Document:

REGISTRATION
      RIGHTS AGREEMENT

    

    THIS
      REGISTRATION RIGHTS AGREEMENT
      (this
“Agreement”)
      is
      made and entered into as of January 31, 2008, between China Sky One Medical,
      Inc., a Nevada corporation (the “Company”)
      and
      each of the several purchasers signatory hereto (each such purchaser, a
“Purchaser”
and,
      collectively, the “Purchasers”).

     

    This
      Agreement is made pursuant to the Securities Purchase Agreement, dated as of
      the
      date hereof, between the Company and each Purchaser (the “Purchase
      Agreement”).

    

    The
      Company and each Purchaser hereby agrees as follows:

    

    1.         
      Definitions.
      Capitalized
      terms used and not otherwise defined herein that are defined in the Purchase
      Agreement shall have the meanings given such terms in the Purchase
      Agreement.
      As used
      in this Agreement, the following terms shall have the following
      meanings:

    

    “Advice”
shall
      have the meaning set forth in Section 6(d).

    

    “Effectiveness
      Date”
means,
      with respect to the Initial Registration Statement required to be filed
      hereunder, the 120th calendar day following the date hereof (or, in the event
      of
      a “full review” by the Commission, the 150th calendar day following the date
      hereof) and with respect to any additional Registration Statements which may
      be
      required pursuant to Section 3(c), the 120th calendar day following the date
      on
      which an additional Registration Statement is required to be filed hereunder;
      provided,
      however,
      that in
      the event the Company is notified by the Commission that one or more of the
      above Registration Statements will not be reviewed or is no longer subject
      to
      further review and comments, the Effectiveness Date as to such Registration
      Statement shall be the fifth Trading Day following the date on which the Company
      is so notified if such date precedes the dates otherwise required
      above.

    

    “Effectiveness
      Period”
shall
      have the meaning set forth in Section 2.

    

    “Filing
      Date”
means,
      with respect to the Initial Registration Statement required hereunder, the
      60th
      calendar day following the date hereof and, with respect to any additional
      Registration Statements which may be required pursuant to Section 3(c), the
      60th
      calendar day following the date on which the Company is permitted by SEC
      Guidance to file such additional Registration Statement related to the
      Registrable Securities (but in no event sooner than the 180th calendar day
      following the date the initial Registration Statement is first declared
      effective by the Commission unless the filing of such additional Registration
      Statement sooner than such 180th calendar is permitted pursuant to Rule
      415).

    

    “Holder”
or
      “Holders”
means
      the holder or holders, as the case may be, from time to time of Registrable
      Securities.

    

    “Indemnified
      Party”
shall
      have the meaning set forth in Section 5(c).

     

    
      
        
        

      

      
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    “Indemnifying
      Party”
shall
      have the meaning set forth in Section 5(c).

    

    “Initial
      Registration Statement”
means
      the initial Registration Statement filed pursuant to this
      Agreement.

    

    “Initial
      Shares”
means
      a
      number of Registrable Securities equal to the lesser of (i) the total number
      of
      Registrable Securities, and (ii) one-third of the number of shares of Common
      Stock issued and outstanding and held by non-affiliates of the Company
      immediately prior to the filing date of the Initial Registration
      Statement.

    

    “Losses”
shall
      have the meaning set forth in Section 5(a).

    

    “Plan
      of Distribution”
shall
      have the meaning set forth in Section 2. 

    

    “Prospectus”
means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated by the Commission pursuant to the Securities Act), as
      amended or supplemented by any prospectus supplement, with respect to the terms
      of the offering of any portion of the Registrable Securities covered by a
      Registration Statement, and all other amendments and supplements to the
      Prospectus, including post-effective amendments, and all material incorporated
      by reference or deemed to be incorporated by reference in such
      Prospectus.

    

    “Registrable
      Securities”
means,
      as of the date in question, (i) all of the Shares of Common Stock, (ii) all
      Warrant Shares (assuming on the date of determination the Warrants are exercised
      in full without regard to any exercise limitations therein), (iii) any
      additional shares of Common Stock issuable in connection with any anti-dilution
      provisions in the Purchase Agreement and the Warrants (in each case, without
      giving effect to any limitations on exercise set forth in the Warrants) (iv)
      all
      Escrow Shares as defined in the Make Good Agreement executed concurrently
      herewith and (v) any securities issued or issuable upon any stock split,
      dividend or other distribution, recapitalization or similar event with respect
      to the foregoing. 

    

    “Registration
      Statement”
means
      the registration statement required to be filed hereunder and any additional
      registration statements contemplated by Section 3(c), including (in each case)
      the Prospectus, amendments and supplements to such registration statement or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

    

    “Rule
      415”
means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended or interpreted from time to time, or any similar rule or
      regulation hereafter adopted by the Commission having substantially the same
      purpose and effect as such Rule.

    

    “Rule
      424”
means
      Rule 424 promulgated by the Commission pursuant to the 1933 Act, as such Rule
      may be amended or interpreted from time to time, or any similar rule or
      regulation hereafter adopted by the Commission having substantially the same
      purpose and effect as such Rule.

     

    
      
        
        

      

      
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    “Selling
      Shareholder Questionnaire”
shall
      have the meaning set forth in Section 3(a).

    

     “SEC
      Guidance”
means
      (i) any publicly-available written or oral guidance, comments, requirements
      or
      requests of the Commission staff, and (ii) the 1933 Act and the rules and
      regulations promulgated thereunder.

     

    2.          Shelf
      Registration.
      On or
      prior to each Filing Date, the Company shall prepare and file with the
      Commission a “Shelf” Registration Statement covering the resale of all or such
      portion of the Registrable Securities as permitted by SEC Guidance (provided
      that the Company shall use diligent efforts to advocate with the Commission
      for
      the registration of all of the Registrable Securities in accordance with the
      SEC
      Guidance, including without limitation, the Manual of Publicly Available
      Telephone Interpretations D.29) that are not then registered on an effective
      Registration Statement for an offering to be made on a continuous basis pursuant
      to Rule 415;
      provided,
      however,
      that if
      100% of the Registrable Securities hereunder shall equal or exceed 30% of the
      issued and outstanding Common Stock of the Company (less any shares of Common
      Stock held by Affiliates of the Company) on the actual filing date of the
      initial Registration Statement, the initial Registration Statement shall
      register a number of shares of Common Stock which is equal to 30% of the issued
      and outstanding shares of Common Stock of the Company (less any shares of Common
      Stock held by Affiliates of the Company) on such actual filing date minus 10,000
      shares of Common Stock, and the remaining Registrable Securities shall be
      subject to Section 3(c). In such event, the number of Registrable Securities
      to
      be registered for each Holder shall be reduced pro-rata among all Holders,
      and
unless
      otherwise directed in writing by a Holder as to its Registrable Securities,
      the
      number of Registrable Securities to be registered on such Registration Statement
      will first be reduced by Registrable Securities represented by the Warrant
      Shares (applied, in the case that some Warrant Shares may be registered, to
      the
      Holders on a pro rata basis based on the total number of unregistered Warrant
      Shares held by such Holders), and second by Registrable Securities represented
      by Shares (applied, in the case that some Shares may be registered, to the
      Holders on a pro rata basis based on the total number of unregistered Shares
      held by such Holders).
      The
      Registration Statement shall be on Form S-3 (except if the Company is not then
      eligible to register for resale the Registrable Securities on Form S-3, in
      which
      case such registration shall be on another appropriate form in accordance
      herewith) and shall contain (unless otherwise directed by at least an 85%
      majority in interest of the Holders) substantially the “Plan
      of Distribution”
      attached hereto as Annex
      A.
      Subject
      to the terms of this Agreement, the Company shall use its best efforts to cause
      a Registration Statement to be declared effective under the Securities Act
      as
      promptly as possible after the filing thereof, but in any event prior to the
      applicable Effectiveness Date, and shall use its best efforts to keep such
      Registration Statement continuously effective under the Securities Act until
      all
      Registrable Securities covered by such Registration Statement have been sold,
      or
      may be sold without volume restrictions pursuant to Rule 144(k), as determined
      by the counsel to the Company pursuant to a written opinion letter to such
      effect, addressed and acceptable to the Company’s transfer agent and the
      affected Holders (the “Effectiveness
      Period”).
      The
      Company shall telephonically request effectiveness of a Registration Statement
      as of 5:00 p.m. New York City time on a Trading Day. The Company shall
      immediately notify the Holders via facsimile or by e-mail delivery of a “.pdf”
format data file of the effectiveness of a Registration Statement on the same
      Trading Day that the Company telephonically confirms effectiveness with the
      Commission, which shall be the date requested for effectiveness of a
      Registration Statement. The Company shall, by 9:30 a.m. New York City time
      on
      the Trading Day after the Effective Date, file a final Prospectus with the
      Commission as required by Rule 424. 

     

    
      
        
        

      

      
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    3.         
      Registration
      Procedures.
      In
      connection with the Company’s registration obligations hereunder, the Company
      shall:

    

    (a) Not
      less
      than five (5) Trading Days prior to the filing of each Registration Statement
      and not less than one (1) Trading Day prior to the filing of any related
      Prospectus or any amendment or supplement thereto (including any document that
      would be incorporated or deemed to be incorporated therein by reference), the
      Company shall (i) furnish to each Holder copies of all such documents proposed
      to be filed, which documents (other than those incorporated or deemed to be
      incorporated by reference) will be subject to the review of such Holders, and
      (ii) cause its officers and directors, counsel and independent certified public
      accountants to respond to such inquiries as shall be necessary, in the
      reasonable opinion of respective counsel to each Holder, to conduct a reasonable
      investigation within the meaning of the 1933 Act. The Company shall not file
      a
      Registration Statement or any such Prospectus or any amendments or supplements
      thereto to which the Holders of a majority of the Registrable Securities shall
      reasonably object in good faith, provided that the Company is notified of such
      objection in writing no later than five (5) Trading Days after the Holders
      have
      been so furnished copies of a Registration Statement or one (1) Trading Day
      after the Holders have been so furnished copies of any related Prospectus or
      amendments or supplements thereto. Each Holder agrees to furnish to the Company
      a completed questionnaire in the form attached to this Agreement as Annex
      B
      (a
“Selling
      Shareholder Questionnaire”)
      not
      less than two Trading Days prior to the Filing Date or by the end of the fourth
      Trading Day following the date on which such Holder receives draft materials
      in
      accordance with this Section. 

    

       
      (b) (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to a Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep a Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements in order to register for resale under the Securities Act all of
      the
      Registrable Securities; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement (subject to the terms of
      this
      Agreement), and, as so supplemented or amended, to be filed pursuant to Rule
      424; (iii) respond as promptly as reasonably possible to any comments received
      from the Commission with respect to a Registration Statement or any amendment
      thereto and provide as promptly as reasonably possible to the Holders true
      and
      complete copies of all correspondence from and to the Commission relating to
      a
      Registration Statement (provided that the Company may excise any information
      contained therein which would constitute material non-public information as
      to
      any Holder which has not executed a confidentiality agreement with the Company);
      and (iv) comply in all material respects with the provisions of the Securities
      Act and the Exchange Act with respect to the disposition of all Registrable
      Securities covered by a Registration Statement during the applicable period
      in
      accordance (subject to the terms of this Agreement) with the intended methods
      of
      disposition by the Holders thereof set forth in such Registration Statement
      as
      so amended or in such Prospectus as so supplemented.

     

    
      
        
        

      

      
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    (c) If
      during
      the Effectiveness Period, the number of Registrable Securities at any time
      exceeds 100% of the number of shares of Common Stock then registered in a
      Registration Statement, then the Company shall file as soon as reasonably
      practicable, but in any case prior to the applicable Filing Date, an additional
      Registration Statement covering the resale by the Holders of not less than
      the
      number of such Registrable Securities.

    

    (d) Notify
      the Holders of Registrable Securities to be sold (which notice shall, pursuant
      to clauses (iii) through (vi) hereof, be accompanied by an instruction to
      suspend the use of the Prospectus until the requisite changes have been made)
      as
      promptly as reasonably possible (and, in the case of (i)(A) below, not less
      than
      one Trading Day prior to such filing) and (if requested by any such Person)
      confirm such notice in writing no later than one Trading Day following the
      day
      (i)(A) when a Prospectus or any Prospectus supplement or post-effective
      amendment to a Registration Statement is proposed to be filed; (B) when the
      Commission notifies the Company whether there will be a “review” of such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement; and (C) with respect to a Registration Statement or
      any
      post-effective amendment, when the same has become effective; (ii) of any
      request by the Commission or any other federal or state governmental authority
      for amendments or supplements to a Registration Statement or Prospectus or
      for
      additional information; (iii) of the issuance by the Commission or any other
      federal or state governmental authority of any stop order suspending the
      effectiveness of a Registration Statement covering any or all of the Registrable
      Securities or the initiation of any Proceedings for that purpose; (iv) of the
      receipt by the Company of any notification with respect to the suspension of
      the
      qualification or exemption from qualification of any of the Registrable
      Securities for sale in any jurisdiction, or the initiation or threatening of
      any
      Proceeding for such purpose; (v) of the occurrence of any event or passage
      of
      time that makes the financial statements included in a Registration Statement
      ineligible for inclusion therein or any statement made in a Registration
      Statement or Prospectus or any document incorporated or deemed to be
      incorporated therein by reference untrue in any material respect or that
      requires any revisions to a Registration Statement, Prospectus or other
      documents so that, in the case of a Registration Statement or the Prospectus,
      as
      the case may be, it will not contain any untrue statement of a material fact
      or
      omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading; and (vi) of the occurrence or existence of any pending
      corporate development with respect to the Company that the Company believes
      may
      be material and that, in the determination of the Company, makes it not in
      the
      best interest of the Company to allow continued availability of a Registration
      Statement or Prospectus, provided that any and all of such information shall
      remain confidential to each Holder until such information otherwise becomes
      public, unless disclosure by a Holder is required by law; provided,
      further,
      that
      notwithstanding each Holder’s agreement to keep such information confidential,
      each such Holder makes no acknowledgement that any such information is material,
      non-public information.

     

    
      
        
        

      

      
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    (e) Use
      its
      best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
      of
      (i) any order stopping or suspending the effectiveness of a Registration
      Statement, or (ii) any suspension of the qualification (or exemption from
      qualification) of any of the Registrable Securities for sale in any
      jurisdiction, at the earliest practicable moment.

    

    (f) Furnish
      to each Holder, without charge, at least one conformed copy of each such
      Registration Statement and each amendment thereto, including financial
      statements and schedules, all documents incorporated or deemed to be
      incorporated therein by reference to the extent requested by such Person, and
      all exhibits to the extent requested by such Person (including those previously
      furnished or incorporated by reference) promptly after the filing of such
      documents with the Commission; provided, that any such item which is available
      on the EDGAR system need not be furnished in physical form.

    

    (g) Subject
      to the terms of this Agreement, the Company hereby consents to the use of such
      Prospectus and each amendment or supplement thereto by each of the selling
      Holders in connection with the offering and sale of the Registrable Securities
      covered by such Prospectus and any amendment or supplement thereto, except
      after
      the giving of any notice pursuant to Section 3(d).

    

    (h) Prior
      to
      any resale of Registrable Securities by a Holder, use its commercially
      reasonable efforts to register or qualify or cooperate with the selling Holders
      in connection with the registration or qualification (or exemption from the
      Registration or qualification) of such Registrable Securities for the resale
      by
      the Holder under the securities or Blue Sky laws of such jurisdictions within
      the United States as any Holder reasonably requests in writing, to keep each
      registration or qualification (or exemption therefrom) effective during the
      Effectiveness Period and to do any and all other acts or things reasonably
      necessary to enable the disposition in such jurisdictions of the Registrable
      Securities covered by each Registration Statement; provided, that the Company
      shall not be required to qualify generally to do business in any jurisdiction
      where it is not then so qualified, subject the Company to any material tax
      in
      any such jurisdiction where it is not then so subject or file a general consent
      to service of process in any such jurisdiction.

    

    (i) If
      requested by a Holder, cooperate with such Holders to facilitate the timely
      preparation and delivery of certificates representing Registrable Securities
      to
      be delivered to a transferee pursuant to a Registration Statement, which
      certificates shall be free, to the extent permitted by the Purchase Agreement,
      of all restrictive legends, and to enable such Registrable Securities to be
      in
      such denominations and registered in such names as any such Holder may
      request.

    

    (j) Upon
      the
      occurrence of any event contemplated by Section 3(d), as promptly as reasonably
      possible under the circumstances taking into account the Company’s good faith
      assessment of any adverse consequences to the Company and its stockholders
      of
      the premature disclosure of such event, prepare a supplement or amendment,
      including a post-effective amendment, to a Registration Statement or a
      supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file any other required document
      so
      that, as thereafter delivered, neither a Registration Statement nor such
      Prospectus will contain an untrue statement of a material fact or omit to state
      a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading. If
      the
      Company notifies the Holders in accordance with clauses (iii) through (vi)
      of
      Section 3(d) above to suspend the use of any Prospectus until the requisite
      changes to such Prospectus have been made, then the Holders shall suspend use
      of
      such Prospectus. The Company will use its best efforts to ensure that the use
      of
      the Prospectus may be resumed as promptly as is practicable. The Company shall
      be entitled to exercise its right under this Section 3(k) to suspend the
      availability of a Registration Statement and Prospectus, for a period not to
      exceed 60 calendar days (which need not be consecutive days) in any 12 month
      period.

     

    
      
        
        

      

      
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    (k) Comply
      with all applicable rules and regulations of the Commission.

    

    (l) The
      Company may require each selling Holder to furnish to the Company a certified
      statement as to the number of shares of Common Stock beneficially owned by
      such
      Holder and, if required by the Commission, the natural persons thereof that
      have
      voting and dispositive control over the shares. During any periods that the
      Company is unable to meet its obligations hereunder with respect to the
      registration of the Registrable Securities solely because any Holder fails
      to
      furnish such information within three Trading Days of the Company’s request, any
      liquidated damages that are accruing at such time as to such Holder only shall
      be tolled until such information is delivered to the Company.

    

    4.         Registration
      Expenses.
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to a Registration Statement. The fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses of the Company’s counsel and auditors) (A) with respect to
      filings made with the Commission, (B) with respect to filings required to be
      made with any Trading Market on which the Common Stock is then listed for
      trading, (C) in compliance with applicable state securities or Blue Sky laws
      reasonably agreed to by the Company in writing (including, without limitation,
      fees and disbursements of counsel for the Company in connection with Blue Sky
      qualifications or exemptions of the Registrable Securities), and (D) if not
      previously paid by the Company in connection with an Issuer Filing, with respect
      to any filing that may be required to be made by any broker through which a
      Holder intends to make sales of Registrable Securities with the NASD pursuant
      to
      NASD Rule 2710, so long as the broker is receiving no more than a customary
      brokerage commission in connection with such sale, (ii) printing expenses
      (including, without limitation, expenses of printing certificates for
      Registrable Securities), (iii) messenger, telephone and delivery expenses,
      (iv)
      fees and disbursements of counsel for the Company, (v) Securities Act liability
      insurance, if the Company so desires such insurance, and (vi) fees and expenses
      of all other Persons retained by the Company in connection with the consummation
      of the transactions contemplated by this Agreement. In addition, the Company
      shall be responsible for all of its internal expenses incurred in connection
      with the consummation of the transactions contemplated by this Agreement
      (including, without limitation, all salaries and expenses of its officers and
      employees performing legal or accounting duties), the expense of any annual
      audit and the fees and expenses incurred in connection with the listing of
      the
      Registrable Securities on any securities exchange as required hereunder. In
      no
      event shall the Company be responsible for any broker or similar commissions
      of
      any Holder or, except to the extent provided for in the Transaction Documents,
      any legal fees or other costs of the Holders.

     

    
      
        
        

      

      
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      5.         Indemnification.

    

    (a) Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Holder, the officers, directors, members, partners, agents,
      brokers (including brokers who offer and sell Registrable Securities as
      principal as a result of a pledge or any failure to perform under a margin
      call
      of Common Stock), investment advisors and employees (and any other Persons
      with
      a functionally equivalent role of a Person holding such titles, notwithstanding
      a lack of such title or any other title) of each of them, each Person who
      controls any such Holder (within the meaning of Section 15 of the Securities
      Act
      or Section 20 of the Exchange Act) and the officers, directors, members,
      shareholders, partners, agents and employees (and any other Persons with a
      functionally equivalent role of a Person holding such titles, notwithstanding
      a
      lack of such title or any other title) of each such controlling Person, to
      the
      fullest extent permitted by applicable law, from and against any and all losses,
      claims, damages, liabilities, costs (including, without limitation, reasonable
      attorneys’ fees) and expenses (collectively, “Losses”),
      as
      incurred, arising out of or relating to (1) any untrue or alleged untrue
      statement of a material fact contained in a Registration Statement, any
      Prospectus or any form of prospectus or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein (in the case of any Prospectus or
      supplement thereto, in light of the circumstances under which they were made)
      not misleading or (2) any violation or alleged violation by the Company of
      the
      Securities Act, the Exchange Act or any state securities law, or any rule or
      regulation thereunder, in connection with the performance of its obligations
      under this Agreement, except to the extent, but only to the extent, that (i)
      such untrue statements or omissions are based solely upon information regarding
      such Holder furnished in writing to the Company by such Holder expressly for
      use
      therein, or to the extent that such information relates to such Holder or such
      Holder’s proposed method of distribution of Registrable Securities and was
      reviewed and expressly approved in writing by such Holder expressly for use
      in a
      Registration Statement, such Prospectus or in any amendment or supplement
      thereto (it being understood that the Holder has approved Annex A hereto for
      this purpose) or (ii) in the case of an occurrence of an event of the type
      specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated
      or
      defective Prospectus after the Company has notified such Holder in writing
      that
      the Prospectus is outdated or defective and prior to the receipt by such Holder
      of the Advice contemplated in Section 6(d). The Company shall notify the Holders
      promptly of the institution, threat or assertion of any Proceeding arising
      from
      or in connection with the transactions contemplated by this Agreement of which
      the Company is aware.

    

    (b) Indemnification
      by Holders.
      Each
      Holder shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each Person who controls
      the Company (within the meaning of Section 15 of the Securities Act and Section
      20 of the Exchange Act), and the directors, officers, agents or employees of
      such controlling Persons, to the fullest extent permitted by applicable law,
      from and against all Losses, as incurred, to the extent arising out of or based
      solely upon: (x) such Holder’s failure to comply with the prospectus delivery
      requirements of the Securities Act, or (y) any untrue or alleged untrue
      statement of a material fact contained in any Registration Statement, any
      Prospectus, or any form of prospectus, or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein not misleading (i) to the extent,
      but
      only to the extent, that such untrue statement or omission is contained in
      any
      information so furnished in writing by such Holder to the Company specifically
      for inclusion in such Registration Statement or such Prospectus or such form
      of
      prospectus, (ii) to the extent that such information relates to such Holder’s
      proposed method of distribution of Registrable Securities and was reviewed
      and
      expressly approved in writing by such Holder expressly for use in a Registration
      Statement (it being understood that the Holder has approved Annex A hereto
      for
      this purpose), such Prospectus or in any amendment or supplement thereto, or
      (ii) in the case of an occurrence of an event of the type specified in Section
      3(d)(iii)-(vi), the use by such Holder of an outdated or defective Prospectus
      after the Company has notified such Holder in writing that the Prospectus is
      outdated or defective and prior to the receipt by such Holder of the Advice
      contemplated in Section 6(d). In no event shall the liability of any selling
      Holder hereunder be greater in amount than the dollar amount of the net proceeds
      received by such Holder upon the sale of the Registrable Securities giving
      rise
      to such indemnification obligation.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (c) Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such
      Indemnified Party shall promptly notify the Person from whom indemnity is sought
      (the “Indemnifying
      Party”)
      in
      writing, and the Indemnifying Party shall have the right to assume the defense
      thereof, including the employment of counsel reasonably satisfactory to the
      Indemnified Party and the payment of all fees and expenses incurred in
      connection with defense thereof; provided, that the failure of any Indemnified
      Party to give such notice shall not relieve the Indemnifying Party of its
      obligations or liabilities pursuant to this Agreement, except (and only) to
      the
      extent that it shall be finally determined by a court of competent jurisdiction
      (which determination is not subject to appeal or further review) that such
      failure shall have prejudiced the Indemnifying Party.

    

    An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; (2) the Indemnifying Party shall have failed promptly to assume the
      defense of such Proceeding and to employ counsel reasonably satisfactory to
      such
      Indemnified Party in any such Proceeding; or (3) the named parties to any such
      Proceeding (including any impleaded parties) include both such Indemnified
      Party
      and the Indemnifying Party, and counsel to the Indemnified Party shall
      reasonably believe that a material conflict of interest is likely to exist
      if
      the same counsel were to represent such Indemnified Party and the Indemnifying
      Party (in which case, if such Indemnified Party notifies the Indemnifying Party
      in writing that it elects to employ separate counsel at the expense of the
      Indemnifying Party, the Indemnifying Party shall not have the right to assume
      the defense thereof and the reasonable fees and expenses of no more than one
      separate counsel shall be at the expense of the Indemnifying Party). The
      Indemnifying Party shall not be liable for any settlement of any such Proceeding
      effected without its written consent, which consent shall not be unreasonably
      withheld or delayed. No Indemnifying Party shall, without the prior written
      consent of the Indemnified Party, effect any settlement of any pending
      Proceeding in respect of which any Indemnified Party is a party, unless such
      settlement includes an unconditional release of such Indemnified Party from
      all
      liability on claims that are the subject matter of such Proceeding.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Subject
      to the terms of this Agreement, all reasonable fees and expenses of the
      Indemnified Party (including reasonable fees and expenses to the extent incurred
      in connection with investigating or preparing to defend such Proceeding in
      a
      manner not inconsistent with this Section) shall be paid to the Indemnified
      Party, as incurred, within ten Trading Days of written notice thereof to the
      Indemnifying Party; provided, that the Indemnified Party shall promptly
      reimburse the Indemnifying Party for that portion of such fees and expenses
      applicable to such actions for which such Indemnified Party is judicially
      determined to be not entitled to indemnification hereunder.

    

    (d) Contribution.
      If the
      indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
      Party or insufficient to hold an Indemnified Party harmless for any Losses,
      then
      each Indemnifying Party shall contribute to the amount paid or payable by such
      Indemnified Party, in such proportion as is appropriate to reflect the relative
      fault of the Indemnifying Party and Indemnified Party in connection with the
      actions, statements or omissions that resulted in such Losses as well as any
      other relevant equitable considerations. The relative fault of such Indemnifying
      Party and Indemnified Party shall be determined by reference to, among other
      things, whether any action in question, including any untrue or alleged untrue
      statement of a material fact or omission or alleged omission of a material
      fact,
      has been taken or made by, or relates to information supplied by, such
      Indemnifying Party or Indemnified Party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in this Agreement, any reasonable attorneys’ or other fees or expenses incurred
      by such party in connection with any Proceeding to the extent such party would
      have been indemnified for such fees or expenses if the indemnification provided
      for in this Section was available to such party in accordance with its
      terms.

    

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 5(d), no Holder shall be required
      to contribute, in the aggregate, any amount in excess of the amount by which
      the
      net proceeds actually received by such Holder from the sale of the Registrable
      Securities subject to the Proceeding exceeds the amount of any damages that
      such
      Holder has otherwise been required to pay by reason of such untrue or alleged
      untrue statement or omission or alleged omission.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.

     

    6.         
      Miscellaneous.

    

    (a) Remedies.
      In the
      event of a breach by the Company or by a Holder of any of their respective
      obligations under this Agreement, each Holder or the Company, as the case may
      be, in addition to being entitled to exercise all rights granted by law and
      under this Agreement, including recovery of damages, shall be entitled to
      specific performance of its rights under this Agreement. The Company and each
      Holder agree that monetary damages would not provide adequate compensation
      for
      any losses incurred by reason of a breach by it of any of the provisions of
      this
      Agreement and hereby further agrees that, in the event of any action for
      specific performance in respect of such breach, it shall not assert or shall
      waive the defense that a remedy at law would be adequate.

    

    (b) No
      Piggyback on Registrations; Prohibition on Filing Other Registration
      Statements.
      Except
      as set forth on Annex
      C
      attached
      hereto, neither the Company nor any of its security holders (other than the
      Holders in such capacity pursuant hereto) may include securities of the Company
      in the initial Registration Statement other than the Registrable Securities.
      The
      Company shall not file any other registration statements until the initial
      Registration Statement required hereunder is declared effective by the
      Commission, provided that this Section 6(b) shall not prohibit the Company
      from
      filing amendments to registration statements already filed.

    

    (c) Compliance.
      Each
      Holder covenants and agrees that it will comply with the prospectus delivery
      requirements of the 1933 Act as applicable to it in connection with sales of
      Registrable Securities pursuant to a Registration Statement.

    

    (d) Discontinued
      Disposition.
      By its
      acquisition of Registrable Securities, each Holder agrees that, upon receipt
      of
      a notice from the Company of the occurrence of any event of the kind described
      in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
      disposition of such Registrable Securities under a Registration Statement until
      it is advised in writing (the “Advice”)
      by the
      Company that the use of the applicable Prospectus (as it may have been
      supplemented or amended) may be resumed. The Company will use its best efforts
      to ensure that the use of the Prospectus may be resumed as promptly as it
      practicable. 

    

    (e) Piggy-Back
      Registrations.
      If, at
      any time during the Effectiveness Period, there is not an effective Registration
      Statement covering all of the Registrable Securities and the Company shall
      determine to prepare and file with the Commission a registration statement
      relating to an offering for its own account or the account of others under
      the
      Securities Act of any of its equity securities, other than on Form S-4 or Form
      S-8 (each as promulgated under the Securities Act) or their then equivalents
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with the Company’s stock option or other employee benefit plans, then
      the Company shall deliver to each Holder a written notice of such determination
      and, if within fifteen days after the date of the delivery of such notice,
      any
      such Holder shall so request in writing, the Company shall include in such
      registration statement all or any part of such Registrable Securities such
      Holder requests to be registered; provided,
      however,
      that
      the Company shall not be required to register any Registrable Securities
      pursuant to this Section 6(e) that are eligible for resale pursuant to Rule
      144(k) promulgated by the Commission pursuant to the Securities Act or that
      are
      the subject of a then effective Registration Statement.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (f) Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and the Holders of a majority of the then outstanding
      Registrable Securities (including, for this purpose any Registrable Securities
      issuable upon exercise or conversion of any Security). If a Registration
      Statement does not register all of the Registrable Securities pursuant to a
      waiver or amendment done in compliance with the previous sentence, then the
      number of Registrable Securities to be registered for each Holder shall be
      reduced pro rata among all Holders and each Holder shall have the right to
      designate which of its Registrable Securities shall be omitted from such
      Registration Statement. Notwithstanding the foregoing, a waiver or consent
      to
      depart from the provisions hereof with respect to a matter that relates
      exclusively to the rights of a Holder or some Holders and that does not directly
      or indirectly affect the rights of other Holders may be given by such Holder
      or
      Holders of all of the Registrable Securities to which such waiver or consent
      relates; provided,
      however,
      that
      the provisions of this sentence may not be amended, modified, or supplemented
      except in accordance with the provisions of the first sentence of this Section
      6(f). 

     

    (g) Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be delivered as set forth in the Purchase Agreement.
      

    

    (h) Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. The Company may not assign (except by merger) its rights or obligations
      hereunder without the prior written consent of all of the Holders of the then
      outstanding Registrable Securities. Each Holder may assign their respective
      rights hereunder in the manner and to the Persons as permitted under the
      Purchase Agreement.

    

    (i) No
      Inconsistent Agreements.
      Neither
      the Company nor any of its Subsidiaries has entered, as of the date hereof,
      nor
      shall the Company or any of its Subsidiaries, on or after the date of this
      Agreement, enter into any agreement with respect to its securities, that would
      have the effect of impairing the rights granted to the Holders in this Agreement
      or otherwise conflicts with the provisions hereof. Except as set forth on
Annex
      C
      attached
      hereto, neither the Company nor any of its Subsidiaries has previously entered
      into any agreement granting any registration rights with respect to any of
      its
      securities to any Person that have not been satisfied in full.

    

    (j) Execution
      and Counterparts.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission or by e-mail delivery of a “.pdf” format data file, such signature
      shall create a valid and binding obligation of the party executing (or on whose
      behalf such signature is executed) with the same force and effect as if such
      facsimile or “.pdf” signature page were an original thereof.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (k) Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be determined in accordance with the provisions of
      the
      Purchase Agreement.

    

    (l) Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any other remedies
      provided by law.

    

    (m) Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their commercially reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction. It is hereby stipulated and declared to be the
      intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.

    

    (n) Headings.
      The
      headings in this Agreement are for convenience only, do not constitute a part
      of
      the Agreement and shall not be deemed to limit or affect any of the provisions
      hereof.

    

    (o) Independent
      Nature of Holders’ Obligations and Rights.
      The
      obligations of each Holder hereunder are several and not joint with the
      obligations of any other Holder hereunder, and no Holder shall be responsible
      in
      any way for the performance of the obligations of any other Holder hereunder.
      Nothing contained herein or in any other agreement or document delivered at
      any
      closing, and no action taken by any Holder pursuant hereto or thereto, shall
      be
      deemed to constitute the Holders as a partnership, an association, a joint
      venture or any other kind of entity, or create a presumption that the Holders
      are in any way acting in concert with respect to such obligations or the
      transactions contemplated by this Agreement. Each Holder shall be entitled
      to
      protect and enforce its rights, including without limitation the rights arising
      out of this Agreement, and it shall not be necessary for any other Holder to
      be
      joined as an additional party in any proceeding for such purpose.

    

    ********************

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Registration Rights Agreement as of the date first
      written above.

     

    
      	 	 	 
	 	CHINA
              SKY
              ONE MEDICAL, INC. 
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Title 

    

     

    

    

    [SIGNATURE
      PAGE OF HOLDERS FOLLOWS]

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    REGISTRATION
      RIGHTS AGREEMENT

    COUNTERPART
      SIGNATURE PAGE OF PURCHASERS

    

     

    Name
      of
      Purchaser: __________________________

    

    Signature
      of Authorized Signatory of Purchaser: __________________________

    

    Name
      of
      Authorized Signatory: _________________________

    

    Title
      of
      Authorized Signatory: __________________________

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Annex
      A

    

    Plan
      of Distribution

    

    Each
      Selling Stockholder (the “Selling
      Stockholders”)
      of the
      common stock and any of their pledgees, assignees and successors-in-interest
      may, from time to time, sell any or all of their shares of common stock on
      the
      OTC Bulletin Board or any other stock exchange, market or trading facility
      on
      which the shares are traded or in private transactions. These sales may be
      at
      fixed or negotiated prices. A Selling Stockholder may use any one or more of
      the
      following methods when selling shares:

     

    
      	·  	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;

            

    

     

    
      	·  	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            

    

     

    
      	·  	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;

            

    

     

    
      	·  	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            

    

     

    
      	·  	
              privately
                negotiated transactions;

            

    

     

    
      	·  	
              settlement
                of short sales entered into after the effective date of the registration
                statement of which this prospectus is a part;

            

    

     

    
      	·  	
              broker-dealers
                may agree with the Selling Stockholders to sell a specified number
                of such
                shares at a stipulated price per
                share;

            

    

     

    
      	·  	
              through
                the writing or settlement of options or other hedging transactions,
                whether through an options exchange or
                otherwise;

            

    

     

    
      	·  	
              a
                combination of any such methods of sale;
                or

            

    

     

    
      	·  	
              any
                other method permitted pursuant to applicable
                law.

            

    

     

    The
      Selling Stockholders may also sell shares under Rule 144 under the Securities
      Act of 1933, as amended (the “Securities
      Act”),
      if
      available, rather than under this prospectus.

     

    Broker-dealers
      engaged by the Selling Stockholders may arrange for other brokers-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the Selling Stockholders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated, but,
      except as set forth in a supplement to this Prospectus, in the case of an agency
      transaction not in excess of a customary brokerage commission in compliance
      with
      NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
      in compliance with NASDR IM-2440. 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    In
      connection with the sale of the common stock or interests therein, the Selling
      Stockholders may enter into hedging transactions with broker-dealers or other
      financial institutions, which may in turn engage in short sales of the common
      stock in the course of hedging the positions they assume. The Selling
      Stockholders may also sell shares of the common stock short and deliver these
      securities to close out their short positions, or loan or pledge the common
      stock to broker-dealers that in turn may sell these securities. The Selling
      Stockholders may also enter into option or other transactions with
      broker-dealers or other financial institutions or the creation of one or more
      derivative securities which require the delivery to such broker-dealer or other
      financial institution of shares offered by this prospectus, which shares such
      broker-dealer or other financial institution may resell pursuant to this
      prospectus (as supplemented or amended to reflect such
      transaction).

     

    The
      Selling Stockholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be “underwriters” within the meaning of the
      Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act. Each Selling Stockholder has informed the
      Company that it does not have any written or oral agreement or understanding,
      directly or indirectly, with any person to distribute the Common Stock. In
      no
      event shall any broker-dealer receive fees, commissions and markups which,
      in
      the aggregate, would exceed eight percent (8%).

     

    The
      Company is required to pay certain fees and expenses incurred by the Company
      incident to the registration of the shares. The Company has agreed to indemnify
      the Selling Stockholders against certain losses, claims, damages and
      liabilities, including liabilities under the Securities Act. 

     

    Because
      Selling Stockholders may be deemed to be “underwriters” within the meaning of
      the Securities Act, they will be subject to the prospectus delivery requirements
      of the Securities Act including Rule 172 thereunder. In addition, any securities
      covered by this prospectus which qualify for sale pursuant to Rule 144 under
      the
      Securities Act may be sold under Rule 144 rather than under this prospectus.
      There is no underwriter or coordinating broker acting in connection with the
      proposed sale of the resale shares by the Selling Stockholders.

     

    We
      agreed
      to keep this prospectus effective until the earlier of (i) the date on which
      the
      shares may be resold by the Selling Stockholders without registration and
      without regard to any volume limitations by reason of Rule 144(k) under the
      Securities Act or any other rule of similar effect or (ii) all of the shares
      have been sold pursuant to this prospectus or Rule 144 under the Securities
      Act
      or any other rule of similar effect. The resale shares will be sold only through
      registered or licensed brokers or dealers if required under applicable state
      securities laws. In addition, in certain states, the resale shares may not
      be
      sold unless they have been registered or qualified for sale in the applicable
      state or an exemption from the registration or qualification requirement is
      available and is complied with.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Under
      applicable rules and regulations under the Exchange Act, any person engaged
      in
      the distribution of the resale shares may not simultaneously engage in market
      making activities with respect to the common stock for the applicable restricted
      period, as defined in Regulation M, prior to the commencement of the
      distribution. In addition, the Selling Stockholders will be subject to
      applicable provisions of the Exchange Act and the rules and regulations
      thereunder, including Regulation M, which may limit the timing of purchases
      and
      sales of shares of the common stock by the Selling Stockholders or any other
      person. We will make copies of this prospectus available to the Selling
      Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including
      by
      compliance with Rule 172 under the Securities Act).

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Annex
      B

     

    CHINA
      SKY ONE MEDICAL, INC.

     

    Selling
      Securityholder Notice and Questionnaire

     

    The
      undersigned beneficial owner of common stock (the “Registrable
      Securities”)
      of
      China Sky One Medical, Inc., a Nevada corporation (the “Company”),
      understands that the Company has filed or intends to file with the Securities
      and Exchange Commission (the “Commission”)
      a
      registration statement (the “Registration
      Statement”)
      for
      the registration and resale under Rule 415 of the Securities Act of 1933, as
      amended (the “Securities
      Act”),
      of
      the Registrable Securities, in accordance with the terms of the Registration
      Rights Agreement (the “Registration
      Rights Agreement”)
      to
      which this document is annexed. A copy of the Registration Rights Agreement
      is
      available from the Company upon request at the address set forth below. All
      capitalized terms not otherwise defined herein shall have the meanings ascribed
      thereto in the Registration Rights Agreement.

     

    Certain
      legal consequences arise from being named as a selling securityholder in the
      Registration Statement and the related prospectus. Accordingly, holders and
      beneficial owners of Registrable Securities are advised to consult their own
      securities law counsel regarding the consequences of being named or not being
      named as a selling securityholder in the Registration Statement and the related
      prospectus.

     

    NOTICE

     

    The
      undersigned beneficial owner (the “Selling
      Securityholder”)
      of
      Registrable Securities hereby elects to include the Registrable Securities
      owned
      by it in the Registration Statement.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    The
      undersigned hereby provides the following information to the Company and
      represents and warrants that such information is accurate:

     

    QUESTIONNAIRE

     

    1.            
      Name.

     

    
      	 	
              (a)

            	
              Full
                Legal Name of Selling
                Securityholder

            

    

     

    
      	 	 
	 	 

    

    

    
      	 	
              (b)

            	
              Full
                Legal Name of Registered Holder (if not the same as (a) above) through
                which Registrable Securities are
                held:

            

    

     

    
      	 	 
	 	 

    

    

    
      	 	
              (c)

            	
              Full
                Legal Name of Natural Control Person (which means a natural person
                who
                directly or indirectly alone or with others has power to vote or
                dispose
                of the securities covered by this
                Questionnaire):

            

    

     

    
      	 	 
	 	 

    

    

     

    2.            
      Address for Notices to Selling Securityholder:

     

    
      	 
	 
	 
	
              Telephone:__________________________________________________________________________________________________

            
	
              Fax:_______________________________________________________________________________________________________

            
	
              Contact
                Person:______________________________________________________________________________________________

            

    

    

    3.            
      Broker-Dealer Status:

     

    
      	 	
              (a)

            	
              Are
                you a broker-dealer?

            

    

     

    Yes
o
No
o 

     

    
      	 	
              (b)

            	
              If
                “yes” to Section 3(a), did you receive your Registrable Securities as
                compensation for investment banking services to the
                Company?

            

    

     

    Yes
o
No
o

     

    
      	 	
              Note:

            	
              If
                “no” to Section 3(b), the Commission’s staff has indicated that you should
                be identified as an underwriter in the Registration
                Statement.

            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (c)

            	
              Are
                you an affiliate of a
                broker-dealer?

            

    

     

    Yes
o
No
o

     

    
      	 	
              (d)

            	
              If
                you are an affiliate of a broker-dealer, do you certify that you
                purchased
                the Registrable Securities in the ordinary course of business, and
                at the
                time of the purchase of the Registrable Securities to be resold,
                you had
                no agreements or understandings, directly or indirectly, with any
                person
                to distribute the Registrable
                Securities?

            

    

     

    Yes
o
No
o

     

    
      	 	
              Note:

            	
              If
                “no” to Section 3(d), the Commission’s staff has indicated that you should
                be identified as an underwriter in the Registration
                Statement.

            

    

     

    4.            
      Beneficial Ownership of Securities of the Company Owned by the Selling
      Securityholder.

     

    Except
      as set forth below in this Item 4, the undersigned is not the beneficial or
      registered owner of any securities of the Company other than the securities
      issuable pursuant to the Purchase Agreement.

     

    
      	 	
              (a)

            	
              Type
                and Amount of other securities beneficially owned by the Selling
                Securityholder:

            

    

     

    
      	 	 
	 	 
	 	 

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    5.            
      Relationships with the Company:

     

    Except
      as set forth below, neither the undersigned nor any of its affiliates, officers,
      directors or principal equity holders (owners of 5% of more of the equity
      securities of the undersigned) has held any position or office or has had any
      other material relationship with the Company (or its predecessors or affiliates)
      during the past three years.

     

    State
      any
      exceptions here:

    
       

      
        	 	 
	 	 
	 	 

      

       

    

     

    The
      undersigned agrees to promptly notify the Company of any inaccuracies or changes
      in the information provided herein that may occur subsequent to the date hereof
      at any time while the Registration Statement remains effective.

     

    By
      signing below, the undersigned consents to the disclosure of the information
      contained herein in its answers to Items 1 through 5 and the inclusion of such
      information in the Registration Statement and the related prospectus
and
      any
      amendments or supplements thereto.
      The
      undersigned understands that such information will be relied upon by the Company
      in connection with the preparation or amendment of the Registration Statement
      and the related prospectus.

     

    IN
      WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
      and Questionnaire to be executed and delivered either in person or by its duly
      authorized agent.

     

    
      	Date:
              _________________________________	 	Beneficial
              Owner:_______________________________
	
            	 	 
	 	 	
              By:__________________________________________

              Name:

              Title: 

            

    

    

    PLEASE
      FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
      THE ORIGINAL BY OVERNIGHT MAIL, TO:

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    Annex
      C

     

     

     

     

     

    
      
         

      

      
        23MAKE
      GOOD AGREEMENT

     

     

    THIS
      MAKE GOOD AGREEMENT
      (the
“Agreement”),
      dated
      January 31, 2008, by and among Pope Asset Management LLC, a Tennessee Registered
      Investment Advisor,
      as the
      authorized agent of the Investors (as defined below) (the “Investor
      Agent”),
      China
      Sky One Medical, Inc., a Nevada corporation, and its current and future
      subsidiaries (collectively, the “Company”)
      and
      Liu Yan-Qing, an individual residing in the People’s Republic of China (the
“CSKI
      Shareholder”).
      This
      Agreement shall become effective upon the execution thereof by all
      parties.

    

    WHEREAS:

    

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

    

    B. The
      Company presented financial projections to the Investors, indicating that the
      Company will report Earnings Per Share (EPS) of at least (i) $1.05 per share
      for
      the fiscal year ending December 31, 2007, as adjusted, based on fully
      diluted shares outstanding (an aggregate of 13,907,696 shares, including all
      outstanding common shares, preferred shares, any convertible security, options,
      and warrants) and (ii) $1.75 per share for the fiscal year ending
      December 31, 2008, as adjusted, based on fully diluted shares outstanding
      (an aggregate of 16,907,696 shares, including all outstanding common shares,
      preferred shares, any convertible security, options, and warrants, excluding
      the
      900,000 warrants to be issued in this Offering), and based upon an audit
      conducted in conformity with United States generally accepted accounting
      principles (“US
      GAAP”).

    

    C. As
      an
      inducement to the Investors to enter into the Securities Purchase Agreement,
      the
      CSKI Shareholder desires to place the Escrow Shares (as hereinafter defined)
      into escrow for the benefit of the Investors in the event that the Company
      fails
      to satisfy the FY07 Performance Threshold and/or FY08 Performance Threshold
      (as
      hereinafter defined).

    

    D. Pursuant
      to the requirements of the Securities Purchase Agreement, the Company, the
      CSKI
      Shareholders and the Investor Agent have agreed to establish an escrow (the
      “Escrow”)
      on the
      terms and conditions set forth in that certain Escrow Agreement, dated of even
      date herewith (the “Escrow
      Agreement”),
      by
      and among Interwest Transfer Company, Inc., the transfer agent for the Company
      (the “Escrow
      Agent”)
      and
      the parties hereto.

    

    E. Contemporaneously
      with the execution and delivery of this Agreement, the Company and the Investors
      are executing and delivering (i) a Registration Rights Agreement, dated as
      of
      even date herewith (the “Registration
      Rights Agreement”),
      pursuant to which the Company has agreed to provide certain registration rights
      with respect to the Escrow Shares (as defined below), under the Securities
      Act
      of 1933, as amended (the “Securities
      Act”),
      and
      the rules and regulations promulgated thereunder, and applicable state
      securities laws and (ii) a Put Agreement, dated as of even date herewith (the
      “Put
      Agreement”),
      pursuant to which the Company and the Investors have agreed upon certain
      circumstances under which the
      Investors shall have the right, but not the obligation, to require the Company
      to repurchase the Shares (the “Put
      Right”).

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    NOW,
      THEREFORE,
      in
      consideration of the covenants, promises and representations set forth herein,
      and for other good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the parties agree as follows:

    

    1. Establishment
      of Escrow.

    

    (a) Escrow
      Deposit.
      Concurrently with the closing of the Offering, the CSKI Shareholder shall
      deliver to the Escrow Agent a stock certificate evidencing 3,000,000 shares,
      in
      the aggregate, of Common Stock (as adjusted for stock splits, stock dividends,
      and similar adjustments) (the “Escrow
      Shares”),
      with
      stock powers executed in blank in form and substance reasonably satisfactory
      to
      the Investor Agent.

    

    (b) Fees
      and Expenses.
      The
      Company shall be responsible for any and all fees and costs related to the
      services rendered by Escrow Agent hereunder and pursuant to the Escrow
      Agreement.

    

    2. Disbursement
      of Escrow Shares.

    

    (a) Performance
      Threshold for Fiscal 2007.
      The
      Company covenants to the Investors and Investor Agent that Adjusted EPS (as
      defined below) for the fiscal year ending December 31, 2007 (“FY07
      Adjusted EPS”)
      of the
      Company will be greater than or equal to $1.05 per share (the “FY07
      Performance Threshold”),
      as
      set forth in financial statements of the Company (the “FY07
      Financial Statements”)
      for
      the period ending December 31, 2007 prepared in accordance with the
      published rules and regulations of US GAAP applied on a consistent basis
      throughout the periods involved and audited in accordance with the auditing
      standards of the Public Company Accounting Oversight Board (“PCAOB”)
      by a
      nationally recognized independent accountant registered with PCAOB (the
“Independent
      Accountant”),
      with
      such statements fairly presenting in all material respects the financial
      position of the Company and its subsidiaries, on a consolidated basis, as of
      the
      fiscal year ending December 31, 2007 (the “FY07”)
      and
      the FY07 Financial Statements shall not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary in order to make the statements therein, in light of the circumstances
      under which they were made, not misleading. For the purpose of this Section
      2(a), “Adjusted
      EPS”
means
      the net income (or loss) of the Company and its subsidiaries for such period,
      determined on a consolidated basis divided by 13,907,696 shares; provided,
      however,
      that
      (i) the Adjusted EPS for such period will be increased by any cash charges
      related to the Offering and non-cash charges incurred as a result of the
      Offering (due to non-cash amortization on warrants charged to the Company’s
      results of operation, if any)
      and
      (ii) if the Offering does not close on or before January 7, 2008 (the
“Closing
      Deadline”),
      the
      FY07 Performance Threshold will be decreased in an amount equal to 2% for each
      7-day period, or pro rata for any portion thereof, following the Closing
      Deadline, until such time as the Offering is consummated.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b) FY07
      Financial Statements.
      The
      Company shall provide the Investor Agent and the Investors (as defined below)
      with its audited FY07 Financial Statements on or before March 31, 2008.
      Concurrently with the release of the audited FY07 Financial Statements to the
      Investor Agent and the Investors, (i) the Company shall provide to the
      Investor Agent and the Investors a written certification as to the amount of
      the
      Adjusted EPS for FY07 and whether the FY07 Performance Threshold, as adjusted,
      has been met and (ii) the Company shall make such FY07 Financial Statements
      and certification publicly available (as part of an Annual Report on Form 10-KSB
      or on a Current Report on Form 8-K, or otherwise). Subject to Section 3
      below, in the event the FY07 Performance Threshold, as adjusted, is not
      attained, the Company and the Investor Agent shall promptly provide a joint
      written instruction to the Escrow Agent (the “Investor
      Joint Instructions”),
      to
      deliver as promptly as practicable (such date, the “FY07
      Released Escrow Shares Release Date”)
      to the
      Investors that did not exercise their Put Rights pursuant to the Put Agreement
      (as further discussed in Section 2(d) below) (the “Eligible
      Investors”),
      on a
      Pro Rata Basis (as defined below), an aggregate amount of Escrow Shares based
      from the following formula (the “FY07
      Released Escrow Shares”):

    

    (i) If
      the
      FY07 Adjusted EPS is less than $0.80, then the number of FY07 Released Escrow
      Shares will be 3,000,000.

    

    (ii) If
      the
      FY07 Adjusted EPS is $0.80 or greater, but less than $1.05, the number of FY07
      Released Escrow Shares shall be calculated as follows:

    

    A
      = 2 x B
      x C

     

    where 

    

    A
      = the
      aggregate number of FY07 Released Escrow Shares;

    

    B
      = the
      percentage under the FY07 Performance Threshold; and

    

    C
      = 3,000,000.

    

    (iii) If
      the
      FY07 Adjusted EPS is $1.05 or greater, then none of the Escrow Shares will
      be
      released to the Investors.

    

    (c) Allocation
      of FY07 Released Escrow Shares; Transfer of FY07 Released Escrow
      Shares.

    

    (i) The
      Eligible Investors shall be entitled to receive allocations of the FY07 Released
      Escrow Shares on a Pro Rata Basis. For the purpose of this Section 2(c)(i),
      “Pro
      Rata Basis”
means
      such portion of the FY07 Released Escrow Shares equal to the product of
      (i) the number of FY07 Released Escrow Shares (as calculated in accordance
      with Section 2(b) above) and (ii) the quotient of (x) the number
      of shares of Common Stock acquired by such Eligible Investor in the Offering
      and
      (y) the number of shares of Common Stock acquired by all Investors in the
      Offering. Any distribution of FY07 Released Escrow Shares hereunder shall also
      include a distribution to such Investor of any dividends or other distributions
      in the Escrow, which were issued or otherwise obtained or deposited with respect
      to such FY07 Released Escrow Shares distributed to such Investor
      hereunder.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (ii) The
      Company and the Investor Agent shall cause the Investor Joint Instructions
      to
      instruct the Escrow Agent to either (x) deliver the FY07 Released Escrow
      Shares allocated to each Eligible Investor by crediting such aggregate number
      of
      shares of Common Stock to which such Eligible Investor is entitled to such
      Eligible Investor’s or such Eligible Investor’s designee’s balance account with
      the Depository Trust Company through the Deposit Withdrawal Agent Commission
      system or (y) if the Escrow Agent is unable to distribute the FY07 Released
      Escrow Shares of any Eligible Investor in accordance with the foregoing, to
      deliver stock certificates evidencing the FY07 Released Escrow Shares of such
      Eligible Investor registered in the name of each such Eligible Investor or
      such
      Eligible Investor’s designee at such address as set forth in the Securities
      Purchase Agreement or such other address provided to the Investor Agent by
      such
      Eligible Investor.

    

    (d) Termination
      of Rights to Escrow Shares upon Exercise of Put Right.
      Notwithstanding anything to the contrary set forth herein, upon any Investor’s
      exercise of its Put Right pursuant to the Put Agreement, such Investor’s right
      to receive Escrow Shares on a Pro Rata Basis hereunder shall automatically
      and
      permanently terminate. The Investor Joint Instructions delivered to the Escrow
      Agent by the Company and Investor Agent pursuant to Section 2(b) hereof shall
      indicate (i) which Investors, if any, have exercised their Put Rights and (ii)
      the corresponding number of Escrow Shares that shall be released from escrow
      and
      delivered back to the CSKI Shareholder (the “Returned
      Shares”).

    

    (e) Performance
      Threshold for Fiscal 2008.
      The
      Company covenants to the Investors and Investor Agent that Adjusted EPS (as
      defined below) for the fiscal year ending December 31, 2008 (“FY08
      Adjusted EPS”)
      of the
      Company will be greater than or equal to $1.75 per share (the “FY08
      Performance Threshold”),
      as
      set forth in financial statements of the Company (the “FY08
      Financial Statements”)
      for
      the period ending December 31, 2008 prepared in accordance with the
      published rules and regulations of US GAAP applied on a consistent basis
      throughout the periods involved and audited in accordance with the auditing
      standards of PCAOB by the Company’s Independent Accountant, with such statements
      fairly presenting in all material respects the financial position of the Company
      and its subsidiaries, on a consolidated basis, as of the fiscal year ending
      December 31, 2008 (the “FY08”)
      and
      the FY08 Financial Statements shall not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary in order to make the statements therein, in light of the circumstances
      under which they were made, not misleading. For the purpose of this Section
      2(e), “Adjusted
      EPS”
means
      the net income (or loss) of the Company and its subsidiaries for such period,
      determined on a consolidated basis divided by 16,907,696 shares; provided,
      however,
      that
      (i) the Adjusted EPS for such period will be increased by any cash charges
      related to the Offering and non-cash charges incurred as a result of the
      Offering (due to non-cash amortization on warrants charged to the Company’s
      results of operation, if any) and (ii) if the Offering does not close on or
      before the Closing Deadline, the FY08 Performance Threshold will be decreased
      in
      an amount equal to 2% for each 7-day period, or pro rata for any portion
      thereof, following the Closing Deadline, until such time as the Offering is
      consummated.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (f) FY08
      Financial Statements.
      The
      Company shall provide the Investor Agent and the Eligible Investors with its
      audited FY08 Financial Statements on or before March 31, 2009. Concurrently
      with the release of the audited FY08 Financial Statements to the Investor Agent
      and the Eligible Investors, (i) the Company shall provide to the Investor
      Agent and the Eligible Investors a written certification as to the amount of
      the
      Adjusted EPS for FY08 and whether the FY08 Performance Threshold, as adjusted,
      has been met and (ii) the Company shall make such FY08 Financial Statements
      and certification publicly available (as part of an Annual Report on Form 10-KSB
      or on a Current Report on Form 8-K, or otherwise). Subject to Section 3
      below, in the event the FY08 Performance Threshold, as adjusted, is not
      attained, the Company and the Investor Agent shall promptly provide Investor
      Joint Instructions, to deliver as promptly as practicable (such date, the
“FY08
      Released Escrow Shares Release Date”)
      to the
      Eligible Investors, on a Pro Rata Basis (as defined below), an aggregate amount
      of Escrow Shares based from the following formula (the “FY08
      Released Escrow Shares”):

    

    (i) If
      the
      FY08 Adjusted EPS is $0.87 or less, then the number of FY08 Released Escrow
      Shares will be 3,000,000, decreased by the amount of the FY07 Released Escrow
      Shares. 

    

    (ii) If
      the
      FY08 Adjusted EPS is greater than $0.87, but less than $1.50, the number of
      FY08
      Released Escrow Shares shall be calculated as follows:

    

    A
      = 2 x B
      x C

     

    where 

    

    A
      = the
      aggregate number of FY08 Released Escrow Shares;

    

    B
      = the
      percentage under the FY08 Performance Threshold; and

    

    C
      = 3,000,000,
      decreased by the amount of the FY07 Released Escrow Shares.

    

    (iii) If
      the
      FY08 Adjusted EPS is $1.50 or greater, but less than $1.75, the number of FY08
      Released Escrow Shares shall be calculated as follows:

    

    A
      = 1 x B
      x C

     

    where 

    

    A
      = the
      aggregate number of FY08 Released Escrow Shares;

    

    B
      = the
      percentage under the FY08 Performance Threshold; and

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    C
      = 3,000,000,
      decreased by the amount of the FY07 Released Escrow Shares.

    

    (iv) If
      the
      FY08 Adjusted EPS is $1.75 or greater, then none of the Escrow Shares will
      be
      released to the Investors.

    

    (g) Allocation
      of FY08 Released Escrow Shares; Transfer of FY08 Released Escrow
      Shares.

    

    (i) The
      Eligible Investors shall be entitled to receive allocations of the FY08 Released
      Escrow Shares on a Pro Rata Basis. For the purpose of this Section 2(g)(i),
      “Pro
      Rata Basis”
means
      such portion of the Released Escrow Shares equal to the product of (i) the
      number of FY08 Released Escrow Shares (as calculated in accordance with
      Section (e) above) and (ii) the quotient of (x) the number of
      shares of Common Stock acquired by such Eligible Investor in the Offering and
      (y) the number of shares of Common Stock acquired by all Investors in the
      Offering. Any distribution of FY08 Released Escrow Shares hereunder shall also
      include a distribution to such Eligible Investor of any dividends or other
      distributions in the Escrow, which were issued or otherwise obtained or
      deposited with respect to such FY08 Released Escrow Shares distributed to such
      Eligible Investor hereunder.

    

    (ii) The
      Company and the Investor Agent shall cause the Investor Joint Instructions
      to
      instruct the Escrow Agent to either (x) deliver the FY08 Released Escrow
      Shares allocated to each Eligible Investor by crediting such aggregate number
      of
      shares of Common Stock to which such Eligible Investor is entitled to such
      Eligible Investor’s or such Eligible Investor’s designee’s balance account with
      the Depository Trust Company through the Deposit Withdrawal Agent Commission
      system or (y) if the Escrow Agent is unable to distribute the FY08 Released
      Escrow Shares of any Eligible Investor in accordance with the foregoing, to
      deliver stock certificates evidencing the FY08 Released Escrow Shares of such
      Eligible Investor registered in the name of each such Eligible Investor or
      such
      Eligible Investor’s designee at such address as set forth in the Securities
      Purchase Agreement or such other address provided to the Investor Agent by
      such
      Eligible Investor.

    

    (g) Distribution
      of Remaining Escrow Shares.
      If
      there are any Escrow Shares remaining in the Escrow after the distribution
      of
      the FY07 Released Escrow Shares, the Returned Shares and/or FY08 Released Escrow
      Shares, or if the Company’s FY07 Performance Threshold and/or FY08 Performance
      Threshold obligation ceases in accordance with Section 3 below (the Escrow
      Shares held in the Escrow at such time, the “Remaining
      Escrow Shares”),
      the
      Company and the Investor Agent shall promptly thereafter provide a joint written
      instruction to the Escrow Agent (the “Shareholder
      Joint Instructions”)
      to
      deliver the Remaining Escrow Shares to the CSKI Shareholder. The Company and
      the
      Investor Agent shall cause the Shareholder Joint Instructions to instruct the
      Escrow to promptly deliver stock certificates evidencing the Remaining Escrow
      Shares registered in the name of the CSKI Shareholder to the addresses set
      forth
      in the Escrow Agreement. Any distribution of Remaining Escrow Shares hereunder
      shall also include a distribution to the CSKI Shareholder of any dividends
      or
      other distributions in the Escrow, which were issued or otherwise obtained
      or
      deposited with respect to such Remaining Escrow Shares distributed
      to
      the CSKI Shareholder hereunder.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    3. Force
      Majeure.

    

    (a) Upon
      the
      occurrence of an event of Force Majeure (as defined below), the obligation
      of
      the Company to meet the FY07 Performance Threshold and/or FY08 Performance
      Threshold shall cease and all Escrow Shares shall be immediately deemed
      Remaining Shares for all purposes hereunder. For the purpose of this Agreement,
      “Force
      Majeure”
means
      a
      natural disaster (e.g., earthquakes, typhoons, flood, fire), war, epidemic,
      civil disturbance, strike, major failure of domestic transportation, act of
      government or public agency that directly and substantially prevents the Company
      from operating a significant part of its business, which was unforeseeable
      at
      the time of the closing and the occurrence and consequences thereof could not
      reasonably be avoided or overcome.

    

    (b) If
      the
      Company intends to claim a Force Majeure has occurred, it must promptly inform
      the Investor Agent in writing within thirty (30) days from the occurrence of
      such event and provide detailed evidence of the occurrence and the duration
      of
      such occurrence.

    

    (c) Should
      any controversy arise with respect to the Company’s claim that a Force Majeure
      has occurred and/or with respect to the right of the Investors to receive the
      Escrow Shares, the Investor Agent shall have the right to consult counsel at
      the
      expense of the Company and/or to institute an appropriate interpleader action
      to
      determine the rights of the parties.

    

    4. Representations
      and Warranties of the CSKI Shareholder.
      The
      CSKI Shareholder hereby represents and warrants that:

    

    (a) Legal
      Capacity; Organization.
      The
      CSKI Shareholder has the legal capacity and right to execute, deliver, enter
      into, consummate and perform the transactions contemplated by hereby and in
      the
      Escrow Agreement and otherwise to carry out its obligations hereunder and
      thereunder.

    

    (b) Accredited
      Investor Status.
      The
      CSKI Shareholder is an “accredited investor” as that term is defined in
      Rule 501(a) of Regulation D under the Securities Act.

    

    (c) Securities
      Ownership.
      As of
      the Closing Date (as defined in the Securities Purchase Agreement), the CSKI
      Shareholder owns the Escrow Shares to be deposited hereunder (i) as the
      sole record and beneficial owner, free from all taxes, liens, claims,
      encumbrances and charges and there are no outstanding rights, options,
      subscriptions or other agreements or commitments obligating the CSKI Shareholder
      to sell or transfer such Escrow Shares and, except in connection with the
      Offering, such Escrow Shares are not subject to any lock-up or other restriction
      on their transfer or on the ability of the Investors to sell or transfer such
      Escrow Shares. As of the Closing Date, the CSKI Shareholder shall have paid
      any
      and all amounts and charges due and owing to the Company with respect to the
      Escrow Shares and there shall be no unpaid amounts or charges claimed to be
      due
      to the Company from the CSKI Shareholder with respect to the Escrow
      Shares.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (d) Authorization;
      Enforcement; Validity.
      This
      Agreement has been duly authorized, executed and delivered by the CSKI
      Shareholder and constitutes a valid and legally binding agreement of the CSKI
      Shareholder enforceable against the CSKI Shareholder in accordance with its
      terms, except as such enforceability may be limited by general principles of
      equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
      liquidation and other similar laws relating to, or affecting generally, the
      enforcement of applicable creditors’ rights and remedies.

    

    (e) Consents.
      All
      government and other consents that are required to have been obtained by the
      CSKI Shareholder with respect to this Agreement have been obtained and are
      in
      full force and effect and all conditions of any such consents have been complied
      with. The CSKI Shareholder has complied and will comply with all applicable
      disclosure or reporting requirements in respect of the transaction contemplated
      hereby.

    

    (f) No
      Conflicts.
      The
      execution and delivery by the CSKI Shareholder of this Agreement, the sale
      and
      delivery of the Escrow Shares and the performance by the CSKI Shareholder of
      its
      obligations under this Agreement do not and will not violate or conflict with
      (i) any law, rule, regulation, order, judgment or decree (including federal
      and state securities laws and regulations and the rules and regulations of
      the
      Principal Market (as defined in the Warrants)), or (ii) any order or
      judgment of any court or other agency of government or any of the CSKI
      Shareholder’s assets or any contractual restriction binding on or affecting the
      CSKI Shareholder or any of the CSKI Shareholder’s assets.

    

    (g) Independent
      Decision.
      The
      CSKI Shareholder is acting solely for his own account, and has made his own
      independent decision to enter into this Agreement and as to whether this
      Agreement is appropriate or proper for the CSKI Shareholder based upon his
      own
      judgment and upon advice of such advisors as the CSKI Shareholder deems
      necessary. The CSKI Shareholder acknowledges and agrees that he is not relying,
      and has not relied, upon any communication (written or oral) of any Investor
      or
      any affiliate, employee or agent of any Investor with respect to the legal,
      accounting, tax or other implications of this Agreement and that he has
      conducted his own analyses of the legal, accounting, tax and other implications
      hereof and thereof; it being understood that information and explanations
      related to the terms and conditions of this Agreement shall not be considered
      investment advice or a recommendation to enter into this Agreement. The CSKI
      Shareholder acknowledges that no Investor nor any affiliate, employee or agent
      of any Investor is acting as a fiduciary for or an advisor to the CSKI
      Shareholder in respect of this Agreement.

    

    (h) Brokerage
      Fees.
      Other
      than amounts payable to the Investor Agent or its affiliates, the CSKI
      Shareholder has taken no action that would give rise to any claim by any person
      for brokerage commissions, finder’s fees or similar payments relating to this
      Agreement or the transactions contemplated hereby.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (i) Litigation.
      There
      is no action, suit, claim, proceeding, inquiry or investigation before or by
      any
      court, public board, government agency or self regulatory organization or body
      pending or, to the knowledge of the CSKI Shareholder, threatened against or
      affecting the CSKI Shareholder that could reasonably be expected to have a
      material adverse affect on his ability to perform its obligations
      hereunder.

    

    5. Registration
      Rights.
      The
      Company acknowledges that the FY07 Released Escrow Shares and FY08 Released
      Escrow Shares are Registrable Securities (as defined in the Registration Rights
      Agreement) and the Investors shall have such registration rights set forth
      in
      the Registration Rights Agreement related thereto.

    

    6. Termination.
      This
      Agreement shall terminate at such time as all of the Escrow Shares shall have
      been released by the Escrow Agent from the Escrow in accordance with
      Section 2 hereof; provided however, that Sections 1(b), 5, 6, 7 and 8
      shall survive any such termination.

    

    7. Indemnity.
      The
      Investor Agent will be indemnified and held harmless, jointly and severally,
      by
      the Company and the CSKI Shareholder from and against any expenses, including
      reasonable attorneys’ fees and disbursements, damages or losses suffered by
      Investor Agent in connection with any claim or demand, which, in any way,
      directly or indirectly, arises out of or relates to this Agreement or the
      services of Investor Agent hereunder or under the Escrow Agreement; except,
      that
      if Investor Agent is guilty of willful misconduct, fraud or gross negligence
      under this Agreement then Investor Agent will bear all losses, damages and
      expenses arising as a result of such willful misconduct, fraud or gross
      negligence. Promptly after the receipt by Investor Agent of notice of any such
      demand or claim or the commencement of any action, suit or proceeding relating
      to such demand or claim, Investor Agent will notify the other parties hereto
      in
      writing. For the purposes hereof, the terms “expense” and “loss” will include
      all amounts paid or payable to satisfy any such claim or demand, or in
      settlement of any such claim, demand, action, suit and all costs and expenses,
      including, but not limited to, reasonable attorneys’ fees and disbursements,
      paid or incurred in investigating or defending against any such claim, demand,
      action, suit or proceeding.

    

    8. Miscellaneous.

    

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

    

    If
      to the
      Investor Agent, to:

    

    Pope
      Asset Management LLC

    5100
      Poplar Avenue, Suite 805

    Memphis,
      TN 38137

    Attn.:
      Bill Wells, President

    tel.:
      (901) 763-4001

    fax.:
      (901) 763-4229

    e-mail:
      billwells@popeasset.com

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    with
      a
      copy to (for informational purposes only):

    

    Wells,
      Moore, Simmons & Hubbard, PLLC

    4450
      Old
      Canton Road, Suite 200

    P.O.
      Box
      1970

    Jackson,
      MS 39215

    Attn.:
      Nash Neyland, Esq.

    tel.:
      (601) 354-5400

    fax:
      (601) 355-5850

    e-mail:
      neyland@wellsmoore.com

    

    If
      to the
      Company, to:

    

    China
      Sky
      One Medical, Inc.

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

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

    Attn.:
      Liu Yan-Qing, Chairman 

    tel.:
      +
86-451-53994073

    fax.:
      +
      86-451-8700-9121

    e-mail:
      cntiandiren@yahoo.com.cn

    

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

    

    with
      a
      copy to:

    

    Hodgson
      Russ, LLP

    1540
      Broadway, 24th
      Floor

    New
      York,
      NY 10036

    Attn.:
      Jeffrey A. Rinde, Esq.

    tel.:
      (212) 751-4300

    fax.:
      (212) 751-0928

    e-mail:
      jrinde@hodgsonruss.com

    

    If
      to the
      CSKI Shareholder, to:

    

    Liu
      Yan-Qing

    c/o
      China
      Sky One Medical, Inc.

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

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

    tel.:
      +
86-451-53994073

    fax.:
      +
      86-451-8700-9121

    e-mail:
      cntiandiren@yahoo.com.cn

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    If
      to the
      Escrow Agent:

    

    Interwest
      Transfer Company, Inc.

    1981
      East
      Murray Holladay Road, Suite 100

    P.O.
      Box
      17136

    Salt
      Lake
      City, UT 84117

    Attn.:
      Kurt Hughes, Vice President

    tel.:
      (801) 272-9294

    fax.:
      (801) 277-3147

    e-mail:
      kh@interwesttc.com

    

    (b) Appointment
      of Agent for Service of Process.
      The
      CSKI Shareholder and the Company (the “Foreign
      Parties”)
      hereby
      irrevocably appoints ______________________, of ________________________, U.S.A.
      (“[_____]”) as its agent for the receipt of service of process in the United
      States. Each Foreign Party agrees that any document may be effectively served
      on
      it in connection with any action, suit or proceeding in the United States by
      service on its agents. The Investor Agent consents and agrees that each Foreign
      Party may, in its reasonable discretion, irrevocably appoint a substitute agent
      for the receipt of service of process located within the Untied States, and
      that
      upon such appointment, the appointment of [_____] may be revoked.

    

    Any
      document shall be deemed to have been duly served if marked for the attention
      of
      the agent at its address as set forth in this Section 8(b) or such other
      address in the United States as may be notified to the party wishing to serve
      the document and (a) left at the specified address if its receipt is
      acknowledged in writing; or (b) sent to the specified address by post,
      registered mail return receipt requested. In the case of (a), the document
      will
      be deemed to have been duly served when it is left and signed for. In the case
      of (b), the document shall be deemed to have been duly served when received
      and
      acknowledged.

    

    If
      any
      Foreign Party’s agent at any time ceases for any reason to act as such, such
      Foreign Party shall appoint a replacement agent having an address for service
      in
      the United States and shall notify the Investor Agent of the name and address
      of
      the replacement agent. Failing such appointment and notification, the holders
      of
      a majority of the Shares (as defined in the Securities Purchase Agreement)
      shall
      be entitled by notice to such Foreign Party to appoint a replacement agent
      to
      act on such Foreign Party’s behalf. The provisions of this Section 8(b)
      applying to service on an agent apply equally to service on a replacement
      agent.

    

    (c) Currency.
      As used
      herein, “Dollar,”
      “US
      Dollar”
and
      “$”
each
      mean the lawful money of the United States.

    

    (d) Assignment;
      Amendment.
      This
      Agreement and the rights and obligations hereunder of any of the parties hereto
      may not be assigned without the prior written consent of the other parties
      hereto. Subject to the foregoing, this Agreement will be binding upon and insure
      to the benefit of each of the parties hereto and their respective successors
      and
      permitted assigns. No portion of the Escrow Shares shall be subject to
      interference or control by any creditor to any party hereto, or be subject
      to
      being taken or reached by any legal or equitable process in satisfaction of
      any
      debt or other liability of any such party hereto prior to the disbursement
      thereof to such party hereto in accordance with the provisions of this
      Agreement. This Agreement may be changed or modified only in writing signed
      by
      all of the parties hereto. No provision hereof may be waived other than by
      an
      instrument in writing signed by the party against whom enforcement is sought.
      A
      waiver or amendment of any term or provision of this Agreement shall not be
      construed as a waiver or amendment of any other term or provision of this
      Agreement or any other Transaction Document.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (e) Entire
      Agreement.
      This
      Agreement, together with the Escrow Agreement and the other Transaction
      Documents, contains the entire understanding and agreement between the parties
      hereto with respect to the subject matter of this Agreement, and all prior
      writings and discussions are hereby merged into this Agreement.

    

    (f) Counterparts.
      This
      Agreement may be executed by facsimile signatures and in multiple counterparts,
      each of which shall be deemed an original. It shall not be necessary that each
      party executes each counterpart, or that any one counterpart be executed by
      more
      than one party so long as each party executes at least one
      counterpart.

    

    (g) Headings.
      The
      headings contained in this Agreement are for convenience or reference only
      and
      shall not affect the construction of this Agreement.

    

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

    

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

    

    (k) Dispute
      Resolution.
      In the
      case of a dispute as to the determination of the number of FY07 Released Escrow
      Shares, FY08 Released Escrow Shares, Remaining Escrow Shares or other arithmetic
      calculation hereunder, the Company shall submit the disputed determinations
      or
      arithmetic calculations via facsimile within one (1) Business Day (as defined
      in
      the Securities Purchase Agreement) of receipt, or deemed receipt, of the event
      giving rise to such dispute, as the case may be, to the Investor Agent. If
      the
      Investor Agent and the Company are unable to agree upon such determination
      or
      calculation within one (1) Business Day of such disputed determination or
      arithmetic calculation being submitted to the Investor Agent, then the Company
      shall, within one Business Day submit via facsimile the disputed determination
      or (the disputed arithmetic calculation to the Independent Accountant. The
      Company at the Company’s expense, shall cause the Independent Accountant to
      perform the determinations or calculations and notify the Company and the
      Investor Agent of the results no later than five (5) Business Days from the
      time
      it receives the disputed determinations or calculations. The Independent
      Accountant’s determination or calculation, as the case may be, shall be binding
      upon all parties absent demonstrable error.

    

     

    [The
      remainder of the page is intentionally left blank]

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

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

    

     

    INVESTOR
      AGENT:

     

    POPE
      ASSET MANAGEMENT LLC

     

    

    By:
      ____________________________

    Name:
      __________________________

    Its:
      ____________________________

    Dated:
      __________________________

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

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

    

     

    THE
      COMPANY:

     

    CHINA
      SKY ONE MEDICAL, INC.

     

    

    
      By:
        ____________________________

      Name:
        __________________________

      Its:
        ____________________________

      Dated:
        __________________________

    

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

    

     

    THE
      CSKI SHAREHOLDER:

     

    

    ____________________________

    Name:
      ___________________________      

    Dated:
      ___________________________  

     

    
      
        
        

      

      
        16

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