CHINA
      KANGTAI CACTUS BIO-TECH, INC.

    


    FIRST
      AMENDED AND RESTATED

    CERTIFICATE
      OF DESIGNATIONS OF PREFERENCES, 

    RIGHTS
      AND LIMITATIONS

    OF
      SERIES A CONVERTIBLE PREFERRED STOCK

    


    The
      undersigned, Jinjiang Wang and Fengxi Lang, do hereby certify that:

     

    1. They
      are
      the President and Secretary, respectively, of China Kangtai Cactus Bio-Tech,
      Inc., a Nevada corporation (the “Company”).

     

    2. The
      Company is authorized to issue 200,000,000 shares of preferred stock, 833,333
      of
      which have been previously issued.

     

    3. The
      following resolutions were duly adopted by the Board of Directors:

     

    WHEREAS,
      the Articles of Incorporation of the Company provides for a class of its
      authorized stock known as preferred stock, comprised of 200,000,000 shares,
      $0.001 par value per share, issuable from time to time in one or more
      series;

     

    WHEREAS,
      the Board of Directors of the Company is authorized to fix the dividend rights,
      dividend rate, voting rights, conversion rights, rights and terms of redemption
      and liquidation preferences of any wholly unissued series of preferred stock
      and
      the number of shares constituting any Series and the designation thereof, of
      any
      of them; 

     

    WHEREAS,
      the Board of Directors of the Company has filed with the Nevada Secretary of
      State on March 21, 2008 a Certificate of Designation which fixed and determined
      the rights, preferences, restrictions and other matters relating to the Series
      A
      Convertible Preferred Stock;

     

    WHEREAS,
      it is the desire of the Board of Directors of the Company, pursuant to its
      authority as aforesaid, to increase the number of shares designated as Series
      A
      Convertible Preferred Stock to up to 1,250,000 shares of the preferred stock
      which the Company has the authority to issue;

     

    WHEREAS,
      the Board of Directors of the Company by unanimous written consent have agreed
      to amend certain provisions of the preferred stock and adopt this First Amended
      and Restated Certificate of Designation of Preferences, Rights and Limitations
      of Series A Convertible Preferred Stock; and 

     

    NOW,
      THEREFORE, BE IT RESOLVED, that Certificate of Designation of Preferences Rights
      and Limitations of Series A Convertible Preferred Stock as filed with the
      Secretary of State of the State of Nevada shall be amended and restated in
      its
      entirety as follows:

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
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    TERMS
      OF PREFERRED STOCK

    


    Section
      1.
      Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Purchase Agreements (as defined below) shall have the meanings given such terms
      in the Purchase Agreements. For the purposes hereof, the following terms shall
      have the following meanings:

     

    “Bankruptcy
      Event”
means
      any of the following events: (a) the Company or any Significant Subsidiary
      (as
      such term is defined in Rule 1.02(s) of Regulation S-X) thereof commences a
      case
      or other proceeding under any bankruptcy, reorganization, arrangement,
      adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
      or
      similar law of any jurisdiction relating to the Company or any Significant
      Subsidiary thereof; (b) there is commenced against the Company or any
      Significant Subsidiary thereof any such case or proceeding that is not dismissed
      within 60 days after commencement; (c) the Company or any Significant Subsidiary
      thereof is adjudicated insolvent or bankrupt or any order of relief or other
      order approving any such case or proceeding is entered; (d) the Company or
      any
      Significant Subsidiary thereof suffers any appointment of any custodian or
      the
      like for it or any substantial part of its property that is not discharged
      or
      stayed within 60 days; (e) the Company or any Significant Subsidiary thereof
      makes a general assignment for the benefit of creditors; (f) the Company or
      any
      Significant Subsidiary thereof calls a meeting of its creditors with a view
      to
      arranging a composition, adjustment or restructuring of its debts; or (g) the
      Company or any Significant Subsidiary thereof, by any act or failure to act,
      expressly indicates its consent to, approval of or acquiescence in any of the
      foregoing or takes any corporate or other action for the purpose of effecting
      any of the foregoing.

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock"
      means
      the Company's common stock, par value $0.001 per share, and stock of any other
      class into which such shares may hereafter have been reclassified or
      changed.

     

    “Common
      Stock Equivalents”
means
      any securities of the Company or the Subsidiaries which would entitle the holder
      thereof to acquire at any time Common Stock, 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.

     

    “Conversion
      Date”
shall
      have the meaning set forth in Section 6(a).

     

    “Conversion
      Ratio”
shall
      have the meaning set forth in Section 6(a).

     

    “Conversion
      Value”
shall
      have the meaning set forth in Section 6(a).

     

    “Conversion
      Shares”
means,
      collectively, the shares of Common Stock into which the shares of Series A
      Preferred Stock are convertible in accordance with the terms
      hereof.

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
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    “Conversion
      Shares Registration Statement”
means
      a
      registration statement that meets the requirements of the Registration Rights
      Agreement and registers the resale of all Conversion Shares by the Holder,
      who
      shall be named as a “selling stockholder” thereunder, all as provided in the
      Registration Rights Agreement.

     

    “Dilutive
      Issuance”
shall
      have the meaning set forth in Section 7(b) hereof.

     

    “Effective
      Date”
means
      the date that the Conversion Shares Registration Statement is declared effective
      by the Commission.

     

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

     

    “Exempt
      Issuance”
means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Company pursuant to any stock or option plan duly adopted
      by a
      majority of the non-employee members of the Board of Directors of the Company
      or
      a majority of the members of a committee of non-employee directors established
      for such purpose, (b) securities upon the exercise of or conversion of any
      securities issued hereunder, and of any convertible securities, options or
      warrants issued and outstanding on the date of this Certificate of Designations,
      provided that such securities have not been amended since the date of this
      Certificate of Designations to increase the number of such securities, and
      (c)
      securities issued pursuant to acquisitions or strategic transactions, provided
      any such issuance shall only be to a Person which is, itself or through its
      subsidiaries, an operating company in a business synergistic with the business
      of the Company and in which the Company receives benefits in addition to the
      investment of funds, but shall not include a transaction in which the Company
      is
      issuing securities primarily for the purpose of raising capital or to an entity
      whose primary business is investing in securities.

     

    “Fundamental
      Transaction”
shall
      have the meaning set forth in Section 7(f)(iv) hereof.

     

    “Holder”
shall
      have the meaning given such term in Section 2 hereof.

     

    “Junior
      Securities”
means
      the Common Stock and all other equity or equity equivalent securities of the
      Company other than those securities that are explicitly senior in rights or
      liquidation preference to the Series A Preferred Stock. 

     

    “Original
      Issue Date”
shall
      mean the date of the first issuance of any shares of the Series A Preferred
      Stock regardless of the number of transfers of any particular shares of Series
      A
      Preferred Stock and regardless of the number of certificates which may be issued
      to evidence such Series A Preferred Stock.

     

    “Person”
means
      a
      Company, an association, a partnership, a limited liability company, a business
      association, an individual, a government or political subdivision thereof or
      a
      governmental agency.

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
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    “Purchase
      Agreements”
means
      the Preferred Stock Purchase Agreements, dated as of March 21, 2008 and July
      16,
      2008, to which the Company and the original Holders are parties, as amended,
      modified or supplemented from time to time in accordance with its terms, a
      copy
      of which is on file at the principal offices of the Company.

     

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement, dated as of the March 21, 2008, to which
      the
      Company and the original Holder are parties, as amended, modified or
      supplemented from time to time in accordance with its terms.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

     

    “Series
      A Preferred Stock”
shall
      have the meaning set forth in Section 2.

     

    “Subsidiary”
shall
      mean a Company, limited liability company, partnership, joint venture or other
      business entity of which the Company owns beneficially or of record more than
      19% of the equity interest.

     

    “Trading
      Day”
means
      a
      day on which the Common Stock is traded on a Trading Market.

     

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the Nasdaq SmallCap Market, the American
      Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or
      the
      OTC Bulletin Board.

     

    “Transaction
      Documents”
shall
      have the meaning set forth in the Purchase Agreements.

     

    “VWAP”
means,
      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 primary Trading Market on which the Common
      Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based
      on
      a Trading Day from 9:30 a.m. EST to 4:02 p.m. Eastern Time) using the VAP
      function; (b) if the Common Stock is not then listed or quoted on the
      Trading Market and if prices for the Common Stock are then reported in the
“Pink
      Sheets” published by the National Quotation Bureau Incorporated (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 (c) in
      all other cases, the fair market value of a share of Common Stock as determined
      by a nationally recognized-independent appraiser selected in good faith by
      Purchasers holding a majority of the principal amount of Series A Preferred
      Stock then outstanding.

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
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    Section
      2.
      Designation,
      Amount and Par Value.
      The
      series of preferred stock shall be designated as the Company’s Series A
      Convertible Preferred Stock (the “Series
      A Preferred Stock or “Preferred Stock”)
      and
      the number of shares so designated shall be (which shall not be subject to
      increase without the consent of all of the holders of the Series A Preferred
      Stock (each a “Holder”
and
      collectively, the “Holders”).
      Each
      share of Series A Preferred Stock shall have a par value of $0.001 per share.
      Capitalized terms not otherwise defined herein shall have the meaning given
      such
      terms in Section 1 hereof.

     

    Section
      3.
      Dividends
      and Other Distributions.
      No
      dividends shall be payable with respect to the Series A Preferred Stock. No
      dividends shall be payable with respect to the Common Stock while the Series
      A
      Preferred Stock is outstanding. The Common Stock shall not be redeemed while
      the
      Series A Preferred Stock is outstanding.

     

    Section
      4.
      Voting
      Rights.
      The
      Series A Preferred Stock shall have no voting rights. However, so long as any
      shares of Series A Preferred Stock are outstanding, the Company shall not,
      without the affirmative approval of the Holders of the shares of the Series
      A
      Preferred Stock then outstanding, (a) alter or change adversely the powers,
      preferences or rights given to the Series A Preferred Stock or alter or amend
      this Certificate of Designation, (b) authorize or create any class of stock
      ranking as to dividends or distribution of assets upon a Liquidation (as defined
      in Section 5) senior to or otherwise pari passu with the Series A Preferred
      Stock, or any of preferred stock possessing greater voting rights or the right
      to convert at a more favorable price than the Series A Preferred Stock, (c)
      amend its certificate or articles of incorporation or other charter documents
      in
      breach of any of the provisions hereof, (d) increase the authorized number
      of
      shares of Series A Preferred Stock, or (e) enter into any agreement with respect
      to the foregoing.

     

    Section
      5.
      Liquidation.
      Upon
      any liquidation, dissolution or winding-up of the Company, whether voluntary
      or
      involuntary (a “Liquidation”),
      the
      Holders shall be entitled to receive out of the assets of the Company, whether
      such assets are capital or surplus, for each share of Series A Preferred Stock
      an amount equal to $0.60 (the “Liquidation
      Value”)
      before
      any distribution or payment shall be made to the holders of any Junior
      Securities, and if the assets of the Company shall be insufficient to pay in
      full such amounts, then the entire assets to be distributed to the Holders
      shall
      be distributed among the Holders ratably in accordance with the respective
      amounts that would be payable on such shares if all amounts payable thereon
      were
      paid in full. At the election of a Holder made by written notice delivered
      to
      the Company at least two (2) business days prior to the effective date of the
      subject transaction, as to the shares of Series A Preferred Stock held by such
      Holder, a Fundamental Transaction (excluding for purposes of this Section 5
      any
      Fundamental Transaction described in Section 7(f)(iv)(A) or 7(f)(iv)(B)) or
      Change of Control shall be treated as a Liquidation. 

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
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    Section
      6.
      Conversion.

     

    a) Conversions
      at Option of Holder.
      Each
      share of Series A Preferred Stock shall be initially convertible (subject to
      the
      limitations set forth in Section 6(c)), into one (1) share of Common Stock
      (as
      adjusted as provided below, the “Conversion
      Ratio”)
      at the
      option of the Holders, at any time and from time to time from and after the
      Original Issue Date. Holders shall effect conversions by providing the Company
      with the form of conversion notice attached hereto as Annex
      A
      (a
“Notice
      of Conversion”)
      as
      fully and originally executed by the Holder, together with the delivery by
      the
      Holder to the Company of the stock certificate(s) representing the number of
      shares of Series A Preferred Stock so converted, with such stock certificates
      being duly endorsed in full for transfer to the Company or with an applicable
      stock power duly executed by the Holder in the manner and form as deemed
      reasonable by the transfer agent of the Common Stock. Each Notice of Conversion
      shall specify the number of shares of Series A Preferred Stock to be converted,
      the number of shares of Series A Preferred Stock owned prior to the conversion
      at issue, the number of shares of Series A Preferred Stock owned subsequent
      to
      the conversion at issue, the stock certificate number and the shares of Series
      A
      Preferred Stock represented thereby which are accompanying the Notice of
      Conversion, and the date on which such conversion is to be effected, which
      date
      may not be prior to the date the Holder delivers such Notice of Conversion
      and
      the applicable stock certificates to the Company by overnight delivery service
      (the “Conversion
      Date”).
      If no
      Conversion Date is specified in a Notice of Conversion, the Conversion Date
      shall be the Trading Day immediately following the date that such Notice of
      Conversion and applicable stock certificates are received by the Company. The
      calculations and entries set forth in the Notice of Conversion shall control
      in
      the absence of manifest or mathematical error. Shares of Series A Preferred
      Stock converted into Common Stock in accordance with the terms hereof shall
      be
      canceled and may not be reissued. The initial value of the Series A Preferred
      Stock on the Conversion Date shall be equal to $0.60 per share (as adjusted
      pursuant to Section 7 or otherwise as provided herein, the “Conversion
      Value”).
      If
      the initial Conversion Value is adjusted pursuant to Section 7 or as otherwise
      provided herein, the Conversion Ratio shall likewise be adjusted and the new
      Conversion Ratio shall equal the Liquidation Value divided by the new Conversion
      Value. Thereafter, subject to any further adjustments in the Conversion Value,
      each share of Series A Preferred Stock shall be initially convertible into
      that
      number of shares of Common Stock equal to the new Conversion Ratio.

     

    b) Automatic
      Conversion Upon Change of Control.

     

    i. Subject
      to Section 5, all of the outstanding shares of Series A Preferred Stock shall
      be
      automatically converted into the Conversion Shares upon the close of business
      on
      the business day immediately preceding the date fixed for consummation of any
      transaction resulting in a Change of Control of the Company (an "Automatic
      Conversion Event"). A "Change in Control" means a consolidation or merger of
      the
      Company with or into another company or entity in which the Company is not
      the
      surviving entity or the sale of all or substantially all of the assets of the
      Company to another company or entity not controlled by the then existing
      stockholders of the Company in a transaction or series of transactions. The
      Company shall not be obligated to issue certificates evidencing the Conversion
      Shares unless certificates evidencing the shares of Series A Preferred Stock
      so
      converted are either delivered to the Company or its transfer agent or the
      holder notifies the Company or its transfer agent in writing that such
      certificates have been lost, stolen, or destroyed and executes an agreement
      satisfactory to the Company to indemnify the Company from any loss incurred
      by
      it in connection therewith. Upon the conversion of the Series A Preferred Stock
      pursuant to this Section 6(b)(i), the Company shall promptly send written notice
      thereof, by hand delivery or by overnight delivery, to the holder of record
      of
      all of the Series A Preferred Stock at its address then shown on the records
      of
      the Company, which notice shall state that certificates evidencing shares of
      Series A Preferred Stock must be surrendered at the office of the Company (or
      of
      its transfer agent for the Common Stock, if applicable).

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
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    c) Beneficial
      Ownership Limitation.
      Except
      as provided in Section 6(b) above, the Company shall not effect any conversion
      of the Series A Preferred Stock, and the Holder shall not have the right to
      convert any portion of the Series A Preferred Stock to the extent that after
      giving effect to such conversion, the Holder (together with the Holder’s
      affiliates), as set forth on the applicable Notice of Conversion, would
      beneficially own in excess of 4.9% of the number of shares of the Common Stock
      outstanding immediately after giving effect to such conversion.  For
      purposes of the foregoing sentence, the number of shares of Common Stock
      beneficially owned by the Holder and its affiliates shall include the number
      of
      shares of Common Stock issuable upon conversion of the Series A Preferred Stock
      with respect to which the determination of such sentence is being made, but
      shall exclude the number of shares of Common Stock which would be issuable
      upon
      (A) conversion of the remaining, nonconverted shares of Series A Preferred
      Stock
      beneficially owned by the Holder or any of its affiliates, so long as such
      shares of Series A Preferred Stock are not convertible within sixty (60) days
      from the date of such determination, and (B) exercise or conversion of the
      unexercised or nonconverted portion of any other securities of the Company
      (including the Warrants) subject to a limitation on conversion or exercise
      analogous to the limitation contained herein beneficially owned by the Holder
      or
      any of its affiliates, so long as such other securities of the Company are
      not
      exercisable nor convertible within sixty (60) days from the date of such
      determination.  For purposes of this Section 6(c), in determining the
      number of outstanding shares of Common Stock, the Holder may rely on the number
      of outstanding shares of Common Stock as reflected in the most recent of the
      following: (A) the Company’s most recent quarterly reports, Form 10-Q, Form
      10-QSB, Annual Reports, Form 10-K, or Form 10-KSB, as the case may be, as filed
      with the Commission under the Exchange Act (B) a more recent public announcement
      by the Company or (C) any other written notice by the Company or the Company’s
      transfer agent setting forth the number of shares of Common Stock
      outstanding.  Upon the written or oral request of the Holder, the Company
      shall within two (2) Trading Days confirm orally and in writing to the Holder
      the number of shares of Common Stock then outstanding.  In any case, the
      number of outstanding shares of Common Stock shall be determined after giving
      effect to the conversion or exercise of securities of the Company, including
      the
      Series A Preferred Stock, by the Holder or its affiliates since the date as
      of
      which such number of outstanding shares of Common Stock was publicly reported
      by
      the Company. This Section 6(c) may be waived or amended only with the consent
      of
      the Holders of all of the Series A Preferred Stock and the consent of the
      holders of a majority of the shares of outstanding Common Stock of the Company
      who are not Affiliates. For the purpose of the immediately preceding sentence,
      the term “Affiliate” shall mean any person: (a) that directly or indirectly,
      through one or more intermediaries controls, or is controlled by, or is under
      common control with the Company, or (b) who beneficially owns (i) any shares
      of
      Series A Preferred Stock, or (ii) the Company’s Common Stock Purchase Warrant(s)
      dated March 21, 2008 and July 16, 2008. For purposes of this Section 6(c),
      beneficial ownership shall be calculated in accordance with Section 13(d) of
      the
      Exchange Act.

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
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    d) Mechanics
      of Conversion

     

    i. Delivery
      of Certificate Upon Conversion.
      Except
      as otherwise set forth herein, not later than three Trading Days after each
      Conversion Date (the “Share
      Delivery Date”),
      the
      Company shall deliver to the Holder (A) a certificate or certificates which,
      after the Effective Date, shall be free of restrictive legends and trading
      restrictions (other than those required by the Purchase Agreements) representing
      the number of shares of Common Stock being acquired upon the conversion of
      shares of Series A Preferred Stock, and (B) a bank check in the amount of
      accrued and unpaid dividends (if the Company has elected or is required to
      pay
      accrued dividends in cash). After the Effective Date, the Company shall, upon
      request of the Holder, deliver any certificate or certificates required to
      be
      delivered by the Company under this Section electronically through the
      Depository Trust Company or another established clearing Company performing
      similar functions. If in the case of any Notice of Conversion such certificate
      or certificates are not delivered to or as directed by the applicable Holder
      by
      the third Trading Day after the Conversion Date, the Holder shall be entitled
      to
      elect by written notice to the Company at any time on or before its receipt
      of
      such certificate or certificates thereafter, to rescind such conversion, in
      which event the Company shall immediately return the certificates representing
      the shares of Series A Preferred Stock tendered for conversion.

     

    ii. Obligation
      Absolute; Partial Liquidated Damages.
      The
      Company’s obligations to issue and deliver the Conversion Shares upon conversion
      of Series A Preferred Stock 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 such Conversion Shares. In the event a Holder shall elect to convert
      any or all of its Series A Preferred Stock, the Company may not refuse
      conversion based on any claim that such Holder or any one associated or
      affiliated with the Holder of has been engaged in any violation of law,
      agreement or for any other reason, unless, an injunction from a court, on
      notice, restraining and or enjoining conversion of all or part of this Series
      A
      Preferred Stock shall have been sought and obtained and the Company posts a
      surety bond for the benefit of the Holder in the amount of 150% of the
      Conversion Value of Series A Preferred Stock outstanding, which is subject
      to
      the injunction, which bond shall remain in effect until the completion of
      arbitration/litigation of the dispute and the proceeds of which shall be payable
      to such Holder to the extent it obtains judgment. 

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
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    iii. Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Conversion.
      If the
      Company fails to deliver to the Holder such certificate or certificates pursuant
      to Section 6(d)(i) by a Share Delivery Date, and if after such Share Delivery
      Date the Holder purchases (in an open market transaction or otherwise) Common
      Stock to deliver in satisfaction of a sale by such Holder of the Conversion
      Shares which the Holder was entitled to receive upon the conversion relating
      to
      such Share Delivery Date (a “Buy-In”),
      then
      the Company shall pay in cash to the Holder the amount by which (x) the Holder's
      total purchase price (including brokerage commissions, if any) for the Common
      Stock so purchased exceeds (y) the product of (1) the aggregate number of shares
      of Common Stock that such Holder was entitled to receive from the conversion
      at
      issue multiplied by (2) the price at which the sell order giving rise to such
      purchase obligation was executed. For example, if the Holder purchases Common
      Stock having a total purchase price of $11,000 to cover a Buy-In with respect
      to
      an attempted conversion of shares of Series A Preferred Stock with respect
      to
      which the aggregate sale price giving rise to such purchase obligation is
      $10,000, under clause (A) of the immediately preceding sentence the Company
      shall be required to pay the Holder $1,000. The Holder shall provide the Company
      written notice indicating the amounts payable to the Holder in respect of the
      Buy-In, together with applicable confirmations and other evidence reasonably
      requested by the Company. 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 shares of Common Stock upon conversion of the shares of Series
      A
      Preferred Stock as required pursuant to the terms hereof.

     

    iv. Reservation
      of Shares Issuable Upon Conversion.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      its authorized and unissued shares of Common Stock solely for the purpose of
      issuance upon conversion of the Series A Preferred Stock, each as herein
      provided, free from preemptive rights or any other actual contingent purchase
      rights of persons other than the Holders, not less than such number of shares
      of
      the Common Stock as shall (subject to any additional requirements of the Company
      as to reservation of such shares set forth in the Purchase Agreements) be
      issuable (taking into account the adjustments and restrictions of Section 7)
      upon the conversion of all outstanding shares of Series A Preferred Stock.
      The
      Company covenants that all shares of Common Stock that shall be so issuable
      shall, upon issue, be duly and validly authorized, issued and fully paid,
      nonassessable and, if the Conversion Shares Registration Statement is then
      effective under the Securities Act, registered for public sale in accordance
      with such Conversion Shares Registration Statement.

     

    v. Fractional
      Shares.
      Upon a
      conversion hereunder, the Company shall not be required to issue stock
      certificates representing fractions of shares of the Common Stock.

     

    vi. Transfer
      Taxes.
      The
      issuance of certificates for shares of the Common Stock on conversion of the
      Series A Preferred Stock shall be made without charge to the Holders thereof
      for
      any documentary stamp or similar taxes that may be payable in respect of the
      issue or delivery of such certificate, provided that the Company shall not
      be
      required to pay any tax that may be payable in respect of any transfer involved
      in the issuance and delivery of any such certificate upon conversion in a name
      other than that of the Holder of such shares of Series A Preferred Stock so
      converted and the Company shall not be required to issue or deliver such
      certificates unless or until the person or persons requesting the issuance
      thereof shall have paid to the Company the amount of such tax or shall have
      established to the satisfaction of the Company that such tax has been
      paid.

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
        PAGE
          9 OF 17

        
          

        

      

      
         

      

       

    

    Section
      7.
       Certain
      Adjustments.

    


    a) Stock
      Dividends and Stock Splits.
      If the
      Company, at any time while the Series A Preferred Stock is outstanding: (A)
      shall pay a stock dividend or otherwise make a distribution or distributions
      on
      shares of its Common Stock or any other equity or equity equivalent securities
      payable in shares of Common Stock (which, for avoidance of doubt, shall not
      include any shares of Common Stock issued by the Company pursuant to this Series
      A Preferred Stock), (B) subdivide outstanding shares of Common Stock into a
      larger number of shares, (C) combine (including by way of reverse stock split)
      outstanding shares of Common Stock into a smaller number of shares, or (D)
      issue
      by reclassification of shares of the Common Stock any shares of capital stock
      of
      the Company, then the Conversion Value shall be multiplied by a fraction of
      which the numerator shall be the number of shares of Common Stock (excluding
      treasury shares, if any) outstanding before such event and of which the
      denominator shall be the number of shares of Common Stock outstanding after
      such
      event. Any adjustment made pursuant to this Section shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution and shall become effective immediately
      after the effective date in the case of a subdivision, combination or
      re-classification.

     

    b) Price
      Adjustment. From
      the
      date hereof until such time as no Purchaser holds any of the Securities, the
      Company closes on the sale of a note or notes, shares of Common Stock, or shares
      of any class of Preferred Stock at a price per share of Common Stock, or with
      a
      conversion right to acquire Common Stock at a price per share of Common Stock,
      that is less than the Conversion Price (as adjusted to the capitalization per
      share as of the March 21, 2008, following any stock splits, stock dividends,
      or
      the like) (collectively, the “Subsequent Conversion Price”), the Company shall
      make a post-Closing adjustment in the Conversion Price so that the effective
      price per share paid by the Investor is adjusted to a price determined by
      multiplying such Conversion Price by a fraction, the numerator of which shall
      be
      the number of shares of Common Stock Outstanding (defined below) immediately
      prior to such issuance plus the number of shares of Common Stock that the
      aggregate consideration received by the Company for such issuance would purchase
      at such Conversion Price; and the denominator of which shall be the number
      of
      shares of Common Stock Outstanding (as defined below) immediately prior to
      such
      issuance plus the number of shares issued at such issuance. For purposes of
      this
Section
      7,
      the
      term “Common Stock Outstanding” shall mean and include the following: (1)
      outstanding Common Stock, (2) Common Stock issuable upon conversion of
      outstanding Preferred Stock, (3) Common Stock issuable upon exercise of
      outstanding warrants. Shares described in (1) through (4) above shall be
      included whether vested or unvested, whether contingent or non-contingent and
      whether exercisable or not yet exercisable.

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
        PAGE
          10 OF 17

        
          

        

      

      
         

      

       

    

    c) Subsequent
      Equity Sales.
      From
      the date hereof until such time as no Purchaser holds any of the Securities,
      the
      Company shall be prohibited from effecting or entering into an agreement to
      effect any Subsequent Financing involving a “Variable Rate Transaction” or an
“MFN Transaction” (each as defined below). The term “Variable Rate Transaction”
shall mean a transaction in which the Company issues or sells (i) any debt
      or
      equity securities that are convertible into, exchangeable or exercisable for,
      or
      include the right to receive additional shares of Common Stock either (A) at
      a
      conversion, exercise or exchange rate or other price that is based upon and/or
      varies with the trading prices of or quotations for the shares of Common Stock
      at any time after the initial issuance of such debt or equity securities, or
      (B)
      with a conversion, exercise or exchange price that is subject to being reset
      at
      some future date after the initial issuance of such debt or equity security
      or
      upon the occurrence of specified or contingent events directly or indirectly
      related to the business of the Company or the market for the Common Stock.
      The
      term “MFN Transaction” shall mean a transaction in which the Company issues or
      sells any securities in a capital raising transaction or series of related
      transactions which grants to an investor the right to receive additional shares
      based upon future transactions of the Company on terms more favorable than
      those
      granted to such investor in such offering. Any Purchaser shall be entitled
      to
      obtain injunctive relief against the Company to preclude any such issuance,
      which remedy shall be in addition to any right to collect damages.
      Notwithstanding the foregoing, this Section 6.184 shall not apply in respect
      of
      an Exempt Issuance, except that no Variable Rate Transaction or MFN Transaction
      shall be an Exempt Issuance, nor shall this Section 6.14 prevent the Company
      from potentially granting anti-dilution protection to any potential future
      investors in the Company.

     

    d) Price
      Adjustment Based on Earnings Per Share.
      In the
      event the Company earns between $0.0670 and $0.0335 (50% Decline) per share
      (where such earnings in this paragraph shall always be defined as earnings
      on a
      pre tax fully diluted basis (including dilution from any options, warrants
      and
      convertible securities) as reported for the audited sixth months ended June
      30,
      2008 from continuing operations before any non-cash items the then current
      Conversion Price to the Investor at the time the audited numbers are reported
      to
      the SEC shall be decrease proportionately by 0% if the pre tax earnings (for
      first six months ended June 30, 2008) are $0.0670 per share or greater and
      by
      50% if the pre tax earnings (for first six months ended June 30, 2008) are
      $0.0335 per share (50% decrease). For example if the earnings are $ 0.0536
      per
      share or less (20% Decline) then the then current Conversion Price to the
      investor shall be reduced by 20%. Such adjustment shall be made automatically
      within five business days of the audited numbers being reported to the SEC.
      

     

    In
      the
      event the Company earns between $0.1559 and $0.0780 (50% Decline) per share
      (where such earnings in this paragraph shall always be defined as earnings
      on a
      pre tax fully diluted basis (including dilution from any options, warrants
      and
      convertible securities) as reported for the audited fiscal year ending 2008
      from
      continuing operations before any non-cash items the then current Conversion
      Price to the Investor at the time the audited numbers are reported to the SEC
      shall be decrease proportionately by 0% if the pre tax earnings are $0.1559
      per
      share or greater and by 50% if the pre tax earnings are $0.0780 per share (50%
      decrease). For example if the earnings are $ 0.1247 per share or less (20%
      Decline) then the then current Conversion Price to the investor shall be reduced
      by 20%. Such adjustment shall be made automatically within five business days
      of
      the audited numbers being reported to the SEC. 

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
        PAGE
          11 OF 17

        
          

        

      

      
         

      

       

    

    e) Pro
      Rata Distributions.
      If the
      Company, at any time while Series A Preferred Stock is outstanding, shall
      distribute to all holders of Common Stock (and not to Holders) evidences of
      its
      indebtedness or assets or rights or warrants to subscribe for or purchase any
      security, then in each such case the Conversion Value shall be determined by
      multiplying such Conversion Value in effect immediately prior to the record
      date
      fixed for determination of stockholders entitled to receive such distribution
      by
      a fraction of which the denominator shall be the VWAP determined as of the
      record date mentioned above, and of which the numerator shall be such VWAP
      on
      such record date less the then fair market value at such record date of the
      portion of such assets or evidence of indebtedness so distributed applicable
      to
      one outstanding share of the Common Stock as determined by the Board of
      Directors in good faith. In either case the adjustments shall be described
      in a
      statement provided to the Holders of the portion of assets or evidences of
      indebtedness so distributed or such subscription rights applicable to one share
      of Common Stock. Such adjustment shall be made whenever any such distribution
      is
      made and shall become effective immediately after the record date mentioned
      above.

     

    f) Calculations.
      All
      calculations under this Section 7 shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be. 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 description of any such shares of Common
      Stock shall be considered on issue or sale of Common Stock. For purposes of
      this
      Section 7, the number of shares of Common Stock deemed to be issued and
      outstanding as of a given date shall be the sum of the number of shares of
      Common Stock (excluding treasury shares, if any) actually issued and
      outstanding.

     

    g) Notice
      to Holders.

     

    i. Adjustment
      to Conversion Price.
      Whenever the Conversion Value is adjusted pursuant to any of this Section 7,
      the
      Company shall promptly mail to each Holder a notice setting forth the Conversion
      Value after such adjustment and setting forth a brief statement of the facts
      requiring such adjustment. If the Company issues a variable rate security,
      despite the prohibition thereon in the Purchase Agreements, the Company shall
      be
      deemed to have issued Common Stock or Common Stock Equivalents at the lowest
      possible conversion or exercise price at which such securities may be converted
      or exercised in the case of a Variable Rate Transaction (as defined in the
      Purchase Agreements), or the lowest possible adjustment price in the case of
      an
      MFN Transaction (as defined in the Purchase Agreements).

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
        PAGE
          12 OF 17

        
          

        

      

      
         

      

       

    

    ii. Notices
      of Other Events.
      If (A)
      the Company shall declare a dividend (or any other distribution) on the Common
      Stock; (B) the Company shall declare a redemption of the Common Stock; (C)
      the
      Company shall authorize the granting to all holders of the Common Stock rights
      or warrants to subscribe for or purchase any shares of capital stock of any
      class or of any rights; (D) the approval of any stockholders of the Company
      shall be required in connection with any reclassification of the Common Stock
      or
      any Fundamental Transaction, (E) the
      Company shall authorize the voluntary or involuntary dissolution, liquidation
      or
      winding up of the affairs of the Company; then in each case, the Company shall
      cause to be filed at each office or agency maintained for the purpose of
      conversion of the Series A Preferred Stock, and shall cause to be mailed
      to
      the Holders at their last addresses as they shall appear upon the stock
      books of
      the
      Company, at least 30 calendar days prior to the applicable record or effective
      date hereinafter specified, a notice stating (x)
      the
      date on which a record is to be taken for the purpose of such dividend,
      distribution, redemption, rights or warrants, or if a record is not to be taken,
      the date as of which the holders of the Common Stock of record to be entitled
      to
      such dividend, distributions, redemption, rights or warrants are to be
      determined or (y) the date on which such reclassification is expected to become
      effective or close, and the date as of which it is expected that holders of
      the
      Common Stock of record shall be entitled to exchange their shares of the Common
      Stock for securities, cash or other property deliverable upon such
      reclassification or Fundamental Transaction; provided,
      that
      the failure to mail such notice or any defect therein or in the mailing thereof
      shall not affect the validity of the corporate action required to be specified
      in such notice.

     

    iii. Exempt
      Issuance.
      Notwithstanding the foregoing, no adjustment will be made under this Section
      7
      in respect of an Exempt Issuance.

     

    iv. Fundamental
      Transaction.
      If, at
      any time while this Series A Preferred Stock is outstanding, (A) the Company
      effects any merger or consolidation of the Company with or into another Person,
      (B) the Company effects any sale of all or substantially all of its assets
      in
      one or a series of related transactions, (C) 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 (D) 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 (in any such case, a “Fundamental
      Transaction”),
      then
      upon any subsequent conversion of this Series A Preferred Stock, the Holder
      shall have the right to receive, for each Conversion Share that would have
      been
      issuable upon such conversion absent such Fundamental Transaction, the same
      kind
      and amount 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 one share
      of
      Common Stock (the “Alternate
      Consideration”).
      For
      purposes of any such conversion, the determination of the Conversion 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
      Conversion 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 conversion of this Series A Preferred Stock following such
      Fundamental Transaction. To the extent necessary to effectuate the foregoing
      provisions, any successor to the Company or surviving entity in such Fundamental
      Transaction shall file a new Certificate of Designations with the same terms
      and
      conditions and issue to the Holder new preferred stock consistent with the
      foregoing provisions and evidencing the Holder’s right to convert such preferred
      stock into Alternate Consideration. 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
      (f)(iv) and insuring that this Series A Preferred Stock (or any such replacement
      security) will be similarly adjusted upon any subsequent transaction analogous
      to a Fundamental Transaction.

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
        PAGE
          13 OF 17

        
          

        

      

      
         

      

       

    

    Section
      8.
       Miscellaneous.
      

     

    a) Notices.
      Any and
      all notices or other communications or deliveries to be provided by the Holders
      hereunder, including, without limitation, any Notice of Conversion, shall be
      in
      writing and delivered personally, by facsimile, sent by a nationally recognized
      overnight courier service, addressed to the Company, at the address provided
      in
      the Purchase Agreements, facsimile number +86 451 57351551,
      Attn: Jinjiang
      Wang or such other address or facsimile number as the Company may specify for
      such purposes by notice to the Holders delivered in accordance with this
      Section. Any and all notices or other communications or deliveries to be
      provided by the Company hereunder shall be in writing and delivered personally,
      by facsimile, sent by a nationally recognized overnight courier service
      addressed to each Holder at the facsimile telephone number or address of such
      Holder appearing on the books of the Company, or if no such facsimile telephone
      number or address appears, at the principal place of business of the Holder.
      Any
      notice or other communication or deliveries hereunder shall be deemed given
      and
      effective on the earliest of (i) the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile telephone number
      specified in this Section prior to 5:30 p.m. (New York City time), (ii) the
      date
      after the date of transmission, if such notice or communication is delivered
      via
      facsimile at the facsimile telephone number specified in this Section later
      than
      5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New
      York
      City time) on such date, (iii) the second Business Day following the date of
      mailing, if sent by nationally recognized overnight courier service, or (iv)
      upon actual receipt by the party to whom such notice is required to be
      given. 

     

    b) Absolute
      Obligation.
      Except
      as expressly provided herein, no provision of this Certificate of Designation
      shall alter or impair the obligation of the Company, which is absolute and
      unconditional, to pay the liquidated damages (if any) on, the shares of Series
      A
      Preferred Stock at the time, place, and rate, and in the coin or currency,
      herein prescribed. 

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
        PAGE
          14 OF 17

        
          

        

      

      
         

      

       

    

    c) Lost
      or Mutilated Preferred Stock Certificate.
      If a
      Holder’s Series A Preferred Stock certificate shall be mutilated, lost, stolen
      or destroyed, the Company shall execute and deliver, in exchange and
      substitution for and upon cancellation of a mutilated certificate, or in lieu
      of
      or in substitution for a lost, stolen or destroyed certificate, a new
      certificate for the shares of Series A Preferred Stock so mutilated, lost,
      stolen or destroyed but only upon receipt of evidence of such loss, theft or
      destruction of such certificate, and of the ownership thereof, and indemnity,
      if
      requested, all reasonably satisfactory to the Company.

     

    d) Next
      Business Day.
      Whenever any payment or other obligation hereunder shall be due on a day other
      than a Business Day, such payment shall be made on the next succeeding Business
      Day.

     

    e) Headings.
      The
      headings contained herein are for convenience only, do not constitute a part
      of
      this Certificate of Designations and shall not be deemed to limit or affect
      any
      of the provisions hereof.

     

    RESOLVED,
      FURTHER,
      that
      the Chairman, the president or any vice-president, and the secretary or any
      assistant secretary, of the Company be and they hereby are authorized and
      directed to prepare and file a Certificate of Designation of Preferences, Rights
      and Limitations in accordance with the foregoing resolution and the provisions
      of Nevada law.

    
       

      CHINA
        KANGTAI CACTUS BIO-TECH, INC. CERTIFICATE OF
        DESIGNATION

    

    
      
         

      

      
        PAGE
          15 OF 17

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the undersigned have executed this Certificate this 16th day
      of
      July 2008.

    

      
        	
                /s/
                  Jinjiang Wang

              	 	
                /s/
                  Fengxi Lang

              
	
                Name:
                  Jinjiang Wang

              	 	
                Name:
                  Fengxi Lang

              
	
                Title:
                  President and Chief Executive Officer

              	 	
                Title:
                  Secretary

              


      

    

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
        PAGE
          16 OF 17

        
          

        

      

      
         

      

    


    ANNEX
      A

    


    NOTICE
      OF
      CONVERSION

    


    (TO
      BE
      EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES 

    OF
      SERIES
      A PREFERRED STOCK)

    


    The
      undersigned hereby elects to convert the number of shares of Series A
      Convertible Preferred Stock indicated below, into shares of common stock, par
      value $0.001 per share (the "Common
      Stock"),
      of
      China Kangtai Cactus Bio-Tech, Inc., a Nevada Company (the "Company"),
      according to the conditions hereof, as of the date written below. If shares
      are
      to be issued in the name of a person other than undersigned, the undersigned
      will pay all transfer taxes payable with respect thereto and is delivering
      herewith such certificates and opinions as reasonably requested by the Company
      in accordance therewith. No fee will be charged to the Holder for any
      conversion, except for such transfer taxes, if any.

    


    Conversion
      calculations:

    


    
      	
              Date
                to Effect Conversion:
                _____________________________________________

            
	 
	
              Number
                of shares of Common Stock owned prior to Conversion:
                _______________

            
	 
	
              Number
                of shares of Series A Preferred Stock to be Converted:
                ________________________

            
	 
	
              Value
                of shares of Series A Preferred Stock to be Converted:
                ____________________

            
	 
	
              Number
                of shares of Common Stock to be Issued:
                ___________________________

            
	 
	
              Certificate
                Number of Series A Preferred Stock attached
                hereto:________________________

            
	 
	
              Number
                of Shares of Series A Preferred Stock represented by attached
                certificate:__________

            
	 
	
              Number
                of shares of Series A Preferred Stock subsequent to Conversion:
                ________________

            


    

    

      
        	
                T
                  Squared Investments LLC 

              
	 	 
	
                By:

              	
                 

              
	
                Name:

              	
                 

              
	
                Title:

              	
                 

              


      

    

     

    CHINA
      KANGTAI CACTUS BIO-TECH, INC.
      CERTIFICATE OF DESIGNATION

    
      
         

      

      
        PAGE
          17 OF 17