Document:

EXHIBIT
        10.16

       

       

      REGISTRATION
        RIGHTS AGREEMENT

       

      THIS
        REGISTRATION RIGHTS AGREEMENT (“Agreement”) made as of this 17th day of October,
        2006, by and among SRKP 1, Inc., a Delaware corporation (the “Company”); Full
        Art International Ltd., a Hong Kong corporation and upon the Closing Date
        (as
        defined below) a 100%-owned subsidiary of the Company ("Full Art"); and the
        undersigned (the “Holder”).

       

      WHEREAS,
        the Company, Full Art, and KGE Group, Ltd., a Hong Kong corporation, are
        parties
        to a certain Share Exchange Agreement dated as of August 21, 2006, as amended
        (the “Exchange Agreement”), pursuant to which Full Art will become a 100%-owned
        subsidiary of the Company and 100% of the outstanding securities of Full
        Art
        will be exchanged for securities in the Company (the “Share Exchange”).
        Immediately after the effective time of the Share Exchange (the “Closing Date”),
        the Company will assume the business and operations of Full Art;
        and

       

      WHEREAS,
        the Company agreed to file, within thirty (30) days after the Closing Date
        with
        the U.S. Securities and Exchange Commission (the “Commission” or “SEC”) a
        registration statement (the “Initial Registration Statement”) covering the
        resale of shares issued in connection with the Company’s private offering that
        closed concurrently with the Share Exchange and covering the resale of Common
        Shares held by those persons that are shareholders of the Company immediately
        prior to the Closing Date (“Pre-Existing Shareholders”), except for WestPark
        Affiliates (as defined below); 

       

      WHEREAS,
        as set forth in Section 10.1 of the Exchange Agreement, and as a condition
        to
        the closing of the Share Exchange, the Company agreed to enter into a
        registration rights agreement with requiring the Company to file, within
        the
        time periods as set forth herein, with the U.S. Securities and Exchange
        Commission (the “Commission”) a registration statement covering the resale of
        shares of Common Stock, as set forth on Schedule
        I
        hereof
        (the “Shares”), held by those persons (and/or their designees) that are (i)
        shareholders of the Company immediately prior to the Closing who are affiliates
        of WestPark Capital (“WestPark Affiliates”), and (ii) FirstAlliance Financial
        Group, Inc. (“FirstAlliance”) (together , the “Holders”).

       

      NOW,
        THEREFORE, for and in consideration of the promises and the mutual covenants
        hereinafter set forth, the parties hereto do hereby agree as
        follows:

       

      1.    
        Registration
        Rights

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      1.1    
        Registration
        Requirement.
        Subject
        to the terms and limitations hereof, the parties hereto agree and acknowledge
        that the Company shall prepare and file a registration statement (the
“Registration Statement”) on Form SB-2 or other appropriate registration
        document under the Securities Act of 1933, as amended (the “Act”) for resale of
        the Shares (the “Registrable Securities”) and shall use its reasonable best
        efforts to maintain the Registration Statement effective for a period of
        twenty-four (24) months at the Company’s expense (the “Effectiveness Period”).
        The Company shall file such Registration Statement no later than the tenth
        (10)
        day after the end of the six (6) month period that immediately follows the
        filing date of the Initial Registration Statement (the “Required Filing Date”),
        provided that if such day is not a Business Day, then the Required Filing
        Date
        shall be the next business day thereafter. The Company shall use reasonable
        best
        efforts to cause such Registration Statement to become effective within one
        hundred and twenty (120) days after the Required Filing Date or the actual
        filing date, whichever is earlier, or one hundred fifty (150) days after
        the
        Required Filing Date or the actual filing date, whichever is earlier, if
        the
        Registration Statement is subject to a full review by the SEC (the “Required
        Effectiveness Date”). If the Company fails to file the Registration Statement by
        the Required Filing Date or if the Registration Statement does not become
        effective on or before the Required Effectiveness Date due to the failure
        of the
        Company to fulfill its obligations hereunder, the Company shall be required
        to
        issue, as liquidated damages, to each of the Holders shares (the “Penalty
        Shares”) equal to a total of 0.0333% of their respective Shares for each
        calendar day that the Registration Statement has not been filed or declared
        effective by the SEC (and until the Registration Statement is filed with
        or
        declared effective by the SEC), as applicable. 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      1.2    
        Limitation
        to Registration Requirement.
        Notwithstanding the foregoing, no Penalty Shares shall be due to the Holders
        if
        the Company is using its best efforts to cause the Registration Statement
        to be
        filed and declared effective in a timely manner. In addition, the Company
        shall
        not be obligated to effect any registration of the Registrable Securities
        or
        take any other action pursuant to this Section 4: (i) in any particular
        jurisdiction in which the Company would be required to execute a general
        consent
        to service of process in effecting such registration, qualification or
        compliance unless the Company is already subject to service in such jurisdiction
        and except as may be required by the Act, or (ii) during any period in which
        the
        Company suspends the rights of a Holder after giving the Holder written
        notification of a Potential Material Event (defined below) pursuant to Section
        1.6 hereof. 

       

      1.3    
        Expenses
        of Registration.
        Except
        as otherwise expressly set forth, the Company shall bear all expenses incurred
        by the Company in compliance with the registration obligation of the Company,
        including, without limitation, all registration and filing fees, printing
        expenses, fees and disbursements of counsel for the Company incurred in
        connection with any registration, qualification or compliance pursuant to
        this
        Agreement and all underwriting discounts, selling commissions and expense
        allowances applicable to the sale of any securities by the Company for its
        own
        account in any registration. All underwriting discounts, selling commissions
        and
        expense allowances applicable to the sale by Holder of Registrable Securities
        and all fees and disbursements of counsel for the Holder shall be borne by
        the
        Holder.

       

      1.4     
        Indemnification.

       

      (a)    
        To
        the
        extent permitted by law the Company will indemnify each Holder, each of its
        officers, directors, agents, employees and partners, and each person controlling
        such Holder, with respect to each registration, qualification or compliance
        effected pursuant to this Agreement, and each underwriter, if any, and each
        person who controls any underwriter, and their respective counsel against
        all
        claims, losses, damages and liabilities (or actions, proceedings or settlements
        in respect thereof) arising out of or based on (i) any untrue statement (or
        alleged untrue statement) of a material fact contained in any prospectus,
        offering circular or other document prepared by the Company (including any
        related registration statement, notification or the like) incident to any
        such
        registration, qualification or compliance, or (ii) any omission (or alleged
        omission) to state therein a material fact required to be stated therein
        or
        necessary to make the statements therein not misleading, or any violation
        by the
        Company of the Act or any rule or regulation thereunder applicable to the
        Company and relating to action or inaction required of the Company in connection
        with any such registration, qualification or compliance, and subject to the
        provisions of Section 1.4(c) below, will reimburse each such Holder, each
        of its
        officers, directors, agents, employees and partners, and each person controlling
        such Holder, each such underwriter and each person who controls any such
        underwriter, for any legal and any other expenses as they are reasonably
        incurred in connection with investigating and defending any such claim, loss,
        damage, liability or action, provided that the Company will not be liable
        in any
        such case to the extent that any such claim, loss, damage, liability or expense
        arises out of or is based on any untrue statement (or alleged untrue statement)
        or omission (or alleged omissions) based upon written information furnished
        to
        the Company by (or on behalf of) such Holder or underwriter, or if the person
        asserting any such loss, claim, damage or liability (or action or proceeding
        in
        respect thereof did not receive a copy of an amended preliminary prospectus
        or
        the final prospectus (or the final prospectus as amended and supplemented)
        at or
        before the written confirmation of the sale of such Registrable Securities
        to
        such person because of the failure of the Holder or underwriter to so provide
        such amended preliminary or final prospectus (or the final prospectus as
        amended
        and supplemented); provided, however, that the indemnity agreement contained
        in
        this subsection shall not apply to amounts paid in settlement of any such
        loss,
        claim, damage, liability or action if such settlement is effected without
        the
        consent of the Company (which consent shall not be unreasonably withheld),
        nor
        shall the Company be liable in any such case for any such loss, claim, damage,
        liability or action to the extent that it arises out of or is based upon
        a
        violation which occurs in reliance upon and in conformity with written
        information furnished expressly for use in connection with such registration
        by
        the Holder, any such partner, officer, director, employee, agent or controlling
        person of such Holder, or any such underwriter or any person who controls
        any
        such underwriter; provided, however, that the obligations of the Company
        hereunder shall be limited to an amount equal to the portion of net proceeds
        represented by the Registrable Securities pursuant to this
        Agreement.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (b)    
        To
        the
        extent permitted by law, each Holder whose Registrable Securities are included
        in any registration, qualification or compliance effected pursuant to this
        Agreement will indemnify the Company, and its directors, officers, agents,
        employees and each underwriter, if any, of the Company’s securities covered by
        such a registration statement, each person who controls the Company or such
        underwriter within the meaning of the Act and the rules and regulations
        thereunder, each other such Holder and each of their officers, directors,
        partners, agents and employees, and each person controlling such Holder,
        and
        their respective counsel against all claims, losses, damages and liabilities
        (or
        actions in respect thereof) arising out of or based on any untrue statement
        (or
        alleged untrue statement) of a material fact contained in any such registration
        statement, prospectus, offering circular or other document, or any omission
        (or
        alleged omission) to state therein a material fact required to be stated
        therein
        or necessary to make the statements therein not misleading, and will reimburse
        the Company and such Holders, directors, officers, partners, persons,
        underwriters or control persons for any legal or any other expenses as they
        are
        reasonably incurred in connection with investigating or defending any such
        claim, loss, damage, liability or action, in each case to the extent, but
        only
        to the extent, that such untrue statement (or alleged untrue statement) or
        omission (or alleged omission) is made in such registration statement,
        prospectus, offering circular or other document in reliance upon and in
        conformity with written information furnished to the Company by such Holder;
        provided,
        however,
        that
        the obligations of any Holder hereunder shall be limited to an amount equal
        to
        the net proceeds to such Holder from Registrable Securities sold under such
        registration statement, prospectus, offering circular or other document as
        contemplated herein; provided, further, that the indemnity agreement contained
        in this subsection shall not apply to amounts paid in settlement of any such
        loss, claim, damage, liability or action if such settlement is effected without
        the consent of the Holder, which consent shall not be unreasonably withheld
        or
        delayed.

       

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      (a)    
        Each
        party entitled to indemnification under this Section (the “Indemnified Party”)
        shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge
        of any claim as to which indemnity may be sought, and shall permit the
        Indemnifying Party to assume the defense of any such claim or any litigation
        resulting therefrom, provided that counsel for the Indemnifying Party, who
        shall
        conduct the defense of such claim or any litigation resulting therefrom,
        shall
        be approved by the Indemnified Party (whose approval shall not unreasonably
        be
        withheld), and the Indemnified Party may participate in such defense at such
        party’s expense; and provided further that if any Indemnified Party reasonably
        concludes that there may be one or more legal defenses available to it that
        are
        not available to the Indemnifying Party, or that such claim or litigation
        involves or could have an effect on matters beyond the scope of this Agreement,
        then the Indemnified Party may retain its own counsel at the expense of the
        Indemnifying Party; and provided further that the failure of any Indemnified
        Party to give notice as provided herein shall not relieve the Indemnifying
        Party
        of its obligations under this Agreement unless and only to the extent that
        such
        failure to give notice results in material prejudice to the Indemnifying
        Party.
        No Indemnifying Party, in the defense of any such claim or litigation, shall,
        except with the consent of each Indemnified Party, consent to entry of any
        judgment or enter into any settlement which does not include as an unconditional
        term thereof the giving by the claimant or plaintiff to such Indemnified
        Party
        of a release from all liability in respect to such claim or litigation. Each
        Indemnified Party shall furnish such information regarding itself or the
        claim
        in question as an Indemnifying Party may reasonably request in writing and
        as
        shall be reasonably required in connection with defense of such claim and
        litigation resulting therefrom.

       

      (b)    
        If
        the
        indemnification provided for in this Section is held by a court of competent
        jurisdiction to be unavailable to an Indemnified Party with respect to any
        loss,
        liability, claim, damage or expense referred to herein, then the Indemnifying
        Party, in lieu of indemnifying such Indemnified Party hereunder, shall
        contribute to the amount paid or payable by such Indemnified Party as a result
        of such loss, liability, claim, damage or expense in such proportion as is
        appropriate to reflect the relative fault of the Indemnifying Party on the
        one
        hand and of the Indemnified Party on the other in connection with the statements
        or omissions which resulted in such loss, liability, claim, damage or expense
        as
        well as any other relevant equitable considerations. The relative fault of
        the
        Indemnifying Party and of the Indemnified Party shall be determined by reference
        to, among other things, whether the untrue or alleged untrue statement of
        a
        material fact or the omission to state a material fact relates to information
        supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct
        or
        prevent such statement or omission.

       

      1.5    
        Transfer
        or Assignment of Registration Rights.
        The
        Registrable Securities, and any related benefits to the Holder hereunder
        may be
        transferred or assigned by the Holder to a permitted transferee or assignee,
        provided that the Company is given written notice of such transfer or
        assignment, stating the name and address of said transferee or assignee and
        identifying the Registrable Securities with respect to which such registration
        rights are being transferred or assigned; provided further that the transferee
        or assignee of such Registrable Securities shall be deemed to have assumed
        the
        obligations of the Holder under this Agreement by the acceptance of such
        assignment and shall, upon request from the Company, evidence such assumption
        by
        delivery to the Company of a written agreement assuming such obligations
        of the
        Holder.

       

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      1.6    
        Registration
        Procedures.
        In the
        case of the registration effected by the Company pursuant to this Agreement,
        the
        Company will keep the Holder advised in writing as to the initiation of each
        registration and as to the completion thereof. The Company will:

       

      (a)    
        Prepare
        and file with the SEC such amendments and supplements to such registration
        statement and the prospectus used in connection with such registration statement
        as may be necessary to comply with the provisions of the Act with respect
        to the
        disposition of securities covered by such registration statement;

       

      (b)    
        Respond
        as promptly as reasonably practicable to any comments received from the SEC
        with
        respect to a registration statement or any amendment thereto.

       

      (c)    
        Notify
        the Holder as promptly as reasonably practicable and (if requested by any
        such
        person) confirm such notice in writing no later than one trading day following
        the day (A) when a prospectus or any prospectus supplement or post-effective
        amendment to a registration statement is proposed to be filed and (B) with
        respect to a registration statement or any post-effective amendment, when
        the
        same has become effective; 

       

      (d)    
        Furnish
        such number of prospectuses and other documents incident thereto, including
        supplements and amendments, as the Holder may reasonably request; 

       

      (e)    
        Furnish
        to the Holder, upon request, a copy of all documents filed with and all
        correspondence from or to the SEC in connection with any such registration
        statement other than non-substantive cover letters and the like;

       

      (f)    
        Use
        its
        reasonable best efforts to avoid the issuance of, or, if issued, obtain the
        withdrawal of (i) any order suspending the effectiveness of a registration
        statement, or (ii) any suspension of the qualification (or exemption from
        qualification) of any of the Registrable Securities for sale in any
        jurisdiction, at the earliest practicable moment; and

       

      (g)    
        Use
        its
        reasonable best efforts to comply with all applicable rules and regulations
        of
        the SEC.

       

      Notwithstanding
        the foregoing, if at any time or from time to time after the date hereof,
        the
        Company notifies the Holder in writing of the existence of an event or
        circumstance that is not disclosed in the Registration Statement and that
        may
        have a material effect on the Company or its business (a “Potential Material
        Event”), the Holder shall not offer or sell any Registrable Securities, or
        engage in any other transaction involving or relating to the Registrable
        Securities, from the time of the giving of notice with respect to a Potential
        Material Event until the Company notifies the Holder that such Potential
        Material Event either has been added to the Registration Statement by amendment
        or supplement or no longer constitutes a Potential Material Event; provided,
        that
        the Company may not so suspend the right of Holder for more than one hundred
        twenty (120) days in the aggregate. 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      1.7    
        Statement
        of Beneficial Ownership.
        The
        Company may require the Holder to furnish to the Company a certified statement
        as to the number of shares of Common Stock beneficially owned, including
        derivative instruments underlying Common Stock, by such Holder and the
        controlling person thereof and any other such information regarding the Holder,
        the Registrable Securities held by the Holder and the intended method of
        disposition of such securities as shall be reasonably required with respect
        to
        the registration of the Holder’s Registrable Securities. The Holder hereby
        understands and agrees that the Company may, in its sole discretion, exclude
        the
        Holder’s shares of Common Stock from the Registration Statement in the event
        that the Holder fails to provide such information requested by the Company
        within the time period reasonably specified by the Company or is required
        to do
        so by law or the SEC.

       

      1.8    
        Compliance.
        Holder
        covenants and agrees that such Holder will comply with the prospectus delivery
        requirements of the Act as applicable to such Holder in connection with sales
        of
        Registrable Securities pursuant to the registration statement required
        hereunder.

       

      1.9    
        Piggy-Back
        Registrations.
        If at
        any time during the Effectiveness Period there is not an effective registration
        statement covering all of the Registrable Securities and the Company shall
        determine to prepare and file with the SEC a registration statement relating
        to
        an offering for its own account or the account of others under the Act of
        any of
        its Common Stock, other than an offering of securities issued pursuant to
        a
        Strategic Issuance (as defined below) and other than a Form S-4 or Form S-8
        registration statement (each as promulgated under the Act or their then
        equivalents relating to equity securities to be issued solely in connection
        with
        any business combination transaction, acquisition of any entity or business
        or
        equity securities issuable in connection with stock option or other employee
        benefit plans), then the Company shall send to the Holder (together with
        any
        other holders of its Common Stock possessing “piggyback registration rights”
comparable to those granted to the Holder hereunder (“Rightsholders”)) written
        notice of such determination and, if within fifteen (15) days after receipt
        of
        such notice, the Holder shall so request in writing, the Company shall include
        in such registration statement all or any part of such Registrable Securities
        such Holder requests to be registered; provided that the Company shall not
        be
        required to register any Registrable Securities pursuant to this Section
        that
        are eligible for resale pursuant to Rule 144(k) promulgated under the Act;
        and
        provided further that the Company may, without the consent of the Holder,
        withdraw such registration statement before its becoming effective if the
        Company or other stockholders have elected to abandon the proposal to register
        the securities proposed to be registered thereunder. If the registration
        statement is being filed for an underwritten public offering, the Holder
        must
        timely execute and deliver the usual and customary agreement among the Company,
        such Holder and the underwriters relating to the registration. If the
        registration statement is being filed for an underwritten offer and sale
        by the
        Company of securities for its own account and the managing underwriters advise
        the Company in writing that in their opinion the offering contemplated by
        the
        registration statement cannot be successfully completed if the Company were
        to
        also register the Registrable Shares of the Holder requested to be included
        in
        such registration statement, then the Company will include in the registration:
        (i) first, any securities the Company proposes to sell, (ii) second, any
        securities of any person whose securities are being registered as a result
        of
        the exercise of a demand registration right, and (iii) third, that portion
        of
        the aggregate number of shares being requested for inclusion in the registration
        statement by (X) the Holder and (Y) all other Rightsholders, which in the
        opinion of such managing underwriters can successfully be sold, such number
        of
        shares to be taken pro
        rata
        from the
        Rightsholders on the basis of the total number of shares being requested
        for
        inclusion in the registration statement by each Rightsholder. “Strategic
        Issuance” shall mean an issuance of securities: (i) in connection with a
“corporate partnering” transaction or a “strategic alliance” (as determined by
        the Board of Directors of the Company in good faith); (ii) in connection
        with
        any financing transaction in respect of which the Company is a borrower;
        or
        (iii) to a vendor, lessor, lender, or customer of the Company, or a research,
        manufacturing or other commercial collaborator of the Company, in a transaction
        approved by the Board of Directors, provided in any case, that such issuance
        is
        not being made primarily for the purpose of avoiding compliance with this
        Agreement.

       

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      2.      
        Miscellaneous

       

      2.1    
        Any
        notice or other communication given hereunder shall be deemed sufficient
        if in
        writing and sent by registered or certified mail, return receipt requested,
        addressed to the Company, at 105 Baishi Road, Jiuzhou West Avenue, Zhuhai,
        People's Republic of China, Attention: Luo Yi with
        a copy to
        (which
        shall not constitute notice) Kirkpatrick & Lockhart Nicholson Graham LLP,
        10100 Santa Monica Blvd., Seventh Floor, Los Angeles, California 90067,
        Attention: Thomas J. Poletti, Esq., and to the Holder at his or her address
        indicated on the signature page of this Agreement. Notices shall be deemed
        to
        have been given three (3) business days after the date of mailing, except
        notices of change of address, which shall be deemed to have been given when
        received.

       

      2.2     This
        Agreement may only be amended through a written instrument signed by the
        Holder,
        Full Art and the Company. 

       

      2.3    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.
        This Agreement sets forth the entire agreement and understanding between
        the
        parties as to the subject matter hereof and merges and supersedes all prior
        discussions, agreements and understandings of any and every nature among
        them.

       

      2.4    
        Notwithstanding
        the place where this Agreement may be executed by any of the parties hereto,
        the
        parties expressly agree that all the terms and provisions hereof shall be
        construed in accordance with and governed by the laws of the State of Delaware.
        

       

      2.5   
        This
        Agreement may be executed in counterparts. Upon the execution and delivery
        of
        this Agreement, this Agreement shall become a binding obligation of the parties
        hereto. This Agreement may be executed and delivered by facsimile.

       

      2.6   
        The
        holding of any provision of this Agreement to be invalid or unenforceable
        by a
        court of competent jurisdiction shall not affect any other provision of this
        Agreement, which shall remain in full force and effect.

       

      2.7   
        It
        is
        agreed that a waiver by either party of a breach of any provision of this
        Agreement shall not operate, or be construed, as a waiver of any subsequent
        breach by that same party.

       

      2.8  
        The
        parties agree to execute and deliver all such further documents, agreements
        and
        instruments and take such other and further action as may be necessary or
        appropriate to carry out the purposes and intent of this Agreement.

       

      2.9  
        The
        Company agrees not to disclose the names, addresses or any other information
        about the Holders, except as required by law, provided that the Company may
        provide information relating to the Holder as required in any registration
        statement under the Act that may be filed by the Company pursuant to the
        requirements of this Agreement. 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      2.10 The
        obligation of the Holder hereunder is several and not joint with the obligations
        of any other Holders (the “Other Holders”), and the Holder shall not be
        responsible in any way for the performance of the obligations of any Other
        Holders. Nothing contained herein or in any other agreement or document
        delivered at the Closing, and no action taken by the Holder pursuant hereto,
        shall be deemed to constitute the Holder and the Other Holders as a partnership,
        an association, a joint venture or any other kind of entity, or create a
        presumption that the Holder and the Other Holders are in any way acting in
        concert with respect to such obligations or the transactions contemplated
        by
        this Agreement. The Holder shall be entitled to protect and enforce the Holder’s
        rights, including without limitation the rights arising out of this Agreement,
        and it shall not be necessary for any Other Holder to be joined as an additional
        party in any proceeding for such purpose. The language used in this Agreement
        will be deemed to be the language chosen by the parties to express their
        mutual
        intent, and no rules of strict construction will be applied against any party.
        The Holder is not acting as part of a “group” (as that term is used in Section
        13(d) of the 1934 Act) in negotiating and entering into this Agreement or
        purchasing the Shares or acquiring, disposing of or voting any of the underlying
        shares of Common Stock. The Company hereby confirms that it understands and
        agrees that the Holder is not acting as part of any such group.

       

       

      [SIGNATURE
        PAGE FOLLOWS]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

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

       

      
        	
                 

                 

                 

              
	
                
                  

                  Full Legal Name of Holder (Please print)

                 

              
	 
	
                 

              
	
                
                  
 Signature
                  of (or on behalf of) Holder

              
	
                Name:

              
	
                Title:
                  

              
	 
	 
	 
	
                 

              
	
                
                  
 Address
                  of Holder

                 

              
	 
	
                 

              
	
                
                  
 Social
                  Security or Taxpayer

              
	
                Identification
                  Number of Holder

                 

              
	
                 

              
	
                
                  
 Number
                  of Shares being Registered

                 

              

      

       

       

      
        	SRKP 1,
                INC. 	 	 FULL
                ART INTERNATIONAL, LTD. 
	 	 	 	 	 
	 By:	 	 	 By:	 
	 Name:	 Richard
                Rappaport	 	 Name:
                	Ken
Luo
                Yi 
	 Title:	 President	 	 Title:	 President

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
        I

       

      HOLDERS
        AND REGISTRABLE SECURITIES

      

      

      
        	 	
                 

                HOLDER

              	 	
                NO.
                  OF SHARES BEING REGISTERED

              
	
                1. 

              	
                FirstAlliance
                  Financial Group, Inc.

              	 	
                2,000,000

              
	
                2. 

              	
                Richard
                  Rappaport

              	 	
                461,825

              
	
                3. 

              	
                The
                  Amanda Rappaport Trust

              	 	
                250,250

              
	
                4. 

              	
                The
                  Kailey Rappaport Trust

              	 	
                250,250

              
	 	 	 	
                 

              
	 	
                TOTAL

              	 	
                2,962,325WAIVER
      OF PENALTIES RELATED TO REGISTRATION RIGHTS

     

    This
      WAIVER OF PENALTIES RELATED TO REGISTRATION
      RIGHTS (“WAIVER”)
      is
      entered into as of this 3RD
      day of
      July, 2007 by and between a CHINA ARCHITECTURAL ENGINEERING, INC., Delaware
      corporation (the “Company”),
      and
      the persons listed on the signature pages hereof (the “Holders”).
      Undefined terms herein shall have the meaning set forth in the Registration
      Rights Agreement, as defined below.

     

    RECITALS:

     

    WHEREAS,
      on October 17, 2006, the Company and each of the Holders entered into a
      Registration Rights Agreement (the “Registration
      Rights Agreement”);

     

    WHEREAS,
      the Company granted each of the Holders certain registration rights pursuant
      to
      which the Company agreed to file a Registration Statement for the resale of
      the
      Registrable Securities held by the Holders;

     

    WHEREAS,
      the Registration Rights Agreement states that Company shall be required to
      issue, as liquidated damages, to each of the Holders shares (the “Penalty
      Shares”)
      equal
      to a total of 0.0333% of their respective Shares for each calendar day that
      the
      Registration Statement has not been filed or declared effective by the SEC
      (and
      until the Registration Statement is filed with or declared effective by the
      SEC), as applicable;

     

    WHEREAS,
      Section 2.2 of the Registration Rights Agreement states that the provisions
      thereof may be amended through a written instrument signed by the parties;
      and

     

    WHEREAS,
      the Company and the Holders desire to waive any and all Penalty Shares, and
      any
      rights to any Penalty Shares, under the Registration Rights
      Agreement.

     

    AGREEMENT:

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals and the mutual promises
      hereinafter set forth, the parties hereto agree as follows:

     

    1. Waiver
      of Penalty Shares.
      The
      Company and Holders hereby agree to remove all references to the Penalty Shares
      from the Registration Rights Agreement, and each of the Holders hereby fully
      and
      irrevocably waive the Penalty Shares, and any and all rights
      thereto.

     

    2. Conflicts.
      To the
      extent there is any conflict between the terms of the Registration Rights
      Agreement and the terms hereof, the terms of this Waiver take
      precedence.

     

    3. Confirmation
      of Subscription Agreement.
      The
      parties hereto hereby confirm that the Registration Rights Agreement, as amended
      by this Waiver, remains in full force and effect.

     

    4. Miscellaneous.
      All the
      provisions of Section 2 of the Registration Rights Agreement are herein
      incorporated by this reference, including, but not limited to, the sections
      regarding governing law and counterparts.

     

    [Signature
      Pages Follow]

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      IN
        WITNESS
        WHEREOF,
        the
        parties hereto have executed this Waiver as of the date set forth in the
        first
        paragraph hereof.

    

     

    
      	 	 	 	 
	CHINA
              ARCHITECTURAL ENGINEERING, INC. 	 	 
	 	 	 	 
	 	 	 	 
	
              By:
                /s/
                Ken Luo Yi

            	 	 	
            
	
              
                

              

              Name:
                Ken Luo Yi

            	 	 	
            
	
              Title:
                Chief Executive Officer

            	 	 	
            

    

     

    Company
      Signature Page

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      IN
        WITNESS
        WHEREOF,
        the
        parties hereto have executed this Waiver as of the date set forth in the
        first
        paragraph hereof.

    

     

    HOLDERS:

    
      	 	 	 	 
	
              Name:
                FirstAlliance
                Financial Group, Inc.

            	 	 	
            
	 	 	 	 
	
              Signature:
                /s/
                Weiming Zhang 

            	 	 	 
	
              
                

              

            	 	 	
            
	 	 	 	 
	
              By:
                Weiming
                Zhang

            	 	 	
            
	
              
                

              

            	 	 	 
	 	 	 	 
	
              Title:
                Director

            	 	 	 
	 	 	 	 
	
              Number
                of Shares: 2,000,000

            	 	 	 

    

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      IN
        WITNESS
        WHEREOF,
        the
        parties hereto have executed this Waiver as of the date set forth in the
        first
        paragraph hereof.

    

     

    HOLDERS:

    
      	 	 	 	 
	
              Name:
                Richard
                Rappaport

            	 	 	
            
	 	 	 	 
	
              Signature:
                /s/
                Richard Rappaport

            	 	 	 
	
              
                

              

            	 	 	
            
	 	 	 	 
	
              Number
                of Shares: 461,825

            	 	 	
            

    

     

    
      	 	 	 	 
	
              Name:
                The
                Amanda Rappaport Trust 

            	 	 	
            
	 	 	 	 
	
              Signature:
                /s/
                Richard Rappaport

            	 	 	 
	
              
                

              

            	 	 	
            
	 	 	 	 
	
              By:
                Richard Rappaport, Trustee

            	 	 	
            
	 	 	 	 
	
              Number
                of Shares: 250,250

            	 	 	 

    

     

    
      	 	 	 	 
	
              Name:
                The
                Kailey Rappaport Trust 

            	 	 	
            
	 	 	 	 
	
              Signature:
                /s/ Richard Rappaport

            	 	 	 
	
              
                

              

            	 	 	
            
	 	 	 	 
	
              By:
                Richard Rappaport, Trustee

            	 	 	
            
	 	 	 	 
	
              Number
                of Shares: 250,250

            	 	 	 

    
      
        
        

      

      
        4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]