Document:

EXHIBIT A
                                       TO
                   COMMON STOCK AND WARRANT PURCHASE AGREEMENT

                                 FORM OF WARRANT

NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "SECURITIES
ACT"). THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
REGISTRATION UNDER THE SECURITIES ACT OR UNLESS SUCH OFFER, SALE OR TRANSFER IS
EXEMPT FROM SUCH REGISTRATION.

                          BIOSTAR PHARMACEUTICALS, INC.

                              COMMON STOCK WARRANT

NO. __________                                                      ______, 2007

         BIOSTAR PHARMACEUTICALS, INC., a Maryland corporation (the "Company"),
hereby certifies that ______________________________________, its permissible
transferees, designees, successors and assigns (collectively, the "Holder"), for
value received, is entitled to purchase from the Company at any time commencing
on the date on which a Conversion Price (as defined in Section 3(d) of Article
SIXTH of the Certificate of Incorporation of the Company, as amended and in
effect as of the date hereof ("Section 3(d)")) is first determinable under such
Section 3(d) (such time is hereinafter referred to as the "Effective Date") and
terminating on the third anniversary of the date hereof (the "Termination Date")
up to such number of shares (each, a "Share" and collectively the "Shares") of
the Company's common stock, $.001 par value per Share (the "Common Stock") as
shall be equal to the number of shares of Common Stock that one share of the
Company's Series A Convertible Preferred Stock, $.001 par value per share (the
"Preferred Stock") shall have been converted into pursuant to the conversion of
Preferred Stock into Common Stock made at the option of the Holder pursuant to
Section 3(d)., at an exercise price per Share equal to 150% of the Conversion
Price (as such Conversion Price may be adjusted pursuant to the terms of Section
3(d)) in effect at the time of exercise.(The purchase price per share of Common
Stock calculated pursuant to the immediately preceding sentence is hereinafter
referred to as the "Exercise Price.")

                                       1
<PAGE>

         1. Exercise of Warrant.

                  (a) The purchase right represented by this Common Stock
         Warrant (this "Warrant") is exercisable, in whole or in part, at any
         time and from time to time from and after the Effective Date through
         and including the Termination Date.

                  (b) Upon presentation and surrender of this Warrant,
         accompanied by a completed Election to Purchase in the form attached
         hereto as EXHIBIT A (the "Election to Purchase") duly executed, at the
         principal office of the Company currently located at
         _________________________________, (or such other office or agency of
         the Company within the United States as the Company may designate to
         the Holder) together with a check payable to, or wire transfer to, the
         Company in the amount of the Exercise Price multiplied by the number of
         Shares being purchased, the Company or the Company's transfer agent, as
         the case may be, shall within three (3) business days deliver to the
         Holder hereof certificates of fully paid and non-assessable Common
         Stock which in the aggregate represent the number of Shares being
         purchased. The certificates so delivered shall be in such denominations
         as may be requested by the Holder and shall be registered in the name
         of the Holder or such other name as shall be designated by the Holder.
         All or less than all of the purchase rights represented by this Warrant
         may be exercised and, in case of the exercise of less than all, the
         Company, upon surrender hereof, will at the Company's expense deliver
         to the Holder a new warrant entitling said holder to purchase the
         number of Shares represented by this Warrant which have not been
         exercised. This Warrant may only be exercised to the extent the Company
         has a sufficient number of Shares of Common Stock available for
         issuance at the time of any exercise.

         2. Warrant.

                  (a) Exchange, Transfer and Replacement. At any time prior to
         the exercise hereof, this Warrant may be exchanged upon presentation
         and surrender to the Company, alone or with other warrants of like
         tenor of different denominations registered in the name of the same
         Holder, for another warrant or warrants of like tenor in the name of
         such Holder exercisable for the aggregate number of Shares as the
         warrant or warrants surrendered.

                  (b) Replacement of Warrant. Upon receipt of evidence
         reasonably satisfactory to the Company of the loss, theft, destruction,
         or mutilation of this Warrant and, in the case of any such loss, theft,
         or destruction, upon delivery of an indemnity agreement reasonably
         satisfactory in form and amount to the Company, or, in the case of any
         such mutilation, upon surrender and cancellation of this Warrant, the
         Company, at its expense, will execute and deliver in lieu thereof, a
         new Warrant of like tenor.

                                       2
<PAGE>

                  (c) Cancellation; Payment of Expenses. Upon the surrender of
         this Warrant in connection with any transfer, exchange or replacement
         as provided in this Section 2, this Warrant shall be promptly canceled
         by the Company. The Holder shall pay all taxes and all other expenses
         (including legal expenses, if any, incurred by the Holder or
         transferees) and charges payable in connection with the preparation,
         execution and delivery of Warrants pursuant to this Section 2.

                  (d) Warrant Register. The Company shall maintain, at its
         principal executive offices (or at the offices of the transfer agent
         for the Warrant or such other office or agency of the Company as it may
         designate by notice to the holder hereof), a register for this Warrant
         (the "Warrant Register"), in which the Company shall record the name
         and address of the person in whose name this Warrant has been issued,
         as well as the name and address of each transferee and each prior owner
         of this Warrant.

         3. Rights and Obligations of Holders of this Warrant. The Holder of
         this Warrant shall not, by virtue hereof, be entitled to any rights of
         a stockholder in the Company, either at law or in equity; provided,
         however, that in the event any certificate representing shares of
         Common Stock or other securities is issued to the holder hereof upon
         exercise of this Warrant, such holder shall, for all purposes, be
         deemed to have become the holder of record of such Common Stock on the
         date on which this Warrant, together with a duly executed Election to
         Purchase, was surrendered and payment of the aggregate Exercise Price
         was made, irrespective of the date of delivery of such Common Stock
         certificate.

4. Registration Rights.

         (a) The Company, for a period of two years after the Conversion Date
(as defined in Section 3(d)), will give written notice to each Holder of this
Warrant or shares of Common Stock issued upon exercise of this Warrant ("Warrant
Shares") not less than 20 days in advance of the initial filing of any
registration statement under the Securities Act of 1933, as amended (other than
a registration statement pertaining to securities issuable pursuant to employee
stock option, stock purchase, or similar plans or a registration statement
pertaining to securities issuable in connection with the acquisition of a
business, whether through a merger, consolidation, acquisition of assets, or
exchange of securities), covering any Common Stock or other securities of the
Company, and will afford the Holder the opportunity to have included in such
registration statement all or such part of the Warrant Shares issued or issuable
upon exercise of this Warrant, as may be designated by written notice to the
Company not later than ten days following receipt of such notice from the
Company. The Company shall be entitled to exclude the Warrant Shares held by or
issuable to the Holder from any one, but not more than one, such registration if
either the Company or the underwriter in connection with offering to be made
pursuant to such registration statement in its sole discretion decides that the
inclusion of such shares will materially interfere with the orderly sale and
distribution of the securities being offered under such registration statement
by the Company. Notwithstanding the foregoing, the Company shall not be entitled

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<PAGE>

to exclude the Warrant Shares held by or issuable to the Holder if shares of
other shareholders are being included in any such registration statement and, in
such circumstances, the Holder shall be entitled to include the Warrant Shares
held by or issuable to the Holder on a pro-rata basis in the proportion that the
number of Warrant Shares of Common Stock held by or issuable to the Holder bears
to the shares of Common Stock held by all other shareholders, including shares
in such registration statement. The Holder shall not be entitled to include
shares in more than two registration statements pursuant to the provisions of
this Section (3)(e), and all rights of any holder under this Section (3)(e)
shall terminate after the holder has included shares of Common Stock in two
registration statements pursuant to this Section (3)(e).

         (b) The Company will pay all out-of-pocket costs and expenses of any
registration effected pursuant to the provisions of Section 5(a), including
registration fees, legal fees, accounting fees, printing expenses (including
such number of any preliminary and the final prospectus as may be reasonably
requested), blue sky qualification fees and expenses, and all other expenses,
except for underwriting commissions or discounts applicable to the shares of
Common Stock being sold by the holder and the fees of counsel for the Holder,
all of which shall be paid by the Holder.

5. Fractional Shares. In lieu of issuance of a fractional share upon any
exercise hereunder, the Company will pay the cash value of that fractional
share, calculated on the basis of the Exercise Price.

6. Legends. Prior to issuance of the shares of Common Stock underlying this
Warrant, all such certificates representing such shares shall bear a restrictive
legend to the effect that the Shares represented by such certificate have not
been registered under the 1933 Act, and that the Shares may not be sold or
transferred in the absence of such registration or an exemption therefrom, such
legend to be substantially in the form of the bold-face language appearing at
the top of Page 1 of this Warrant.

7. Disposition of Warrants or Shares; Lockup.

         (a) The Holder of this Warrant, each transferee hereof and any holder
and transferee of any Shares, by his or its acceptance thereof, agrees that no
public distribution of Warrants or Shares will be made in violation of the
provisions of the Securities Act of 1933, as amended. Furthermore, it shall be a
condition to the transfer of this Warrant that any transferee thereof deliver to
the Company his or its written agreement to accept and be bound by all of the
terms and conditions contained in this Warrant.

         (b) The Holder may not, without obtaining the prior written consent of
the Company, directly or indirectly sell, offer to sell, grant an option for the
sale of, transfer, assign, hypothecate, pledge, distribute or otherwise dispose
of or encumber any Warrant Shares or any beneficial interest therein until at
least 150 days following the Effective Date; provided, however, after the
expiration of 90 days after the Effective Date a Holder may sell up to one-third
of the Warrant Shares issued to such Holder upon exercise of this Warrant, and
after the expiration of 120 days following the Effective Date a holder may sell
up to an additional one-third of the Warrant Shares issued to such Holder.

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<PAGE>

8. Merger or Consolidation. The Company will not merge or consolidate with or
into any other corporation, or sell or otherwise transfer its property, assets
and business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the Company), or
such transferee corporation, as the case may be, shall expressly assume, by
supplemental agreement reasonably satisfactory in form and substance to the
Holder, the due and punctual performance and observance of each and every
covenant and condition of this Warrant to be performed and observed by the
Company.

9. Notices. Except as otherwise specified herein to the contrary, all notices,
requests, demands and other communications required or desired to be given
hereunder shall only be effective if given in writing by certified or registered
U.S. mail with return receipt requested and postage prepaid; by private
overnight delivery service (e.g. Federal Express); by facsimile transmission (if
no original documents or instruments must accompany the notice); or by personal
delivery. Any such notice shall be deemed to have been given (a) on the business
day immediately following the mailing thereof, if mailed by certified or
registered U.S. mail as specified above; (b) on the business day immediately
following deposit with a private overnight delivery service if sent by said
service; (c) upon receipt of confirmation of transmission if sent by facsimile
transmission; or (d) upon personal delivery of the notice. All such notices
shall be sent to the following addresses (or to such other address or addresses
as a party may have advised the other in the manner provided in this Section
10):

                  IF TO THE COMPANY:

                  Biostar Pharmaceuticals, Inc.

                  [Address]
                  Attention:
                  Facsimile:

                  IF TO THE HOLDER:

         Notwithstanding the time of effectiveness of notices set forth in this
Section, an Election to Purchase shall not be deemed effectively given until it
has been duly completed and submitted to the Company together with this original
Warrant and payment of the Exercise Price in a manner set forth in this Section.

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<PAGE>

10. Governing Law. This Warrant shall be governed by and construed in accordance
with the laws of the State of Maryland applicable to contracts made and to be
performed in the State of Maryland.

11. Successors and Assigns. This Warrant shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns.

12. Headings. The headings of various sections of this Warrant have been
inserted for reference only and shall not affect the meaning or construction of
any of the provisions hereof.

13. Severability. If any provision of this Warrant is held to be unenforceable
under applicable law, such provision shall be excluded from this Warrant, and
the balance hereof shall be interpreted as if such provision were so excluded.

14. Modification and Waiver. This Warrant and any provision hereof may be
amended, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Holder.

15. Specific Enforcement. The Company and the Holder acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Warrant were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Warrant and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which either of them may be entitled by
law or equity.

16. Assignment. Subject to prior written approval by the Company, this Warrant
may be transferred or assigned, in whole or in part, at any time and from time
to time by the then Holder by submitting this Warrant to the Company together
with a duly executed Assignment in substantially the form and substance of the
Form of Assignment which accompanies this Warrant, as Exhibit B hereto, and,
upon the Company's receipt hereof, and in any event, within three (3) business
days thereafter, the Company shall issue a warrant to the Holder to evidence
that portion of this Warrant, if any as shall not have been so transferred or
assigned.

                      (SIGNATURE PAGE IMMEDIATELY FOLLOWS)

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<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, manually or by facsimile, by one of its officers thereunto duly
authorized.

                                        BIOSTAR PHARMACEUTICALS, INC.

Date: __________, 2007                  By:____________________________________
                                        Name:
                                        Title:   President

--------------------------------------- ----------------------------------------

                                       7
<PAGE>

                                    EXHIBIT A
                                       TO
                               WARRANT CERTIFICATE

                              ELECTION TO PURCHASE

To Be Executed by the Holder
in Order to Exercise the Warrant

         The undersigned Holder hereby elects to purchase _______ Shares
pursuant to the attached Warrant, and requests that certificates for securities
be issued in the name of:

           ----------------------------------------------------------
                     (Please type or print name and address)

           ----------------------------------------------------------
                 (Social Security or Tax Identification Number)

and delivered
to:_________________________________________________________________

-------------------------------------------------------------------.

         (Please type or print name and address if different from above)

         If such number of Shares being purchased hereby shall not be all the
Shares that may be purchased pursuant to the attached Warrant, a new Warrant for
the balance of such Shares shall be registered in the name of, and delivered to,
the Holder at the address set forth below.

         In full payment of the purchase price with respect to the Shares
purchased and transfer taxes, if any, the undersigned hereby tenders payment of
$__________ by check, money order or wire transfer payable in United States
currency to the order of BIOSTAR PHARMACEUTICALS, INC.

                                                HOLDER:

                                                By:_____________________________
                                                         Name:
                                                         Title:
                                                         Address:
----------------------------------------------- --------------------------------

----------------------------------------------- --------------------------------

Dated:_______________________
----------------------------------------------- --------------------------------

                                       8
<PAGE>

                                    EXHIBIT B
                                       TO
                                     WARRANT

                               FORM OF ASSIGNMENT
                   (To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto
_____________ the right represented by the within Warrant to purchase ______
shares of Common Stock of Biostar Pharmaceuticals, Inc., a Maryland corporation,
to which the within Warrant relates, and appoints ____________________ Attorney
to transfer such right on the books of Biostar Pharmaceuticals, Inc., a Maryland
corporation, with full power of substitution of premises.

Dated:                                         By:______________________________
                                               Name:
                                               Title:
                                               (signature must conform to name
                                               of holder as specified on the
                                               fact of the  Warrant)

                                                        Address:
------------------------------------------------------- ------------------------

Signed in the presence of:

Dated:

                                       9ENTRUSTED MANAGEMENT AGREEMENT

                                      AMONG

                   THE FOURTEEN PERSONS INCLUDING WANG RONGHUA

                     SHAANXI AOXING PHARMACEUTICAL CO., LTD

                                       AND

                           SHAANXI BIOSTAR BIOTECH LTD

                                    [ ] 2007

                                 XIANYANG, CHINA

<PAGE>

                         ENTRUSTED MANAGEMENT AGREEMENT

     This Entrusted Management Agreement (the "Agreement") is entered into on
the [ ] o [ ] day of [ ] o [ ] 2007 in Xianyang, China by:

PARTY A:

                1. Wang Ronghua, a citizen of PRC with ID Card
[ ]61040219550901129[ ], owns 45.13% shares of Shaanxi Aoxing
Pharmaceutical Co., Ltd.,

                2. Wang Yan, a citizen of PRC with ID Card number
[ ]610402198705207517[ ], owns 5.83% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            3. Wang Rongfa, a citizen of PRC with ID Card number
[ ]610125196107262216[ ], owns 5.83% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            4. Wang Rangmei, a citizen of PRC with ID Card number
[ ]610125196005042220[ ], owns 5.83% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            5. Cao Xuezhu, a citizen of PRC with ID Card number
[ ]239005196007133130[ ], owns 5.18% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            6. Wang Yuxing, a citizen of PRC with ID Card number
[ ]610104195707052654[ ], owns 4.85% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            7. An Xiaoru, a citizen of PRC with ID Card number
[ ]220104196406234421[ ], owns 4.85% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            8. Ao Quanfang, a citizen of PRC with ID Card number
[ ]61040219570504122x[ ], owns 4.69% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            9. Tang Wenying, a citizen of PRC with ID Card number
[ ]61010219431016356x[ ], owns 3.24% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

                                       1
<PAGE>

            10. Qin Hongxia, a citizen of PRC with ID Card number
[ ]610103196601022420[ ], owns 3.24% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            11. Wu Gang, a citizen of PRC with ID Card number
[ ]610402196512265236[ ], owns 3.07% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            12. Wu Weiping, a citizen of PRC with ID Card number
[ ]610403198202050067[ ], owns 2.91% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            13. Bai Rong, a citizen of PRC with ID Card number
i3/462050319790316422xi?, owns 2.91% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

            14. Wu Jin, a citizen of PRC with ID Card number
i3/4610125198301140529i?, owns 2.27% shares of Shaanxi Aoxing Pharmaceutical
Co., Ltd.,

             15. Shaanxi Aoxing Pharmaceutical Co., Ltd. is an enterprise
incorporated and existing within the territory of China in accordance with the
law of the People's Republic of China, the registration number of its legal and
valid Business License is 6104001290270 and the legal registered address is
Chenyangzhai, Xianyang.

      and

PARTY B: Shaanxi Biostar Biotech Ltd is a wholly-foreign owned enterprise
registered in Xianyang, PRC, and the registration number of its legal and valid
Business License is Qi Du Shaan Xian Zong Zi No. 000177.

WHEREAS:

     1. Party A constitutes Shaanxi Aoxing Pharmaceutical Co., Ltd. (hereinafter
referred to as "Shaanxi Aoxing") and all of its shareholders holding all issued
and outstanding shares of Shaanxi Aoxing. Under this Agreement, Shaanxi Aoxing
and The Fourteen Persons including Wang Ronghua have acted collectively as one
party to this Agreement;

     2. Shaanxi Biostar Biotech Ltd. (hereinafter referred to as "Party B") is a
wholly-foreign owned enterprise incorporated and existing within the territory
of China in accordance with the law of the People's Republic of China, the
registration number of its legal and valid Business License is Qi Du Shaan Xian
Zong Zi No. 000177, and the legal registered address is 3rd floor, backyard of
Industrial and Business Bureau, Shiji Avenue, Xianyang.

     3. Party A desires to entrust Party B to manage and operate Shaanxi Aoxing;

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<PAGE>

     4. Party B agrees to accept such entrustment and to manage Shaanxi Aoxing
on behalf of Party A.

         Therefore, in accordance with laws and regulations of the People's
Republic of China, the Parties agree as follows after friendly consultation
based on the principle of equality and mutual benefit.

     ARTICLE 1   ENTRUSTED MANAGEMENT

     1.1 Party A agrees to entrust the management of Shaanxi Aoxing to Party B
pursuant to the terms and conditions of this Agreement. Party B agrees to manage
Shaanxi Aoxing in accordance with the terms and conditions of this Agreement.

     1.2 The term of this Entrusted Management Agreement shall be from the
effective date of this Agreement to the earlier of the following:
      (1) the winding up of Shaanxi Aoxing (the "Entrusted Period"), or
      (2) the  termination date of this Entrusted Management Agreement to be
          determined by the Parties hereto, or
      (3) the date on which Party B completes the acquisition of Shaanxi Aoxing.

     1.3 During the Entrusted Period, Party B shall be fully responsible for the
management of Shaanxi Aoxing. The management service includes without limitation
the following:

         (1)    Party B shall be fully responsible for the operation of Shaanxi
                Aoxing, which includes the right to appoint and terminate
                members of Board of Directors and the right to hire managerial
                and administrative personnel etc. Party A or its voting proxy
                shall make a shareholder's resolution and a Board of Directors'
                resolution based on the decision of Party B's Board of
                Directors.

         (2)    Party B has the right to manage and control all assets of Party
                A. Shaanxi Aoxing shall open an entrusted account or designate
                an existing account as an entrusted account. Party B has the
                full right to decide the use of the funds in the entrusted
                account. The signer of the account shall be appointed or
                confirmed by Party B. All of the funds of Shaanxi Aoxing y shall
                be kept in this account, including but not limited to its
                existing working capital and purchase price received from
                selling its production equipment, inventory, raw materials and
                accounts receivable to Party B, all payments of funds shall be
                disbursed through this entrusted account, including but not
                limited to the payment of all existing accounts payable and
                operating expenses, payment of employees salaries and purchase
                of assets, and all revenues from its operation shall be kept in
                this account.

                                       3
<PAGE>

         (3)    Party B shall have the full right to control and administrate
                the financial affairs and daily operation of Shaanxi Aoxing,
                such as entering into and performance of contracts, and payment
                of taxes etc.

         (4)    If Shaanxi Aoxing requires additional funds to maintain its
                operations, Party B shall provide such additional funds through
                a bank loan or other resources and Party A shall provide
                necessary assistance in obtaining these funds.

       1.4 As consideration for the services provided by Party B hereunder,
Party A shall pay an entrusted management fee to Party B which shall be equal to
the earnings before tax (if any) of Shaaxi Aoxing. The entrusted management fee
shall be as follows: during the term of this agreement, the entrusted management
fee shall equal to Shaaxi Aoxing's estimated earnings before tax, being the
monthly revenues after deduction of operating costs, expenses and taxes other
than income tax. If the earnings before tax is zero, Shaanxi Aoxing is not
required to pay the entrusted management fee; if Shaanxi Aoxing sustains losses,
all such losses will be carried over to next month and deducted from next
month's entrusted management fee. Both Parties shall calculate, and Party A
shall pay, the monthly entrusted management fee within 20 days of the following
month. The above monthly payment shall be adjusted after the end of each quarter
but before the filing of tax return for such quarter (the "Quarterly
Adjustment"), so as to make the after-tax profit of Shaanxi Aoxing of that
quarter is zero. In addition, the above monthly payment shall be adjusted after
the end of each fiscal year but before the filing for the yearly tax return (the
"Annual Adjustment"), so as to make the after-tax profit Shaanxi Aoxing of that
fiscal year is zero.

      1.5 Party B shall assume all operation risks out of the entrusted
management of Shaanxi Aoxing and bear all losses of Shaanxi Aoxing. If Shaanxi
Aoxing has no sufficient funds to repay its debts, Party B is responsible for
paying off these debts on behalf of Shaanxi Aoxing; if Shaanxi Aoxing's net
assets are lower than its registered capital, Party B is responsible for funding
the deficit.

       ARTICLE 2     RIGHTS AND OBLIGATIONS OF THE PARTIES

      2.1 During the term of this Agreement, Party A's rights and obligations
include:

         (1)   to hand over Shaanxi Aoxing to Party B for entrusted management
               as of the effectiveness date of this Agreement and to hand over
               all of business materials together with Business License and
               corporate seal of Shaanxi Aoxing to Party B; --

         (2)   Party A has no right to make any decision regarding Shaanxi
               Aoxing's operations without the consent of Party B;

         (3)   to have the right to know the business conditions of Shaanxi
               Aoxing at any time and provide proposals;

                                       4
<PAGE>

         (4)   to assist Party B in carrying out the entrusted management
               according to Party B's requirement;

         (5)   to perform its obligations pursuant to the Shareholders' Voting
               Rights Proxy Agreement by and between the Parties, and not to
               violate the said agreement;

         (6)   not to intervene Party B's management over Shaanxi Aoxing in any
               form by making use of shareholder's power;

         (7)   not to entrust or grant their shareholders' rights in Shaanxi
               Aoxing to a third party other than Party B without Party B's
               consent;

         (8)   not to otherwise entrust other third party other than Party B to
               manage Shaanxi Aoxing in any form without Party B's consent;

         (9)   not to terminate this Agreement unilaterally with any reason; or

         (10)  to enjoy other rights and perform other obligations under the
               Agreement.

      2.2 During the term of this Agreement, Party B's rights and obligations
include:

         (1)   to enjoy independent and full right to manage Shaanxi Aoxing;

         (2)   to enjoy the right to dispose of all assets of Shaanxi Aoxing;

         (3)   to enjoy profits and bear losses arising from Shaanxi Aoxing's
               operations during the period of entrusted management;

         (4)   to appoint all directors of Shaanxi Aoxing;

         (5)   to appoint general manager, deputy general manager, financial
               manager and other senior managerial personnel of Shaanxi Aoxing;

         (6)   to convene shareholders' meetings of Shaanxi Aoxing in accordance
               with the Shareholders' Voting Rights Proxy Agreement and sign
               resolutions of shareholders' meetings; and

         (7)   to enjoy other rights and perform other obligations under the
               Agreement.

                                       5
<PAGE>

       ARTICLE 3     REPRESENTATIONS AND WARRANTIES

       The Parties hereto hereby make the following representations and
warranties to each other as of the date of this Agreement that:

         (1)   has the right to enter into the Agreement and the ability to
               perform the same;

         (2)   the execution and delivery of this Agreement by each party have
               been duly authorized by all necessary corporate action;

         (3)   the execution of this Agreement by the officer or representative
               of each party has been duly authorized(pound)>>

         (4)   each party has no other reasons that will prevent this Agreement
               from becoming a binding and effective agreement between both
               parties after execution;

         (5)   the execution and performance of the obligations under this
               Agreement will not:
               (a) violate any provision of the business license, articles of
               association or other similar documents of its own;
               (b) violate any provision of the laws and regulations of PRC or
               other governmental or regulatory authority or approval;
               (c) violate or result in a breach of any contract or agreement to
               which the party is a party or by which it is bound.

      ARTICLE 4  EFFECTIVENESS

       This Agreement shall take effect after it is duly executed by the
authorized representatives of the parties hereto with seals affixed.

     ARTICLE 5  LIABILITY FOR BREACH OF AGREEMENT

       During the term of this Agreement, any violation of any provisions herein
by either party constitutes breach of contract and the breaching party shall
compensate the non-breaching party for the loss incurred as a result of this
breach.

      ARTICLE 6  FORCE MAJEURE

       The failure of either party to perform all or part of the obligations
under the Agreement due to force majeure shall not be deemed as breach of
contract. The affected party shall present promptly valid evidence of such force
majeure, and the failure of performance shall be settled through consultations
between the parties hereto.

                                       6
<PAGE>

     ARTICLE 7  GOVERNING LAW

       The conclusion, validity, interpretation, and performance of this
Agreement and the settlement of any disputes arising out of this Agreement shall
be governed by the laws and regulations of the People's Republic of China.

     ARTICLE 8  SETTLEMENT OF DISPUTE

          Any disputes under the Agreement shall be settled at first through
friendly consultation between the parties hereto. In case no settlement can be
reached through consultation, each party shall have the right to submit such
disputes to China International Economic and Trade Arbitration Commission in
Beijing. The Place of arbitration is Beijing. The arbitration award shall be
final and binding on both parties.

     ARTICLE 9  CONFIDENTIALITY

       9.1 The parties hereto agree to cause its employees or representatives
who has access to and knowledge of the terms and conditions of this Agreement to
keep strict confidentiality and not to disclose any of these terms and
conditions to any third party without the expressive requirements under law or
request from judicial authorities or governmental departments or the consent of
the other party, otherwise such party or personnel shall assume corresponding
legal liabilities.

       9.2 The obligations of confidentiality under Section 1 of this Article
shall survive after the termination of this Agreement.

     ARTICLE 10 SEVERABILITY

    10.1 Any provision of this Agreement that is invalid or unenforceable due to
the laws and regulations shall be ineffective without affecting in any way the
remaining provisions hereof.

     10.2. In the event of the foregoing paragraph, the parties hereto shall
prepare supplemental agreement as soon as possible to replace the invalid
provision through friendly consultation.

     ARTICLE 11 NON-WAIVER OF RIGHTS

     11.1 Any failure or delay by any party in exercising its rights under this
Agreement shall not constitute a waiver of such right.

     11.2 Any failure of any party to demand the other party to perform its
obligations under this Agreement shall not be deemed as a waiver of its right to
demand the other party to perform such obligations later.

                                       7
<PAGE>

     11.3 If a party excuses the non-performance by other party of certain
provisions under this Agreement, such excuse shall not be deemed to excuse any
future non-performance by the other party of the same provision.

     ARTICLE 12 NON-TRANSFERABILITY

       Unless otherwise specified under this Agreement, no party can assign or
delegate any of the rights or obligations under this Agreement to any third
party nor can it provide any guarantee to such third party or carry out other
similar activities without the prior written from the other party.

     ARTICLE 13 MISCELLANEOUS

     13.1 Any and all taxes arising from execution and performance of this
Agreement and during the course of the entrusted management and operation shall
be borne by the Parties respectively pursuant to the provisions of laws and
regulations.

     13.2 Any amendment entered into by the parties hereto after the
 effectiveness of this Agreement shall be an integral part of this Agreement and
 have the same legal effect as part of this Agreement. In case of any
 discrepancy between the amendment and this Agreement, the amendment shall
 prevail. In case of several amendments, the amendment with the latest date
 shall prevail.

     13.3 This Agreement is executed by Chinese and English in duplicate, and in
case of any conflict the Chinese version shall prevail. Each of the original
Chinese and English versions of this Agreement shall be executed in 4 copies.
Each party shall hold two original of each version, and the rest shall be used
for governmental registration or other necessary approval purposes.

     13.4 In witness hereof, the Agreement is duly executed by the parties
hereto on the date first written above.

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
     ----------------------------------------------------------------------

                                       8
<PAGE>

(Page of signature only)

PARTY A:

WANG RONGHUA(signature):

WANG YAN(signature):

WANG RONGFA(signature):

WANG RANGMEI(signature):

CAO XUEZHU(signature):

WANG YUXING(signature):

AN XIAORU(signature):

AO QUANFANG(signature):

TANG WENYING(signature):

QIN HONGXIA(signature):

WU GANG(signature):

WU WEIPING(signature):

BAI RONG(signature):

WU JIN(signature):

SHAANXI AOXING PHARMACEUTICAL CO., LTD

(official seal)

                                       9
<PAGE>

Authorized representative:
(signature)

PARTY B:

SHAANXI BIOSTAR BIOTECH LTD

 (official seal)

Authorized representative:
(signature)

                                       10

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