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Exhibit 10.1
 
WARRANT EXCHANGE AGREEMENT

THIS WARRANT EXCHANGE AGREEMENT (this “Agreement”) is effective as of
_______________, 2010, by and between CHINA BROADBAND, INC., a Nevada
corporation (the “Company”) and the person signatory hereto (the “Holder”).

RECITAL

WHEREAS, the Company desires to reduce the complexity of its capital structure
and thereby increase its investment appeal to institutional investors;

WHEREAS, the Holder purchased that a warrant (the “Warrant”) to purchase a
number of shares of the Company’s common stock (the “Common Stock”) from the
Company pursuant to that certain Securities Purchase Agreement, dated May 20,
2010;

WHEREAS, the Holder desires to exchange the Warrant (the “Exchange”) for the
number of shares of Common Stock determined by multiplying the number of shares
of Common Stock underlying the Warrant by 0.60 (the “Exchange Shares”); and

WHEREAS, the Company desires to issue to the Holder the Exchange Shares in
exchange for the Warrant for the purpose described in the first recital clause
of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
set forth, the parties hereby agree as follows:

1.             Exchange of Warrant.

(a)            On the date of Closing (as defined below), the Company shall
issue to the Holder in exchange for the Warrant the Exchange
Shares.  Immediately upon the Exchange, all obligations of the Company under the
Warrant shall cease and the Warrant shall terminate and be of no further force
and effect.

(b)            The closing of the Exchange (the “Closing”) shall take place on
or about October 20, 2010 at the offices of Pillsbury Winthrop Shaw Pittman LLP,
2300 N Street NW, Washington, DC 20037, or at such other place as the Company
and the Holder may mutually agree.

(c)            At the Closing, the Holder shall deliver, or cause to be
delivered, to the Company its original Warrant, marked cancelled, and the
Company shall deliver, or cause to be delivered, to the Holder a certificate
representing its Exchange Shares; provided, however, that in the event that a
Holder is unable to deliver the original Warrant due to loss, theft or
destruction thereof, then, in lieu of delivery of the original Warrant, such
Holder may deliver to the Company an indemnity reasonably satisfactory to the
Company with respect to such loss, theft or destruction.  The certificate
representing the Exchange Shares shall be stamped or otherwise imprinted with a
legend substantially similar to the following (in addition to any legend
required under applicable state securities laws):

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

 
 

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2.             Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties, each of which is true and
correct on the date hereof.

(a)            The Company is a corporation duly formed, validly existing and in
good standing under the laws of the State of Nevada.  The Company has the power
and authority to own its own property and assets and to transact the business in
which it is engaged.  The Company is qualified to do business in each state or
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business.

(b)            The Company has the power and authority to execute, deliver and
perform this Agreement, and the Company has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement.  This
Agreement constitutes the authorized, valid and legally binding obligations of
the Company, enforceable against the Company in accordance with its terms,
except that such enforcement may be subject to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of the Holder’s rights generally, and (b) general principles of
equity.

(c)            The Exchange Shares to be issued pursuant to the Exchange, have
been duly authorized, and upon consummation of the transactions contemplated by
this Agreement, will be validly issued, fully paid and nonassessable.

(d)            Neither the Company nor any person acting on its behalf has
offered or sold any of the Exchange Shares by any form of general solicitation
or general advertising (as those terms are used in Regulation D).

(e)            Assuming the accuracy of the Holder’s representations and
warranties set forth in Section 3, neither the Company nor any of its
affiliates, nor any person acting on its behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would cause this issuance of the Exchange
Shares to be integrated with prior offerings by the Company for purposes of (i)
the Securities Act of 1933, as amended (the “Securities Act”) which would
require the registration of any such securities under the Securities Act, or
(ii) any applicable shareholder approval provisions of any trading market on
which any of the securities of the Company are listed or designated.

(f)             Assuming the truth and accuracy of the representation and
warranties set forth in Section 3, no registration under the Securities Act is
required for the offer and issuance of the Exchange Shares to the Holder as
contemplated hereby.

3.             Representations and Warranties of the Holder. The Holder hereby
makes the following representations and warranties, each of which is true and
correct on the date hereof.

 
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(a)            The Holder is an individual or is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.

(b)            The Holder has the power and authority to execute, deliver and
perform this Agreement, and the Holder is an individual or has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement.  This Agreement constitutes the authorized, valid and legally
binding obligations of the Holder, enforceable against the Holder in accordance
with its terms, except that such enforcement may be subject to (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of Holder’s rights generally, and (b) general principles
of equity.

(c)            The Holder has good and valid title to the Warrant, free and
clear of any mortgage, lien, pledge, charge, security interest, encumbrance,
title retention agreement, option, equity or other adverse claim thereto.  The
Holder has not, in whole or in part, (i) assigned, transferred, hypothecated,
pledged or otherwise disposed of the Warrant or its rights in such Warrant, or
(ii) given any person or entity any transfer order, power of attorney or other
authority of any nature whatsoever with respect to such Warrant which would
limit the Holder’s power to exchange the Warrant hereunder.

(d)            The Exchange Shares to be received by the Holder hereunder will
be acquired for such Holder’s own account, not as nominee or agent, and not with
a view to the resale or distribution of any part thereof in violation of the
Act, and such Holder has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the
Securities Act without prejudice, however, to such Holder’s right at all times
to sell or otherwise dispose of all or any part of such Exchange Shares in
compliance with applicable federal and state securities laws.  Nothing contained
herein shall be deemed a representation or warranty by such Holder to hold the
Exchange Shares for any period of time. Such Holder is not a broker-dealer
registered with the SEC under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) or an entity engaged in a business that would require it to
be so registered.

(e)            The Holder has had an opportunity to receive all information
related to the Company requested by it and to ask questions of and receive
answers from the Company regarding the Company, its business and the terms and
conditions of the issuance of the Exchange Shares.  Neither such inquiries nor
any other due diligence investigation conducted by such Holder shall modify,
amend or affect such Holder’s right to rely on the Company’s representations and
warranties contained in this Agreement.

(f)             The Holder understands that the Exchange Shares are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances.

(g)            No person will have, as a result of the transactions contemplated
by this Agreement, any valid right, interest or claim against or upon the
Company, any subsidiary of the Company or any shareholder of the Company for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of such Holder.

(h)            The Holder understands that the Exchange Shares are being issued
to it in reliance upon specific exemptions from the registration requirements of
United States federal and state securities laws and that the Company is relying
upon the truth and accuracy of, and such Holder’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Holder set forth herein in order to determine the availability of such
exemptions and the eligibility of such Holder to acquire the Securities.

 
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4.             Registration.  The Exchange Shares shall be deemed to carry the
same registration rights pursuant to that certain Registration Rights Agreement
between the Company and the Holder (or among the Company, the Holder, and the
other parties listed on Schedule A thereto, if applicable), dated July 30, 2010,
as the shares of Common Stock underlying the Warrant.

5.             Notice.  Except as otherwise provided herein, all notices,
requests, consents, demands, approvals and other communications hereunder must
be in writing and shall be deemed to have been duly given, made, served or
received (i) on the date when delivered personally, (ii) on the third day after
being sent when mailed first class mail, postage prepaid, return receipt
requested, or (iii) on the next day after being delivered to an overnight
delivery courier, charges prepaid to the respective parties to this Agreement at
the address listed under such party’s name in the signature block hereof.  The
designation of the person to be so notified or the address of such person for
the purposes of such notice may be changed from time to time by similar notice
in writing, except that any communication with respect to a change of address
shall be deemed to be given or made when actually received by the party to whom
such communication was sent.

6.             Governing Law.  This Agreement and the rights and obligations of
all parties hereunder shall be deemed to have been made in the State of New York
and shall be governed by and construed in accordance with, the laws of the State
of New York without giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York.

7.             Authority.  The undersigned executing on behalf of the Company
hereby represents that he or she is a duly authorized representative of the
Company and that he or she has authority to execute and bind the organization on
behalf of the organization.  The Holder is an individual or the undersigned
executing on behalf of the Holder hereby represents that he or she is a duly
authorized representative of the Holder and that he or she has authority to
execute and bind the organization on behalf of the organization

8.             Entire Agreement; Amendment.  This Agreement contains the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, and can be amended only by the written instrument of each party.

9.             Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

[The remainder of this page is intentionally left blank.]

 
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed on
the date first written above.

 
COMPANY:
       
CHINA BROADBAND, INC.
             
By
   
Name:
   
Title:
 

 
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[HOLDER SIGNATURE PAGE TO WARRANT EXCHANGE AGREEMENT]

In Witness Whereof, the undersigned Holder has executed this Warrant Exchange
Agreement as of the date first above written.

Name of Holder:  
 

Signature of Authorized Signatory of Holder:  
 

Name of Authorized Signatory:  
 

Title of Authorized Signatory:  
 

Email Address of Authorized Signatory:  
 

Facsimile Number of Authorized Signatory:  
 

Address for Notice of Holder (include fax number):  
 

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Address for Delivery of Exchange Shares to Holder  (if not same as address for
notice):

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Shares Underlying Warrant being exchanged:  
 

Number of Exchange Shares received in Exchange:  
 

 
 
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