Document:

MAKE
      GOOD ESCROW AGREEMENT

    

    

    THIS
      MAKE GOOD ESCROW AGREEMENT (the
      “Agreement”),
      dated
      January 31, 2008, by and among Pope Asset Management, LLC, a
      Tennessee Registered Investment Advisor,
      as the
      authorized agent of the Investors (as defined below) (the “Investor
      Agent”),
      China
      Sky One Medical, Inc., a Nevada corporation, and its current and future
      subsidiaries (collectively, the “Company”
and,
      together with the Investor Agent, the “Third
      Parties”),
      Liu
      Yan-Qing, an individual residing in the People’s Republic of China (the
“CSKI
      Shareholder”)
      and
      Interwest Transfer Company, Inc., the transfer agent for the Company (the
“Escrow
      Agent”).

    

    WHEREAS:

    

    A. The
      Company has offered for sale (the “Offering”)
      certain shares of the Company’s common stock, $.001 par value per share
      (“Common
      Stock”)
      and
      attached warrants to purchase shares of Common Stock in accordance with that
      certain Securities Purchase Agreement, dated as of the date hereof (the
“Securities
      Purchase Agreement”),
      by
      and among the Company and certain investors signatory thereto (the “Investors”),
      and
      certain other papers, agreements, documents, instruments and certificates
      necessary to carry out the purposes thereof (collectively, the “Transaction
      Documents”).

    

    B. As
      an
      inducement to the Investors to enter into the Securities Purchase Agreement,
      the
      CSKI Shareholder desires to place the Escrow Shares (as hereinafter defined)
      into an escrow for the benefit of the Investors in the event that the Company
      fails to satisfy certain performance thresholds in accordance with that certain
      Make Good Agreement, dated as of even date herewith (the “Make
      Good Agreement”),
      by
      and among the Company, the CSKI Shareholder and the Investor Agent.

    

    C. Pursuant
      to the requirements of the Securities Purchase Agreement and the Make Good
      Agreement, the Company, the CSKI Shareholder and the Investor Agent have agreed
      to establish an escrow (the “Escrow”)
      on the
      terms and conditions set forth in this Agreement and the Escrow Agent has agreed
      to act as escrow agent pursuant to the terms and conditions of this
      Agreement.

    

    NOW,
      THEREFORE,
      the
      CSKI Shareholder, the Third Parties and the Escrow Agent, hereby agree that,
      in
      consideration of the mutual promises and covenants contained herein, the Escrow
      Agent shall hold in escrow and shall distribute Escrow Shares in accordance
      with, and subject to, the provisions of this Agreement:

    

    1. Appointment.
      The
      CSKI Shareholder and Third Parties hereby appoint the Escrow Agent as each
      party’s respective escrow agent for the purposes set forth herein, and the
      Escrow Agent hereby accepts such appointment.

    

    2. Escrow
      Fund.
      Concurrently with the closing of the Offering, the CSKI Shareholder shall
      deliver to the Escrow Agent a stock certificate evidencing 3,000,000 shares
      of
      Common Stock (as adjusted for stock splits, stock dividends, and similar
      adjustments) (“Escrow
      Shares”),
      with
      the stock powers executed in blank, medallion signature guaranteed, or in other
      form and substance acceptable for transfer. The Escrow Agent shall not be under
      any duty or obligation to solicit the deposit of the Escrow Shares to the
      Escrow. The foregoing property plus all dividends and other distributions and
      payments thereon, if any (collectively the “Distributions”)
      received by the Escrow Agent, less any property distributed or paid in
      accordance with this Agreement, are collectively referred to herein as the
      “Escrow
      Property.”

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    3. Investment
      of Escrow Property.
      During
      the term of this Agreement, the Escrow Agent shall not invest or liquidate
      the
      Escrow Property and any distribution of all or part of the Escrow Property
      shall
      be conducted in accordance with Section 4
      below.

    

    4. Distribution
      of Escrow Property.
      The
      Escrow Agent shall disburse the Escrow Property as follows: (i) upon
      receipt of a joint written instruction letter to the Escrow Agent from the
      Investor Agent and the Company, the Escrow Agent shall promptly disburse the
      Escrow Property in accordance with the instructions set forth in such letter,
      or
      (ii) upon receipt of evidence of the entry of a nonappealable order of a
      court of competent jurisdiction requiring the Escrow Agent to release such
      Escrow Property from the Escrow Account, the Escrow Agent shall release such
      Escrow Property in accordance with such order.

    

    5. Disagreement
      of Parties.
      In the
      event of a dispute between or conflicting claims by or among the parties or
      any
      other person or entity with respect to all or a portion of the Escrow Property
      or the terms of this Agreement, the Escrow Agent shall be entitled in its sole
      discretion to refuse to comply with claims, demands or instructions with respect
      to the Escrow Property so long as such dispute or conflict shall continue and
      the Escrow Agent shall not be or become liable in any way to the parties for
      such refusal or failure to comply. The Escrow Agent shall not be required to
      act
      until, in its sole discretion such conflicting or adverse claims or demands
      either (a) shall have been determined by a final order, judgment or decree
      of a court of competent jurisdiction which order, judgment or decree is not
      subject to appeal, or (b) settled by agreement between the conflicting
      parties as evidenced in a writing satisfactory to the Escrow Agent.

    

    6. Termination.
      Unless
      the Escrow Agent earlier resigns, this Agreement shall terminate, subject to
      the
      provisions of Section 8
      hereof, upon
      final distribution of all property in the Escrow Property by the Escrow
      Agent.

    

    7. Escrow
      Agent.

    

    (a) The
      Escrow Agent undertakes to perform only those duties expressly set forth herein
      and no duties shall be implied.

    

    (b) The
      Escrow Agent shall have no liability under and no duty to inquire as to the
      provisions of any agreement of the CSKI Shareholder and/or the Third Parties
      other than this Agreement.

    

    (c) The
      Escrow Agent may rely upon and shall not be liable for acting or refraining
      from
      acting upon any written notice, instruction or request furnished to it hereunder
      and believed by it to be genuine and to have been signed or presented by the
      proper party or parties.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (d) The
      Escrow Agent shall be under no duty to inquire into or investigate the validity,
      accuracy or content of any document.

    

    (e) The
      Escrow Agent shall not be liable for any action taken or omitted by it in good
      faith except to the extent that a court of competent jurisdiction determines
      that the Escrow Agent’s gross negligence or willful misconduct was the primary
      cause of any loss to the Third Parties or the CSKI Shareholder.

    

    (f) The
      Escrow Agent may consult with legal counsel of its choosing as to any matter
      relating to this Agreement and the Escrow Agent shall not incur any liability
      in
      acting in good faith in accordance with advice from such counsel.

    

    (g) Anything
      in this Agreement to the contrary notwithstanding, in no event shall the Escrow
      Agent be liable for special, indirect or consequential loss or damage of any
      kind whatsoever (including but not limited to lost profits and/or savings),
      even
      if the Escrow Agent has been advised of the likelihood of such loss or damage
      and regardless of the form of action.

    

    (h) The
      Escrow Agent may resign at any time by giving the CSKI Shareholder and the
      Third
      Parties thirty (30) calendar days’ prior written notice thereof.

    

    (i) In
      the
      event Escrow Agent shall be uncertain as to its duties or rights hereunder
      or
      receive instructions, claims or demands which, in its opinion, are in conflict
      with any of the provisions of this Agreement, it shall be entitled to refrain
      from taking any action, other than keep safely the Escrow Shares, until it
      shall
      be jointly directed otherwise by the parties hereto or by a determination by
      a
      court of competent jurisdiction which order or decree is not subject to
      appeal.

    

    (j)
       The
      Escrow Agent shall not be obligated to institute legal proceedings of any kind
      and shall not be required to defend any legal proceeding instituted against
      it
      or in respect to the Escrow Shares.

    

    8. Fees.
      The
      Company agrees to (i) pay the Escrow Agent reasonable compensation for the
      services to be rendered hereunder, which shall be as described in Schedule
      I
      attached
      hereto, and (ii) pay or reimburse the Escrow Agent upon request for all
      reasonable expenses, disbursements and advances, including reasonable attorneys’
fees and expenses, incurred or made by it in connection with the preparation
      execution, delivery, performance, modification and/or termination of this
      Agreement. This Section 8
      shall
      survive the termination of this Agreement and the resignation of the Escrow
      Agent.

    

    9. Indemnity.
      The
      Company shall indemnify, defend and save harmless the Escrow Agent and its
      directors, officers, agents and employees (the “indemnitees”)
      from
      and against all demands, claims, liabilities, losses, damages, settlements,
      awards, judgments, fines, penalties, costs or expenses (including, without
      limitation, reasonable attorneys’ fees) (collectively, “Losses”)
      incurred by Escrow Agent as a result (directly or indirectly) of or relating
      to
      Escrow Agent’s acceptance of this Agreement or provision of services under this
      Agreement; provided,
      however,
      that no
      indemnitee shall have the right to be indemnified hereunder for any liability
      to
      the extent finally determined by a court of competent jurisdiction that such
      Losses have resulted directly from the gross negligence or willful misconduct
      of
      such indemnitee. The parties hereto acknowledge that the foregoing indemnities
      shall survive the resignation or removal of the Escrow Agent or the termination
      of this Agreement and that costs of enforcement of this provision is the
      obligation of the Company.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    10 Taxes.
      It is
      understood that the Escrow Agent shall be responsible for income reporting
      only
      with respect to income earned on the Escrow Property and will not be responsible
      for any other reporting.

    

    11. Notices.
      Any
      communication, notice or document required or permitted to be given under this
      Agreement shall be given in writing and shall be deemed received (i) when
      personally delivered to the relevant party at such party’s address as set forth
      below, (ii) if sent by mail (which must be certified or registered mail,
      postage prepaid) or overnight courier, when received or rejected by the relevant
      party at such party’s address indicated below, or (iii) if sent by
      facsimile, when confirmation of delivery is received by the sending
      party:

    

    If
      to the
      Investor Agent, to:

    

    Pope
      Asset Management, LLC

    5100
      Poplar Avenue, Suite 805

    Memphis,
      TN 38137

    Attn.:
      Bill Wells, President

    tel.:
      (901) 763-4001

    fax.:
      (901) 763-4229

    e-mail:
      billwells@popeasset.com

    

    with
      a
      copy to (for informational purposes only):

    

    Wells,
      Moore, Simmons & Hubbard, PLLC

    4450
      Old
      Canton Road, Suite 200

    P.O.
      Box
      1970

    Jackson,
      MS 39215

    Attn.:
      Nash Neyland, Esq.

    tel.:
      (601) 354-5400

    fax:
      (601) 355-5850

    e-mail:
      neyland@wellsmoore.com

    

    If
      to the
      Company, to:

    

    China
      Sky
      One Medical, Inc.

    Room
      1706, No. 30 Di Wang Building, Gan Shui Road,

    Nandang
      District, Harbin, People’s Republic of China 150001

    Attn.:
      Liu Yan-Qing, Chairman 

    tel.:
      +
86-451-53994073

    fax.:
      +
      86-451-8700-9121

    e-mail:
      cntiandiren@yahoo.com.cn

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    or
      such
      other address as indicated by the Company as its primary business address in
      its
      SEC filings.

    

    with
      a
      copy to:

    

    Hodgson
      Russ, LLP

    1540
      Broadway, 24th
      Floor

    New
      York,
      NY 10036

    Attn.:
      Jeffrey A. Rinde, Esq.

    tel.:
      (212) 751-4300

    fax.:
      (212) 751-0928

    e-mail:
      jrinde@hodgsonruss.com

    

    If
      to the
      CSKI Shareholder, to:

    

    Liu
      Yan-Qing

    c/o
      China
      Sky One Medical, Inc.

    Room
      1706, No. 30 Di Wang Building, Gan Shui Road,

    Nandang
      District, Harbin, People’s Republic of China 150001

    tel.:
      +
86-451-53994073

    fax.:
      +
      86-451-8700-9121

    e-mail:
      cntiandiren@yahoo.com.cn

    

    If
      to the
      Escrow Agent:

    

    Interwest
      Transfer Company, Inc.

    1981
      East
      Murray Holladay Road, Suite 100

    P.O.
      Box
      17136

    Salt
      Lake
      City, UT 84117

    Attn.:
      Kurt Hughes, Vice President

    tel.:
      (801) 272-9294

    fax.:
      (801) 277-3147

    e-mail:
      kh@interwesttc.com

    

    12. Miscellaneous

    .
      

    

    (a) The
      provisions of this Agreement may be waived, altered, amended or supplemented,
      in
      whole or in part, only by a writing signed by all of the parties hereto. This
      Agreement and the rights and obligations hereunder of the parties may not be
      assigned except with the prior written consent of the other parties
      hereto.

    

    (b) The
      covenants and provisions of this Agreement by or for the benefit of the CSKI
      Shareholder, the Third Parties or the Escrow Agent shall bind and inure to
      the
      benefit of their respective successors and permitted assigns
      hereunder.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c) All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by the internal laws of the State of Utah,
      without giving effect to any choice of law or conflict of law provision or
      rule
      (whether of the State of Utah or any other jurisdictions) that would cause
      the
      application of the laws of any jurisdictions other than the State of Utah.
      The
      parties hereby agree that all actions or proceedings arising directly or
      indirectly from or in connection with this Agreement shall be litigated only
      in
      the Supreme Court of the State of Utah or the United States District Court
      for
      the District of Utah located in Salt Lake County, Utah. The parties consent
      to
      the jurisdiction and venue of the foregoing courts and consent that any process
      or notice of motion or other application to any of said courts or a judge
      thereof may be served inside or outside the State of Utah or the District of
      Utah by registered mail, return receipt requested, directed to the party being
      served at its address set forth on the signature pages to this Agreement (and
      service so made shall be deemed complete three (3) days after the same has
      been
      posted as aforesaid) or by personal service or in such other manner as may
      be
      permissible under the rules of said courts. Each of the parties hereto
      irrevocably waives, to the fullest extent permitted by law, any objection which
      it may now or hereafter have to the laying of the venue of any such suit,
      action, or proceeding brought in such a court and any claim that suit, action,
      or proceeding has been brought in an inconvenient forum. EACH
      PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
      HEREBY.

    

    (d) No
      party
      to this Agreement is liable to any other party for losses due to, or if it
      is
      unable to perform its obligations under the terms of this Agreement because
      of,
      acts of God, fire, floods, strikes, equipment or transmission failure, or other
      causes reasonably beyond its control. This Agreement may be executed in one
      or
      more counterparts, each of which shall be deemed an original, but all of which
      together shall constitute one and the same instrument.

    

    (e) This
      Agreement may be executed by each of the parties hereto by facsimile signature
      and in any number of counterparts, each of which counterpart, when so executed
      and delivered, shall be deemed to be an original and all such counterparts
      shall
      together constitute one and the same agreement.

    

    (f) The
      headings contained in this Agreement are for convenience of reference only
      and
      shall have no effect on the interpretation or operation hereof.

    

    (g) The
      Investors shall be intended third party beneficiaries of this Agreement to
      the
      same extent as if they were parties hereto, and shall be entitled to enforce
      the
      provisions hereof.

    

    (h) If
      any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any rule of law, or public policy, all other conditions and
      provisions of this Agreement shall nevertheless remain in full force and effect
      so long as the economic or legal substance of this Agreement is not affected
      in
      any manner materially adverse to any party. Upon such determination that any
      term or other provision is invalid, illegal or incapable of being enforced,
      the
      parties hereto shall negotiate in good faith to modify this Agreement so as
      to
      effect the original intent of the parties as closely as possible in a mutually
      acceptable manner in order that the terms of this Agreement remain as originally
      contemplated to the fullest extent possible.

    

    

    [The
      remainder of the page is intentionally left blank]

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      each of
      the parties hereto has executed this Agreement by the authorized officer named
      below.

    

     

    INVESTOR
      AGENT:

     

    POPE
      ASSET MANAGEMENT, LLC

     

    

    By:
      ______________________________

    Name:
      ____________________________

    Its:
      ______________________________

    Dated:
      ____________________________

     

     

     

     

    
      SIGNATURE
        PAGE FOR

      MAKE
        GOOD
        ESCROW AGREEMENT

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

 

     

    IN
      WITNESS WHEREOF,
      each of
      the parties hereto has executed this Agreement by the authorized officer named
      below.

    

     

    THE
      COMPANY:

     

    CHINA
      SKY ONE MEDICAL, INC.

     

    

    By:
      ______________________________

    Name:
      ____________________________

    Its:
      ______________________________

    Dated:
      ____________________________

     

     

     

    

    
      SIGNATURE
        PAGE FOR

      MAKE
        GOOD
        ESCROW AGREEMENT

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF,
      each of
      the parties hereto has executed this Agreement by the authorized officer named
      below.

    

     

    CSKI
      SHAREHOLDER:

     

     

    _____________________________

    Name:
      ____________________________

    Dated:
      ____________________________ 

     

     

     

    

    SIGNATURE
      PAGE FOR

    MAKE
      GOOD
      ESCROW AGREEMENT

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      each of
      the parties hereto has executed this Escrow Agreement by the authorized officer
      named below.

    

     

    INTERWEST
      TRANSFER COMPANY, INC.

     

    

    By:
      ______________________________

    Name:
      ____________________________

    Title:
      _____________________________

    Dated:
      ____________________________

     

     

     

    

    SIGNATURE
      PAGE FOR

    MAKE
      GOOD
      ESCROW AGREEMENT

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

     

    Interwest
      Transfer Company, Inc.

    China
      Sky One Medical, Inc. Escrow

     

     

    
      Escrow
        Agent Fee Schedule

    

     

    
      	
              Account
                Acceptance Fee

            	 	
              $

            	
              —

            	 
	
              Annual
                Administrative Fee

            	 	
              $

            	
              
                —

              

            	 
	
              Overnight
                Delivery Charges

            	 	 	
              At
                cost

            	 
	
              Out-of-Pocket
                Expenses

            	 	 	
              At
                cost

            	 

    

     

    The
      acceptance and first year’s annual fee are payable at closing. Annual
      administrative fees are due in advance of the period for which service is to
      be
      rendered. Special or extraordinary events, such as amendments to the documents
      or disputes are not included in the above fees, and we reserve the right to
      charge an additional amount based on the time incurred in handling such events
      should they occur. Late charges are one and one-half percent (11⁄2%) per month on
      outstanding balances owing forty-five (45) days from date of invoice.
      Interwest reserves the right to earn investment fees on escrow funds payable
      by
      third-party investment providers and pursuant to contracts with
      same. 

     

    
      
        
        

      

      
        11PUT
      AGREEMENT

    

    THIS
      PUT AGREEMENT
      (this
“Agreement”)
      is
      made and entered into this 31st day of January, 2008, by and between China
      Sky
      One Medical, Inc., a corporation organized and existing under the laws of the
      State of Nevada, with an address at Room 1706, No. 30 Di Wang Building, Gan
      Shui
      Road, Nandang District, Harbin, People’s Republic of China 150001 (the
“Company”)
      and
      the Investors set forth on the signature pages affixed hereto (each an
“Investor”
and
      collectively the “Investors”).
      

    

    RECITALS:
      

    

    WHEREAS,
      the
      Company has offered for sale (the “Offering”)
      certain shares (the “Shares”)
      of
      common stock of the Company, $.001 par value per share (“Common
      Stock”)
      and
      attached warrants (the “Warrants”)
      to
      purchase shares of Common Stock in accordance with that certain Securities
      Purchase Agreement by and among the Company and the Investors, dated as of
      even
      date herewith (the “Securities
      Purchase Agreement”);
      and

    

    WHEREAS,
      the
      Company has represented to the Investors that the Adjusted EPS (as defined
      below) of the Company for the fiscal year ending December 31, 2007, will be
      greater than or equal to $1.05 per share (the “FY07
      Performance
      Threshold”),
      as
      set forth in audited financial statements of the Company for the period ending
      December 31, 2007 (the “FY07
      Financial Statements”)
      (For
      the purposes hereof, “Adjusted
      EPS”
means
      the net income (or loss) of the Company and its subsidiaries for such period,
      determined on a consolidated basis divided by 13,907,696 shares; provided,
      however,
      that
      (i) the Adjusted EPS for such period will be increased by any cash charges
      related to the Offering and non-cash charges incurred as a result of the
      Offering (due to non-cash amortization on warrants charged to the Company’s
      results of operation, if any), and (ii) if the Offering does not close on or
      before January 7, 2008 (the “Closing
      Deadline”),
      the
      FY07 Performance Threshold will be decreased in an amount equal to 2% for each
      7-day period, or pro rata for any portion thereof, following the Closing
      Deadline, until such time as the Offering is consummated); and

    

    WHEREAS,
      as an
      inducement to the Investors to enter into the Securities Purchase Agreement,
      a
      certain shareholder of the Company (the “CSKI
      Shareholder”)
      has
      agreed to place an aggregate of 3,000,000 shares of Common Stock of the Company
      (the “Escrow
      Shares”)
      into
      escrow for the benefit of the Investors in the event that the Company fails
      to
      satisfy the FY07 Performance Threshold, pursuant to the terms and conditions
      of
      a Make Good Agreement by and among Pope Asset Management LLC, as the authorized
      agent of the Investors, the Company
      and the
CSKI
      Shareholder,
      dated
      as of even date herewith (the “Make
      Good Agreement”);
      and

    

    WHEREAS,
      the
      parties hereto desire to set forth the circumstances under which the
      Investors shall have the right, but not the obligation, to require the Company
      to repurchase the Shares.

    

    NOW,
      THEREFORE,
      in
      consideration of the foregoing recitals, the premises and mutual covenants
      contained herein and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto agree as
      follows:

     

    
      
        
        

      

      
        -
          1
          -

        
          

        

      

      
        
        

      

    

     

    1. Put
      Right. 

    

    (a) Grant
      of Put Right.
      Subject
      to the terms and conditions hereof, each Investor shall have the right (the
      “Put
      Right”),
      but
      not the obligation, to cause the Company to repurchase the Shares such Investor
      purchased in the Offering (the “Purchased
      Shares”).
      

    

    (b) Put
      Repurchase Price.
      In the
      event an Investor exercises his, her or its Put Right, the repurchase price
      for
      the Purchased Shares shall be $10.00 per share (the “Repurchase
      Price”).

    

    (c) Exercise
      of Put Right.
      

    

    (i) An
      Investor shall exercise his, her or its Put Right by giving written notice
      of
      its exercise of the Put Right to the Company (“Put
      Exercise Notice”),
      in
      accordance with the provisions of Section 6 hereof. 

    

    (ii) Each
      Investor may only exercise his, her or its Put Right as to all, but not less
      than all, of such Investor’s Purchased Shares. 

    

    (iii) Upon
      exercise of the Put Right by an Investor, the repurchase of such Investor’s
      Purchased Shares by the Company shall be consummated within sixty (60) days
      following the date of the Put Exercise Notice (the “Repurchase
      Deadline”).
      In
      the event the Company does not pay the Repurchase Price to an Investor on or
      prior to the Repurchase Deadline, interest shall be payable on the Repurchase
      Amount at the rate of ten (10%) percent per annum until the Repurchase Amount,
      and any accrued and unpaid interest thereon, is paid in full.

    

    (iv) Concurrently
      with the Company’s payment of the Repurchase Price to an exercising Investor,
      such Investor shall deliver to the Company (A) the original stock certificate
      representing his, her or its Purchased Shares and (B) the original warrant
      certificate representing Warrants such Investor purchased in the Offering (the
      “Purchased
      Warrants”).

    

    (v)
       After
      exercise of the Put Right, and upon delivery by the Company to the Investor
      of
      the applicable Repurchase Price, such Investor shall no longer be deemed to
      be
      the owner of the Purchased Shares and Purchased Warrants. The Purchased Shares
      shall be returned to the Company’s treasury and the Purchased Warrants shall be
      cancelled on the books of the Company.

    

    (d) Conditions
      to Exercise of Put Right.
      The
      Investors may only exercise their Put Right in the event that
      either:

    

    (i) the
      Adjusted EPS of the Company for the fiscal year ending December 31, 2007 is
      less than $0.80 per share, as set forth in the FY07 Financial Statements; or
      

    

    (ii) the
      Company’s accounts receivable exceeds $12,000,000 at the end of fiscal 2007, as
      set forth in the FY07 Financial Statements (each of 1(d)(i) and (ii), a
“Put
      Right Trigger”).

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    (e) Put
      Right Term.
      Within
      two (2) business days after the filing of Company’s Annual Report on Form 10-KSB
      for the fiscal year ended December 31, 2007 (the “2007
      10-KSB”),
      the
      Company will provide the Investors written notice of such filing (“Filing
      Notice”).
      The
      Investors may only exercise their Put Right by delivering a Put Exercise Notice
      to the Company within ten (10) days of the date of the Filing Notice;
provided,
      however,
      if the
      Company has not provided the Investors with Filing Notice within twelve (12)
      days after the filing of the 2007 10-KSB (the “Filing
      Notice Deadline”),
      then
      the Investors may exercise their Put Right by delivering a Put Exercise Notice
      to the Company within ten (10) days of the Filing Notice Deadline.

    

    (f) Termination
      of Certain Rights.
      Upon
      the Company’s receipt of a Put Exercise Notice from any Investor:

    

    (i) such
      Investor’s right to receive Escrow Shares on a Pro Rata Basis (as defined in the
      Make Good Agreement) shall automatically and permanently terminate, subject
      only
      to the satisfaction of the Company’s obligations hereunder; and

    

    (ii) such
      Investor’s right to exercise the Purchased Warrants shall be suspended pending
      the satisfaction of the Company’s obligation to pay the Repurchase Price in
      full, and any interest accrued thereon, to the applicable Investor.

    

    2.
       Title.
      Upon
      exercise of the Put Right by an Investor, such Investor shall deliver to the
      Company good and marketable title to his, her or its Shares, free and clear
      of
      any liens or other restrictions, except for applicable restrictions on transfer
      under federal and state securities laws. 

    

    3.
       Binding
      Effect.
      This
      Agreement and the rights and obligations hereunder shall be binding upon and
      inure to the benefit of the parties hereto and their respective heirs, legal
      representatives, successors and assigns. 

    

    4.
       Amendments.
      This
      Agreement may not be altered, modified, or amended except by a writing signed
      by
      each of the parties hereto. 

    

    5.
       Further
      Assurances.
      Each of
      the parties hereto agrees to execute, acknowledge, deliver, file, record and
      publish certificates, instruments, agreements and documents, and to take all
      action which may be required by law or may be deemed by the Investors or the
      Company, in the exercise of their reasonable good faith discretion, to be
      reasonably necessary in furtherance of the purposes and the objectives and
      intentions underlying this Agreement and not inconsistent with the terms hereof.
      

    

    6.
       Notices.
      All
      notices required or permitted hereunder shall be in writing and shall be deemed
      effectively given: (a) upon personal delivery to the party to be notified;
      (b)
      when sent by confirmed telex or facsimile if sent during normal business hours
      of the recipient, if not, then on the next business day; (c) five days after
      having been sent by registered or certified mail, return receipt requested,
      postage prepaid; or (d) two days after deposit with a nationally recognized
      overnight courier, specifying next day delivery, with written verification
      of
      receipt. All communications shall be sent to the parties hereto at the
      respective addresses set forth below, or as notified by such party from time
      to
      time at least ten (10) days prior to the effectiveness of such notice:

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

     

    if
      to the
      Company, to: 

    

    China
      Sky
      One Medical, Inc.

    Room
      1706, No. 30 Di Wang Building

    Gan
      Shui
      Road, Nandang District, Harbin

    People’s
      Republic of China 150001

    Attention:
      Liu Yan-Qing, Chairman

       Facsimile:
      + 86-451-8700-9121

    

    with
      a
      copy to:  

    

    Hodgson
      Russ LLP

       1540
      Broadway, 24th Floor

       New
      York,
      NY 10036

       Attention:
      Jeffrey A. Rinde, Esq.

       Facsimile:
      (212) 751-0928

    

    if
      to the
      Investors:  

    

    to
      the
      address provided by such Investor on the signature page hereto.

    

    7.
       Governing
      Law; Jurisdiction.
      This
      Agreement shall be governed by, interpreted under, and construed in accordance
      with the laws of the State of New York, applicable to contracts made and to
      be
      performed therein, without giving effect to the principles of conflicts of
      law.
      Except in respect of an action commenced by a third party in another
      jurisdiction, the Investors and the Company agree that any legal suit, action,
      or proceeding arising out of or relating to this Agreement must be instituted
      in
      a state or federal court in the State of New York, County of New York, if there
      is any such court which has and will exercise its jurisdiction in any such
      matter, and they hereby irrevocably subject to the jurisdiction of any such
      court and agree not to assert therein any objection based on venue or the
      inconvenience of such forum. 

    

    8.
       Captions.
      Captions
      used herein are inserted for reference purposes only and shall not affect the
      interpretation or construction of this Agreement. 

    

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

     

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

    

     

    10.
       No
      Third Party
      Beneficiaries.
      This
      Agreement shall be binding upon and inure solely to the benefit of the parties
      hereto and their successors and assigns and nothing herein, express or implied,
      is intended to or shall confer upon any other person any legal or equitable
      right, benefit or remedy of any nature whatsoever under or by reason of this
      Agreement. 

    

    11.
       Expenses.
      All
      costs and expenses, including, without limitation, fees and disbursements of
      counsel, financial advisors and accountants, incurred in connection with this
      Agreement and the transactions contemplated hereby shall be paid by the party
      incurring such costs and expenses.

    

    [The
      Remainder Of This Page Is Left Blank Intentionally. Signature pages
      follow.]

     

    
      
        
        

      

      
        -
          5
          -

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      undersigned have executed this Agreement as of the date and year first written
      above. 

    

    CHINA
      SKY ONE MEDICAL, INC.

    

    

    

    By:
      ______________________________

    Name:

    Title:

     

    
      
        
        

      

      
        -
          6
          -

        
          

        

      

      
        
        

      

    

     

    PUT
      AGREEMENT

    COUNTERPART
      SIGNATURE PAGE

    

    IN
      WITNESS WHEREOF,
      the
      undersigned have executed this Agreement as of the date and year first written
      above.

     

    
      	
            	 	
              INVESTOR:

            
	
            	 	
            
	
              Number
                of Shares being purchased:

            	 	___________________________________
	
            	 	
            
	___________________________________	 	By:
              _________________________________
	
            	 	
              Name:

            
	
              Number
                of Warrants being purchased:

            	 	
              Title:

            
	
            	 	
            
	___________________________________	 	
              Address:
                _________________________

            
	 	 	
              
              
                       _________________________
	 	 	                       _________________________
	 	 	
              Facsimile:
                _________________________

            
	 	 	
            
	 	 	with a copy to:
	 	 	
            
	
            	 	
            

    

     

    
      
        
        

      

      
        -
          7
          -

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