make Good Pledgor is a party or by which any property or asset of the Company
      or
      any Subsidiary or the Make Good Pledgor 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 or the Make Good Pledgor is subject (including
      federal and state securities laws and regulations), or by which any property
      or
      asset of the Company or a Subsidiary or the Make Good Pledgor 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, and the Make Good Pledgor is not, required to obtain
      any consent, waiver, authorization or order of, give any notice to, or make
      any
      filing or registration with, any United States or 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,
      and
      the Make Good Pledgor, to the extent such Subsidiary or the Make Good Pledgor,
      as the case may be, is a party thereto, of the Transaction Documents or the
      Exchange Agreement, 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.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (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.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (j) Material
      Changes.
      Except
      as specified on Schedule 3.1(j) or in the Disclosure Materials, since June
      30,
      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, and the Make Good Pledgor and none of its directors or officers are or
      have 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 the
      Make Good Pledgor 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.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (m) Indebtedness;
      Compliance.
      Except
      as disclosed on Schedule
      3.1(m),
      no
      Existing Company Entity is, and the Make Good Pledgor is not, 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,
      and the Make Good Pledgor is not, (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 nor the Make Good Pledgor 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 Exchange Agreement complies with all applicable laws, rules and
      regulations of the United States and the PRC. The Company is in compliance
      with
      all effective requirements of the Sarbanes-Oxley Act of 2002, as amended, and
      the rules and regulations thereunder that are applicable to it, except where
      such noncompliance could not have or reasonably be expected to result in a
      Material Adverse Effect.

     

    (n) Regulatory
      Permits.
      The
      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.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (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-KSB or 10-QSB, as
      the case may be, is being prepared. The Company’s certifying officers have
      evaluated the effectiveness of the Company’s controls and procedures in
      accordance with Item 307 of Regulation S-B under the Exchange Act for the
      Company’s most recently ended fiscal quarter or fiscal year-end (such date, the
“Evaluation Date”). The Company presented in its most recently filed Form 10-KSB
      or Form 10-QSB the conclusions of the certifying officers about the
      effectiveness of the disclosure controls and procedures based on their
      evaluations as of the Evaluation Date.

    
      
        
        

      

      
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    (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).
      The
      Make Good Pledgor is not insolvent.

     

    (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)
      or
      pursuant to the April Financing, 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.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

     

    (y) Application
      of Takeover Protections.
      The
      Company has taken all necessary action, if any, in order to render inapplicable
      any control share acquisition, business combination, poison pill (including
      any
      distribution under a rights agreement) or other similar anti-takeover provision
      under the Company’s 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) Make
      Good Shares.
      The
      Make Good Pledgor is the sole record and beneficial owner of the Make Good
      Shares, and holds such shares free and clear of all Liens.

     

    (cc) 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.

     

    (dd) 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.

     

    (ee) 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.

    
      
        
        

      

      
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    (ff) 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.

     

    (gg) 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.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (vii) All
      agreements to which CVJ 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).

     

    (hh) 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:

     

    (ii) 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.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (jj) 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.

     

    (kk) Investor
      Status.
      At the
      time such Investor was offered the Shares, it was, and at the date hereof it
      is,
      a “qualified institutional buyer” as defined in Rule 144A 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.

     

    (ll) 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.

     

    (mm) 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.

     

    (nn) 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.

     

    (oo) 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.

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (pp) 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.

     

    (qq) 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.

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

     

    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).

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (c) Certificates
      evidencing Shares, Make Good Shares and Restructuring Make Good Shares, if
      ever
      Make Good Shares or Restructuring Make Good Shares are due to be delivered
      pursuant to the Transaction Documents (collectively with the Shares, 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.

     

    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.

    
      
        
        

      

      
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    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 (including, without limitation, details with respect
      to the make good provisions and thresholds (i.e. After Tax Net Income and EPS)
      contained in Sections 4.11, 4.12 and 4.13 herein as well as projected revenue
      estimates for the Company for the fiscal years ending December 31, 2008 and
      2009) and the Closing and (b) the Company will file a Form 8-K disclosing the
      material terms of the Transaction Documents, including details with respect
      to
      the make good provisions and thresholds (i.e. After Tax Net Income and EPS)
      contained in Sections 4.11, 4.12 and 4.13 herein (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.

     

    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.

    
      
        
        

      

      
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    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
      capital expenditures, research and development, marketing, sales and
      distribution expansion and working capital purposes and for the purchase from
      Inner Mongolia Yongye Biotechnology Co. Limited of existing finished goods
      inventory and for no other purposes.

     

    4.11 2008
      Earnings Make Good Shares.

     

    (a) The
      Make
      Good Pledgor agrees that in the event that (i) the 2008 After Tax Net Income
      (as
      defined below) reported in the 2008 Annual Report is less than $10,263,919
      (the
“2008 Guaranteed ATNI”), or (ii) the Fully Diluted Earnings Per Share (as
      defined below) reported in the 2008 Annual Report is less than $0.42 (the “2008
      Guaranteed EPS”), then the Earnings Make Good Shares (as defined below) shall be
      transferred (which Earnings Make Good Shares shall be comprised solely of shares
      owned beneficially and of record by the Make Good Pledgor ) in accordance with
      the Make Good Escrow Agreement to the Investors on a pro-rata basis (determined
      by dividing each Investor's Investment Amount by the aggregate of all Investment
      Amounts delivered to the Company by the Investors hereunder) for no
      consideration other than their respective Investment Amounts paid to the Company
      at Closing. After giving effect to such transfer of the Earnings Make Good
      Shares to the Investors pursuant to this Section 4.11(a), the Make Good Escrow
      shall terminate (solely with respect to the Earnings Make Good Shares) and
      the
      provisions of Section 4.12 hereof shall not be operative. The “Earnings Make
      Good Shares” means the 2,000,000 shares of Common Stock (as equitably adjusted
      for any stock splits, stock combinations, stock dividends or similar
      transactions) required to be deposited with the Make Good Escrow Agent pursuant
      to the Make Good Escrow Agreement. “Fully Diluted Earnings Per Share” means
      After Tax Net Income divided by the weighted average diluted shares of Common
      Stock outstanding. 

    
      
        
        

      

      
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    (b) In
      the
      event that (i) the 2008 After Tax Net Income reported in the 2008 Annual Report
      is equal to or greater than the 2008 Guaranteed ATNI and (ii) the Fully Diluted
      Earnings Per Share reported in the 2008 Annual Report is equal to or greater
      than the 2008 Guaranteed EPS, no transfer of the Earnings Make Good Shares
      shall
      be required by the Make Good Pledgor to the Investors and the Earnings Make
      Good
      Shares shall be retained by the Make Good Escrow Agent and shall be available
      in
      connection with the Make Good Pledgor’s obligations under Section 4.12 hereof.
      Any such transfer of the Earnings Make Good Shares as set forth in Section
      4.11(a) shall be made to the Investors within 10 Business Days after the date
      which the 2008 Annual Report is filed with the Commission and a copy thereof
      is
      delivered to the Make Good Escrow Agent. Notwithstanding the foregoing or
      anything else to the contrary herein, for purposes of determining whether or
      not
      each of the 2008 Guaranteed ATNI and the 2008 Guaranteed EPS has been met,
      the
      following items shall not be deemed to be an expense, charge, or any other
      deduction from revenues even though GAAP may require contrary treatment or
      the
      2008 Annual Report filed with the Commission by the Company may report
      otherwise: (i) any accounting charges for issuing warrants, (ii) the release
      of
      any of the Earnings Make Good Shares to the Investors as a result of the
      operation of this Section 4.11, (iii) the release of any Existing Make Good
      Shares and (iv) the increase in the equity ownership of the CJV by Yong Ye
      in
      excess of 1.15% in connection with the Restructuring, as reflected in the
      provision for minority interest on the Company’s statement of
      operations.

     

    No
      other
      exclusions shall be made for any non-recurring expenses of the Company,
      including liquidated damages under the Transaction Documents, in determining
      whether each of the 2008 Guaranteed ATNI and 2008 Guaranteed EPS has been
      achieved. If prior to the second anniversary of the filing of the 2008 Annual
      Report, the Company or their auditors report or recognize that the financial
      statements contained in such report are subject to amendment or restatement
      such
      that the Company would recognize or report adjusted 2008 After Tax Net Income
      of
      less than the 2008 Guaranteed ATNI or adjusted Fully Diluted Earnings Per Share
      less than the 2008 Guaranteed EPS, then notwithstanding the retention of the
      Earnings Make Good Shares in the escrow by the Make Good Escrow Agent in
      connection with the Make Good Pledgor’s obligations under Section 4.12 hereof,
      or any prior return of Earnings Make Good Shares to the Make Good Pledgor under
      Section 4.12, as the case may be, the Make Good Pledgor will, within 10 Business
      Days following the earlier of the filing of such amendment or restatement or
      recognition, deliver the Earnings Make Good Shares to the Investors. “2008 After
      Tax Net Income” shall mean the Company's operating income after taxes for the
      fiscal year ending December 31, 2008, determined in accordance with GAAP as
      reported in the 2008 Annual Report.

     

    (c) If
      the
      2008 Annual Report is not filed timely with the Commission and remains unfiled
      for a period in excess of 45 days after the last day that the same was required
      to have been filed (taking into account the relief permitted under Rule 12(b)-25
      of the Exchange Act), then the 2008 After Tax Net Income shall be deemed to
      be
      less than the 2008 Guaranteed ATNI, and all of the Earnings Make Good Shares
      shall be transferred in accordance with the Make Good Escrow Agreement to the
      Investors on a pro-rata basis. 

     

    (d) In
      connection with the foregoing, the Make Good Pledgor agrees that,
      contemporaneously with, and as a condition to, the Closing, the Make Good
      Pledgor will deposit all Earnings Make Good Shares into escrow in accordance
      with the Make Good Escrow Agreement along with stock powers executed in blank
      (or such other signed instrument of transfer acceptable to the Company's
      transfer agent), and the handling and disposition of the Earnings Make Good
      Shares shall be governed by this Section 4.11, Section 4.12 and the Make Good
      Escrow Agreement. The Make Good Escrow Agent shall notify the Investors when
      it
      has received from the Make Good Pledgor the Earnings Make Good Shares and
      associated stock powers. The Make Good Pledgor understands and agrees that
      the
      Investors’ right to receive Earnings Make Good Shares pursuant to this Section
      4.11, Section 4.12 and the Make Good Escrow Agreement shall continue to run
      to
      the benefit of each Investor even if such Investor shall have transferred or
      sold all or any portion of its Shares, and that each Investor shall have the
      right to assign its rights to receive all or any such shares of Common Stock
      to
      other Persons in conjunction with negotiated sales or transfers of any of its
      Shares. The Make Good Pledgor represents and warrants that it has carefully
      considered and understands its obligations and rights under this Section 4.11,
      Section 4.12 and the Make Good Escrow Agreement, and in furtherance thereof
      (x)
      has consulted with its legal and other advisors with respect thereto and (y)
      hereby forever waives and agrees that it may not assert any equitable defenses
      in any Proceeding involving the Earnings Make Good Shares. 

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (e) The
      Company covenants and agrees that upon any transfer of the Earnings Make Good
      Shares to the Investors in accordance with the Make Good Escrow Agreement,
      the
      Company shall promptly instruct its Transfer Agent to reissue the Earnings
      Make
      Good Shares in the applicable Investor's name and deliver the same as directed
      by such Investor. 

     

    (f) If
      any
      term or provision of this Section 4.11 contradicts or conflicts with any term
      or
      provision of the Make Good Escrow Agreement, the terms of the Make Good Escrow
      Agreement shall control.

     

    4.12 2009
      Earnings Make Good Shares.
      This
      Section 4.12 shall only be operative in the event that the Earnings Make Good
      Shares have not been distributed to the Investors as described in Section
      4.11(a) and have been retained by the Make Good Escrow Agent to be available
      in
      connection with the Company’s obligations to meet the 2009 Guaranteed ATNI (as
      defined below) and 2009 Guaranteed EPS (as defined below).

     

    (a) The
      Make
      Good Pledgor agrees that in the event that (i) the 2009 After Tax Net Income
      (as
      defined below) reported in the 2009 Annual Report equals or exceeds $12,649,248
      and is less than $15,811,560 (the “2009 Guaranteed ATNI”), or (ii) the Fully
      Diluted Earnings Per Share reported in the 2009 Annual Report equals or exceeds
      $0.42 and is less than $0.53 (the “2009 Guaranteed EPS”), then a number of
      Earnings Make Good Shares equal to the product of (i) (A) $15,811,560 minus
      the
      2009 After Tax Net Income, divided by (B) $15,811,560, and (ii) the Earnings
      Make Good Shares, shall be transferred in accordance with the Make Good Escrow
      Agreement to the Investors on a pro-rata basis (determined by dividing each
      Investor's Investment Amount by the aggregate of all Investment Amounts
      delivered to the Company by the Investors hereunder) for no consideration other
      than their respective Investment Amounts paid to the Company at Closing. Any
      remaining Earnings Make Good Shares shall be transferred to the Make Good
      Pledgor in accordance with the Make Good Escrow Agreement.

     

    (b) In
      the
      event that (i) the 2009 After Tax Net Income reported in the 2009 Annual Report
      is less than $12,649,248 or (ii) the Fully Diluted Earnings Per Share reported
      in the 2009 Annual Report is less than $0.42, then the Earnings Make Good Shares
      shall be transferred in accordance with the Make Good Escrow Agreement to the
      Investors on a pro-rata basis (determined by dividing each Investor's Investment
      Amount by the aggregate of all Investment Amounts delivered to the Company
      by
      the Investors hereunder) for no consideration other than their respective
      Investment Amounts paid to the Company at Closing. 

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (c) In
      the
      event that (i) the 2009 After Tax Net Income reported in the 2009 Annual Report
      is equal to or greater than $15,811,560 and (ii) the Fully Diluted Earnings
      Per
      Share reported in the 2009 Annual Report is equal to or greater than $0.53,
      no
      transfer of the Earnings Make Good Shares pursuant to this Section 4.12 shall
      be
      required by the Make Good Pledgor to the Investors and the Earnings Make Good
      Shares pursuant to this Section 4.12 shall be returned to the Make Good Pledgor
      in accordance with the Make Good Escrow Agreement. Any such transfer of the
      Earnings Make Good Shares, or any portion thereof, pursuant to this Section
      4.12, shall be made to the Investors or the Make Good Pledgor, as applicable,
      within 10 Business Days after the date which the 2009 Annual Report is filed
      with the Commission and a copy thereof is delivered to Make Good Escrow Agent.
      Notwithstanding the foregoing or anything else to the contrary herein, for
      purposes of determining whether or not each of the 2009 Guaranteed ATNI and
      the
      2009 Guaranteed EPS has been met, the following items shall not be deemed to
      be
      an expense, charge, or any other deduction from revenues even though GAAP may
      require contrary treatment or the Annual Report for the fiscal year filed with
      the Commission by the Company may report otherwise: (i) any accounting charges
      for issuing warrants, (ii) the release of any of the Earnings Make Good Shares
      to the Make Good Pledgor, or the Investors, as the case may be, as a result
      of
      the operation of this Section 4.12, (iii) the release of any Existing Make
      Good
      Shares and (iv) the increase in the equity ownership of the CJV by Yong Ye
      in
      excess of 1.15% in connection with the Restructuring, as reflected in the
      provision for minority interest on the Company’s statement of
      operations.

     

    No
      other
      exclusions shall be made for any non-recurring expenses of the Company,
      including liquidated damages under the Transaction Documents, in determining
      whether the 2009 Guaranteed ATNI and 2009 Guaranteed EPS has been achieved.
      If
      prior to the second anniversary of the filing of the 2009 Annual Report, the
      Company or their auditors report or recognize that the financial statements
      contained in such report are subject to amendment or restatement such that
      the
      Company would recognize or report adjusted After Tax Net Income of less than
      $12,649,248 or adjusted fully diluted earnings per share less than $0.42, then
      notwithstanding any prior return of the Earnings Make Good Shares, or any
      portion thereof, pursuant to this Section 4.12, to the Make Good Pledgor, the
      Make Good Pledgor will, within 10 Business Days following the earlier of the
      filing of such amendment or restatement or recognition, deliver the relevant
      Earnings Make Good Shares to the Investors; provided, however, that if any
      Earnings Make Good Shares have been transferred to the Investors as provided
      for
      in the second paragraph of Section 4.11(b), the Make Good Pledgor shall only
      be
      responsible for transferring such number of Earnings Make Good Shares pursuant
      to this paragraph of Section 4.12(c), up to the number of Earnings Make Good
      Shares that were previously returned to the Make Good Pledgor. In no event
      shall
      the Make Good Pledgor be responsible for transferring any number of Earnings
      Make Good Shares in excess of what has been previously returned to the Make
      Good
      Pledgor pursuant to the provisions of Section 4.11 or 4.12, as applicable.
“2009
      After Tax Net Income” shall mean the Company's operating income after taxes for
      the fiscal year ending December 31, 2009, determined in accordance with GAAP
      as
      reported in the 2009 Annual Report.

     

    (d) If
      the
      2009 Annual Report is not filed timely with the Commission and remains unfiled
      for a period in excess of 45 days after the last day that the same was required
      to have been filed (taking into account the relief permitted under Rule 12(b)-25
      of the Exchange Act), then 2009 After Tax Net Income shall be deemed to be
      less
      than the 2009 Guaranteed ATNI, and all of the Earnings Make Good Shares shall
      be
      transferred in accordance with the Make Good Escrow Agreement to the Investors
      on a pro-rata basis. 

     

    (e) If
      any
      term or provision of this Section 4.12 contradicts or conflicts with any term
      or
      provision of the Make Good Escrow Agreement, the terms of the Make Good Escrow
      Agreement shall control.

    
      
        
        

      

      
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    4.13 Restructuring
      Make Good Shares.

     

    (a) The
      Make
      Good Pledgor agrees that in the event the License has not been issued to, and
      received by, the CJV by June 30, 2009, or such later date as the Company and
      Investors holding a majority of the Shares at such time consent to in writing
      (the “License Grant Date”), the Restructuring Make Good Shares (as defined
      below) shall be transferred in accordance with the Make Good Escrow Agreement
      to
      the Investors on a pro-rata basis (determined by dividing each Investor's
      Investment Amount by the aggregate of all Investment Amounts delivered to the
      Company by the Investors hereunder) for no consideration other than their
      respective Investment Amounts paid to the Company at Closing. In the event
      the
      License has been issued by the License Grant Date, but the Restructuring is
      not
      completed by the Restructuring Completion Date (as defined below), the
      Restructuring Make Good Shares shall be transferred in accordance with the
      Make
      Good Escrow Agreement to the Investors on a pro-rata basis (determined by
      dividing each Investor's Investment Amount by the aggregate of all Investment
      Amounts delivered to the Company by the Investors hereunder) for no
      consideration other than their respective Investment Amounts paid to the Company
      at Closing. 

     

    (b) The
      “Restructuring Make Good Shares” means 2,000,000 shares of Common Stock (as
      equitably adjusted for any stock splits, stock combinations, stock dividends
      or
      similar transactions) required to be deposited with the Make Good Escrow Agent
      pursuant to the Make Good Escrow Agreement. 

     

    (c) The
      “Restructuring Completion Date” means the License Grant Date plus 132 calendar
      days.

     

    In
      the
      event that the Restructuring is consummated by the Restructuring Completion
      Date, no transfer of the Restructuring Make Good Shares shall be required by
      the
      Make Good Pledgor to the Investors and such Restructuring Make Good Shares
      shall
      be returned to the Make Good Pledgor in accordance with the Make Good Escrow
      Agreement. Any such transfer of the Restructuring Make Good Shares shall be
      made
      to the Investors or the Make Good Pledgor, as applicable, within 10 Business
      Days after the earlier of (i) the date of consummation of the Restructuring
      and
      (ii) the Restructuring Completion Date. Notwithstanding the foregoing or
      anything else to the contrary herein, for purposes of determining whether or
      not
      the Restructuring has been consummated, the following conditions (which shall
      not be deemed to be a complete list of all closing conditions required to be
      satisfied) shall have been satisfied: (A) execution and completion of the asset
      transfer agreement (in such form acceptable to the Investors) in relation to
      the
      Yong Ye Assets Acquisition, (B) the increase and full contribution of the
      registered capital of the CJV in relation to the Yong Ye Assets Acquisition,
      (C)
      the amendments of the articles of association of the CJV and the joint venture
      agreement between the CJV and its shareholders (in such forms acceptable to
      the
      Investors) to enable the CJV to distribute 95% of its distributable profits
      to
      Asia Standard Oil Ltd. and 5% of its distributable profits to Yong Ye, ( D)
      bring down of representations and warranties contained in the asset transfer
      agreement, including, but not limited to, representations and warranties
      relating to the valid title of the Yong Ye Assets being transferred, (E)
      issuance of a legal opinion by Han Kun Law Offices, the legal advisers to the
      CJV, in a form acceptable to the Investors, and (F) securing and drawing down
      the CJV Bank Loan.

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (d) In
      connection with the foregoing, the Make Good Pledgor agrees that,
      contemporaneously with, and as a condition to, the Closing, the Make Good
      Pledgor will deposit all Restructuring Make Good Shares into escrow in
      accordance with the Make Good Escrow Agreement along with stock powers executed
      in blank (or such other signed instrument of transfer acceptable to the
      Company's transfer agent), and the handling and disposition of the Restructuring
      Make Good Shares shall be governed by this Section 4.13 and the Make Good Escrow
      Agreement. The Make Good Escrow Agent shall notify the Investors when it has
      received from the Make Good Pledgor the Restructuring Make Good Shares and
      associated stock powers. The Make Good Pledgor understands and agrees that
      the
      Investors' right to receive Restructuring Make Good Shares pursuant to this
      Section 4.13 and the Make Good Escrow Agreement shall continue to run to the
      benefit of each Investor even if such Investor shall have transferred or sold
      all or any portion of its Shares, and that each Investor shall have the right
      to
      assign its rights to receive all or any such shares of Common Stock to other
      Persons in conjunction with negotiated sales or transfers of any of its Shares.
      The Make Good Pledgor represents and warrants that it has carefully considered
      and understands its obligations and rights under this Section 4.13 and the
      Make
      Good Escrow Agreement, and in furtherance thereof (x) has consulted with its
      legal and other advisors with respect thereto and (y) hereby forever waives
      and
      agrees that it may not assert any equitable defenses in any Proceeding involving
      the Restructuring Make Good Shares. 

     

    (e) The
      Company covenants and agrees that upon any transfer of Restructuring Make Good
      Shares to the Investors in accordance with the Make Good Escrow Agreement,
      the
      Company shall promptly instruct its Transfer Agent to reissue such Restructuring
      Make Good Shares in the applicable Investor's name and deliver the same as
      directed by such Investor. 

     

    (f) If
      any
      term or provision of this Section 4.13 contradicts or conflicts with any term
      or
      provision of the Make Good Escrow Agreement, the terms of the Make Good Escrow
      Agreement shall control.

     

    4.14 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. In addition, either prior to or following
      the
      Closing, the CJV Founder and each Company Entity signatory hereto will, and
      will
      cause each other Company Entity and its management to, perform, or cause to
      be
      done and performed, all such further acts and things, and shall execute and
      deliver all such other agreements, certificates, instruments and documents,
      as
      any other party may reasonably request in order to carry out the intent and
      accomplish the purposes of this Agreement and the consummation of the
      transactions contemplated hereby.

    
      
        
        

      

      
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    4.15 Financial
      Professionals.
      (a)
The
      Company covenants and agrees that, no later than 365 days following the Closing
      Date, the Company will hire a chief financial officer who has experience as
      a
      senior financial officer of a United States public reporting company and who
      is
      (i) fluent in English, (ii) residing or will reside, upon employment by the
      Company, in Asia, and (iii) familiar with (x) GAAP and (y) auditing procedures
      and compliance for United States public companies (such a chief financial
      officer being referred to as a “Qualified CFO”). The
      Company shall enter into an employment agreement with the Qualified CFO for
      a
      term of no less than two years. Should the Qualified CFO be dismissed at any
      time prior to the second anniversary of the Closing Date, then the Company
      shall
      replace the Qualified CFO with a chief financial officer who fits the criteria
      set forth herein as soon as practicable. By
      9:00
      a.m. (New York time) on the second Trading Day following the hiring of such
      Qualified CFO, the Company will file a Current Report on Form 8-K disclosing
      the
      information required by Item 5.02 of Form 8-K. If the Company fails to comply
      timely with the appointment of a Qualified CFO and filing of a Current Report
      on
      Form 8-K disclosing the information required by Item 5.02 of Form 8-K, as
      required in this Section 4.15(a) above (the “Qualified CFO Requirement”), then
      commencing on the date that the Qualified CFO Requirement was to have been
      satisfied hereunder, and on each monthly anniversary thereof, until the
      Qualified CFO Requirement is satisfied, the Company shall pay to the Investors,
      as liquidated damages and not as a penalty, by wire transfer in immediately
      available funds, an aggregate amount equal to 1% of the total Investment Amount
      hereunder for all of the Investors, which shall be paid to the Investors pro
      rata in accordance with their respective Investment Amounts, until such time
      as
      the Qualified CFO Requirement is satisfied. The
      liquidated damages pursuant to the terms of this Section 4.15(a) in no event
      shall exceed, in the aggregate, an amount equal to 6% of
      the
      total Investment Amount hereunder for all of the Investors in the aggregate,
      but
shall
      be
      independent of any other damages payable under Section 4.15(b) and elsewhere
      in
      this Agreement or any other Transaction Document.

     

    (b) The
      Company covenants and agrees that, no later than 180 days following the
      Effective Date, the Company shall have hired a “top 15” independent registered
      public accounting firm having its principal office in the United States (or
      other independent registered public accounting firm reasonably acceptable to
      the
      Placement Agent), that has experience as the independent registered public
      accounting firm for a United States public reporting company and having
      principals who are (i) a certified public accountants, (ii) fluent in English,
      and (iii) an expert in (x) GAAP and (y) auditing procedures and compliance
      for
      United States public companies (such audit firm being referred to as a
“Qualified Auditor”). The
      Company shall enter into an audit engagement agreement with the Qualified
      Auditor for a term of no less than 12 months, to conduct the annual financial
      audit of the Company, prepare the audited annual financial statements of the
      Company required to be included in its United States public company filings
      and
      review and assist in the preparation of the unaudited quarterly financial
      statements of the Company required to be included in its United States public
      company filings. Should the Qualified Auditor be dismissed at any time within
      18
      months after the Closing Date, then the Company shall replace the Qualified
      Auditor with another independent registered public accounting firm that
      satisfies the criteria set forth herein as soon as practicable. By
      9:00
      a.m. (New York time) on the second Trading Day following the engagement of
      such
      Qualified CFO, the Company will file a Current Report on Form 8-K disclosing
      the
      information required by Item 4.01 of Form 8-K. If the Company fails to comply
      timely with the appointment of a Qualified Auditor and filing of a Current
      Report on Form 8-K disclosing the information required by Item 4.01 of Form
      8-K,
      as required in this Section 4.15(b) above (the “Qualified Auditor Requirement”),
      then commencing on the date that the Qualified Auditor Requirement was to have
      been satisfied hereunder, and on each monthly anniversary thereof, until the
      Qualified Auditor Requirement is satisfied, the Company shall pay to the
      Investors, as liquidated damages and not as a penalty, by wire transfer in
      immediately available funds, an aggregate amount equal to 1% of the total
      Investment Amount hereunder for all of the Investors, which shall be paid to
      the
      Investors pro rata in accordance with their respective Investment Amounts,
      until
      such time as the Qualified Auditor Requirement is satisfied. The
      liquidated damages pursuant to the terms of this Section 4.15(b) in no event
      shall exceed, in the aggregate, an amount equal to 6% of
      the
      total Investment Amount hereunder for all of the Investors in the aggregate,
      but
shall
      be
      independent of any other damages payable under Section 4.15(a) and elsewhere
      in
      this Agreement or any other Transaction Document.

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    4.16 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 4.16. 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 4.16 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
      4.16(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 Responsing 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.

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (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
      4.16), 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 4.16(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 4.15(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 4.16(b) above.

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (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 4.16(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 4.16(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 4.16(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 4.16(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 4.16 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 any Subsidiary,
      which
      acquisition has been approved by the Board of Directors of the Company.
      .

     

    4.17 April
      Financing Matters.
      In
      connection with entering into this Agreement, each Investor who is a party
      to
      the April Agreement hereby (a) waives (on behalf of itself and each other
      investor party to the April Agreement) any right to (i) any liquidated damages
      arising under the Registration Rights Agreement entered into in connection
      with
      the April Financing as a result of the Company’s delay in filing an acceleration
      request pursuant to Section 2(f)(iii) of such agreement until not later than
      September 9, 2008, and (ii) any adjustment to the exercise price in the warrants
      issued in the April Financing to the investors therein resulting from the sale
      or issuance of any securities under the Agreement, and (b) amends the definition
      of “Initial Financing” contained in the April Agreement so that “120 days” shall
      be replaced with “145 days”. 

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    4.18 Restructuring.
      Except
      for the issuance of the License, which shall be completed by the License Grant
      Date, and the action points enumerated as items 8 through 14 on Schedule 4.18
      hereof, which action points shall be completed by the Restructuring Completion
      Date, the Company shall comply with action items 1 through 6 by the respective
      target completion dates set forth on Schedule 4.18 hereof.

     

    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:

     

    (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 and the Make Good Pledgor 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) CJV
      Intellectual Property Rights.
      The CJV
      shall provide to the Investors evidence acceptable to the Investors that all
      Intellectual Property Rights are either (i) validly owned by the CJV, or (ii)
      (a) if owned by any Person other than the CJV or its predecessor, subject to
      valid and binding Intellectual Property Right Licensing Agreements which may
      not
      be terminated for any reason until any such Intellectual Property Right covered
      thereby is validly owned by the CJV, or (b) if owned by the predecessor of
      the
      CJV, the application for the change of the registered owner information from
      that of the CJV’s predecessor to the CJV’s current name, address and other
      related updates which is or may be required by relevant PRC authorities in
      charge of such Intellectual Property is submitted by the CJV to the relevant
      PRC
      authority on or before the Closing.

     

    (f) PRC,
      Nevada, and US Opinions.
      The
      Company shall have delivered to the Investors, and the Investors shall be able
      to rely upon, the legal opinions that the Company shall have received from
      its
      legal counsel in Nevada and the PRC (which, among other things, shall confirm
      the legality arrangements between PRC operating entity and its corporate
      ownership structure, including CJV, BVI and the Company, under applicable PRC
      law and the legality of the restructuring being effected with BVI in connection
      with the Exchange) and with regard to the same and the Make Good Pledgor and
      from Company U.S. Counsel and Nevada counsel with regard to the Exchange and
      the
      enforceability of the Transaction Documents;

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (g) 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(e) is satisfied in all respects;

     

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

     

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

     

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

     

    (iii) The
      Make
      Good Escrow Agreement, duly executed by all parties thereto (other than the
      Investors) and certificates for the Make Good Shares, with stock powers in
      respect of the same, executed in blank by the Make Good Pledgor shall have
      been
      delivered to the Make Good Escrow Agent;

     

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

     

    (v) Lockup
      Agreements, previously executed by the Company, Full Alliance and each officer
      and member of the Board of Directors of the Company listed on Schedule 5.1(h)(v)
      attached hereto.

     

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

     

    (j) Exchange.
      The
      Exchange, as described in, and to be effectuated pursuant to, the Exchange
      Agreement, shall have been completed; and

     

    (k) 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;

     

    (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;

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (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, the Closing
      Escrow Agreement and the Make Good 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; provided
      that,
      the
      Company shall pay all actual attorney’s fees and expenses (including
      disbursements and out-of-pocket expenses) incurred by a single counsel for
      the
      Investors in connection with the preparation, execution and delivery of the
      Transaction Documents, not to exceed $40,000. 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:

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    
      	
              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(b)(i), 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.

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    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.”

     

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

     

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

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    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.

     

    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.

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    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.

     

    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]

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

     

    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

            

    

     

    
      	
              Only as to Sections 4.11, 4.12 and 4.13 herein:

            
	
              FULL ALLIANCE INTERNATIONAL LIMITED

            
	 
	
              By:

            	/s/
              Zhong
              Xingmei
	
              Name:
                

            	
              Zhong
                Xingmei

            
	
              Title:

            	
              Director

            

    

     

    [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

               

              BLACK
                RIVER SMALL CAPITALIZATION FUND LTD.

              by:
                Black River Asset Management LLC,

              its
                Investment Adviser

               

            
	
              By:

            	/s/
              Eric Larson
	
              Name:

            	
              Eric
                Larson  

            
	
              Title:

            	
              Principal 
                

            
	
              Investment
                Amount:

            	
              $3,000,000.00

            
	
              Tax
                ID No.:

            	
               

            
	
               

            
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Black
                River Asset Management LLC

            
	
              Street:

            	
              12700
                Whitewater Drive

            
	
              City/State/Zip:

            	
              Minnetonka,
                MN 55343

            
	
              Attention:

            	
              Sarah
                Kolar

            
	
              Tel:

            	
              952-984-3249

            
	
              Fax:

            	
              952-249-4236

            
	 	 
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	 
	
              c/o:

            	
              Black
                River Asset Management LLC

            
	
              Street:

            	
              12700
                Whitewater Drive

            
	
              City/State/Zip:

            	
              
                Minnetonka,
                  MN 55343

              

            
	
              Attention:

            	
              Robbie
                Bray

            
	
              Tel:

            	
              952-984-3557

            
	
              Fax:

            	
              952-249-4265 

            

    

     

    Investor
      Signature Page to the Securities Purchase Agreement

    Page 1
      of
      21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    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

               

              BLACK
                RIVER COMMODITY SELECT FUND LTD.

              by:
                Black River Asset Management LLC,

              its
                Investment Adviser

               

            
	
              By:

            	
              /s/
                Eric Larson  

            
	
              Name:

            	
              Eric
                Larson

            
	
              Title:

            	
              Principal 
                

            
	
              Investment
                Amount:

            	
              $950,000.00

            
	
              Tax
                ID No.:

            	
               

            
	 
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Black
                River Asset Management LLC

            
	
              Street:

            	
              12700
                Whitewater Drive

            
	
              City/State/Zip:

            	
              Minnetonka,
                MN 55343

            
	
              Attention:

            	
              Sarah
                Kolar

            
	
              Tel:

            	
              952-984-3249

            
	
              Fax:

            	
              952-249-4236

            
	 	 
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	 
	
              c/o:

            	
              
                Black
                  River Asset Management LLC

              

            
	
              Street:

            	
              
                12700
                  Whitewater Drive

              

            
	
              City/State/Zip:

            	
              
                Minnetonka,
                  MN 55343

              

            
	
              Attention:

            	
              Robbie
                Bray

            
	
              Tel:

            	
              952-857-3557

            
	
              Fax:

            	
              952-249-4265  
                

            

    

     

    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.

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 2
        of 21

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    
      	
              NAME
                OF INVESTOR

               

              MARION
                LYNTON

               

            
	
              By:

            	/s/
              Steve
              Napoli
	
              Name:

            	
              Steve
                Napoli

            
	
              Title:

            	
              Agent/Advisor

            
	
              Investment
                Amount:

            	$29,098.44 
              
	
              Tax
                ID No.:

            	
               

            
	 
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Ardsley
                Partners

            
	
              Street:

            	
              262
                Harbor Drive, 4th Floor

            
	
              City/State/Zip:

            	
              Stamford,
                CT 06902

            
	
              Attention:

            	
              Steve
                Napoli

            
	
              Tel:

            	
              (203)
                564-4230 

            
	
              Fax:

            	
              (203)
                355-0715

            
	 	 
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	 
	
              c/o:

            	
              
              

            
	
              Street:

            	  

	
              City/State/Zip:

            	  

	
              Attention:

            	  

	
              Tel:

            	  

	
              Fax:

            	 

    

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 3
        of 21

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    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

               

              ARDSLEY
                PARTNERS FUND II, LP

               

            
	
              By:

            	
              /s/
                Steve Napoli  

            
	
              Name:

            	
              Steve
                Napoli

            
	
              Title:

            	
              Agent/Advisor

            
	
              Investment
                Amount:

            	$1,140,760.46
	
              Tax
                ID No.:

            	
               

            
	 
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Ardsley
                Partners

            
	
              Street:

            	
              262
                Harbor Drive, 4th Floor

            
	
              City/State/Zip:

            	
              Stamford,
                CT 06902

            
	
              Attention:

            	
              Steve
                Napoli

            
	
              Tel:

            	
              (203)
                564-4230 

            
	
              Fax:

            	
              (203)
                355-0715

            
	 	
               

            
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	 
	
              c/o:

            	  

	
              Street:

            	  

	
              City/State/Zip:

            	  

	
              Attention:

            	  

	
              Tel:

            	  

	
              Fax:

            	 

    

     

    
      Investor
        Signature Page to the Securities Purchase Agreement

      Page 4
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    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

               

              
                1998
                  HEMPLEMAN FAMILY TRUST

              

               

            
	
              By:

            	/s/
              Phil
              Hempleman
	
              Name:

            	
              Phil
                Hempleman

            
	
              Title:

            	
              Advisor/Trustee

            
	
              Investment
                Amount:

            	
              $500,370.00 

            
	
              Tax
                ID No.:

            	
               

            
	
               

            
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Ardsley
                Partners

            
	
              Street:

            	
              262
                Harbor Drive, 4th Floor

            
	
              City/State/Zip:

            	
              Stamford,
                CT 06902

            
	
              Attention:

            	
              Steve
                Napoli

            
	
              Tel:

            	
              (203)
                564-4230 

            
	
              Fax:

            	
              (203)
                355-0715

            
	 	
               

            
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	 
	
              c/o:

            	  

	
              Street:

            	  

	
              City/State/Zip:

            	  

	
              Attention:

            	  

	
              Tel:

            	  

	
              Fax:

            	  

    

     

    
      Investor
        Signature Page to the Securities Purchase Agreement

      Page 5
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESSWHEREOF, 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

               

              ARDSLEY
                PARTNERS INSTITUTIONAL FUND, L.P.

               

            
	
              By:

            	
              /s/
                Steve Napoli

            
	
              Name:

            	
              Steve
                Napoli

            
	
              Title:

            	
              Agent/Advisor

            
	
              Investment
                Amount:

            	$729,770.40
	
              Tax
                ID No.:

            	
               

            
	 
	
              ADDRESS
                FOR NOTICE

            
	
               

            
	
              c/o:

            	
              Ardsley
                Partners

            
	
              Street:

            	
              262
                Harbor Drive, 4th Floor

            
	
              City/State/Zip:

            	
              Stamford,
                CT 06902

            
	
              Attention:

            	
              Steve
                Napoli

            
	
              Tel:

            	
              (203)
                564-4230 

            
	
              Fax:

            	
              (203)
                355-0715

            
	 	
               

            
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	
               

            
	
              c/o:

            	 

	
              Street:

            	 

	
              City/State/Zip:

            	 

	
              Attention:

            	 

	
              Tel:

            	 

	
              Fax:

            	 

    

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 6
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    IN
      WITNESSWHEREOF, 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:

            	
              $700,000.00

            
	
              Tax
                ID No.:

            	
               

            
	
               

            
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Special
                Situations Private Equity Fund

            
	
              Street:

            	
              527
                Madison Avenue, Suite 2600

            
	
              City/State/Zip:

            	
              New
                York, New York 10022 

            
	
              Attention:

            	
              Marianne
                Kelly/David Greenhouse

            
	
              Tel:

            	
              (212)
                319-6670 

            
	
              Fax:

            	
              (212)
                319-6677

            
	 	
               

            
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	 
	
              c/o:

            	 

	
              Street:

            	 

	
              City/State/Zip:

            	 

	
              Attention:

            	 

	
              Tel:

            	 

	
              Fax:

            	 

    

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 7
        of 21

       

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESSWHEREOF, 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 CAYMAN FUND, L.P.

               

            
	
              By:

            	
              /s/
                David Greenhouse

            
	
              Name:

            	
              David
                Greenhouse

            
	
              Title:

            	
              Managing
                Director

            
	
              Investment
                Amount:

            	
              $1,300,000.00

            
	
              Tax
                ID No.:

            	
               

            
	 
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Special
                Situations Cayman Fund

            
	
              Street:

            	
              527
                Madison Avenue, Suite 2600

            
	
              City/State/Zip:

            	
              New
                York, New York 10022 

            
	
              Attention:

            	
              Marianne
                Kelly/David Greenhouse

            
	
              Tel:

            	
              (212)
                319-6670

            
	
              Fax:

            	
              (212)
                319-6677

            
	 	 
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	 
	
              c/o:

            	 

	
              Street:

            	 

	
              City/State/Zip:

            	 

	
              Attention:

            	 

	
              Tel:

            	 

	
              Fax:

            	 

    

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 8
        of 21

       

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESSWHEREOF, 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

               

              MIDSOUTH
                INVESTOR FUND LP

               

            
	
              By:

            	
              /s/
                Lyman O. Heidtke

            
	
              Name:

            	
              Lyman
                O. Heidtke  

            
	
              Title:

            	General
              Partner  
	
              Investment
                Amount:

            	$250,000.00 
              
	
              Tax
                ID No.:

            	
               

            
	 
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Heidtke
                & Company, Inc. 

            
	
              Street:

            	
              201
                4th
                Ave. North, Suite 1950

            
	
              City/State/Zip:

            	
              Nashville,
                TN 37219

            
	
              Attention:

            	
              L.O.
                Heidtke

            
	
              Tel:

            	
              (615)
                254-0992

            
	
              Fax:

            	
              (615)
                254-1603

            
	 	
               

            
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	 
	
              c/o:

            	 

	
              Street:

            	 

	
              City/State/Zip:

            	 

	
              Attention:

            	 

	
              Tel:

            	 

	
              Fax:

            	 

    

     

    
      Investor
        Signature Page to the Securities Purchase Agreement

      Page
        9 of
        21

       

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESSWHEREOF, 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, LP

               

            
	
              By:

            	
              /s/
                Andrew Marks  

            
	
              Name:

            	
              Andrew
                Marks

            
	
              Title:

            	CFO 
              
	
              Investment
                Amount:

            	$112,500.11 
	
              Tax
                ID No.:

            	
               

            
	 
	
              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:

            	 

    

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 10
        of 21

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESSWHEREOF, 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, LP

               

            
	
              By:

            	
              /s/
                Andrew Marks

            
	
              Name:

            	
              Andrew
                Marks

            
	
              Title:

            	CFO  
              
	
              Investment
                Amount:

            	$137,500.14  
              
	
              Tax
                ID No.:

            	
               

            
	 
	
              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:

            	 

    

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 11
        of 21

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESSWHEREOF, 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/
                Peter Siris  

            
	
              Name:

            	
               Peter
                Siris

            
	
              Title:

            	Managing
              Director    
	
              Investment
                Amount:

            	$350,000.00 
	
              Tax
                ID No.:

            	
               

            
	 
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Guerrilla
                Capital Management

            
	
              Street:

            	
              237
                Park Ave 9th Floor

            
	
              City/State/Zip:

            	
              New
                York, NY 10017

            
	
              Attention:

            	
              Peter
                Siris

            
	
              Tel:

            	
              (212)
                692-7692

            
	
              Fax:

            	
              (212)
                692-7689

            
	 	 
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	 
	
              c/o:

            	 

	
              Street:

            	 

	
              City/State/Zip:

            	 

	
              Attention:

            	 

	
              Tel:

            	 

	
              Fax:

            	 

    

    

    
      Investor
        Signature Page to the Securities Purchase Agreement

      Page 12
        of 21

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESSWHEREOF, 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

               

              GUERRILLA
                PARTNERS LP

               

            
	
              By:

            	
              /s/
                Peter Siris 

            
	
              Name:

            	
              Peter
                Siris 

            
	
              Title:

            	Managing
              Director  
	
              Investment
                Amount:

            	$150,000.00  
	
              Tax
                ID No.:

            	
               

            
	 
	
              ADDRESS
                FOR NOTICE

            
	 
	
              c/o:

            	
              Guerrilla
                Capital Management

            
	
              Street:

            	
              237
                Park Ave 9th Floor

            
	
              City/State/Zip:

            	
              New
                York, NY 10017

            
	
              Attention:

            	
              Peter
                Siris

            
	
              Tel:

            	
              (212)
                692-7692

            
	
              Fax:

            	
              (212)
                692-7689

            
	 	
               

            
	
              DELIVERY
                INSTRUCTIONS

              (if
                different from above)

            
	
               

            
	
              c/o:

            	 
	
              Street:

            	 
	
              City/State/Zip:

            	 
	
              Attention:

            	 
	
              Tel:

            	 
	
              Fax:

            	 

    

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 13
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

      
        	
                Appendix
                  A

              	
                Schedule
                  of Investors

              
	 	 
	
                Appendix
                  B

              	
                Disclosure
                  Schedules

              
	 	 
	
                Exhibit
                  A

              	
                Form
                  of Closing Escrow Agreement

              
	 	 
	
                Exhibit
                  B-1

              	
                Form
                  of Investor Warrant 

              
	 	 
	
                Exhibit
                  B-2

              	
                Form
                  of Placement Agent Warrant

              
	 	 
	
                Exhibit
                  C

              	
                Form
                  of Make Good Escrow Agreement

              
	 	 
	
                Exhibit
                  D

              	
                Form
                  of Registration Rights
                  Agreement

              

      

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    APPENDIX
      A

    

    SCHEDULE
      OF INVESTORS

     

    BLACK
      RIVER SMALL CAPITALIZATION FUND LTD.

     

    BLACK
      RIVER COMMODITY SELECT FUND LTD.

     

    MARION
      LYNTON

     

    ARDSLEY
      PARTNERS FUND II, LP

     

    ARDSLEY
      OFFSHORE FUND, LTD

     

    ARDSLEY
      PARTNERS INSTITUTIONAL

     

    SPECIAL
      SITUATIONS PRIVATE EQUITY FUND, L.P.

     

    SPECIAL
      SITUATIONS CAYMAN FUND, L.P.

     

    MIDSOUTH
      INVESTOR FUND LP

     

    STRAUS
      PARTNERS, LP

     

    STRAUS-GEPT
      PARTNERS, LP

     

    HUA
      - MEI 21ST CENTURY PARTNERS, LP

     

    GUERRILLA
      PARTNERS LP

     

    
      Investor
        Signature Page to the Securities Purchase Agreement

      Page 15
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    APPENDIX
      B

    

    DISCLOSURE
      SCHEDULES

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 16
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    EXHIBIT
      A

    

    FORM
      OF CLOSING ESCROW AGREEMENT

     

    
      Investor
        Signature Page to the Securities Purchase Agreement

      Page 17
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      B-1

    

    FORM
      OF INVESTOR WARRANT

     

    
      Investor
        Signature Page to the Securities Purchase Agreement

      Page 18
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      B-2

    

    FORM
      OF PLACEMENT AGENT WARRANT

     

    
      Investor
        Signature Page to the Securities Purchase Agreement

      Page 19
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      C

    

    FORM
      OF MAKE GOOD ESCROW AGREEMENT

    
       

      Investor
        Signature Page to the Securities Purchase Agreement

      Page 20
        of 21

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      D

    

    FORM
      OF REGISTRATION RIGHTS AGREEMENT

     

    
      Investor
        Signature Page to the Securities Purchase Agreement

      Page 21
        of 21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]