WARRANT
      CLARIFICATION AGREEMENT

     

    This
      Warrant Clarification Agreement (this “Agreement”), dated
      April 16, 2007, is to the Warrant Agreement, dated as of
      August 2, 2005 (the “Warrant Agreement”), by and between Chardan South
      China Acquisition Corporation, a Delaware corporation (“Company”), and
      Continental Stock Transfer & Trust Company, a New York corporation (“Warrant
      Agent”).

     

    WHEREAS,
      Section
      3.3.2 of the Warrant Agreement provides that Company shall not be obligated
      to
      deliver any securities pursuant to the exercise of a warrant unless a
      registration statement under the Securities Act of 1933, as amended (“Securities
      Act”), with respect to the common stock is effective.

     

    WHEREAS,
      in
      furtherance of the foregoing, the Company’s final prospectus, dated August 2,
      2005, indicated (i) that no warrant would be exercisable unless at the time
      of
      exercise a prospectus relating to the common stock issuable upon exercise of
      the
      warrant is current and the common stock has been registered under the Securities
      Act or qualified or deemed to be exempt under the securities laws of the state
      of residence of the holder of the warrant and (ii) that the warrant may be
      deprived of any value and the market for the warrant may be limited if the
      prospectus relating to the common stock issuable upon the exercise of the
      warrant is not current or if the common stock is not qualified or exempt from
      qualification in the jurisdictions in which the holder of the warrant
      resides.

     

    WHEREAS,
      as a
      result of certain questions that have arisen regarding the accounting treatment
      applicable to the warrants, the parties hereto deem it necessary and desirable
      to amend the Warrant Agreement to further clarify that the registered holders
      do
      not have the right to receive a net cash settlement in the event the Company
      does not maintain a current prospectus relating to the common stock issuable
      upon exercise of the warrants at the time such warrants are
      exercisable.

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual agreements contained herein and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, and intending to be legally bound hereby, the parties hereto
      agree
      to amend the Warrant Agreement as set forth herein.

     

    1. Warrant
      Agreement.
      The
      Warrant Agreement is hereby clarified by adding the following sentence as the
      penultimate sentence of Section 3.3.2:

     

    “Accordingly,
      the Warrants may expire unexercised or unredeemed if there is no effective
      registration statement and the Company would have no obligation to pay such
      registered holder any cash or other consideration or otherwise “net cash settle”
the Warrant.”

     

    2. Miscellaneous.

     

    (a) Governing
      Law.
      The
      validity, interpretation, and performance of this Agreement and of the Warrants
      shall be governed in all respects by the laws of the State of New York, without
      giving effect to conflicts of law principles that would result in the
      application of the substantive laws of another jurisdiction. The Company hereby
      agrees that any action, proceeding or claim against it arising out of or
      relating in any way to this Agreement shall be brought and enforced in the
      courts of the State of New York or the United States District Court for the
      Southern District of New York, and irrevocably submits to such jurisdiction,
      which jurisdiction shall be exclusive. The Company hereby waives any objection
      to such exclusive jurisdiction and that such courts represent an inconvenience
      forum. Any such process or summons to be served upon the Company may be served
      by transmitting a copy thereof by registered or certified mail, return receipt
      requested, postage prepaid, addressed to it at the address set forth in Section
      9.2 of the Warrant Agreement. Such mailing shall be deemed personal service
      and
      shall be legal and binding upon the Company in any action, proceeding or
      claim.

     

    
      
         

      

      
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    (b) Binding
      Effect.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and to their respective heirs, legal representatives, successors and
      assigns.

     

    (c) Entire
      Agreement.
      This
      Agreement sets forth the entire agreement and understanding between the parties
      as to the subject matter thereof and merges and supersedes all prior
      discussions, agreements and understandings of any and every nature among them.
      Except as set forth in this Agreement, provisions of the Warrant Agreement
      which
      are not inconsistent with this Agreement shall remain in full force and effect.
      This Agreement may be executed in counterparts.

     

    (d) Severability.
      This
      Agreement shall be deemed severable, and the invalidity or unenforceability
      of
      any term or provision hereof shall not affect the validity or enforceability
      of
      this Agreement or of any other term or provision hereof. Furthermore, in lieu
      of
      any such invalid or unenforceable term or provision, the parties hereto intend
      that there shall be added as part of this Agreement a provision as similar
      in
      terms to such invalid or unenforceable provision as may be possible and be
      valid
      and enforceable.

     

    
      
         

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have executed this Warrant Clarification
      Agreement as of the date first written above.

     

    
      	 	
              CHARDAN
                SOUTH CHINA ACQUISITION CORPORATION

            
	 	 
	 	
              By:

            	
              /s/
                Kerry S. Propper

            
	 	 	
              Kerry
                S. Propper, Chief Executive Officer

            
	 	 	 
	 	 	 
	 	
              CONTINENTAL
                STOCK TRANSFER & TRUST COMPANY

            
	 	 
	 	
              By:

            	
              /s/
                Steven G. Nelson

            
	 	 	
              Steven
                G. Nelson, President

            


    

     

    
      
         

      

      
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