SC 13E3/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 13E-3
(Amendment No. 2)
(Rule 13e-100)

 

TRANSACTION STATEMENT UNDER SECTION 13(e) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND RULE 13e-3 THEREUNDER

RULE 13e-3 Transaction Statement
Under Section 13(e) of the Securities Exchange Act of 1934

 

Yongye International, Inc.

(Name of the Issuer)

 

Yongye International, Inc.
Yongye International Limited
Yongye International Merger Sub Limited
Full Alliance International Limited
Mr. Zishen Wu
Ms. Xingmei Zhong
Orient Blossom Investments Limited
Morgan Stanley Private Equity Asia III, L.L.C.
Morgan Stanley Private Equity Asia III, L.P.
Morgan Stanley Private Equity Asia III Holdings (Cayman) Ltd
MSPEA Agriculture Holding Limited
Lead Rich International Limited
Stable Rich Capital Advisory Limited
Mr. Peng Liu
Prosper Sino Development Limited

(Names of Persons Filing Statement)

 

Common Stock, par value $0.001 par value per share

(Title of Class of Securities)

98607B106

(CUSIP Number)

Yongye International, Inc. Suite 608, Xue Yuan International Tower, No. 1 Zhichun Road, Haidian District Beijing, People’s Republic of China +(86) 10 8232 8866	Zishen Wu c/o Yongye International, Inc. Suite 608, Xue Yuan International Tower, No. 1 Zhichun Road, Haidian District Beijing, People’s Republic of China +(86) 10 8232 8866	Xingmei Zhong Full Alliance International Limited Room 1701, Wing Tuck Commercial Centre, 183 Wing Lok Street Sheung Wan, Hong Kong +(852) 2572 3986

Marco Chung Morgan Stanley Level 46, International Commerce Centre 1 Austin Road West, Kowloon Hong Kong +(852) 2848-5200	Peng Liu Lead Rich International Limited Stable Rich Capital Advisory Limited c/o Interglobe Corporate Solutions Ltd 26/F, Beautiful Group Tower 77 Connaught Road, Central, Hong Kong +(852) 3585 3340

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

With copies to:

Ling Huang, Esq. W. Clayton Johnson, Esq. Cleary Gottlieb Steen & Hamilton LLP Twin Towers — West (23Fl), Jianguomenwai Da Jie Chaoyang District, Beijing		Peter X. Huang, Esq. Daniel Dusek, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 30th Floor, China World Office 2 1 Jianguomenwai Avenue, Beijing 100004

John E. Lange, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP Hong Kong Club Building, 12th Floor 3A Chater Road, Central, Hong Kong	Akiko Mikumo, Esq. Weil, Gotshal & Manges LLP 29/F Alexandra House 18 Chater Road, Central, Hong Kong	Mitchell S. Nussbaum, Esq. Norwood P. Beveridge, Jr., Esq. Loeb & Loeb LLP 345 Park Avenue New York, New York 10154

This statement is filed in connection with (check the appropriate box):

a	þ The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14-C or Rule 13e-3(c) under the Securities Exchange Act of 1934.
b	o  The filing of a registration statement under the Securities Act of 1933.
c	o  A tender offer
d	o  None of the above

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: þ

Check the following box if the filing is a final amendment reporting the results of the transaction: o

Calculation of Filing Fee

	Transactional Valuation*		Amount of Filing Fee**
	$	256,323,797.61	$	33,014.51

* Calculated solely for the purposes of determining the filing fee. The filing fee is calculated based on the sum of 38,314,469 shares of common stock issued and outstanding as of September 23, 2013 (being the remainder of the 50,685,216 shares of common stock as of September 23, 2013 minus the 12,370,747 shares of common stock beneficially owned by the rollover holders) multiplied by $6.69 per share merger consideration (the “Transaction Valuation”).

** The amount of the filing fee, calculated in accordance with Exchange Act Rule 0-11(b)(1) under the Securities Exchange Act of 1934, as amended and the Securities and Exchange Commission Fee Rate Advisory #1 for Fiscal Year 2014, was calculated by multiplying the Transaction Valuation by 0.00012880.

þ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting of the fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid: $33,014.51
Form or Registration No.: Schedule 14A — Preliminary Proxy Statement
Filing Party: Yongye International, Inc.
Date Filed: October 28, 2013

TABLE OF CONTENTS

Item 1 Summary Term Sheet		3
Item 2 Subject Company Information		3
Item 3 Identity and Background of Filing Person		3
Item 4 Terms of the Transaction		3
Item 5 Past Contacts, Transactions, Negotiations and Agreements		5
Item 6 Purposes of the Transaction and Plans or Proposals		6
Item 7 Purposes, Alternatives, Reasons and Effects		7
Item 8 Fairness of the Transaction		8
Item 9 Reports, Opinions, Appraisals and Negotiations		9
Item 10 Source and Amount of Funds or Other Consideration		9
Item 11 Interest in Securities of the Subject Company		10
Item 12 The Solicitation or Recommendation		10
Item 13 Financial Statements		10
Item 14 Persons/Assets, Retained, Employed, Compensated or Used		11
Item 15 Additional Information		11
Item 16 Exhibits		11

i

INTRODUCTION

This Amendment No. 2 to Rule 13E-3 transaction statement on Schedule 13E-3, together with the exhibits hereto (this “Transaction Statement”), is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), jointly by the following persons (each, a “Filing Person,” and collectively, the “Filing Persons”):

• Yongye International, Inc., a Nevada corporation (the “Company”), the issuer of the common stock, par value $0.001 per share (the “Company common stock”), that is subject to the transaction pursuant to Rule 13e-3 under the Exchange Act;

• Yongye International Limited, a Cayman Islands exempted company with limited liability (“Parent”);

• Yongye International Merger Sub Limited, a Nevada corporation and wholly-owned subsidiary of Parent (“Merger Sub”);

• Full Alliance International Limited, a British Virgin Islands company and the parent company of Parent (“Holdco”);

• Mr. Zishen Wu, the chairman and chief executive officer of the Company (“Mr. Wu”);

• Orient Blossom Investments Limited, a British Virgin Islands business company with limited liability (“Orient Blossom”);

• Ms. Xingmei Zhong, the sole director and indirect shareholder of Holdco (“Ms. Zhong”);

• Morgan Stanley Private Equity Asia III, L.L.C., a Delaware limited liability company (“MS LLC”);

• Morgan Stanley Private Equity Asia III, L.P., a Cayman Islands limited partnership (“MS LP”);

• Morgan Stanley Private Equity Asia III Holdings (Cayman) Ltd, a Cayman Islands limited liability company (“MSPEA Holdings”);

• MSPEA Agriculture Holding Limited, a Cayman Islands limited liability company (“MSPEA”);

• Lead Rich International Limited, a British Virgin Islands business company with limited liability (“Lead Rich”);

• Stable Rich Capital Advisory Limited, a British Virgin Islands business company with limited liability (“Stable Rich”);

• Mr. Peng Liu, the sole shareholder and director of Lead Rich and Stable Rich (“Mr. Liu”); and

• Prosper Sino Development Limited, a British Virgin Islands business company with limited liability (“Prosper Sino”).

In this Transaction Statement, we refer to MS LLC, MS LP, MSPEA III and MSPEA collectively as the “MS Filing Persons.” We refer to Holdco, Mr. Zishen Wu, MSPEA and Prosper Sino collectively as the “rollover holders.” We refer to the rollover holders, Parent, Merger Sub, Lead Rich and their affiliates collectively as the “buyer group” (which, for the avoidance of doubt, includes Orient Blossom, Ms. Zhong, the MS Filing Persons, Stable Rich and Mr. Liu).

On September 23, 2013, Holdco, Parent, Merger Sub and the Company entered into an agreement and plan of merger (the “merger agreement”), providing for the merger of Merger Sub with and into the Company (the “merger”), with the Company continuing as the surviving corporation after the merger as a wholly-owned subsidiary of Parent. Parent is wholly-owned by Holdco as of the date of this Transaction Statement. The merger is a going private transaction the buyer group. Immediately prior to the effective time of the merger, the rollover holders will contribute their shares of Company common stock and Company preferred stock (as defined below) to Parent in exchange for newly issued shares or options, as applicable, of Holdco, while Mr. Wu and Lead Rich will make certain equity investment in Holdco, as a result of which the rollover holders and Lead Rich will beneficially own 100% of the Company at the effective time of the merger.

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If the merger is approved by the required stockholder approval and consummated, except as described below, each outstanding share of Company common stock will be converted into the right to receive per share merger consideration of US$6.69 in cash without interest and net of any applicable withholding taxes. Shares (i) owned by the Company or any subsidiary of the Company or (ii) owned by the rollover holders, including shares of Company common stock and shares of Series A Convertible Preferred Shares (“Company preferred stock”), that will be contributed to Parent by the rollover holders pursuant to a contribution agreement (the “contribution agreement”) dated September 23, 2013 among Parent and the rollover holders ((i) and (ii) collectively, the “excluded shares”), will be cancelled and cease to exist and no payment or distribution will be made to the holders of such excluded shares.

The merger remains subject to the satisfaction or waiver of the conditions set forth in the merger agreement, including obtaining the requisite approval of the stockholders of the Company. The merger agreement must be approved by (i) the affirmative vote (in person or by proxy) of the holders of at least a majority of the outstanding shares of Company common stock and Company preferred stock, voting together as a single class, with the holders of shares of Company preferred stock being entitled to a number of votes equal to the number of the shares of Company common stock into which such shares of Company preferred stock are convertible as of the record date for the special meeting, (ii) the affirmative vote (in person or by proxy) or consent of the holders of at least a majority of the shares of Company preferred stock outstanding on the record date, and (iii) the affirmative vote (in person or by proxy) of the holders of at least a majority of the outstanding shares of Company common stock (other than the excluded shares) on the record date, in each case in accordance with the Company’s articles of incorporation and bylaws and the Nevada Revised Statutes. As of September 23, 2013, the rollover holders, as a group, beneficially owned 12,370,747 shares of Company common stock (which, with respect to Prosper Sino, only includes 2,030,000 shares held by it (the “Prosper Sino rollover shares”)) and 6,505,113 shares of Company preferred stock, which represent approximately 33.2% of the total outstanding shares of the Company common stock, on an as-converted basis. The rollover holders have agreed, under the voting agreement with Parent and the Company, dated September 23, 2013 (the “voting agreement”), to vote all the shares of Company common stock and Company preferred stock beneficially owned by them, except that Prosper Sino has only agreed to vote the Prosper Sino rollover shares held by it (with respect to each rollover holder, the “rollover shares”) in favor of the proposal to approve the merger agreement. Accordingly, due to the “majority of the unaffiliated stockholders” vote requirement described in clause (iii) above, based on the shares of Company common stock outstanding on the record date, more than      shares, or 50% of the shares of Company common stock owned by the unaffiliated stockholders (representing   % of the total outstanding shares of Company common stock), must be voted in favor of the proposal to approve the merger agreement for it to be approved.

Concurrently with the filing of this Amendment No. 2 to Schedule 13E-3, the Company is filing a revised preliminary proxy statement (the “Preliminary Proxy Statement”) under Regulation 14A of the Exchange Act, relating to a special meeting of the stockholders of the Company at which the stockholders of the Company will consider and vote upon a proposal to approve the merger agreement and to approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement. The cross reference sheet below is being supplied pursuant to General Instruction G to Schedule 13E-3 and shows the location in the Preliminary Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. The information set forth in the Preliminary Proxy Statement, including all annexes thereto, is hereby incorporated herein by reference, and the responses to each such item in this Transaction Statement are qualified in their entirety by the information contained in the Preliminary Proxy Statement and the annexes thereto. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Preliminary Proxy Statement.

All information contained in this Transaction Statement concerning each Filing Person has been supplied by such Filing Person.

2

Item 1 Summary Term Sheet

The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Questions and Answers about the Special Meeting and the Merger”

Item 2 Subject Company Information

(a) Name and Address.  The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference:

• “Special Factors — The Parties”

(b) Securities.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Questions and Answers about the Special Meeting and the Merger”

• “The Special Meeting — Record Date and Quorum”

• “Security Ownership of Certain Beneficial Owners and Management of the Company”

• “Common Stock Transaction Information”

(c) Trading Market and Price.  The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference:

• “Market Price of the Company’s Shares, Dividends and Other Matters”

(d) Dividends.  The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference:

• “Market Price of the Company’s Shares, Dividends and Other Matters”

(e) Prior Public Offerings.  Not applicable.

(f) Prior Stock Purchases.  The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference:

• “Common Stock Transaction Information”

Item 3 Identity and Background of Filing Person

(a) Name and Address.  Yongye International, Inc. is the subject company. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Special Factors — The Parties”

• “Annex C — Directors and Executive Officers of Each Filing Person”

(b) Business and Background of Entities.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Special Factors — The Parties”

• “Annex C — Directors and Executive Officers of Each Filing Person”

(c) Business and Background of Natural Persons.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Special Factors — The Parties”

• “Annex C — Directors and Executive Officers of Each Filing Person”

Item 4 Terms of the Transaction

(a)-(1) Material Terms — Tender Offers.  Not applicable.

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(a)-(2) Material Terms — Mergers or Similar Transactions.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Questions and Answers about the Special Meeting and the Merger”

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Reasons of the Buyer Group for the Merger”

• “Special Factors — Position of the Buyer Group as to the Fairness of the Merger”

• “The Special Meeting”

• “The Agreement and Plan of Merger”

• “Material U.S. Federal Income Tax Consequences”

• “Certain Material PRC Income Tax Consequences”

• “Annex A — The Agreement and Plan of Merger”

(c) Different Terms.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Interests of Certain Persons in the Merger”

• “Special Factors — Certain Effects of the Merger”

• “Special Factors — Financing of the Merger”

• “Special Factors — Voting Agreement”

• “Special Factors — Interim Investors Agreement”

• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

(d) Appraisal Rights.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Questions and Answers about the Special Meeting and the Merger”

• “No Dissenter’s Rights for Holders of Common Stock”

(e) Provisions for Unaffiliated Security Holders.  The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference:

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

There have been no other provisions in connection with the merger to grant unaffiliated security holders access to the corporate files of the Filing Persons or to obtain counsel or appraisal services at the expense of the Filing Persons.

(f) Eligibility for Listing or Trading.  Not applicable.

4

Item 5 Past Contacts, Transactions, Negotiations and Agreements

(a) Transactions.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Background of the Merger”

• “Special Factors — Interests of Certain Persons in the Merger”

• “Special Factors — Relationship between Company and Buyer Group”

• “The Agreement and Plan of Merger”

• “Common Stock Transaction Information”

• “Annex A — The Agreement and Plan of Merger”

(b) Significant Corporate Events.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Reasons for the Buyer Group for the Merger”

• “Special Factors — Position of the Buyer Group as to the Fairness of the Merger”

• “Special Factors — Effects of the Merger on the Company”

• “Special Factors — Financing of the Merger”

• “Special Factors — Limited Guarantee”

• “Special Factors — Voting Agreement”

• “Special Factors — Interim Investors’ Agreement”

• “Special Factors — Liability Cap and Limitation on Remedies”

• “Special Factors — Interests of Certain Persons in the Merger”

• “The Special Meeting — Vote Required”

• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

(c) Negotiations or Contacts.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Special Factors — Background of the Merger”

• “Special Factors — Interests of Certain Persons in the Merger”

• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

(e) Agreements Involving the Subject Company’s Securities.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Background of the Merger”

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• “Special Factors — Plans for the Company after the Merger”

• “Special Factors — Financing of the Merger”

• “Special Factors — Interests of Certain Persons in the Merger”

• “Special Factors — Limited Guarantee”

• “Special Factors — Voting Agreement”

• “Special Factors — Interim Investors Agreement”

• “The Agreement and Plan of Merger”

• “Common Stock Transaction Information”

• “Annex A — The Agreement and Plan of Merger”

Item 6 Purposes of the Transaction and Plans or Proposals

(b) Use of Securities Acquired.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Questions and Answers about the Special Meeting and the Merger”

• “Special Factors — Effect of the Merger on the Company”

• “Special Factors — Plans for the Company after the Merger”

• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

(c)(1) – (8) Plans.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Reasons of the Buyer Group for the Merger”

• “Special Factors — Effect of the Merger on the Company”

• “Special Factors — Plans for the Company after the Merger”

• “Special Factors — Financing of the Merger”

• “Special Factors — Voting Agreement”

• “Special Factors — Dividends”

• “Special Factors — Interests of Certain Persons in the Merger”

• “Special Factors — Delisting and Deregistration of the Company Common Stock”

• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

6

Item 7 Purposes, Alternatives, Reasons and Effects

(a) Purposes.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Reasons of the Buyer Group for the Merger”

• “Special Factors — Effect of the Merger on the Company”

• “Special Factors — Plans for the Company after the Merger”

• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

(b) Alternatives.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Reasons of the Buyer Group for the Merger”

• “Special Factors — Position of the Buyer Group as to the Fairness of the Merger”

• “Special Factors — Effects on the Company if the Merger is not Completed”

• “Special Factors — Alternatives to the Merger”

(c) Reasons.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Opinion of the Special Committee’s Financial Advisor”

• “Special Factors — Reasons of the Buyer Group for the Merger”

(d) Effects.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Effect of the Merger on the Company”

• “Special Factors — Plans for the Company after the Merger”

• “Special Factors — Effects on the Company if the Merger is not Completed”

• “Special Factors — Interests of Certain Persons in the Merger”

7

• “Special Factors — Delisting and Deregistration of the Company Common Stock”

• “The Agreement and Plan of Merger”

• “Material U.S. Federal Income Tax Consequences”

• “Certain Material PRC Income Tax Consequences”

• “No Dissenter’s Rights for Holders of Common Stock”

• “Annex A — The Agreement and Plan of Merger”

Item 8 Fairness of the Transaction

(a) – (b) Fairness; Factors Considered in Determining Fairness.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Opinion of the Special Committee’s Financial Advisor”

• “Special Factors — Position of the Buyer Group as to the Fairness of the Merger”

• “Special Factors — Interests of Certain Persons in the Merger”

• “Annex B — Opinion of Houlihan Lokey Capital, Inc.”

(c) Approval of Security Holders.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Questions and Answers about the Special Meeting and the Merger”

• “The Special Meeting — Vote Required”

• “The Special Meeting — Record Date and Quorum”

• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

(d) Unaffiliated Representative.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Opinion of the Special Committee’s Financial Advisor”

• “Annex B — Opinion of Houlihan Lokey Capital, Inc.”

(e) Approval of Directors.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Questions and Answers about the Special Meeting and the Merger”

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

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(f) Other Offers.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

Item 9 Reports, Opinions, Appraisals and Negotiations

(a) Report, Opinion or Appraisal.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Background of the Merger”

• “Special Factors — Opinion of the Special Committee’s Financial Advisor”

• “Annex B — Opinion of Houlihan Lokey Capital, Inc.”

(b) Preparer and Summary of the Report, Opinion or Appraisal.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Special Factors — Opinion of the Special Committee’s Financial Advisor”

• “Annex B — Opinion of Houlihan Lokey Capital, Inc.”

(c) Availability of Documents.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

• “Where You Can Find More Information”

The reports, opinions or appraisals referenced in this Item 9 will be made available for inspection and copying at the principal executive offices of the Company during its regular business hours by any interested holder of the shares of Company common stock or his, her or its representative who has been so designated in writing.

Item 10 Source and Amount of Funds or Other Consideration

(a) Source of Funds.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Financing of the Merger”

• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

(b) Conditions.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Financing of the Merger”

• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

(c) Expenses.  The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference:

• “Special Factors — Effects on the Company if the Merger is not Completed”

• “Special Factors — Fees and Expenses”

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• “The Agreement and Plan of Merger”

• “Annex A — The Agreement and Plan of Merger”

(d) Borrowed Funds.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Financing of the Merger”

Item 11 Interest in Securities of the Subject Company

(a) Securities Ownership.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Interests of Certain Persons in the Merger”

• “Security Ownership of Certain Beneficial Owners and Management of the Company”

(b) Securities Transactions.  The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference:

• “Common Stock Transaction Information”

Item 12 The Solicitation or Recommendation

(d) Intent to Tender or Vote in a Going-Private Transaction.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Questions and Answers about the Special Meeting and the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Financing of the Merger”

• “Special Factors — Voting Agreement”

• “Special Factors — Interests of Certain Persons in the Merger”

• “The Special Meeting — Vote Required”

• “Security Ownership of Certain Beneficial Owners and Management of the Company”

(e) Recommendations of Others.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Position of the Buyer Group as to the Fairness of the Merger”

Item 13 Financial Statements

(a) Financial Information.  The audited financial statements of the Company for the fiscal year ended December 31, 2012 are incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed on April 1, 2013 (see page F-1 and following pages). The unaudited consolidated financial statements of the Company for the fiscal quarters ended March 31, 2013, June 30, 2013 and September 30, 2013 are incorporated herein by reference to the Company’s Quarterly Reports on Form 10-Q filed on May 10, 2013, August 9, 2013 and November 12, 2013, respectively (see page 1 and following pages).

10

The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Selected Financial Information”

• “Where You Can Find More Information”

(b) Pro Forma Information.  Not applicable.

Item 14 Persons/Assets, Retained, Employed, Compensated or Used

(a) Solicitation or Recommendations.  The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference:

• “Summary Term Sheet”

• “Questions and Answers about the Special Meeting and the Merger”

• “Special Factors — Background of the Merger”

• “Special Factors — Recommendation of Our Board of Directors and the Special Committee and Their Reasons for the Merger”

• “Special Factors — Fees and Expenses”

• “The Special Meeting — Proxies and Revocation”

(b) Employees and Corporate Assets.  The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference:

• “Summary Term Sheet”

• “Special Factors — Interests of Certain Persons in the Merger”

• “Annex C — Directors and Executive Officers of Each Filing Person”

Item 15 Additional Information

(b) Golden Parachute Compensation.  Not applicable.

(c) Other Material Information.  The information contained in the Preliminary Proxy Statement, including all annexes thereto, is incorporated herein by reference.

Item 16 Exhibits

(a)-(1) Preliminary Proxy Statement of Yongye International, Inc., incorporated by reference to the Schedule 14A filed with the SEC on November 26, 2013.

(a)-(2) Notice of Special Meeting of Stockholders of the Company, incorporated herein by reference to the Preliminary Proxy Statement.

(a)-(3) Form of Proxy Card, incorporated herein by reference to the Preliminary Proxy Statement.

(a)-(4) Press Release issued by the Company, dated September 23, 2013, incorporated herein by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by the Company with the SEC on September 23, 2013.

(b)-(1) Facility Contract by and between CDB and Parent, dated September 23, 2013, incorporated herein by reference to Exhibit 7.03 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(b)-(2) Note Purchase Agreement, dated September 23, 2013, among Lead Rich, Mr. Wu and Holdco, incorporated herein by reference to Exhibit 7.06 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(c)-(1) Opinion of Houlihan Lokey Capital, Inc., dated September 23, 2013, incorporated herein by reference to Annex B to the Preliminary Proxy Statement.

11

(c)-(2) Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated December 10, 2012.*

(c)-(3) Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated January 31, 2013.*

(c)-(4) Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated July 9, 2013.*

(c)-(5) English Translation of Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated August 29, 2013.†

(c)-(6) English Translation of Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated September 21, 2013.†

(c)-(7) Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated September 23, 2013.*

(c)-(8) Addendum to Houlihan Lokey Capital, Inc. Engagement Letter, dated December 5, 2013.

(d)-(1) Agreement and Plan of Merger, dated as of September 23, 2013, among the Company, Holdco, Parent and Merger Sub, incorporated herein by reference to Annex A to the Preliminary Proxy Statement.

(d)-(2) Limited Guarantee, dated as of September 23, 2013 by Mr. Wu and MSPEA in favor of the Company, incorporated herein by reference to Exhibit 9.2 to the Current Report on Form 8-K filed by the Company with the SEC on September 23, 2013.

(d)-(3) Voting Agreement, dated September 23, 2013, by the Company, Parent and the rollover holders, incorporated herein by reference to Exhibit 9.1 to the Current Report on Form 8-K filed by the Company with the SEC on September 23, 2013.

(d)-(4) Contribution Agreement, dated September 23, 2013, by and among the Company, Parent and the rollover holders, incorporated herein by reference to Exhibit 7.08 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(d)-(5) Equity Commitment Letter by and between Mr. Wu and Parent, dated September 23, 2013, incorporated herein by reference to Exhibit 7.04 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(d)-(6) Equity Commitment Letter by and among Lead Rich, Holdco and Parent, dated September 23, 2013, incorporated herein by reference to Exhibit 7.05 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(d)-(7) Interim Investors Agreement by and among Mr. Wu, Ms. Zhong, Full Alliance, MSPEA and Lead Rich, dated September 23, 2013, incorporated herein by reference to Exhibit 7.10 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(d)-(8) Amendment to Contribution Agreement, dated November 25, 2013, by and among the Company, Parent and the rollover holders, incorporated herein by reference to Exhibit 7.13 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on November 25, 2013.

(f) Not applicable.

(g) Not applicable.

* Previously filed on October 28, 2013.

† Previously filed on November 6, 2013.

12

SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: November 26, 2013

Yongye International, Inc.

By: /s/ Sean Shao

Name: Sean Shao
Title: Director and Chair of Special Committee

Yongye International Limited

By: /s/ Zishen Wu

Name: Zishen Wu
Title: Director

Yongye International Merger Sub Limited

By: /s/ Zishen Wu

Name: Zishen Wu
Title: Director

Xingmei Zhong

By: /s/ Xingmei Zhong

Full Alliance International Limited

By: /s/ Xingmei Zhong

Name: Xingmei Zhong
Title: Director

Zishen Wu

By: /s/ Zishen Wu

Orient Blossom Investments Limited

By: /s/ Xingmei Zhong

Name: Xingmei Zhong
Title: Director

Morgan Stanley Private Equity Asia III, L.L.C.

By: Morgan Stanley Private Equity Asia III, Inc., its managing member

By: /s/ Samantha Jennifer Cooper

Name: Samantha Jennifer Cooper
Title: Vice President

Morgan Stanley Private Equity Asia III, L.P.

By: Morgan Stanley Private Equity Asia III, L.L.C., its general partner

By: Morgan Stanley Private Equity Asia III, Inc., its managing member

By: /s/ Samantha Jennifer Cooper

Name: Samantha Jennifer Cooper
Title: Vice President

Morgan Stanley Private Equity Asia III Holdings (Cayman) Ltd.

By: /s/ Samantha Jennifer Cooper

Name: Samantha Jennifer Cooper
Title: Director

MSPEA Agriculture Holding Limited

By: /s/ Samantha Jennifer Cooper

Name: Samantha Jennifer Cooper
Title: Director

Lead Rich International Limited

By: /s/ Peng Liu

Name: Peng Liu
Title: Director

Stable Rich Capital Advisory Limited

By: /s/ Peng Liu

Name: Peng Liu
Title: Director

Peng Liu

By: /s/ Peng Liu

Prosper Sino Development Limited

By: /s/ Miss Chiu Soo Ching, Katherine

Name: Miss Chiu Soo Ching, Katherine, representing INB Holdings Limited
Title: Director

Exhibit Index

(a)-(1) Preliminary Proxy Statement of Yongye International, Inc., incorporated by reference to the Schedule 14A filed with the SEC on November 26, 2013.

(a)-(2) Notice of Special Meeting of Stockholders of the Company, incorporated herein by reference to the Preliminary Proxy Statement.

(a)-(3) Form of Proxy Card, incorporated herein by reference to the Preliminary Proxy Statement.

(a)-(4) Press Release issued by the Company, dated September 23, 2013, incorporated herein by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by the Company with the SEC on September 23, 2013.

(b)-(1) Facility Contract by and between CDB and Parent, dated September 23, 2013, incorporated herein by reference to Exhibit 7.03 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(b)-(2) Note Purchase Agreement, dated September 23, 2013, among Lead Rich, Mr. Wu and Holdco, incorporated herein by reference to Exhibit 7.06 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(c)-(1) Opinion of Houlihan Lokey Capital, Inc., dated September 23, 2013, incorporated herein by reference to Annex B to the Preliminary Proxy Statement.

(c)-(2) Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated December 10, 2012.*

(c)-(3) Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated January 31, 2013.*

(c)-(4) Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated July 9, 2013.*

(c)-(5) English Translation of Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated August 29, 2013.†

(c)-(6) English Translation of Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated September 21, 2013.†

(c)-(7) Discussion Materials prepared by Houlihan Lokey Capital, Inc. for discussion with the Special Committee, dated September 23, 2013.*

(c)-(8) Addendum to Houlihan Lokey Capital, Inc. Engagement Letter, dated December 5, 2013.

(d)-(1) Agreement and Plan of Merger, dated as of September 23, 2013, among the Company, Holdco, Parent and Merger Sub, incorporated herein by reference to Annex A to the Preliminary Proxy Statement.

(d)-(2) Limited Guarantee, dated as of September 23, 2013 by Mr. Wu and MSPEA in favor of the Company, incorporated herein by reference to Exhibit 9.2 to the Current Report on Form 8-K filed by the Company with the SEC on September 23, 2013.

(d)-(3) Voting Agreement, dated September 23, 2013, by the Company, Parent and the rollover holders, incorporated herein by reference to Exhibit 9.1 to the Current Report on Form 8-K filed by the Company with the SEC on September 23, 2013.

(d)-(4) Contribution Agreement, dated September 23, 2013, by and among the Company, Parent and the rollover holders, incorporated herein by reference to Exhibit 7.08 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(d)-(5) Equity Commitment Letter by and between Mr. Wu and Parent, dated September 23, 2013, incorporated herein by reference to Exhibit 7.04 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(d)-(6) Equity Commitment Letter by and among Lead Rich, Holdco and Parent, dated September 23, 2013, incorporated herein by reference to Exhibit 7.05 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(d)-(7) Interim Investors Agreement by and among Mr. Wu, Ms. Zhong, Full Alliance, MSPEA and Lead Rich, dated September 23, 2013, incorporated herein by reference to Exhibit 7.10 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on September 24, 2013.

(d)-(8) Amendment to Contribution Agreement, dated November 25, 2013, by and among the Company, Parent and the rollover holders, incorporated herein by reference to Exhibit 7.13 to Schedule 13D, as amended, filed by Mr. Wu, Holdco and Ms. Zhong with the SEC on November 25, 2013.

(f) Not applicable.

(g) Not applicable.

* Previously filed on October 28, 2013.

† Previously filed on November, 6 2013.

EX-99.C8

 

December 5, 2012

Personal and Confidential

The Special Committee of the Board of Directors of Yongye International, Inc.

6th Floor, Suite 608, Xue Yuan International Tower

No. 1 Zichun Road, Haidian District Beijing, China

Attention: Shao Xiaoheng

Yongye International, Inc.

6th Floor, Suite 608, Xue Yuan International Tower

No. 1 Zichun Road, Haidian District Beijing, China

Attention: Sam Yu

Dear Ladies and Gentlemen:

This addendum to the engagement letter agreement (the “Existing Agreement”) among Houlihan Lokey Capital, Inc. (“HL,” “our” or “we”), Yongye International, Inc. (the “Company”) and the Special Committee of the Board of Directors of the Company (the “Special Committee”) dated October 25, 2012 sets forth the facts of our engagements with certain Consortium Members (defined below) and Morgan Stanley & Co. (“Morgan Stanley”) and our internal measures to ensure independence and confidentiality. Terms used but not defined in this letter shall have the meaning attributed to them in the Existing Agreement.

I. Engagements with Certain Consortium Members and Internal Measures to Ensure Independence and Confidentiality

We hereby inform the Special Committee of the prior and existing engagements entered into between HL and the Company buyer consortium members (“Consortium Members”), which include Chairman Zishen Wu, Full Alliance International (“Full Alliance”), MSPEA Agriculture Holding Limited (“MSPEA”), and Abax Global Capital (Hong Kong) (“Abax”). We hereby represent that HL’s engagements with the Consortium Members and Morgan Stanley provided in Exhibit A hereto are true, correct and without material omission.

HL has provided periodic valuation work for Morgan Stanley and Abax, which is conducted by our Portfolio Valuation team. As background, HL’s Portfolio Valuation team, which is a product line of our Financial Advisory Services practice, provides independent valuation services to hundreds of private equity and hedge fund clients each year. In Portfolio Valuation engagements, valuation analyses are provided to fund managers to help them assess the value of their existing investments in portfolio companies, assets, or other investments. These engagements are performed on a fixed fee basis and are not contingent on fund performance or valuation results. Oftentimes HL is hired by these same clients to provide other advisory services, including M&A advisory, fairness opinions and financial restructuring advisory, without concern over conflicts due to our strict confidentiality policy and strong internal controls.

In order to segregate the various teams within HL to preserve complete independence, HL has implemented firewall procedures such that only direct deal team members are allowed access to Portfolio Valuation client information. Additionally, when we feel it is necessary, firewall procedures are implemented on non-Portfolio Valuation client information.

The Special Committee of the Board of Directors of Yongye International, Inc. - 2 -

Before the Existing Agreement was executed and upon the Special Committee’s inquiry, HL confirmed via email that (i) HL had no conflicts of interest in connection with the Transaction and (ii) HL had no relationship with the Company or any of the Consortium Members, the latter of which HL discovered was inaccurate after the execution of the Existing Agreement, as an affiliate of HL, Houlihan Lokey Financial Advisors, Inc., provides certain valuation services to Morgan Stanley and Abax. HL continues to believe that we have no conflicts in connection with the Transaction because (i) the engagements with Morgan Stanley and Abax were only through our Portfolio Valuation practice and (ii) we and our clients do not typically view work performed by our Portfolio Valuation team as conflicting due to the nature of the work and the policies and procedures in place to ensure independence and confidentiality.

In our view, the engagements listed in Exhibit A do not impair our independence for the Transaction. None of the engagements listed in Exhibit A involve the valuation of entities that are related to the Transaction. The services rendered to Abax and Morgan Stanley are provided to their back office teams for help in determining the current net asset value of existing investments (e.g. value of investments that Abax or Morgan Stanley previously made and hold in existing funds). The valuation services are not delivered to front office personnel to assist in the investment making decision process, nor are they intended to be advisory/investment banking type services (including fairness opinion services). These types of services are provided by numerous other valuation firms, many of which use automated software based on market inputs to develop valuation estimates. Moreover, none of the fees for the engagements listed in Exhibit A are contingent on HL’s, Abax’s or Morgan Stanley’s performance, as they are all fixed-fee assignments. To date we have received approximately US$950,000 in fees from Abax since our initial engagement in 2008, with the annual fees received from Abax being approximately US$200,000 to US$250,000 consistently per year. To date, we have received less than US$100,000 in fees from Morgan Stanley since our initial engagement in 2011. The fees for these engagements are immaterial to HL’s overall revenue and the yearly fees for these engagements are less than the fees expected to be received pursuant to the Existing Agreement. The fees reflect the volume of work performed, as HL has provided monthly valuations for dozens of investments over a long period of time. Abax has requested that this fee disclosure be kept strictly confidential.

While many of HL’s employees have worked on Portfolio Valuation assignments at one time or another, in a technical, industry, and/or geographic expertise capacity, the HL engagement team for the Transaction does not contain anyone that has worked or is currently working on assignments for Abax or Morgan Stanley.

In connection with the Transaction, we have restricted access to the Company’s client information to direct deal team members only. Further, the engagement team for the Transaction and the HL teams which worked on the other assignments for Morgan Stanley and Abax are based in different HL office locations.

In addition to the aforementioned policies and procedures in place, we have adopted procedures requiring the deal teams and coverage officers responsible for managing relationships with the various Consortium Members and Morgan Stanley to promptly communicate any potential engagement opportunities, including any Portfolio Valuation engagements, with the HL Yongye deal team. This will supplement our internal conflicts check system, which will flag any prospective work with Consortium Members or Morgan Stanley.

II. Covenants and Arrangement on Fees

In light of the fact that HL has provided periodic valuation services for Morgan Stanley and Abax, HL hereby covenants and agrees that, during the period from the date hereof until the closing of the Transaction or the termination of the Existing Agreement, HL shall (i) strictly maintain its firewall procedures such that only direct deal team members are allowed access to portfolio valuation client information and only deal team members for the Transaction are allowed access to information about the Transaction as described above; (ii) to the extent that Abax, MSPEA or their respective affiliates, including Morgan Stanley, are involved in the Transaction, use its best efforts to obtain each of Abax’s and/or Morgan Stanley’s permission for the Company to disclose such engagements and related fees in any proxy statements, Schedule 13E-3, or other similar disclosure documents or communications filed by the Company with the SEC in connection with the Transaction; (iii) promptly notify the Special Committee of any potential engagement opportunities, including any portfolio valuation engagements, with any Consortium Members, their affiliates, or Morgan Stanley, (iv) obtain the Special Committee’s prior written consent before HL is retained by any Consortium Members, their affiliates, or Morgan Stanley for any investment banking or other financial advisory services and (v) consult in good faith with the Special Committee before HL is retained by any Consortium Members, their affiliates, or Morgan Stanley for any portfolio valuation services if the fees proposed to be received for such services, together with any other fees received or receivable from such Consortium Member, its affiliates or Morgan Stanley, in such year, would be significantly higher than the annual fees received by HL from such person in 2011.

The Special Committee of the Board of Directors of Yongye International, Inc. - 3 -

Notwithstanding anything to the contrary in the Existing Agreement, if the Special Committee determines, at its sole discretion due to concerns over HL’s independence, to engage another financial advisor to render to it a second written opinion as to whether the consideration to be received by the Company or holders of the Company’s shares of common stock (other than the Consortium Members, any other shareholders of the Company that will retain or obtain, directly or indirectly, an equity interest in the Company after giving effect to the Transaction, and their respective affiliates and shareholders who have validly exercised appraisal rights in accordance with the Nevada state law, if any) (as the case may be) in the Transaction is fair, from a financial point of view, to such holders, fees payable pursuant to clause (c) of the first paragraph of Section 4 of the Existing Agreement shall be reduced by US$100,000. For the avoidance of doubt and notwithstanding anything in the contrary in the Existing Agreement, no fees payable pursuant to clauses (b), (c) and (d) of the first paragraph of Section 4 of the Existing Agreement shall be payable, and HL hereby agrees to waive such fees, if HL materially breaches any of its representations or covenants set forth in this letter.

Except for the disclosure of the engagements with Abax and Morgan Stanley and related fees as specifically provided above, none of the contents of this letter shall be disclosed in any proxy statements, Schedule 13E-3, or other similar disclosure documents or communications filed by the Company with the SEC in connection with the Transaction without the written permission of HL, which shall not be unreasonably withheld, delayed or conditioned; provided that HL understands that the Company may include a description of the contents of this letter in the proxy statements, Schedule 13E-3, or other similar disclosure documents or communications filed by the Company with the SEC in connection with the Transaction as long as the content of such disclosure is subject to HL’s prior review and approval, which shall not be unreasonably withheld, delayed or conditioned.

Sincerely,

HOULIHAN LOKEY

By:  /s/Weimin Chen

Weimin Chen

Managing Director

The Special Committee of the Board of Directors of Yongye International, Inc. - 4 -

Accepted and agreed to as of the date

first written above:

SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS

OF YONGYE INTERNATIONAL, INC.

By:  /s/ Sean Xiaoheng Shao

Sean Xiaoheng Shao

Chairman of the Special Committee

Acknowledged and agreed to as of the date

first written above:

YONGYE INTERNATIONAL, INC.

By:  /s/ Sam Yu

Sam Yu

Chief Financial Officer

Exhibit A - Engagements between HL and Consortium Members

Party	Date	Product	Description
Chairman Wu	Not applicable	Not applicable	No engagements in the past three years
Full Alliance International	Not applicable	Not applicable	No engagements in the past three years
MSPEA Agriculture Holding Limited	Not applicable	Not applicable	No engagements in the past three years
Morgan Stanley & Co.	2012 through current	Portfolio valuation services	HL provides periodic RMBS pricing information
	2012 through current	Portfolio valuation services	HL provides periodic RMBS pricing information
	2011	Portfolio valuation services	HL provides periodic RMBS pricing information
Abax Global Capital (Hong Kong)	2008 through current	Portfolio valuation services	Valuation of certain warrants and convertible securities owned by Abax on a monthly basis
	2011 through current	Portfolio valuation services	Valuation of certain private investments owned by Abax on a monthly basis

Furthermore, in connection with bankruptcies, restructurings, and similar matters, HL and certain of its affiliates may have in the past acted, may currently be acting and may in the future act as financial advisor to debtors, creditors, equity holders, trustees and other interested parties (including, without limitation, formal and informal committees or groups of creditors) that may have included or represented and may include or represent, directly or indirectly, or may be or have been adverse to, MSPEA, Abax, Morgan Stanley or their affiliates (provided that this does not include cases where, to the best knowledge of the Transaction deal team after due inquiry, MSPEA, Abax, Morgan Stanley or any Consortium Member or their respective affiliates were or are (i) the only debtor, creditor, equity holder, trustee or interested party, (ii) a leading party or part of the steering committee of a group of debtors, creditors, equity holders, trustees and other interested parties or (iii) the party directly engaging HL), for which advice and services HL and such affiliates have received and may receive compensation.