Document:

SECURITY
      AGREEMENT

     

    1. Identification.

    

    This
      Security Agreement (the “Agreement”), dated as of December 13, 2006, is entered
      into by and between China Biopharma, Inc., a Delaware corporation (“Parent”),
      China Quantum Communications Ltd., a Cayman Islands corporation, China Biopharma
      Ltd., a Cayman Islands corporation, and Guang Tong Wang Luo (China) Co. Ltd.,
      a
      corporation incorporated in the Peoples Republic of China (“Guarantor” and
      together with Parent, each a “Debtor” and collectively the “Debtors”), and
      Barbara R. Mittman, as collateral agent acting in the manner and to the extent
      described in the Collateral Agent Agreement defined below (the “Collateral
      Agent”), for the benefit of the parties identified on Schedule A hereto
      (collectively, the “Lenders”).

    

    2. Recitals.

    

    2.1 The
      Lenders have made, are making and will be making loans to Parent (the “Loans”).
      It is beneficial to each Debtor that the Loans were made and are being
      made.

    

    2.2 The
      Loans
      are and will be evidenced by certain convertible promissory notes (each a
“Note”) issued by Parent on or about the date of and after the date of this
      Agreement pursuant to a subscription agreement dated as of the date hereof
      (the
“Subscription Agreement”) to which Parent and each of the Lenders are parties.
      The Notes are further identified on Schedule A hereto and were and will be
      executed by Parent as “Borrower” or “Debtor” for the benefit of each Lender as
      the “Holder” or “Lender” thereof.

    

    2.3 In
      consideration of the Loans made and to be made by Lenders to Parent and for
      other good and valuable consideration, and as security for the performance
      by
      Parent of its obligations under the Notes and as security for the repayment
      of
      the Loans and all other sums due from Debtors to Lenders arising under the
      Transaction Documents (as defined in the Subscription Agreement), and any other
      agreement between or among them (collectively, the “Obligations”), each Debtor,
      for good and valuable consideration, receipt of which is acknowledged, has
      agreed to grant to the Collateral Agent, for the benefit of the Lenders, a
      security interest in the Collateral (as such term is hereinafter defined),
      on
      the terms and conditions hereinafter set forth. Obligations include all future
      advances by Lenders to Debtor made pursuant to the Subscription
      Agreement.

    

    2.4 The
      Lenders have appointed Barbara R. Mittman as Collateral Agent pursuant to that
      certain Collateral Agent Agreement dated at or about the date of this Agreement
      (“Collateral Agent Agreement”), among the Lenders and Collateral
      Agent.

    

    2.5 The
      following defined terms which are defined in the Uniform Commercial Code in
      effect in the State of New York on the date hereof are used herein as so
      defined: Accounts, Chattel Paper, Documents, Equipment, General Intangibles,
      Instruments, Inventory and Proceeds.

    

    3. Grant
      of General Security Interest in Collateral.

    

    3.1As
      security for the Obligations of Debtors, each Debtor hereby grants the
      Collateral Agent, for the benefit of the Lenders, a security interest in the
      Collateral.

    

    3.2“Collateral”
      shall mean all of the following property of Debtors:

    

    
      
        
        

      

      
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    (A) All
      now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of all Accounts, Goods, real or personal property, all present and
      future books and records relating to the foregoing and all products and Proceeds
      of the foregoing, and as set forth below:

    

    (i) All
      now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of all: Accounts, interests in goods represented by Accounts, returned,
      reclaimed or repossessed goods with respect thereto and rights as an unpaid
      vendor; contract rights; Chattel Paper; investment property; General Intangibles
      (including but not limited to, tax and duty claims and refunds, registered
      and
      unregistered patents, trademarks, service marks, certificates, copyrights trade
      names, applications for the foregoing, trade secrets, goodwill, processes,
      drawings, blueprints, customer lists, licenses, whether as licensor or licensee,
      chooses in action and other claims, and existing and future leasehold interests
      in equipment, real estate and fixtures); Documents; Instruments; letters of
      credit, bankers’ acceptances or guaranties; cash moneys, deposits; securities,
      bank accounts, deposit accounts, credits and other property now or hereafter
      owned or held in any capacity by Debtors, as well as agreements or property
      securing or relating to any of the items referred to above;

    

    (ii) Goods:
      All now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of goods, including, but not limited to:

    

    (a) All
      Inventory, wherever located, whether now owned or hereafter acquired, of
      whatever kind, nature or description, including all raw materials,
      work-in-process, finished goods, and materials to be used or consumed in
      Debtors’ business; finished goods, timber cut or to be cut, oil, gas,
      hydrocarbons, and minerals extracted or to be extracted, and all names or marks
      affixed to or to be affixed thereto for purposes of selling same by the seller,
      manufacturer, lessor or licensor thereof and all Inventory which may be returned
      to any Debtor by its customers or repossessed by any Debtor and all of Debtors’
right, title and interest in and to the foregoing (including all of a Debtor’s
      rights as a seller of goods);

    

    (b) All
      Equipment and fixtures, wherever located, whether now owned or hereafter
      acquired, including, without limitation, all machinery, furniture and fixtures,
      and any and all additions, substitutions, replacements (including spare parts),
      and accessions thereof and thereto (including, but not limited to Debtors’
rights to acquire any of the foregoing, whether by exercise of a purchase option
      or otherwise);

    

    (iii) Property:
      All now
      owned and hereafter acquired right, title and interests of Debtors in, to and
      in
      respect of any other personal property in or upon which a Debtor has or may
      hereafter have a security interest, lien or right of setoff; 

    

    (iv) Books
      and Records:
      All
      present and future books and records relating to any of the above including,
      without limitation, all computer programs, printed output and computer readable
      data in the possession or control of the Debtors, any computer service bureau
      or
      other third party; and

    

    (v) Products
      and Proceeds:
      All
      products and Proceeds of the foregoing in whatever form and wherever located,
      including, without limitation, all insurance proceeds and all claims against
      third parties for loss or destruction of or damage to any of the
      foregoing.

    

    (B) All
      now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of the following:

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (i) the
      shares of stock, partnership interests, member interests or other equity
      interests at any time and from time to time acquired by Debtors of any and
      all
      entities now or hereafter existing, (such entities, being hereinafter referred
      to collectively as the “Pledged Issuers” and individually as a “Pledged
      Issuer”), including but not limited to 100% of the equity ownership of
      Guarantor, the certificates representing such shares, partnership interests,
      member interests or other interests all options and other rights, contractual
      or
      otherwise, in respect thereof and all dividends, distributions, cash,
      instruments, investment property and other property from time to time received,
      receivable or otherwise distributed in respect of or in exchange for any or
      all
      of such shares, partnership interests, member interests or other
      interests;

     

    (ii) all
      additional shares of stock, partnership interests, member interests or other
      equity interests from time to time acquired by Debtors, of any Pledged Issuer,
      the certificates representing such additional shares, all options and other
      rights, contractual or otherwise, in respect thereof and all dividends,
      distributions, cash, instruments, investment property and other property from
      time to time received, receivable or otherwise distributed in respect of or
      in
      exchange for any or all of such additional shares, interests or equity; and
      

    

    (iii) all
      security entitlements of Debtors in, and all Proceeds of any and all of the
      foregoing in each case, whether now owned or hereafter acquired by a Debtor
      and
      howsoever its interest therein may arise or appear (whether by ownership,
      security interest, lien, claim or otherwise).

    

    3.3 The
      Collateral Agent is hereby specifically authorized, after the Maturity Date
      (defined in the Notes) accelerated or otherwise, or after an Event of Default
      (as defined herein) and the expiration of any applicable cure period, to
      transfer any Collateral into the name of the Collateral Agent and to take any
      and all action deemed advisable to the Collateral Agent to remove any transfer
      restrictions affecting the Collateral.

    

    4. Perfection
      of Security Interest.

    

    4.1 Each
      Debtor shall prepare, execute and deliver to the Collateral Agent UCC-1
      Financing Statements. The Collateral Agent is instructed to prepare and file
      at
      each Debtor’s cost and expense, financing statements in such jurisdictions
      deemed advisable to the Collateral Agent, including but not limited to the
      State
      of Delaware. The Financing Statements are deemed to have been filed for the
      benefit of the Collateral Agent and Lenders identified on Schedule A
      hereto.

    

    4.2 Upon
      Collateral Agent’s demand after the occurrence of an Event of Default, Parent
      shall deliver to Collateral Agent stock certificates representing all of the
      shares of outstanding capital stock of the Guarantor (the “Securities”). All
      such certificates shall be held by or on behalf of Collateral Agent pursuant
      hereto and shall be delivered in suitable form for transfer by delivery, or
      shall be accompanied by duly executed instruments of transfer or assignment
      or
      undated stock powers executed in blank, all in form and substance satisfactory
      to Collateral Agent. 

     

    4.3 
      All
      other certificates and instruments constituting Collateral from time to time
      required to be pledged to Collateral Agent pursuant to the terms hereof (the
      “Additional Collateral”) shall be delivered to Collateral Agent promptly upon
      receipt thereof by or on behalf of Debtors. All such certificates and
      instruments shall be held by or on behalf of Collateral Agent pursuant hereto
      and shall be delivered in suitable form for transfer by delivery, or shall
      be
      accompanied by duly executed instruments of transfer or assignment or undated
      stock powers executed in blank, all in form and substance reasonably
      satisfactory to Collateral Agent. If any Collateral consists of uncertificated
      securities, unless the immediately following sentence is applicable thereto,
      Debtors shall cause Collateral Agent (or its custodian, nominee or other
      designee) to become the registered holder thereof, or cause each issuer of
      such
      securities to agree that it will comply with instructions originated by
      Collateral Agent with respect to such securities without further consent by
      Debtors. If any Collateral consists of security entitlements, Debtors shall
      transfer such security entitlements to Collateral Agent (or its custodian,
      nominee or other designee) or cause the applicable securities intermediary
      to
      agree that it will comply with entitlement orders by Collateral Agent without
      further consent by Debtors. 

     

    
      
        
        

      

      
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    4.4 Within
      five (5) days after the receipt by a Debtor of any Additional Collateral, a
      Pledge Amendment, duly executed by such Debtor, in substantially the form of
      Annex I hereto (a “Pledge Amendment”), shall be delivered to Collateral Agent in
      respect of the Additional Collateral to be pledged pursuant to this Agreement.
      Each Debtor hereby authorizes Collateral Agent to attach each Pledge Amendment
      to this Agreement and agrees that all certificates or instruments listed on
      any
      Pledge Amendment delivered to Collateral Agent shall for all purposes hereunder
      constitute Collateral.

     

    4.5 If
      Debtor
      shall receive, by virtue of Debtor being or having been an owner of any
      Collateral, any (i) stock certificate (including, without limitation, any
      certificate representing a stock dividend or distribution in connection with
      any
      increase or reduction of capital, reclassification, merger, consolidation,
      sale
      of assets, combination of shares, stock split, spin-off or split-off),
      promissory note or other instrument, (ii) option or right, whether as an
      addition to, substitution for, or in exchange for, any Collateral, or otherwise,
      (iii) dividends payable in cash (except such dividends permitted to be retained
      by Debtor pursuant to Section 5.1 hereof) or in securities or other property
      or
      (iv) dividends or other distributions in connection with a partial or total
      liquidation or dissolution or in connection with a reduction of capital, capital
      surplus or paid-in surplus, Debtor shall receive such stock certificate,
      promissory note, instrument, option, right, payment or distribution in trust
      for
      the benefit of Collateral Agent, shall segregate it from Debtor’s other property
      and shall deliver it forthwith to Collateral Agent, in the exact form received,
      with any necessary endorsement and/or appropriate stock powers duly executed
      in
      blank, to be held by Collateral Agent as Collateral and as further collateral
      security for the Obligations.

    

    5. Distribution.

    

    5.1 So
      long
      as an Event of Default does not exist, Debtors shall be entitled to exercise
      all
      voting power pertaining to any of the Collateral, provided such exercise is
      not
      contrary to the interests of the Lenders and does not impair the Collateral.
      Notwithstanding the provisions of Section 4.5 hereof, as long as an Event of
      Default has not occurred and does not exist, Debtors shall be entitled to
      receive and retain all dividends payable in cash.

    

    5.2. At
      any
      time an Event of Default exists or has occurred, all rights of Debtors, upon
      notice given by Collateral Agent, to exercise the voting power and receive
      payments, which it would otherwise be entitled to pursuant to Section 5.1,
      shall
      cease and all such rights shall thereupon become vested in Collateral Agent,
      which shall thereupon have the sole right to exercise such voting power and
      receive such payments.

    

    5.3 All
      dividends, distributions, interest and other payments which are received by
      Debtors contrary to the provisions of Section 5.2 shall be received in trust
      for
      the benefit of Collateral Agent as security and Collateral for payment of the
      Obligations shall be segregated from other funds of Debtors, and shall be
      forthwith paid over to Collateral Agent as Collateral in the exact form received
      with any necessary endorsement and/or appropriate stock powers duly executed
      in
      blank, to be held by Collateral Agent as Collateral and as further collateral
      security for the Obligations.

    

    
      
        
        

      

      
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    6. Further
      Action By Debtors; Covenants and Warranties.

    

    6.1 Collateral
      Agent at all times shall have a perfected security interest in the Collateral.
      Each Debtor represents that it has and will continue to have full title to
      the
      Collateral free from any liens, leases, encumbrances, judgments or other claims.
      Collateral Agent’s security interest in the Collateral constitutes and will
      continue to constitute a first, prior and indefeasible security interest in
      favor of Collateral Agent except as described on Schedule 6.1 hereto. Each
      Debtor will do all acts and things, and will execute and file all instruments
      (including, but not limited to, security agreements, financing statements,
      continuation statements, etc.) reasonably requested by Collateral Agent to
      establish, maintain and continue the perfected security interest of Collateral
      Agent in the Perfected Collateral, and will promptly on demand, pay all costs
      and expenses of filing and recording, including the costs of any searches
      reasonably deemed necessary by Collateral Agent from time to time to establish
      and determine the validity and the continuing priority of the security interest
      of Collateral Agent, and also pay all other claims and charges that, in the
      opinion of Collateral Agent, exercised in good faith, are reasonably likely
      to
      materially prejudice, imperil or otherwise affect the Collateral or Collateral
      Agent’s or Lenders’ security interests therein.

    

    6.2 Other
      than in the ordinary course of business, for fair value and in cash, and except
      for Collateral which is substituted by assets of identical or greater value
      (with the consent of the Collateral Agent) or which is inconsequential in value,
      each Debtor will not sell, transfer, assign or pledge those items of Collateral
      (or allow any such items to be sold, transferred, assigned or pledged), without
      the prior written consent of Collateral Agent other than a transfer of the
      Collateral to a wholly-owned United States formed and located wholly-owned
      subsidiary or to another Debtor on prior notice to Collateral Agent, and
      provided the Collateral remains subject to the security interest herein
      described. Although Proceeds of Collateral are covered by this Agreement, this
      shall not be construed to mean that Collateral Agent consents to any sale of
      the
      Collateral, except as provided herein. Sales of Collateral in the ordinary
      course of business shall be free of the security interest of Lenders and
      Collateral Agent and Lenders and Collateral Agent shall promptly execute such
      documents (including without limitation releases and termination statements)
      as
      may be required by Debtors to evidence or effectuate the same.

    

    6.3 Each
      Debtor will, at all reasonable times during regular business hours and upon
      reasonable notice, allow Collateral Agent or its representatives free and
      complete access to the Collateral and all of such Debtor’s records which in any
      way relate to the Collateral, for such inspection and examination as Collateral
      Agent reasonably deems necessary.

    

    6.4 Each
      Debtor, at its sole cost and expense, will protect and defend this Security
      Agreement, all of the rights of Collateral Agent and Lenders hereunder, and
      the
      Collateral against the claims and demands of all other persons.

    

    6.5 Debtors
      will promptly notify Collateral Agent of any levy, distraint or other seizure
      by
      legal process or otherwise of any part of the Collateral, and of any threatened
      or filed claims or proceedings that are reasonably likely to affect or impair
      any of the rights of Collateral Agent under this Security Agreement in any
      material respect.

    

    6.6 Each
      Debtor, at its own expense, will obtain and maintain in force insurance policies
      covering losses or damage to those items of Collateral which constitute physical
      personal property, which insurance shall be of the types customarily insured
      against by companies in the same or similar business, similarly situated, in
      such amounts (with such deductible amounts) as is customary for such companies
      under the same or similar circumstances, similarly situated. Debtors shall
      make
      the Collateral Agent a loss payee thereon to the extent of its interest in
      the
      Collateral. Collateral Agent is hereby irrevocably (until the Obligations are
      paid in full) appointed each Debtor’s attorney-in-fact to endorse any check or
      draft that may be payable to such Debtor so that Collateral Agent may collect
      the proceeds payable for any loss under such insurance. The proceeds of such
      insurance, less any costs and expenses incurred or paid by Collateral Agent
      in
      the collection thereof, shall be applied either toward the cost of the repair
      or
      replacement of the items damaged or destroyed, or on account of any sums secured
      hereby, whether or not then due or payable.

    

    
      
        
        

      

      
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    6.7 Collateral
      Agent may, at its option, and without any obligation to do so, pay, perform
      and
      discharge any and all amounts, costs, expenses and liabilities herein agreed
      to
      be paid or performed by Debtor.  Upon
      Debtor’s
      failure
      to do
      so,
      all
      amounts expended by Collateral Agent in so doing shall become part of the
      Obligations secured hereby, and shall be immediately due and payable by Debtor
      to Collateral Agent upon demand
      and
      shall
      bear interest at the lesser of 15% per annum or the highest legal amount from
      the dates of such expenditures until paid.

    

    6.8 Upon
      the
      request of Collateral Agent, Debtors will furnish to Collateral Agent within
      five (5) business days thereafter, or to any proposed assignee of this Security
      Agreement, a written statement in form reasonably satisfactory to Collateral
      Agent, duly acknowledged, certifying the amount of the principal and interest
      and any other sum then owing under the Obligations, whether to its knowledge
      any
      claims, offsets or defenses exist against the Obligations or against this
      Security Agreement, or any of the terms and provisions of any other agreement
      of
      Debtors securing the Obligations. In connection with any assignment by
      Collateral Agent of this Security Agreement, each Debtor hereby agrees to cause
      the insurance policies required hereby to be carried by such Debtor, if any,
      to
      be endorsed in form satisfactory to Collateral Agent or to such assignee, with
      loss payable clauses in favor of such assignee, and to cause such endorsements
      to be delivered to Collateral Agent within ten (10) calendar days after request
      therefor by Collateral Agent.

    

    6.9 Each
      Debtor will, at its own expense, make, execute, endorse, acknowledge, file
      and/or deliver to the Collateral Agent from time to time such vouchers,
      invoices, schedules, confirmatory assignments, conveyances, financing
      statements, transfer endorsements, powers of attorney, certificates, reports
      and
      other reasonable assurances or instruments and take further steps relating
      to
      the Collateral and other property or rights covered by the security interest
      hereby granted, as the Collateral Agent may reasonably require to perfect its
      security interest hereunder.

    

    6.10 Debtors
      represent and warrant that they are the true and lawful exclusive owners of
      the
      Collateral, free and clear of any liens and encumbrances.

    

    6.11 Each
      Debtor hereby agrees not to divest itself of any right under the Collateral
      except as permitted herein absent prior written approval of the Collateral
      Agent, except to a subsidiary organized and located in the United States on
      prior notice to Collateral Agent provided the Collateral remains subject to
      the
      security interest herein described.

     

    6.12 Each
      Debtor shall cause each Subsidiary of such Debtor in existence on the date
      hereof and each Subsidiary not in existence on the date hereof to execute and
      deliver to Collateral Agent promptly and in any event within 10 days after
      the
      formation, acquisition or change in status thereof (A) a guaranty guaranteeing
      the Obligations and (B) if requested by Collateral Agent, a security and pledge
      agreement substantially in the form of this Agreement together with (x)
      certificates evidencing all of the capital stock of each Subsidiary of and
      any
      entity owned by such Subsidiary, (y) undated stock powers executed in blank
      with
      signatures guaranteed, and (z) such opinion of counsel and such approving
      certificate of such Subsidiary as Collateral Agent may reasonably request in
      respect of complying with any legend on any such certificate or any other matter
      relating to such shares and (C) such other agreements, instruments, approvals,
      legal opinions or other documents reasonably requested by Collateral Agent
      in
      order to create, perfect, establish the first priority of or otherwise protect
      any lien purported to be covered by any such pledge and security agreement
      or
      otherwise to effect the intent that all property and assets of such Subsidiary
      shall become Collateral for the Obligations. For purposes of this Agreement,
      “Subsidiary”
means,
      with respect to any entity at any date, any corporation, limited or general
      partnership, limited liability company, trust, estate, association, joint
      venture or other business entity) of which more than 50% of (A) the
      outstanding capital stock having (in the absence of contingencies) ordinary
      voting power to elect a majority of the board of directors or other managing
      body of such entity, (B) in the case of a partnership or limited liability
      company, the interest in the capital or profits of such partnership or limited
      liability company or (C) in the case of a trust, estate, association, joint
      venture or other entity, the beneficial interest in such trust, estate,
      association or other entity business is, at the time of determination, owned
      or
      controlled directly or indirectly through one or more intermediaries, by such
      entity. Annex
      I annexed hereto contains a list of all Subsidiaries of the Debtors as of the
      date of this Agreement.

    

    
      
        
        

      

      
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    7. Power
      of Attorney.

    

    At
      any
      time an Event of Default exists or has occurred, each Debtor hereby irrevocably
      constitutes and appoints the Collateral Agent as the true and lawful attorney
      of
      such Debtor, with full power of substitution, in the place and stead of such
      Debtor and in the name of such Debtor or otherwise, at any time or times, in
      the
      discretion of the Collateral Agent, to take any action and to execute any
      instrument or document which the Collateral Agent may deem necessary or
      advisable to accomplish the purposes of this Agreement. This power of attorney
      is coupled with an interest and is irrevocable until the Obligations are
      satisfied.

    

    8. Performance
      By The Collateral Agent.

    

    If
      a
      Debtor fails to perform any material covenant, agreement, duty or obligation
      of
      such Debtor under this Agreement, the Collateral Agent may, after any applicable
      cure period, at any time or times in its discretion, take action to effect
      performance of such obligation. All reasonable expenses of the Collateral Agent
      incurred in connection with the foregoing authorization shall be payable by
      Debtors as provided in Paragraph 12.1 hereof. No discretionary right, remedy
      or
      power granted to the Collateral Agent under any part of this Agreement shall
      be
      deemed to impose any obligation whatsoever on the Collateral Agent with respect
      thereto, such rights, remedies and powers being solely for the protection of
      the
      Collateral Agent.

    

    9. Event
      of Default.

    

    An
      event
      of default (“Event of Default”) shall be deemed to have occurred hereunder upon
      the occurrence of any event of default as defined and described in this
      Agreement, in the Notes, the Subscription Agreement, and any other agreement
      to
      which Debtor and a lender are parties. Upon and after any Event of Default,
      after the applicable cure period, if any, any or all of the Obligations shall
      become immediately due and payable at the option of the Collateral Agent, for
      the benefit of the Lenders, and the Collateral Agent may dispose of Collateral
      as provided below. A
      default
      by Debtor of any of its material obligations pursuant to this Agreement and
      any
      of the Transaction Documents (as defined in the Subscription Agreement) shall
      be
      an Event of Default hereunder and an “Event of Default” as defined in the Notes,
      and Subscription Agreement.

    

    10. Disposition
      of Collateral.

    

    Upon
      and
      after any Event of Default which is then continuing,

    

    
      
        
        

      

      
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    10.1 The
      Collateral Agent may exercise its rights with respect to each and every
      component of the Collateral, without regard to the existence of any other
      security or source of payment for the Obligations. In addition to other rights
      and remedies provided for herein or otherwise available to it, the Collateral
      Agent shall have all of the rights and remedies of a lender on default under
      the
      Uniform Commercial Code then in effect in the State of New York.

    

    10.2 If
      any
      notice to Debtors of the sale or other disposition of Collateral is required
      by
      then applicable law, five business (5) days prior written notice (which Debtors
      agree is reasonable notice within the meaning of Section 9.612(a) of the Uniform
      Commercial Code) shall be given to Debtors of the time and place of any sale
      of
      Collateral which Debtors hereby agree may be by private sale. The rights granted
      in this Section are in addition to any and all rights available to Collateral
      Agent under the Uniform Commercial Code.

    

    10.3 The
      Collateral Agent is authorized, at any such sale, if the Collateral Agent deems
      it advisable to do so, in order to comply with any applicable securities laws,
      to restrict the prospective bidders or purchasers to persons who will represent
      and agree, among other things, that they are purchasing the Collateral for
      their
      own account for investment, and not with a view to the distribution or resale
      thereof, or otherwise to restrict such sale in such other manner as the
      Collateral Agent deems advisable to ensure such compliance. Sales made subject
      to such restrictions shall be deemed to have been made in a commercially
      reasonable manner.

    

    10.4 All
      proceeds received by the Collateral Agent for the benefit of the Lenders in
      respect of any sale, collection or other enforcement or disposition of
      Collateral, shall be applied (after deduction of any amounts payable to the
      Collateral Agent pursuant to Paragraph 12.1 hereof) against the Obligations
      pro
      rata among the Lenders in proportion to their interests in the Obligations.
      Upon
      payment in full of all Obligations, Debtors shall be entitled to the return
      of
      all Collateral, including cash, which has not been used or applied toward the
      payment of Obligations or used or applied to any and all costs or expenses
      of
      the Collateral Agent incurred in connection with the liquidation of the
      Collateral (unless another person is legally entitled thereto). Any assignment
      of Collateral by the Collateral Agent to Debtors shall be without representation
      or warranty of any nature whatsoever and wholly without recourse. To the extent
      allowed by law, each Lender may purchase the Collateral and pay for such
      purchase by offsetting up to such Lender’s pro rata portion of the purchase
      price with sums owed to such Lender by Debtors arising under the Obligations
      or
      any other source.

    

    11. Waiver
      of Automatic Stay.
      Debtor
      acknowledges and agrees that should a proceeding under any bankruptcy or
      insolvency law be commenced by or against Debtor, or if any of the Collateral
      should become the subject of any bankruptcy or insolvency proceeding, then
      the
      Collateral Agent may be entitled to, among other relief to which the Collateral
      Agent or Lenders may be entitled under the Note, Subscription Agreement and
      any
      other agreement to which the Debtor, Lenders or Collateral Agent are parties,
      (collectively “Loan Documents”) and/or applicable law, an order from the court
      granting immediate relief from the automatic stay pursuant to 11 U.S.C. Section
      362 to permit the Collateral Agent to exercise all of its rights and remedies
      pursuant to the Loan Documents and/or applicable law. Debtor EXPRESSLY WAIVES
      THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE,
      Debtor EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362
      NOR
      ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING,
      WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION,
      REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE COLLATERAL AGENT TO ENFORCE
      ANY
      OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW.
      Debtor hereby consents to any motion for relief from stay which may be filed
      by
      the Collateral Agent in any bankruptcy or insolvency proceeding initiated by
      or
      against Debtor, and further agrees not to file any opposition to any motion
      for
      relief from stay filed by the Collateral Agent. Debtor represents, acknowledges
      and agrees that this provision is a specific and material aspect of this
      Agreement, and that the Collateral Agent would not agree to the terms of this
      Agreement if this waiver were not a part of this Agreement. Debtor further
      represents, acknowledges and agrees that this waiver is knowingly, intelligently
      and voluntarily made, that neither the Collateral Agent nor any person acting
      on
      behalf of the Collateral Agent has made any representations to induce this
      waiver, that Debtor has been represented (or has had the opportunity to be
      represented) in the signing of this Agreement and in the making of this waiver
      by independent legal counsel selected by Debtor and that Debtor has had the
      opportunity to discuss this waiver with counsel. Debtor further agrees that
      any
      bankruptcy or insolvency proceeding initiated by Debtor will only be brought
      in
      the Federal Court within the Southern District of New York.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    12. Miscellaneous.

    

    12.1 Expenses.
      Debtors
      shall pay to the Collateral Agent, on demand, the amount of any and all
      reasonable expenses, including, without limitation, attorneys’ fees, legal
      expenses and brokers’ fees, which the Collateral Agent may incur in connection
      with (a) sale, collection or other enforcement or disposition of Collateral;
      (b)
      exercise or enforcement of any the rights, remedies or powers of the Collateral
      Agent hereunder or with respect to any or all of the Obligations upon breach
      or
      threatened breach; or (c) failure by Debtors to perform and observe any
      agreements of Debtors contained herein which are performed by the Collateral
      Agent.

    

    12.2 Waivers,
      Amendment and Remedies.
      No
      course of dealing by the Collateral Agent and no failure by the Collateral
      Agent
      to exercise, or delay by the Collateral Agent in exercising, any right, remedy
      or power hereunder shall operate as a waiver thereof, and no single or partial
      exercise thereof shall preclude any other or further exercise thereof or the
      exercise of any other right, remedy or power of the Collateral Agent. No
      amendment, modification or waiver of any provision of this Agreement and no
      consent to any departure by Debtors therefrom, shall, in any event, be effective
      unless contained in a writing signed by the Collateral Agent, and then such
      waiver or consent shall be effective only in the specific instance and for
      the
      specific purpose for which given. The rights, remedies and powers of the
      Collateral Agent, not only hereunder, but also under any instruments and
      agreements evidencing or securing the Obligations and under applicable law
      are
      cumulative, and may be exercised by the Collateral Agent from time to time
      in
      such order as the Collateral Agent may elect.

    

    12.3 Notices.
      All
      notices or other communications given or made hereunder shall be in writing
      and
      shall be personally delivered or deemed delivered the first business day after
      being faxed (provided that a copy is delivered by first class mail) to the
      party
      to receive the same at its address set forth below or to such other address
      as
      either party shall hereafter give to the other by notice duly made under this
      Section:

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    To
      Debtors:                                          China
      Biopharma, Inc.

    31
      Airpark Road

    Princeton,
      New Jersey 08540

    Attn:
      Peter Wang, CEO

    Fax:
      (904) 399-9151

    

    With
      a
      copy by telecopier only to:

    

    Loeb
      & Loeb LLP

    345
      Park
      Avenue

    New
      York,
      New York 10154

    Fax
      (212)
      407-4990

    

    To
      Lenders:                                         To
      the
      addresses and telecopier numbers set forth

    on
      Schedule A 

    

    

    To
      the
      Collateral
      Agent:                    Barbara
      R. Mittman

    551
      Fifth
      Avenue, Suite 1601

    New
      York,
      New York 10176

    Fax:
      (212) 697-3575

    

    

    If
      to
      Debtor, Lender or Collateral Agent,

    with
      a
      copy by telecopier only to:

     

    Grushko
      & Mittman, P.C.

    551
      Fifth
      Avenue, Suite 1601

    New
      York,
      New York 10176

    Fax:
      (212) 697-3575

    

    Any
      party
      may change its address by written notice in accordance with this
      paragraph.

    

    12.4 Term;
      Binding Effect.
      This
      Agreement shall (a) remain in full force and effect until payment and
      satisfaction in full of all of the Obligations; (b) be binding upon each Debtor,
      and its successors and permitted assigns; and (c) inure to the benefit of the
      Collateral Agent, for the benefit of the Lenders and their respective successors
      and assigns. 

    

    12.5 Captions.
      The
      captions of Paragraphs, Articles and Sections in this Agreement have been
      included for convenience of reference only, and shall not define or limit the
      provisions hereof and have no legal or other significance
      whatsoever.

    

    12.6 Governing
      Law; Venue; Severability.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without
      regard to conflicts
      of laws principles
      that
      would result in the application of the substantive laws of another
      jurisdiction,
      except
      to the extent that the perfection of the security interest granted hereby in
      respect of any item of Collateral may be governed by the law of another
      jurisdiction. Any legal action or proceeding against a Debtor with respect
      to
      this Agreement may be brought in the courts in the State of New York or of
      the
      United
      States for the Southern District of New York, and, by execution and delivery
      of
      this Agreement, each Debtor hereby irrevocably accepts for itself and in respect
      of its property, generally and unconditionally, the jurisdiction of the
      aforesaid courts. Each Debtor hereby irrevocably waives any objection which
      they
      may now or hereafter have to the laying of venue of any of the aforesaid actions
      or proceedings arising out of or in connection with this Agreement brought
      in
      the aforesaid courts and hereby further irrevocably waives and agrees not to
      plead or claim in any such court that any such action or proceeding brought
      in
      any such court has been brought in an inconvenient forum. If any provision
      of
      this Agreement, or the application thereof to any person or circumstance, is
      held invalid, such invalidity shall not affect any other provisions which can be
      given effect without the invalid provision or application, and to this end
      the
      provisions hereof shall be severable and the remaining, valid provisions shall
      remain of full force and effect.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    12.7 Entire
      Agreement.
      This
      Agreement contains the entire agreement of the parties and supersedes all other
      agreements and understandings, oral or written, with respect to the matters
      contained herein.

    

    12.8 Counterparts/Execution.
      This
      Agreement may be executed in any number of counterparts and by the different
      signatories hereto on separate counterparts, each of which, when so executed,
      shall be deemed an original, but all such counterparts shall constitute but
      one
      and the same instrument. This Agreement may be executed by facsimile signature
      and delivered by facsimile transmission.

    

    13. Intercreditor
      Terms.
      As
      between the Lenders, any distribution under paragraph 10.4 shall be made
      proportionately based upon the remaining principal amount (plus accrued and
      unpaid interest) to each as to the total amount then owed to the Lenders as
      a
      whole. The rights of each Lender hereunder are pari
      passu
      to the
      rights of the other Lenders hereunder. Any recovery hereunder shall be shared
      ratably among the Lenders according to the then remaining principal amount
      owed
      to each (plus accrued and unpaid interest) as to the total amount then owed
      to
      the Lenders as a whole. 

    

    14. Termination;
      Release.
      When
      the Obligations have been indefeasibly paid and performed in full or
      all
      outstanding Notes have been converted to common stock of the Parent pursuant
      to
      the terms of the Notes [and the Subscription Agreement],
      this
      Agreement shall terminated, and the Collateral Agent, at the request and sole
      expense of the Debtors, will execute and deliver to the Debtors the proper
      instruments (including UCC termination statements) acknowledging the termination
      of the Security Agreement, and duly assign, transfer and deliver to the Debtors,
      without recourse, representation or warranty of any kind whatsoever, such of
      the
      Collateral, including, without limitation, Securities and any Additional
      Collateral, as may be in the possession of the Collateral Agent.

    

    15. Collateral
      Agent.

    

    15.1 Collateral
      Agent Powers.
      The
      powers conferred on the Collateral Agent hereunder are solely to protect its
      interest (on behalf of the Lenders) in the Collateral and shall not impose
      any
      duty on it to exercise any such powers.

    

    15.2 Reasonable
      Care.
      The
      Collateral Agent is required to exercise reasonable care in the custody and
      preservation of any Collateral in its possession; provided, however, that the
      Collateral Agent shall be deemed to have exercised reasonable care in the
      custody and preservation of any of the Collateral if it takes such action for
      that purposes as any owner thereof reasonably requests in writing at times
      other
      than upon the occurrence and during the continuance of any Event of Default,
      but
      failure of the Collateral Agent, to comply with any such request at any time
      shall not in itself be deemed a failure to exercise reasonable
      care.

    

    

    [THIS
      SPACE INTENTIONALLY LEFT BLANK]

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

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

    

    

      
        	
                “DEBTOR”

              	
                “THE
                  COLLATERAL AGENT”

              
	
                CHINA
                  BIOPHARMA, INC.

              	
                BARBARA
                  R. MITTMAN

              
	
                a
                  Delaware corporation

              	 
	 	 
	
                By:
                  _____________________________________

              	
                _____________________________________

              
	 	 
	
                Its:
                  _____________________________________

              	 
	 	 
	 	 
	
                “SUBSIDIARY”

              	
                “SUBSIDIARY”

              
	
                CHINA
                  QUANTUM COMMUNICATIONS LTD.

              	
                CHINA
                  BIOPHARMA LTD.

              
	
                a
                  Cayman Islands corporation

              	
                a
                  Cayman Islands corporation

              
	 	 
	
                By:
                  _____________________________________

              	
                By:
                  __________________________________

              
	 	 
	
                Its:
                  _____________________________________

              	
                Its:
                  ___________________________________

              
	 	 
	 	 
	
                “SUBSIDIARY”

              	 
	
                GUANG
                  TONG WANG LUO (CHINA) CO. LTD.

              	 
	
                a
                  China corporation

              	 
	 	 
	 	 
	
                By:
                  _____________________________________

              	 
	 	 
	
                Its:
                  _____________________________________

              	 
	 	 
	 	 
	
                APPROVED
                  BY “LENDERS”:

              
	 	 
	
                Name
                  of Lender (Print):

              	
                Name
                  of Lender (Print):

              
	 	 
	
                ________________________________________

              	
                ______________________________________

              
	 	 
	 	 
	
                By:_____________________________________

              	
                By:____________________________________

              
	 	 
	
                Print
                  Name of Signator:_____________________

              	
                Print
                  Name of
                  Signator:____________________

              

      

    

    

    This
      Security Agreement may be signed by facsimile signature
      and

    delivered
      by confirmed facsimile transmission.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A TO SECURITY AGREEMENT

    

    
      	
              LENDERS

            	 	
              NOTE
                PRINCIPAL

            	 
	
              ANTHONY
                HELLER

              c/o
                Plazacorp Investments Limited

              10
                Wanless Ave.-Suite 201

              Toronto,
                Ontario M4N 1V6

              Fax:
                (416) 481-8000

            	 	
              $

            	
              150,000.00

            	 
	
              BRIO
                CAPITAL L.P.

              401
                E. 34th
                St.

              Suite
                s-33c

              New
                York, NY 10016

              Fax:
                (646) 390-2158

            	 	
              $

            	
              150,000.00

            	 
	
              CHESTNUT
                RIDGE PARTNERS, L.P.

              50
                Tice Boulevard

              Woodcliff
                Lake, NJ 07677

              Fax:
                (201) 802-9450

            	 	
              $

            	
              250,000.00

            	 
	
              MARVIN
                MERMELSTEIN

              6500
                N. Hamlin

              Lincolnwood,
                IL 60712

              Fax:
                (847) 679-7462

            	 	
              $

            	
              250,000.00

            	 
	
              MONARCH
                CAPITAL FUND LTD.

              Harbour
                House, 2nd
                Fl.

              Waterfront
                Drive, 

              Road
                Town, Tortola, BVI

              Fax:
                (284) 494-4770

            	 	
              $

            	
              250,000.00

            	 
	
              PROFESSIONAL
                OFFSHORE OPPORTUNITY FUND, LTD.

              1400
                Old Country Road, Suite 206

              Westbury,
                NY 11590

              Fax:
                (516) 228-8083

            	 	
              $

            	
              300,000.00

            	 
	
              NITE
                CAPITAL LP

              100
                East Cook Avenue, Suite 201

              Libertyville,
                IL 60048

              Fax:
                (847) 968-2648

            	 	
              $

            	
              250,000.00

            	 
	
              VISION
                OPPORTUNITY MASTER FUND, LTD.

              20
                W. 55th
                Street, 5th
                Fl.

              New
                York, NY 10019

              Fax:
                (212) 867-1416

            	 	
              $

            	
              700,000.00

            	 
	
              FIRST
                MIRAGE, INC.

              333
                Sandy Springs Circle, Suite 230

              Atlanta,
                GA 30328

              Fax:
                (404) 257-9125

            	 	
              $

            	
              125,000.00

            	 
	
              GENERATION
                CAPITAL ASSOCIATES

              1985
                Riverside Trace

              Atlanta,
                GA 30328

              Fax:
                (404) 257-9125

            	 	
              $

            	
              125,000.00

            	 
	
              DOUBLE
                U MASTER FUND L.P.

              P.
                O. Box 972

              Harbour
                House

              Roadtown,
                Tortola, BVI

              Fax:
                (284) 494-4770

            	 	
              $

            	
              100,000.00

            	 
	
              CENTURION
                MICROCAP, LP

              3014
                Avenue L

              Brooklyn,
                NY 11210

              Fax:
                (718) 228-9570

            	 	
              $

            	
              250,000.00

            	 
	
              BURSTEIN
                & LINDSAY SEC. CORP.

              140
                Birmensdorfer Str.

              CH8003

              Zurich,
                Switzerland

              Fax:
                (411) 451-0946

            	 	
              $

            	
              100,000.00

            	 
	
              TOTALS

            	 	
              $

            	
              3,000,000.00

            	 

    

    

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    ANNEX
      I

     

    TO

     

    SECURITY
      AGREEMENT

     

    PLEDGE
      AMENDMENT

     

    This
      Pledge Amendment, dated _________ __ 200_, is delivered pursuant to Section
      4.3
      of the Security Agreement referred to below. The undersigned hereby agrees
      that
      this Pledge Amendment may be attached to the Security Agreement, dated December
      13, 2006, as it may heretofore have been or hereafter may be amended, restated,
      supplemented or otherwise modified from time to time and that the shares listed
      on this Pledge Amendment shall be hereby pledged and assigned to Collateral
      Agent and become part of the Collateral referred to in such Security Agreement
      and shall secure all of the Obligations referred to in such Security
      Agreement.

     

    

    

    
      	
              Name
                of Issuer

            	
              Number

              of
                Shares

            	
              Class

            	
              Certificate

              Number(s)

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

    

    

     

    
      	 	 	 
	 	CHINA
              BIOPHARMA, INC.
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

            
	 	
            

    

     

     

     

    
      
        
        

      

      
        14FORM
      OF GUARANTY
      

     

    1. Identification.

    

    This
      Guaranty (the “Guaranty”), dated as of December 13, 2006, is entered into by
China
      Quantum Communications Ltd., a Cayman Islands corporation, China Biopharma
      Ltd.,
      a Cayman Islands corporation, and Guang Tong Wang Luo (China) Co. Ltd., a
      corporation incorporated in the Peoples Republic of China
      (each a
“Guarantor”), for the benefit of the parties identified on Schedule A hereto
      (each a “Lender” and collectively, the “Lenders”).

    

    2. Recitals.

    

    2.1 Guarantor
      is a direct or indirect subsidiary of China Biopharma, Inc., a Delaware
      corporation (“Parent”). The Lenders have made, are making and will be making
      loans to Parent (the “Loans”). Guarantor will obtain substantial benefit from
      the proceeds of the Loans.

    

    2.2 The
      Loans
      are and will be evidenced by certain promissory Notes (collectively, “Note” or
“Notes”) issued by Parent on, about or after the date of this Guaranty pursuant
      to subscription agreements dated at or about the date hereof (“Subscription
      Agreements”). The Notes are further identified on Schedule A hereto and were and
      will be executed by Parent as “Borrower” or “Debtor” for the benefit of each
      Lender as the “Holder” or “Lender” thereof.

    

    2.3 In
      consideration of the Loans made and to be made by Lenders to Parent and for
      other good and valuable consideration, and as security for the performance
      by
      Parent of its obligations under the Notes and as security for the repayment
      of
      the Loans and all other sums due from Debtor to Lenders arising under the Notes,
      Subscription Agreements and any other agreement between or among them relating
      to the foregoing (collectively, the “Obligations”), Guarantor, for good and
      valuable consideration, receipt of which is acknowledged, has agreed to enter
      into this Guaranty. Obligations include all future advances by Lenders to Parent
      made by Lenders pursuant to the Subscription Agreement. 

    

    2.4 The
      Lenders have appointed Barbara R. Mittman as Collateral Agent pursuant to that
      certain Collateral Agent Agreement dated at or about the date of this Agreement
      (“Collateral Agent Agreement”), among the Lenders and Collateral
      Agent.

    

    3. Guaranty.

    

    3.1 Guaranty.
      Guarantor hereby unconditionally and irrevocably guarantees, jointly and
      severally with any other Guarantor, the punctual payment, performance and
      observance when due, whether at stated maturity, by acceleration or otherwise,
      of all of the Obligations now or hereafter existing, whether for principal,
      interest (including, without limitation, all interest that accrues after the
      commencement of any insolvency, bankruptcy or reorganization of Parent, whether
      or not constituting an allowed claim in such proceeding), fees, commissions,
      expense reimbursements, liquidated damages, indemnifications or otherwise (such
      obligations, to the extent not paid by Parent being the “Guaranteed
      Obligations”), and agrees to pay any and all reasonable costs, fees and expenses
      (including reasonable counsel fees and expenses) incurred by Collateral Agent
      and the Lenders in enforcing any rights under the guaranty set forth herein.
      Without limiting the generality of the foregoing, Guarantor’s liability shall
      extend to all amounts that constitute part of the Guaranteed Obligations and
      would be owed by Parent to Collateral Agent and the Lenders, but for the fact
      that they are unenforceable or not allowable due, in either case, to the
      existence of an insolvency, bankruptcy or reorganization involving
      Parent.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.2 Guaranty
      Absolute.
      Guarantor guarantees that the Guaranteed Obligations will be paid strictly
      in
      accordance with the terms of the Notes, regardless of any law, regulation or
      order now or hereafter in effect in any jurisdiction affecting any of such
      terms
      or the rights of Collateral Agent or the Lenders with respect thereto. The
      obligations of Guarantor under this Guaranty are independent of the Guaranteed
      Obligations, and a separate action or actions may be brought and prosecuted
      against Guarantor to enforce such obligations, irrespective of whether any
      action is brought against Parent or any other Guarantor or whether Parent or
      any
      other Guarantor is joined in any such action or actions. The liability of
      Guarantor under this Guaranty constitutes a primary obligation, and not a
      contract of surety, and to the extent permitted by law, shall be irrevocable,
      absolute and unconditional irrespective of, and, to the extent permitted by
      law,
      Guarantor hereby irrevocably waives any defenses it may now or hereafter have
      in
      any way relating to, any or all of the following:

     

    (a)
        any
      lack
      of validity or enforceability of the Notes or any agreement or instrument
      relating thereto;

     

    (b)
        any
      change in the time, manner or place of payment of, or in any other term of,
      all
      or any of the Guaranteed Obligations, or any other amendment or waiver of or
      any
      consent to departure from the Notes, including, without limitation, any increase
      in the Guaranteed Obligations resulting from the extension of additional credit
      to Parent or otherwise;

     

    (c)
        any
      taking, exchange, release, subordination or non-perfection of any Collateral,
      or
      any taking, release or amendment or waiver of or consent to departure from
      any
      other guaranty, for all or any of the Guaranteed Obligations;

     

    (d)
        any
      change, restructuring or termination of the corporate, limited liability company
      or partnership structure or existence of Parent; or

     

    (e)
        any
      other
      circumstance (including, without limitation, any statute of limitations) or
      any
      existence of or reliance on any representation by Collateral Agent or the
      Lenders that might otherwise constitute a defense available to, or a discharge
      of, Parent or any other guarantor or surety.

     

    This
      Guaranty shall continue to be effective or be reinstated, as the case may be,
      if
      at any time any payment of any of the Guaranteed Obligations is rescinded or
      must otherwise be returned by Collateral Agent, the Lenders or any other entity
      upon the insolvency, bankruptcy or reorganization of the Parent or otherwise
      (and whether as a result of any demand, settlement, litigation or otherwise),
      all as though such payment had not been made.

     

    3.3 Waiver.
      Guarantor hereby waives promptness, diligence, notice of acceptance and any
      other notice with respect to any of the Guaranteed Obligations and this Guaranty
      and any requirement that Collateral Agent or the Lenders or exhaust any right
      or
      take any action against Parent or any other person or entity or any Collateral.
      Guarantor acknowledges that it will receive direct and indirect benefits from
      the financing arrangements contemplated herein and that the waiver set forth
      in
      this Section 3.3
      is
      knowingly made in contemplation of such benefits. Guarantor hereby waives any
      right to revoke this Guaranty, and acknowledges that this Guaranty is continuing
      in nature and applies to all Guaranteed Obligations, whether existing now or
      in
      the future.

     

    3.4
      Continuing
      Guaranty; Assignments.
      This
      Guaranty is a continuing guaranty and shall (a) remain in full force and effect
      until the later of the indefeasible cash payment in full of the Guaranteed
      Obligations and all other amounts payable under this Guaranty, the Subscription
      Agreements and Notes, (b) be binding upon Guarantor, its successors and assigns
      and (c) inure to the benefit of and be enforceable against Guarantor by the
      Lenders and their successors, pledgees, transferees and assigns. Without
      limiting the generality of the foregoing clause (c), any Lender may pledge,
      assign or otherwise transfer all or any portion of its rights and obligations
      under this Guaranty (including, without limitation, all or any portion of its
      Notes owing to it) to any other Person, and such other Person shall thereupon
      become vested with all the benefits in respect thereof granted such Collateral
      Agent or Lender herein or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.5
      Subrogation.
      No
      Guarantor will exercise any rights that it may now have or hereafter acquire
      against the Collateral Agent or any Lender or other Guarantor (if any) that
      arise from the existence, payment, performance or enforcement of such
      Guarantor’s obligations under this Guaranty, including, without limitation, any
      right of subrogation, reimbursement, exoneration, contribution or
      indemnification, whether or not such claim, remedy or right arises in equity
      or
      under contract, statute or common law, including, without limitation, the right
      to take or receive from the Collateral Agent or any Lender or other Guarantor
      (if any), directly or indirectly, in cash or other property or by set-off or
      in
      any other manner, payment or security solely on account of such claim, remedy
      or
      right, unless and until all of the Guaranteed Obligations and all other amounts
      payable under this Guaranty shall have been indefeasibly paid in full in cash.
      

     

    3.6
      Maximum
      Obligations.
      Notwithstanding any provision herein contained to the contrary, Guarantor’s
      liability with respect to the Obligations shall be limited to an amount not
      to
      exceed, as of any date of determination, the amount that could be claimed by
      Lenders from Guarantor without rendering such claim voidable or avoidable under
      Section 548 of the Bankruptcy Code or under any applicable state Uniform
      Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
      or
      common law.

     

    4. Miscellaneous.
      

     

    4.1 Expenses.
      Guarantor shall pay to the Lenders, on demand, the amount of any and all
      reasonable expenses, including, without limitation, attorneys’ fees, legal
      expenses and brokers’ fees, which the Lenders may incur in connection with
      exercise or enforcement of any the rights, remedies or powers of the Lenders
      hereunder or with respect to any or all of the Obligations.

    

    4.2 Waivers,
      Amendment and Remedies.
      No
      course of dealing by the Lenders and no failure by the Lenders to exercise,
      or
      delay by the Lender in exercising, any right, remedy or power hereunder shall
      operate as a waiver thereof, and no single or partial exercise thereof shall
      preclude any other or further exercise thereof or the exercise of any other
      right, remedy or power of the Lenders. No amendment, modification or waiver
      of
      any provision of this Guaranty and no consent to any departure by Guarantor
      therefrom, shall, in any event, be effective unless contained in a writing
      signed by the Majority in Interest (as such term is defined in the Collateral
      Agent Agreement) or the Lender or Lenders against whom such amendment,
      modification or waiver is sought, and then such waiver or consent shall be
      effective only in the specific instance and for the specific purpose for which
      given. The rights, remedies and powers of the Lenders, not only hereunder,
      but
      also under any instruments and agreements evidencing or securing the Obligations
      and under applicable law are cumulative, and may be exercised by the Lenders
      from time to time in such order as the Lenders may elect.

    

    4.3 Notices.
      All
      notices or other communications given or made hereunder shall be in writing
      and
      shall be personally delivered or deemed delivered the first business day after
      being faxed (provided that a copy is delivered by first class mail) to the
      party
      to receive the same at its address set forth below or to such other address
      as
      either party shall hereafter give to the other by notice duly made under this
      Section:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    To
      Parent
      and

    Guarantor,
      to:                                      China
      Biopharma, Inc.

    31
      Airpark Road

    Princeton,
      New Jersey 08540

    Attn:
      Peter Wang, CEO

    Fax:
      (904) 399-9151

    

    With
      a
      copy by telecopier only to:

    Loeb
      & Loeb LLP

    345
      Park
      Avenue

    New
      York,
      New York 10154

    Fax
      (212)
      407-4990

    

    To
      Lenders:                                         To
      the
      addresses and telecopier numbers set 

    Forth
      on
      Schedule A 

    

    

    To
      the
      Collateral
      Agent:                    Barbara
      R. Mittman

    551
      Fifth
      Avenue, Suite 1601

    New
      York,
      New York 10176

    Fax:
      (212) 697-3575

    

    

    If
      to
      Parent, Guarantor, Lender or

    Collateral
      Agent, with a copy by telecopier only to:

    

    Grushko
      & Mittman, P.C.

    551
      Fifth
      Avenue, Suite 1601

    New
      York,
      New York 10176

    Fax:
      (212) 697-3575

    

    Any
      party
      may change its address by written notice in accordance with this
      paragraph.

    

    4.4 Term;
      Binding Effect.
      This
      Guaranty shall (a) remain in full force and effect until payment and
      satisfaction in full of all of the Obligations; (b) be binding upon Guarantor
      and its successors and permitted assigns; and (c) inure to the benefit of the
      Lenders and their respective successors and assigns. All
      the
      rights and benefits granted by Guarantor to the Collateral Agent and Lenders
      hereunder and other agreements and documents delivered in connection therewith
      are deemed granted to both the Collateral Agent and Lenders. Upon the payment
      in
      full of the Obligations, (i) this Guaranty shall terminate and (ii) the Lenders
      will, upon Guarantor’s request and at Guarantor’s expense, execute and deliver
      to Guarantor such documents as Guarantor shall reasonably request to evidence
      such termination, all without any representation, warranty or recourse
      whatsoever.

    

    4.5 Captions.
      The
      captions of Paragraphs, Articles and Sections in this Guaranty have been
      included for convenience of reference only, and shall not define or limit the
      provisions hereof and have no legal or other significance
      whatsoever.

    

    4.6 Governing
      Law; Venue; Severability.
      This
      Guaranty shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to principles of conflicts or choice of law.
      Any legal action or proceeding against Guarantor with respect to this Guaranty
      may be brought in the courts of the State of New York or of the United States
      for the Southern District of New York, and, by execution and delivery of this
      Guaranty, Guarantor hereby irrevocably accepts for itself and in respect of
      its
      property, generally and unconditionally, the jurisdiction of the aforesaid
      courts. Guarantor hereby irrevocably waives any objection which they may now
      or
      hereafter have to the laying of venue of any of the aforesaid actions or
      proceedings arising out of or in connection with this Guaranty brought in the
      aforesaid courts and hereby further irrevocably waives and agrees not to plead
      or claim in any such court that any such action or proceeding brought in any
      such court has been brought in an inconvenient forum. If any provision of this
      Guaranty, or the application thereof to any person or circumstance, is held
      invalid, such invalidity shall not affect any other provisions which can be
      given effect without the invalid provision or application, and to this end
      the
      provisions hereof shall be severable and the remaining, valid provisions shall
      remain of full force and effect.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.7 Satisfaction
      of Obligations.
      For all
      purposes of this Guaranty, the payment in full of the Obligations shall be
      conclusively deemed to have occurred when either the Obligations have been
      indefeasibly paid in cash or all outstanding Notes have been converted to common
      stock pursuant to the terms of the Notes and the Subscription
      Agreements.

    

    4.8 Counterparts/Execution.
      This
      Agreement may be executed in any number of counterparts and by the different
      signatories hereto on separate counterparts, each of which, when so executed,
      shall be deemed an original, but all such counterparts shall constitute but
      one
      and the same instrument. This Agreement may be executed by facsimile signature
      and delivered by facsimile transmission.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    
      
        	
                “GUARANTOR”

              	
                “GUARANTOR”

              
	
                CHINA
                  QUANTUM COMMUNICATIONS LTD.

              	
                CHINA
                  BIOPHARMA LTD.

              
	
                a
                  Cayman Islands corporation

              	
                a
                  Cayman Islands corporation

              
	 	 
	 	 
	
                By:
                  _____________________________________

              	
                By:
                  __________________________________

              
	 	 
	
                Its:
                  _____________________________________

              	
                Its:
                  ___________________________________

              
	 	 
	 	 
	
                “GUARANTOR”

              	 
	
                GUANG
                  TONG WANG LUO (CHINA) CO. LTD.

              	 
	
                a
                  China corporation

              	 
	 	 
	 	 
	
                By:
                  _____________________________________

              	 
	 	 
	
                Its:
                  _____________________________________

              	 
	 	 
	 	 
	
                APPROVED
                  BY “LENDERS”:

              
	 	 
	 	 
	
                Name
                  of Lender (Print):

              	 
	 	 
	 	
                Name
                  of Lender (Print):

              
	 	 
	
                ________________________________________

              	
                ______________________________________

              
	 	 
	 	 
	
                By:_____________________________________

              	
                By:____________________________________

              
	 	 
	
                Print
                  Name of Signator:_____________________

              	
                Print
                  Name of
                  Signator:____________________

              

      

    

    

    This
      Guaranty Agreement may be signed by facsimile signature
      and

    delivered
      by confirmed facsimile transmission.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A TO GUARANTY

    

    
      	
              LENDERS

            	 	
              NOTE
                PRINCIPAL

            	 
	
              ANTHONY
                HELLER

              c/o
                Plazacorp Investments Limited

              10
                Wanless Ave.-Suite 201

              Toronto,
                Ontario M4N 1V6

              Fax:
                (416) 481-8000

            	 	
              $

            	
              150,000.00

            	 
	
              BRIO
                CAPITAL L.P.

              401
                E. 34th
                St.

              Suite
                s-33c

              New
                York, NY 10016

              Fax:
                (646) 390-2158

            	 	
              $

            	
              150,000.00

            	 
	
              CHESTNUT
                RIDGE PARTNERS, L.P.

              50
                Tice Boulevard

              Woodcliff
                Lake, NJ 07677

              Fax:
                (201) 802-9450

            	 	
              $

            	
              250,000.00

            	 
	
              MARVIN
                MERMELSTEIN

              6500
                N. Hamlin

              Lincolnwood,
                IL 60712

              Fax:
                (847) 679-7462

            	 	
              $

            	
              250,000.00

            	 
	
              MONARCH
                CAPITAL FUND LTD.

              Harbour
                House, 2nd
                Fl.

              Waterfront
                Drive, 

              Road
                Town, Tortola, BVI

              Fax:
                (284) 494-4770

            	 	
              $

            	
              250,000.00

            	 
	
              PROFESSIONAL
                OFFSHORE OPPORTUNITY FUND, LTD.

              1400
                Old Country Road, Suite 206

              Westbury,
                NY 11590

              Fax:
                (516) 228-8083

            	 	
              $

            	
              300,000.00

            	 
	
              NITE
                CAPITAL LP

              100
                East Cook Avenue, Suite 201

              Libertyville,
                IL 60048

              Fax:
                (847) 968-2648

            	 	
              $

            	
              250,000.00

            	 
	
              VISION
                OPPORTUNITY MASTER FUND, LTD.

              20
                W. 55th
                Street, 5th
                Fl.

              New
                York, NY 10019

              Fax:
                (212) 867-1416

            	 	
              $

            	
              700,000.00

            	 
	
              FIRST
                MIRAGE, INC.

              333
                Sandy Springs Circle, Suite 230

              Atlanta,
                GA 30328

              Fax:
                (404) 257-9125

            	 	
              $

            	
              125,000.00

            	 
	
              GENERATION
                CAPITAL ASSOCIATES

              1985
                Riverside Trace

              Atlanta,
                GA 30328

              Fax:
                (404) 257-9125

            	 	
              $

            	
              125,000.00

            	 
	
              DOUBLE
                U MASTER FUND L.P.

              P.
                O. Box 972

              Harbour
                House

              Roadtown,
                Tortola, BVI

              Fax:
                (284) 494-4770

            	 	
              $

            	
              100,000.00

            	 
	
              CENTURION
                MICROCAP, LP

              3014
                Avenue L

              Brooklyn,
                NY 11210

              Fax:
                (718) 228-9570

            	 	
              $

            	
              250,000.00

            	 
	
              BURSTEIN
                & LINDSAY SEC. CORP.

              140
                Birmensdorfer Str.

              CH8003

              Zurich,
                Switzerland

              Fax:
                (411) 451-0946

            	 	
              $

            	
              100,000.00

            	 
	
              TOTALS

            	 	
              $

            	
              3,000,000.00

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