Document:

Exhibit
10.9

     

    FORM OF SUBSIDIARY
GUARANTY

     

    1.           Identification.

    

    This
Guaranty (the “Guaranty”), dated as
of  January 22, 2010, is entered into by
[____________________________], a [______________] corporation (“Guarantor”), for the
benefit of the Collateral Agent identified below and 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 Yongxin Pharmaceuticals, Inc., a
Delaware corporation (“Parent”).  The
Lenders have made and/or are 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 senior secured 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 described on Schedule A
hereto and were and or be executed by Parent as “Borrower” for the benefit of
each Lender as the “Holder” 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
(collectively, the “Obligations”),
Guarantor, for good and valuable consideration, receipt of which is
acknowledged, has agreed to enter into this Guaranty.

    

    2.4           The
Lenders have appointed Collateral Agents, LLC, a Delaware Limited Liability
Company 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 of the Obligations, 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 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 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 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 exhaust any right or take any
action against any Borrower 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 , (b) be binding upon Guarantor,
its successors and assigns and (c) inure to the benefit of and be enforceable 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.  Guarantor
will not exercise any rights that it may now 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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    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, reasonable attorneys’ fees, reasonable
legal expenses and reasonable 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 Guarantor and the Majority
in Interest (as such term is defined in the Collateral Agent Agreement) of
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, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (a) personally served, (b) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (c)
delivered by a reputable overnight courier service with charges prepaid, or (d)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective upon hand delivery or
delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below if delivered on a
business day during normal business hours, or the first business day following
such delivery (if delivered other than on a business day during normal business
hours), (ii) on the first business day following the date deposited with an
overnight courier service with charges prepaid, or (iii) on the fifth business
day following the date of mailing pursuant to subpart (b) above, or upon actual
receipt of such mailing, whichever shall first occur.  The addresses
for such communications shall be:

     

    
      
        	 
      	
                To
      Guarantor, to:

              	
                China
      Yongxin Pharmaceuticals, Inc.

              
	 
      	 
      	
                927
      Canada Court

              
	 
      	 
      	
                City
      of Industry, CA 91748

              
	 
      	 
      	
                Attn:
      Yongxin Liu, CEO

              
	 
      	 
      	
                Fax:
      (626) 581-9138

              
	 
      	 
      	 
      
	 
      	
                With
      a copy by facsimile only to:

              
	 
      	 
      	 
      
	 
      	 
      	
                Richardson
      & Patel, LLP

              
	 
      	 
      	
                10900
      Wilshire Blvd., Suite 500

              
	 
      	 
      	
                Los
      Angeles, CA 90024

              
	 
      	 
      	
                Attn:
      Nimish Patel, Esq.

              
	 
      	 
      	
                Fax:
      (310) 208-1154

              
	 
      	 
      	 
      
	 
      	
                To
      Lenders:

              	
                To
      the addresses and telecopier numbers set

              
	 
      	 
      	
                Forth
      on Schedule A

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 
      	
              To
      the Collateral Agent:

            	
              Collateral
      Agents, LLC

            
	 
      	 
      	
              111
      West 57th Street,
      Suite 1416

            
	 
      	 
      	
              New
      York, NY 10019

            
	 
      	 
      	
              Attn:
      General Counsel

            
	 
      	 
      	
              Fax:
      (212) 245-9101

            
	 
      	 
      	 
      
	 
      	
              If
      to 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 Guaranteed
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 it
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.  This
Guaranty shall be deemed an unconditional obligation of
Guarantor for the payment of money and, without limitation to any other remedies
of Lenders, may be enforced against Guarantor by summary proceeding pursuant to
New York Civil Procedure Law and Rules Section 3213 or any similar rule or statute in the jurisdiction
where enforcement is sought.  For purposes of such rule or statute,
any other document or agreement to which Lenders and Guarantor are parties or
which Guarantor delivered to Lenders, which may be convenient or
necessary to determine Lenders’ rights hereunder or
Guarantor’s obligations to Lenders are deemed a
part of this Guaranty, whether or not such other document or agreement was
delivered together herewith or was executed apart from this
Guaranty.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any suit, action or
proceeding in connection with this Agreement or any other Transaction Document
by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.  Each Guarantor irrevocably
appoints Parent its true and lawful agent for service of process upon whom all
processes of law and notices may be served and given in the manner
described above; and such service and notice shall be deemed valid personal
service and notice upon each such Guarantor with the same force and validity as
if served upon such Guarantor.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    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 the
Obligations have been indefeasibly paid 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 electronic transmission.

    

    [THE
BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

    

    
      	
              “GUARANTOR”

            	 
      
	
              [_____________________________________]

            	 
      
	 
      	 
      
	
              By:

            	 
      	 
      
	 
      	 
      
	
              Its:

            	 
      	 
      

    

    

    This
Guaranty Agreement may be signed by facsimile signature and

    delivered
by confirmed facsimile transmission.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
A

    

    First Financing (January 22,
2010)

     

    
      
        
          
            
              	
                      Subscribers

                    	 
      	
                      Note

                      Principal

                      Amount

                    	 
      	 
      	
                      Shares for

                      which

                      Warrant

                      can be

                      Exercised

                    	 
      
	
                      Excalibur
      Special Opportunities LP

                    	 
      	
                      $  

                    	
                      300,000.00

                    	 
      	 
      	 
      	
                      1,500,000

                    	 
      
	
                      Dana
      Katzenmeier

                    	 
      	
                      $

                    	
                      50,000.00

                    	 
      	 
      	 
      	
                      250,000

                    	 
      
	
                      Fourth
      Street Holdings, LP

                    	 
      	
                      $

                    	
                      100,000.00

                    	 
      	 
      	 
      	
                      500,000

                    	 
      
	
                      Robert
      B. Prag

                    	 
      	
                      $

                    	
                      100,000.00

                    	 
      	 
      	 
      	
                      500,000

                    	 
      
	
                      Peter
      B. Tentler

                    	 
      	
                      $

                    	
                      50,000.00

                    	 
      	 
      	 
      	
                      250,000

                    	 
      
	
                      Richardson
      & Patel LLP

                    	 
      	
                      $

                    	
                      100,000.00

                    	 
      	 
      	 
      	
                      500,000

                    	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                      TOTAL

                    	 
      	
                      $

                    	
                      700,000.00

                    	 
      	 
      	 
      	
                      3,500,000

                    	 
      

            

          

        

      

    

    

     Second
Financing (March
4,
2010)

    

    
      
        
          
            	
                    Subscribers

                  	 
      	
                    Note

                    Principal

                    Amount

                  	 
      	 
      	
                    Shares for

                    which

                    Warrant

                    can be

                    Exercised

                  	 
      
	
                    Marc
      Freeman

                  	 
      	
                    $

                  	
                    75,000.00

                  	 
      	 
      	 
      	
                    15,000

                  	 
      
	
                    Paul
      T. Mannion Jr.

                  	 
      	
                    $

                  	
                    25,000.00

                  	 
      	 
      	 
      	
                    5,000

                  	 
      
	
                    Linda
      Hecter

                  	 
      	
                    $

                  	
                    25,000.00

                  	 
      	 
      	 
      	
                    5,000

                  	 
      
	
                    TOTAL

                  	 
      	
                    $  

                  	
                    125,000.00

                  	 
      	 
      	 
      	
                    25,000

                  	 
      

          

        

      

    

     

    First Financing
(May
3,
2010)

    

    
      
        
          
            	
                    Subscribers

                  	 
      	
                    Note

                    Principal

                    Amount

                  	 
      	 
      	
                    Shares for

                    which

                    Warrant

                    can be

                    Exercised

                  	 
      
	
                    Excalibur
      Special Opportunities LP

                  	 
      	
                    $

                  	
                    100,000.00

                  	 
      	 
      	 
      	
                    500,000

                  	 
      
	
                    Dana
      Katzenmeier

                  	 
      	
                    $

                  	
                    25,000.00

                  	 
      	 
      	 
      	
                    125,000

                  	 
      
	
                    Fourth
      Street Holdings, LP

                  	 
      	
                    $

                  	
                    40,000.00

                  	 
      	 
      	 
      	
                    200,000

                  	 
      
	
                    Robert
      B. Prag

                  	 
      	
                    $  

                  	
                    50,000.00

                  	 
      	 
      	 
      	
                    250,000

                  	 
      
	
                    Peter
      B. Tentler

                  	 
      	
                    $

                  	
                    25,000.00

                  	 
      	 
      	 
      	
                    125,000

                  	 
      
	
                    Paul
      T. Mannion Jr.

                  	 
      	
                    $

                  	
                    10,000.00

                  	 
      	 
      	 
      	
                    50,000

                  	 
      
	
                    TOTAL

                  	 
      	
                    $

                  	
                    250,000.00

                  	 
      	 
      	 
      	
                    1,250,000

                  	 
      

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
B

     

    Schedule
prepared in accordance with Instruction 2 to Item 601 of Regulation
S-K

     

    The
Subsidiary Guaranty Agreements dated January 22, 2010 are substantially
identical in all material respects except as to the guarantors.

     

    
      
        
          	
                  Guarantors

                
	
                  Changchun
      Yongxin Dirui Medical Co., Ltd

                
	
                  Jilin
      Province Yongxin Chain Drugstore Ltd.

                
	
                  Jilin
      Dingjian Natural & Health Products Co., Ltd.

                
	
                  Tianjin
      Jingyongxin Chain Drugstore Ltd.

                
	
                  Baishan
      Caoantang Chain Drugstore
Ltd.

                

        

      

    

     

    The text
of the Subsidiary Guaranty Agreements is incorporated by reference from Exhibit
10.6 to the Company’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on January 26, 2010.Exhibit
10.10

       

      STOCK PLEDGE
AGREEMENT

       

      STOCK PLEDGE
AGREEMENT (this “Agreement”), dated
January 22, 2010 by and among ________________________________________ (“Pledgor”); the
subscribers who are parties to a certain Subscription Agreement among China
Yongxin Pharmaceuticals, Inc., a Delaware corporation (“Borrower”), and such
Subscribers identified on Schedule I hereto (each a
“Pledgee”); and
Collateral Agents, LLC, a Delaware Limited Liability Company (“Collateral Agent”) on
behalf of Pledgees;

       

      WITNESSETH:

       

      WHEREAS, the Pledgee will lend
up to the amount set forth on Schedule I hereto to
Borrower, with such loan to be evidenced by one or more convertible promissory
Notes (each a “Note”);
and

       

      WHEREAS, Pledgor is a
shareholder, officer and/or director of Borrower, and it is to his benefit and
advantage that the loan is made and the Note is issued; and

       

      WHEREAS, in order to induce
Pledgee to make the loan and accept the Note, the Pledgor has agreed to secure
all of the Borrower’s obligations under the Note with the grant to the Pledgee
of a first priority security interest in Pledgor’s shares of Borrower’s $.001
par value Common Stock, which Common Stock is owned of record and beneficially
controlled by the Pledgor.

       

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

       

      1.           Definitions.

       

      The
following terms shall have the following meanings wherever used in this
Agreement:

       

      ·           “Event of Default”
shall have the meaning given thereto in the Note.

       

      ·           “Loan” means the
advance of funds under the Note.

       

      ·           “Obligations” shall
mean all principal and interest and other payments which may be due and payable
under the Note, whether upon stated maturity, by acceleration, or otherwise,
outstanding at any time and under this Agreement, and pursuant to the
“Transaction Documents” as defined in the “Subscription Agreement” pursuant to
which the Note is being issued.

       

      ·           “Pledged Stock” shall mean in
the aggregate, _____________ shares of $0.001 par value Common Stock of
Borrower.

       

      ·           “Satisfaction Date”
shall mean that date on which all of the Obligations have been indefeasibly paid
or otherwise satisfied in full.

        

      ·           All
other capitalized terms shall have the meanings ascribed to them in the
Transaction Documents.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        2.           Pledge of the Pledged
Stock/Additional Deposits.
   

      

      (a)           As
security for the due and timely payment and performance of all of the
Obligations, the Pledgor pledges to the Pledgee, and grants to the Pledgee a
first priority lien and security interest in, all of the Pledged Stock (as same
are constituted from time to time), together with all cash dividends, stock
dividends, interest, profits, premiums, redemptions, warrants, subscription
rights, options, substitutions, exchanges and other distributions now or
hereafter made on the Pledged Stock and all cash and non-cash proceeds thereof,
until the Satisfaction Date.  The Pledged Stock and all property at
any time pledged to the Pledgee hereunder or in which the Pledgee is granted a
security interest (whether described herein or not) and all income therefrom and
proceeds thereof are herein included in the definition of Pledged
Stock.  The Pledged Stock includes all Pledged Stock in which Pledgor
has a direct or indirect interest or beneficial interest regardless of the
manner in which title is held or the name of the holder of the Pledged Stock on
the books and records of Borrower or its transfer agent.

       

      (b)           In
furtherance of the pledge hereunder, the Pledgor is, concurrently herewith,
delivering to the Pledgee, the certificates representing all of the Pledged
Stock, each of which now remains in the name of the Pledgor and accompanied by
appropriate undated stock powers duly endorsed in blank by the Pledgor bearing
“medallion” signature guarantees.

       

      (c)           If,
while this Agreement is in effect, the Pledgor becomes entitled to receive or
receives any stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
conversion, reclassification, increase or reduction of capital or issued in
connection with any reorganization), option or rights, whether as an addition
to, in substitution of, or in exchange for, any Pledged Stock or otherwise, the
Pledgor agrees to accept the same as agent for the Pledgee, to hold the same in
trust on behalf of and for the benefit of the Pledgee, and to deliver the same
forthwith to the Pledgee in the exact form received, with the endorsement of the
Pledgor when necessary and/or appropriate undated “medallion” stock or
other powers duly executed in blank, to be held by the Pledgee, subject to the
terms hereof, as additional collateral security for the
Obligations.  Any sums paid on or in respect of the Pledged Stock on
the liquidation or dissolution of the Pledgor shall be paid over to the Pledgee,
to be held by the Pledgee, subject to the terms and conditions hereof, as
additional collateral security for the Obligations.

      

      3.           Retention of the Pledged
Stock.

       

      (a)           Except
as otherwise provided herein, the Pledgee shall have no obligation with respect
to the Pledged Stock, except to use reasonable care in the custody and
preservation thereof, to the extent required by law.

       

      (b)           The
Pledgee shall hold the Pledged Stock in the form in which same are delivered
herewith, unless and until there shall occur an Event of Default.

        

      4.           Rights of the
Pledgor.  Throughout the term of this Agreement, so long as an
Event of Default has not occurred and is continuing, the Pledgor shall have the
right to vote the Pledged Stock in all matters presented to the stockholders of
the Borrower for vote thereon, except in a manner inconsistent with the terms of
this Agreement or detrimental to the interests of the Pledgee.

       

      5.           Event of Default; Rights of
Pledgee; Power of Attorney.

       

      (a)           Upon
the occurrence and during the continuance of any Event of Default, the Pledgee
shall have the right to: (i) exercise all voting and corporate rights of, and
all rights of conversion, exchange, subscription or any other rights, privileges
or options pertaining to, any Pledged Stock as if the Pledgee were the absolute
owner thereof, including (without limitation) in connection with the merger,
consolidation, reorganization, recapitalization or other readjustment of the
Borrower or Pledgor or upon the exercise by the Pledgor or the Pledgee of any
right, privilege or option pertaining to any of the Pledged Stock and, in
connection therewith, to deposit and deliver any and all of the Pledged Stock
with any committee, depository, transfer agent, registrar or other designated
agency on such terms and conditions as the Pledgee may determine, all without
liability except to account for property actually received by it; (ii) apply any
funds or other property received in respect of the Pledged Stock to the
Obligations, and receive in its own name any and all further distributions which
may be paid in respect of the Pledged Stock, all of which shall, upon receipt by
the Pledgee, be applied to the Obligations; (iii) transfer all or any portion of
the Pledged Stock (as determined by the Pledgee in its discretion) on the books
of the Pledgor to and in the name of the Pledgee or such other person or persons
as the Pledgee may designate; (iv) effect any commercially reasonable sale,
transfer or disposition of all or any portion of the Pledged Stock and in
furtherance thereof, take possession of and endorse any and all checks, drafts,
bills of exchange, money orders or other documents and instruments received on
account of the Pledged Stock; (v) collect, sue for and give acquittance for any
money due on account of any of the foregoing; and (vi) take any and all other
action contemplated by this Agreement, or as otherwise permitted by law, or as
the Pledgee may reasonably deem necessary or appropriate, in order to accomplish
the purposes of this Agreement.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (b)           In
furtherance of the foregoing powers of the Pledgee, the Pledgor hereby
authorizes and appoints the Pledgee, effective upon the occurrence and during
the continuation of an Event of Default, with full powers of substitution, as
the true and lawful attorney-in-fact of the Pledgor, in his name, place and
stead, to take any and all such action as the Pledgee, in its sole discretion,
may deem necessary or appropriate in furtherance of the exercise of the
aforesaid powers.  Such power of attorney shall be coupled with an
interest, and shall be irrevocable until the Satisfaction Date. Without
limitation of the foregoing, such power of attorney shall not in any manner be
affected or impaired by reason of any act of the Pledgor or by operation of
law.  Nothing herein contained, however, shall be deemed to require or
impose any duty upon the Pledgee to exercise any of the rights or powers granted
herein.

       

      (c)           The
foregoing rights and powers granted to the Pledgee, and the foregoing power of
attorney, shall be fully binding upon any person who may acquire any beneficial
interest in any of the Pledged Stock or any other property held or received by
the Pledgee hereunder.

       

      6.           Foreclosure; Sale of Pledged
Stock.

       

      (a)           Without
limitation of paragraph 5 above, in the event that the Pledgee shall make any
sale or other disposition of any or all of the Pledged Stock following an Event
of Default, the Pledgee may also:

       

      (i)           offer
and sell, in a commercially reasonable manner, all or any portion of the Pledged
Stock publicly through a registered broker-dealer, or by means of a private
placement restricting the offer or sale to a limited number of prospective
purchasers who meet such suitability standards as the Pledgee and its counsel
may deem appropriate, and who may be required to represent that they are
purchasing Pledged Stock for investment and not with a view to
distribution;

       

      (ii)          sell
any or all of the Pledged Stock upon credit or for future delivery, in a
commercially reasonable manner, without being in any way liable for failure of
the purchaser to pay for the subject Pledged Stock; and

       

      (iii)         receive
and collect the net proceeds of any sale or other disposition of any Pledged
Stock, and apply same in such order and to such of the Obligations (including
the customary costs and expenses of the sale or disposition of the Pledged
Stock) as the Pledgee may, in its absolute discretion, deem
appropriate.

       

      (b)           Upon
any sale of any of the Pledged Stock in accordance with this Agreement, the
Pledgee shall have the right to assign, transfer and deliver the subject Pledged
Stock to the purchaser(s) thereof, and each such purchaser shall be entitled to
hold such Pledged Stock absolutely free from any right or claim of the Pledgor
and/or any other person claiming any beneficial interest in the Pledged Stock,
including any equity of redemption (which right and all other such rights are
hereby waived by the Pledgor to the fullest extent permitted by
law).

       

      (c)           Following
the occurrence and during the existence of an Event of Default, Pledgor will
cooperate and provide such certificate, resolutions, representations, legal
opinions and all other matters necessary to facilitate a transfer or sale of any
part of the Pledged Stock.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (d)           Nothing
herein contained shall be deemed to require the Pledgee to effect any sale or
disposition of any Pledged Stock at any time, or to consummate any proposed
public or private sale at the time and place at which same was initially
called.  It is the intention of the parties hereto that the Pledgee
shall, subject to any further conditions imposed by this Agreement, upon the
occurrence and during the continuation of an Event of Default, have the right to
use or deal with the Pledged Stock as if the Pledgee were the outright owner
thereof, and to exercise any and all rights and remedies, as a secured party in
possession of collateral or otherwise, under any and all provisions of
law.

      

      (e)           The
Pledgee may exercise its rights with respect to each and every component of the
Pledged Stock, without regard to the existence of any other security or source
of payment for, in order to satisfy the Obligations.  In addition to
other rights and remedies provided for herein or otherwise available to
it, the Pledgee shall have all of the rights and remedies of a secured
party under the Uniform Commercial Code then in effect in the State of New
York.

      

      (f)           Pledgee
is authorized, at any such sale, if the Pledgee 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 Pledged Stock 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 Pledgee deems
advisable to ensure such compliance.  Sales made to the highest bidder
in pursuant to such restricted sale shall be deemed to have been made in a
commercially reasonable manner.

       

      (g)           All
proceeds received by Pledgees in respect of any sale, collection or other
enforcement or disposition of Pledged Stock, shall be applied (after deduction
of any amounts payable to Pledgees pursuant to Paragraph 10 hereof) against the
Obligations.   Upon payment in full of all Obligations, Pledgor
shall be entitled to the return of all Pledged Stock, 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 Pledgees incurred in connection
with the liquidation of the Pledged Stock (unless another person is legally
entitled thereto).  Any assignment of Pledged Stock by the Pledgees to
Pledgor shall be without representation or warranty of any nature whatsoever and
wholly without recourse.  To the extent allowed by law, each Pledgee
may purchase the Pledged Stock and may pay for such purchase by offsetting the
purchase price with such Pledgees proportionate share of the Obligations owed to
such Pledgee by Borrower arising under the Obligations or any other source;
provided however, that if any Pledgee shall purchase Pledged Stock, the per
share purchase price therefor shall be no less than 100% of the average closing
bid price of the Common Stock as reported by Bloomberg L.P. for the Principal
Market for the five (5) trading days immediately preceding the Event of Default
giving rise to the right of Pledgees to dispose of the Pledged Stock under this
Agreement.

      

      (h)           Without
limiting, and in addition to, any other rights, options and remedies Pledgee has
under the Transaction Documents, the UCC, at law or in equity, or otherwise,
upon the occurrence and continuation of an Event of Default, Pledgee shall have
the right to apply for and have a receiver appointed by a court of competent
jurisdiction.  Pledgor expressly agrees that such a receiver will be
able to manage, protect and preserve the Pledged Stock and until a sale or other
disposition of the Pledged Stock shall be finally made and
consummated.  Pledgor waives any right to require a bond to be posted
by or on behalf of any such receiver.

      

      7.           Covenants, Representations
and Warranties.

       

      In
connection with the transactions contemplated by this Agreement, and knowing
that the Pledgee is and shall be relying hereon, the Pledgor hereby covenants,
represents and warrants that:

       

      (a)           the
Pledged Stock has been and will be duly and validly issued, is and will be fully
paid and non-assessable, and is and will be owned by the Pledgor free and clear
of any and all restrictions, pledges, liens, encumbrances or other security
interests of any kind, save and except for the pledge to the Pledgee pursuant to
this Agreement;

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (b)           there
are and will be no options, warrants or other rights in respect of the sale,
transfer or other disposition of any of the Pledged Stock by the Pledgor, and
the Pledgor has the absolute right to pledge the Pledged Stock hereunder without
the necessity of any consent of any Person;

      

      (c)           neither
the execution or delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, nor the compliance with or performance of this
Agreement by the Pledgor, conflicts with or will result in the breach or
violation of or a default under the terms, conditions or provisions of (i) any
mortgage, security agreement, indenture, evidence of indebtedness, loan or
financing agreement, or other agreement or instrument to which the Pledgor is a
party or by which the Pledgor is bound, or (ii) any provision of law, any order
of any court or administrative agency, or any rule or regulation
applicable to the Pledgor or Borrower;

       

      (d)           this
Agreement has been duly executed and delivered by the Pledgor, and constitutes
the legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms;

       

      (e)           there
are no actions, suits or proceedings pending or threatened against or affecting
the Pledgor that involve or relate to the Pledged Stock; and

       

      (f)           upon
execution of this Agreement by Pledgor, the Pledgee shall have the senior
security interest in the Pledged Stock.

      

      8.           UCC
Filings.   Pledgor hereby grants to Pledgee the right and
authority at Pledgee’s expense, to file UCC Financing Statements in Washington,
D.C., Delaware, New York and any other jurisdiction in the sole discretion of
Pledgee to memorialize the security interest herein granted.

      

      9.           Return of the Pledged
Stock.  To the extent that the Pledgee shall not previously
have taken, acquired, sold, transferred, disposed of or otherwise realized value
on the Pledged Stock in accordance with this Agreement, at the Satisfaction
Date, any security interest in the Pledged Stock shall automatically terminate,
cease to exist and be released, and the Pledgee shall forthwith return the
Pledged Stock to and in the name of the Pledgor, and file, at Pledgor’s
reasonable expenses, releases of Pledgee’s security interest in the Pledged
Stock.

      

      10.         Expenses of the
Pledgee.   All reasonable expenses incurred by the Pledgee
(including but not limited to reasonable attorneys’ fees) in connection with any
actual or attempted sale or other disposition of Pledged Stock hereunder shall
be reimbursed to the Pledgee by the Pledgor on demand, or, at the Pledgee’s
option, such expenses may be added to the Obligations and shall be payable on
demand.

      

      11.         Further
Assurances.  From time to time hereafter, each party shall take
any and all such further action, and shall execute and deliver any and all such
further documents and/or instruments, as any other party may reasonably request
in order to accomplish the purposes of and fulfill the parties’ obligations
under this Agreement, and in order to enable the Pledgee to exercise any of its
rights hereunder.

      

      12.         Miscellaneous.

      

      (a)           All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be:

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            
              	
                      To
      Pledgor:

                    	
                      c/o
      China Yongxin Pharmaceuticals, Inc.

                    
	 
      	
                      927
      Canada Court

                    
	 
      	
                      City
      of Industry, CA 91748

                    
	 
      	
                      Attn:
      Yongxin Liu, CEO

                    
	 
      	
                      Fax:
      (626) 581-9138

                    

            

          

        

      

      

      
        
          
            
              	
                      With
      a copy by facsimile only to:

                    	 
      
	 
      	 
      
	 
      	
                      Richardson
      & Patel, LLP

                    
	 
      	
                      10900
      Wilshire Blvd., Suite 500

                    
	 
      	
                      Los
      Angeles, CA 90024

                    
	 
      	
                      Attn:
      Ryan Hong, Esq.

                    
	 
      	
                      Fax:
      (310) 208-1154

                    

            

          

        

      

       

      
        
          
            
              	
                      To
      Pledgees:

                    	
                      As
      identified on Schedule I hereto

                    
	 
      	 
      
	
                      To
      Collateral Agent:

                    	
                      Collateral
      Agents, LLC

                    
	 
      	
                      111
      West 57th Street,
      Suite 1416

                    
	 
      	
                      New
      York, NY 10019

                    
	 
      	
                      Attn:
      General Counsel

                    
	 
      	
                      Fax:
      (212) 245-9101

                    
	 
      	 
      
	 
      	
                      If
      to Pledgor, Pledgees,

                    
	 
      	
                      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

                    

            

          

        

      

       

      (b)           If
any notice to Pledgor of the sale or other disposition of Pledged Stock is
required by then applicable law, five (5) business days prior written notice
(which Pledgor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code) to Pledgor of the time and place of any
sale of Pledged Stock which Pledgor agrees may be by private
sale.  The rights granted in this Section are in addition to any and
all rights available to Pledgee under the Uniform Commercial Code.

      

       (c)          The
laws of the State of New York including but not limited to Article 9 of the
Uniform Commercial Code as in effect from time to time, shall govern the
construction and enforcement of this Agreement and the rights and remedies of
the parties hereto.  The parties hereby consent to the exclusive
jurisdiction of all courts sitting in the State and County of New York, in
connection with any action or proceeding under or relating to this Agreement,
and waive trial by jury in any such action or proceeding.

       

      (d)           This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.  The Pledgor shall
not, however, assign any of its or his rights or obligations hereunder without
the prior written consent of the Pledgee, and the Pledgee shall not assign its
rights hereunder without simultaneously assigning its obligations hereunder to
the subject assignee.  Except as otherwise referred to herein,
this Agreement, and the documents executed and delivered pursuant hereto,
constitute the entire agreement between the parties relating to the specific
subject matter hereof.

       

      (e)           Neither
any course of dealing between the Pledgor and the Pledgee nor any failure to
exercise, or any delay in exercising, on the part of the Pledgee, any right,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege operate as a waiver
of any other exercise of such right, power or privilege or any other right,
power or privilege.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (f)           The
rights of the Pledgees hereunder, except as otherwise set forth herein shall be
exercised upon the approval of Pledgees holding 75% of the outstanding
Obligations (“Majority in Interest”) at the time such approval is sought or
given.  Any tangible or physical Pledged Stock shall be delivered to
and be held by the Collateral Agent pursuant to this Agreement and on behalf of
all Pledgees as to their respective rights.

       

      (g)          The
Collateral Agent was appointed by the Pledgees pursuant to a Collateral Agent
Agreement of even date herewith.  All of the rights and benefits
granted to the Pledgees pursuant to this Agreement, including the security
interest and enforcement rights are also granted to the Collateral Agent and
will be exercised by Collateral Agent on behalf of Pledgees pursuant to the
Collateral Agent Agreement.  All deliveries required to be made by
Pledgors hereunder shall be made to the Collateral Agent.

       

      (h)          The
Pledgee’s rights and remedies, whether hereunder or pursuant to any other
agreements or by law or in equity, shall be cumulative and may be exercised
singly or concurrently and by the Escrow Agent on Pledgee’s behalf or pursuant
to the Escrow Agreement.

       

      (i)           No
change, amendment, modification, waiver, assignment of rights or obligations,
cancellation or discharge hereof, or of any part hereof, shall be valid unless
the Pledgee shall have consented thereto in writing.

       

      (j)           The
captions and paragraph headings in this Agreement are for convenience of
reference only, and shall not in any way define, limit or describe the
construction, terms or provisions of this Agreement.

       

      (k)           If
any provision of this Agreement is held invalid or unenforceable, either in its
entirety or by virtue of its scope or application to given circumstances, such
provision shall thereupon be deemed modified only to the extent necessary to
render same valid, or not applicable to given circumstances, or excised from
this Agreement, as the situation may require, and this Agreement shall be
construed and enforced as if such provision had been included herein as so
modified in scope or application, or had not been included herein, as the case
may be.

       

      (l)           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.

       

      [THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      CHINA
YONGXIN PHARMACEUTICALS, INC., a Delaware corporation, acknowledges the
execution of the foregoing Stock Pledge Agreement and agrees to cooperate with
the Pledgees and Collateral Agent and further agrees not to take any action or
suffer inaction inconsistent with the Pledgees’ and Collateral Agent’s lawful
rights under the Stock Pledge Agreement.

      

      IN WITNESS WHEREOF, the
parties hereto have executed this Stock Pledge Agreement on and as of the date
first set forth above.

       

      
        
          
            
              
                
                  	
                          CHINA
      YONGXIN PHARMACEUTICALS, INC.

                        	 
      
	
                          a
      Delaware corporation

                        	 
      
	 
      	 
      
	
                          By:

                        	 
      	 
      
	 
      	
                          Name:

                        	 
      
	 
      	
                          Title:

                        	 
      
	 
      	 
      
	
                          PLEDGOR:

                        	 
      
	 
      	 
      
	 
      	 
      

                

              

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      OMNIBUS
PLEDGEE SIGNATURE PAGE TO

      STOCK
PLEDGE AGREEMENT

       

      The
undersigned, in its capacity as a Pledgee, hereby executes and delivers the
Stock Pledge Agreement to which this signature page is attached and agrees to be
bound by the Stock Pledge Agreement on the date set forth on the first page of
the Stock Pledge Agreement. This counterpart signature page, together with all
counterparts of the Stock Pledge Agreement and signature pages of the other
parties named therein, shall constitute one and the same instrument in
accordance with the terms of the Stock Pledge Agreement.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	 
      	 
      	 
      
	
                                                          [Print
      Name of Pledgee]

                                                        	 
      	
                                                          [Name
      of Co-Pledgee, if applicable]

                                                        
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                          [Signature]

                                                        	 
      	
                                                          [Signature]

                                                        
	 
      	 
      	 
      
	
                                                          Name:

                                                        	 
      	 
      	
                                                          Name:

                                                        	 
      
	
                                                          Title:

                                                        	 
      	 
      	
                                                          Title:

                                                        	 
      
	 
      	 
      	 
      
	
                                                          Mailing
      Address:

                                                        	 
      	
                                                          Telephone
      No.:_____________________________

                                                        
	 
      	 
      	
                                                          Facsimile
      No:_______________________________

                                                        
	 
      	 
      	
                                                          Email
      Address:______________________________

                                                        
	 
      	 
      	 
      
	
                                                          (City,
      State and Zip)

                                                        	 
      	 
      

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      COLLATERAL
AGENT SIGNATURE PAGE TO

      STOCK
PLEDGE AGREEMENT

       

      The
undersigned, in its capacity as a Collateral Agent, hereby executes and delivers
the Stock Pledge Agreement to which this signature page is attached and agrees
to be bound by the Stock Pledge Agreement on the date set forth on the first
page of the Stock Pledge Agreement.  This counterpart signature page,
together with all counterparts of the Stock Pledge Agreement and signature pages
of the other parties named therein, shall constitute one and the same instrument
in accordance with the terms of the Stock Pledge Agreement.

      

      
        
          
            
              	
                      COLLATERAL
      AGENT:

                    	 
      
	 
      	 
      
	
                      COLLATERAL
      AGENTS, LLC

                    	 
      
	 
      	 
      
	
                      By:

                    	 
      	 
      
	
                      Name:

                    	 
      
	
                      Title:

                    	 
      

            

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Schedule
I

      

      First Financing (January 22,
2010)

       

      
        
          
            
              
                
                  
                    	
                            Subscribers

                          	 
      	
                            Note

                            Principal

                            Amount

                          	 
      	 
      	
                            Shares for

                            which

                            Warrant

                            can be

                            Exercised

                          	 
      
	
                            Excalibur
      Special Opportunities LP

                          	 
      	
                            $

                          	
                            300,000.00

                          	 
      	 
      	 
      	
                            1,500,000

                          	 
      
	
                            Dana
      Katzenmeier

                          	 
      	
                            $

                          	
                            50,000.00

                          	 
      	 
      	 
      	
                            250,000

                          	 
      
	
                            Fourth
      Street Holdings, LP

                          	 
      	
                            $

                          	
                            100,000.00

                          	 
      	 
      	 
      	
                            500,000

                          	 
      
	
                            Robert
      B. Prag

                          	 
      	
                            $

                          	
                            100,000.00

                          	 
      	 
      	 
      	
                            500,000

                          	 
      
	
                            Peter
      B. Tentler

                          	 
      	
                            $

                          	
                            50,000.00

                          	 
      	 
      	 
      	
                            250,000

                          	 
      
	
                            Richardson
      & Patel LLP

                          	 
      	
                            $

                          	
                            100,000.00

                          	 
      	 
      	 
      	
                            500,000

                          	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                            TOTAL

                          	 
      	
                            $

                          	
                            700,000.00

                          	 
      	 
      	 
      	
                            3,500,000

                          	 
      

                  

                

              

            

          

        

      

      

       Second
Financing (March
4,
2010)

      

      
        
          
            
              
                
                  
                    	
                            Subscribers

                          	 
      	
                            Note

                            Principal

                            Amount

                          	 
      	 
      	
                            Shares for

                            which

                            Warrant

                            can be

                            Exercised

                          	 
      
	
                            Marc
      Freeman

                          	 
      	
                            $

                          	
                            75,000.00

                          	 
      	 
      	 
      	
                            15,000

                          	 
      
	
                            Paul
      T. Mannion Jr.

                          	 
      	
                            $

                          	
                            25,000.00

                          	 
      	 
      	 
      	
                            5,000

                          	 
      
	
                            Linda
      Hecter

                          	 
      	
                            $

                          	
                            25,000.00

                          	 
      	 
      	 
      	
                            5,000

                          	 
      
	
                            TOTAL

                          	 
      	
                            $

                          	
                            125,000.00

                          	 
      	 
      	 
      	
                            25,000

                          	 
      

                  

                

              

            

          

        

      

       

      First Financing
(May
3,
2010)

      

      
        
          
            
              
                
                  
                    	
                            Subscribers

                          	 
      	
                            Note

                            Principal

                            Amount

                          	 
      	 
      	
                            Shares for

                            which

                            Warrant

                            can be

                            Exercised

                          	 
      
	
                            Excalibur
      Special Opportunities LP

                          	 
      	
                            $

                          	
                            100,000.00

                          	 
      	 
      	 
      	
                            500,000

                          	 
      
	
                            Dana
      Katzenmeier

                          	 
      	
                            $

                          	
                            25,000.00

                          	 
      	 
      	 
      	
                            125,000

                          	 
      
	
                            Fourth
      Street Holdings, LP

                          	 
      	
                            $

                          	
                            40,000.00

                          	 
      	 
      	 
      	
                            200,000

                          	 
      
	
                            Robert
      B. Prag

                          	 
      	
                            $

                          	
                            50,000.00

                          	 
      	 
      	 
      	
                            250,000

                          	 
      
	
                            Peter
      B. Tentler

                          	 
      	
                            $

                          	
                            25,000.00

                          	 
      	 
      	 
      	
                            125,000

                          	 
      
	
                            Paul
      T. Mannion Jr.

                          	 
      	
                            $

                          	
                            10,000.00

                          	 
      	 
      	 
      	
                            50,000

                          	 
      
	
                            TOTAL

                          	 
      	
                            $

                          	
                            250,000.00

                          	 
      	 
      	 
      	
                            1,250,000

                          	 
      

                  

                

              

            

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Schedule II

       

      Schedule
prepared in accordance with Instruction 2 to Item 601 of Regulation
S-K

       

      The Stock
Pledge Agreements dated January 22, 2010 are substantially identical in all
material respects except as to the pledgor.  The number of stocks
pledged for all Stock Pledge Agreements is 26,599,988 shares of the Company’s
common stock.

        

      
        
          
            
              	
                      Pledgor

                    
	
                      Perfect
      Sum Investment Ltd.

                    
	
                      Misala
      Holdings Inc.

                    
	
                      Boom
      Day Investments
Ltd.

                    

            

          

        

      

       

      The text
of the Stock Pledge Agreements is incorporated by reference from Exhibit 10.5 to
the Company’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 26, 2010.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}]]