Document:

NUMBER                    (SEE REVERSE SIDE FOR LEGEND)                 WARRANTS
________-      (THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO
                  5:00 P.M. NEW YORK CITY TIME, __________, 2009

                       CHARDAN CHINA ACQUISITION CORP. III

                                                                  CUSIP

                                     WARRANT

THIS CERTIFIES THAT, for value received

is the registered holder of a Warrant or Warrants expiring  ________,  2009 (the
"Warrant") to purchase one fully paid and non-assessable  share of Common Stock,
par value $.0001 per share ("Shares"), of Chardan China Acquisition Corp. III, a
Delaware corporation (the "Company"), for each Warrant evidenced by this Warrant
Certificate.  The  Warrant  entitles  the holder  thereof to  purchase  from the
Company,  commencing on the later of (i) the  Company's  completion of a merger,
capital stock exchange,  asset acquisition or other similar business combination
and (ii) ______________, 2006, such number of Shares of the Company at the price
of $5.00 per share  (subject to  adjustment),  upon  surrender  of this  Warrant
Certificate  and  payment  of the  Warrant  Price at the office or agency of the
Warrant  Agent,  Continental  Stock Transfer & Trust Company (such payment to be
made by check  made  payable  to the  Warrant  Agent),  but only  subject to the
conditions set forth herein and in the Warrant Agreement between the Company and
Continental Stock Transfer & Trust Company.  The Warrant Agreement provides that
upon the  occurrence  of  certain  events  the  Warrant  Price and the number of
Warrant Shares purchasable hereunder, set forth on the face hereof, may, subject
to certain  conditions,  be  adjusted.  The term  Warrant  Price as used in this
Warrant  Certificate  refers  to the  price  per  Share at which  Shares  may be
purchased at the time the Warrant is exercised.

      No fraction of a Share will be issued upon any  exercise of a Warrant.  If
the holder of a Warrant  would be entitled to receive a fraction of a Share upon
any exercise of a Warrant,  the Company shall,  upon such exercise,  round up to
the nearest whole number the number of Shares to be issued to such holder.

      Upon any  exercise of the  Warrant for less than the total  number of full
Shares  provided  for  herein,  there shall be issued to the  registered  holder
hereof or his assignee a new Warrant  Certificate  covering the number of Shares
for which the Warrant has not been exercised.

      Warrant  Certificates,  when  surrendered  at the  office or agency of the
Warrant  Agent by the  registered  holder  hereof in person or by attorney  duly
authorized  in  writing,  may be  exchanged  in the  manner  and  subject to the
limitations  provided  in the  Warrant  Agreement,  but  without  payment of any
service charge, for another Warrant Certificate or Warrant  Certificates of like
tenor and evidencing in the aggregate a like number of Warrants.

      Upon  due  presentment  for   registration  of  transfer  of  the  Warrant
Certificate  at the  office  or  agency  of the  Warrant  Agent,  a new  Warrant
Certificate  or  Warrant  Certificates  of  like  tenor  and  evidencing  in the
aggregate  a like  number  of  Warrants  shall be issued  to the  transferee  in
exchange for this Warrant  Certificate,  subject to the limitations  provided in
the Warrant  Agreement,  without  charge except for any  applicable tax or other
governmental charge.

      The Company and the Warrant Agent may deem and treat the registered holder
as the absolute owner of this Warrant Certificate  (notwithstanding any notation
of ownership  or other  writing  hereon made by anyone),  for the purpose of any
exercise hereof, of any distribution to the registered holder, and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary.

      This Warrant does not entitle the  registered  holder to any of the rights
of a stockholder of the Company.

      The  Company  reserves  the right to call the Warrant at any time prior to
its  exercise,  with a notice of call in writing to the holders of record of the
Warrant,  giving  30 days'  notice of such  call at any time  after the  Warrant
becomes exercisable if the last sale price of the Shares has been at least $8.50
per  share  (subject  to  adjustment)  on each of 20  trading  days  within  any
30-trading  day  period  ending on the third  business  day prior to the date on
which notice of such call is given. The call price of the Warrants is to be $.01
per Warrant. Any Warrant either not exercised or tendered back to the Company by
the end of the date  specified  in the notice of call shall be  canceled  on the
books of the Company and have no further value except for the $.01 call price.

By

------------------------------------------             -------------------------
                                 Secretary                 Chairman of the Board

<PAGE>

                                SUBSCRIPTION FORM
      To Be Executed by the Registered Holder in Order to Exercise Warrants

The undersigned Registered Holder irrevocably elects to exercise  ______________
Warrants represented by this Warrant Certificate,  and to purchase the shares of
Common Stock  issuable  upon the exercise of such  Warrants,  and requests  that
Certificates for such shares shall be issued in the name of

________________________________________________________________________________
                     (PLEASE TYPE OR PRINT NAME AND ADDRESS)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
                 (SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

and be delivered to ____________________________________________________________
                     (PLEASE PRINT OR TYPE NAME AND ADDRESS)

________________________________________________________________________________
and, if such number of Warrants shall not be all the Warrants  evidenced by this
Warrant  Certificate,  that a new  Warrant  Certificate  for the balance of such
Warrants be registered in the name of, and delivered to, the  Registered  Holder
at the address stated below:

Dated: _____________________                ____________________________________
                                            (SIGNATURE)

                                            ____________________________________
                                            (ADDRESS)
                                            ____________________________________

                                            ____________________________________
                                            (TAX IDENTIFICATION NUMBER)

                                   ASSIGNMENT
       To Be Executed by the Registered Holder in Order to Assign Warrants

For Value Received, __________________ hereby sell, assign, and transfer unto

________________________________________________________________________________
                     (PLEASE TYPE OR PRINT NAME AND ADDRESS)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
                 (SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
and be delivered to ____________________________________________________________
                     (PLEASE PRINT OR TYPE NAME AND ADDRESS)

______________________  of the Warrants represented by this Warrant Certificate,
and hereby irrevocably constitute and appoint  _________________________________
Attorney to transfer this Warrant Certificate on the books of the Company,  with
full power of substitution in the premises.

Dated: _________________________            _________________________________
                                            (SIGNATURE)

THE SIGNATURE TO THE ASSIGNMENT OF THE SUBSCRIPTION  FORM MUST CORRESPOND TO THE
NAME  WRITTEN  UPON THE FACE OF THIS WARRANT  CERTIFICATE  IN EVERY  PARTICULAR,
WITHOUT  ALTERATION  OR  ENLARGEMENT  OR ANY  CHANGE  WHATSOEVER,  AND  MUST  BE
GUARANTEED  BY A  COMMERCIAL  BANK OR  TRUST  COMPANY  OR A  MEMBER  FIRM OF THE
AMERICAN  STOCK  EXCHANGE,  NEW YORK STOCK  EXCHANGE,  PACIFIC STOCK EXCHANGE OR
CHICAGO STOCK EXCHANGE.THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE  HEREOF,  AGREES
THAT IT WILL NOT SELL,  TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED AND THE REGISTERED  HOLDER OF THIS PURCHASE  OPTION AGREES THAT IT WILL
NOT SELL,  TRANSFER,  ASSIGN,  PLEDGE OR HYPOTHECATE  THIS PURCHASE OPTION FOR A
PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED  BELOW) TO ANYONE OTHER
THAN (I)  EARLYBIRDCAPITAL,  INC. ("EBC") OR AN UNDERWRITER OR A SELECTED DEALER
IN CONNECTION  WITH THE OFFERING,  OR (II) A BONA FIDE OFFICER OR PARTNER OF EBC
OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

THIS  PURCHASE  OPTION  IS NOT  EXERCISABLE  PRIOR  TO  THE  LATER  OF  (I)  THE
CONSUMMATION  BY CHARDAN CHINA  ACQUISITION  CORP. III  ("COMPANY") OF A MERGER,
CAPITAL STOCK EXCHANGE,  ASSET ACQUISITION OR OTHER SIMILAR BUSINESS COMBINATION
("BUSINESS  COMBINATION") (AS DESCRIBED MORE FULLY IN THE COMPANY'S REGISTRATION
STATEMENT (DEFINED HEREIN)) AND (II) ______________,  2006. VOID AFTER 5:00 P.M.
EASTERN TIME, _____________, 2010.

                              UNIT PURCHASE OPTION

                               FOR THE PURCHASE OF

                                __________ UNITS

                                       OF

                       CHARDAN CHINA ACQUISITION CORP. III

1. Purchase Option.

                  THIS CERTIFIES THAT, in  consideration  of $_____ duly paid by
or on behalf of  ____________________  ("Holder"),  as registered  owner of this
Purchase Option, to Chardan China  Acquisition Corp. III ("Company"),  Holder is
entitled,  at any  time  or  from  time  to  time  upon  the  later  of (i)  the
consummation of a Business Combination and (ii) ___________, 2006 ("Commencement
Date"),  and  at  or  before  5:00  p.m.,  Eastern  Time,  _____________,   2010
("Expiration Date"), but not thereafter, to subscribe for, purchase and receive,
in whole or in part, up to ____________ (______) units ("Units") of the Company,
each Unit  consisting  of one share of common  stock of the  Company,  par value
$.0001 per share ("Common Stock"), and two warrants ("Warrant(s)") expiring four
years from the effective date ("Effective  Date") of the registration  statement
("Registration  Statement")  pursuant to which Units are offered for sale to the
public  ("Offering").  Each Warrant is the same as the warrants  included in the
Units  being  registered  for  sale  to the  public  by way of the  Registration
Statement ("Public Warrants") except that the Warrants have an exercise price of
$___ per share.  If the Expiration  Date is a day on which banking  institutions
are  authorized by law to close,  then this Purchase  Option may be exercised on
the next  succeeding  day which is not such a day in  accordance  with the terms
herein.  During the period ending on the Expiration Date, the Company agrees not
to take any action that would  terminate  the  Purchase  Option.  This  Purchase
Option  is  initially  exercisable  at $___  per  Unit so  purchased;  provided,
however,  that upon the  occurrence of any of the events  specified in Section 6
hereof, the rights granted by this Purchase Option, including the exercise price
per Unit and the number of Units (and shares of Common Stock and Warrants) to be
received upon such exercise,  shall be adjusted as therein  specified.  The term
"Exercise Price" shall mean the initial exercise price or the adjusted  exercise
price, depending on the context.

                                       1
<PAGE>

2.   Exercise.

     2.1  Exercise Form. In order to exercise this Purchase Option, the exercise
form  attached  hereto must be duly  executed and completed and delivered to the
Company,  together with this Purchase  Option and payment of the Exercise  Price
for the Units being purchased  payable in cash or by certified check or official
bank check. If the subscription rights represented hereby shall not be exercised
at or before 5:00 p.m.,  Eastern  time,  on the  Expiration  Date this  Purchase
Option shall become and be void without further force or effect,  and all rights
represented hereby shall cease and expire.

     2.2  Legend.  Each  certificate  for the  securities  purchased  under this
Purchase  Option shall bear a legend as follows unless such securities have been
registered under the Securities Act of 1933, as amended ("Act"):

          "The  securities   represented  by  this  certificate  have  not  been
          registered  under the  Securities  Act of 1933, as amended  ("Act") or
          applicable state law. The securities may not be offered for sale, sold
          or otherwise transferred except pursuant to an effective  registration
          statement under the Act, or pursuant to an exemption from registration
          under the Act and applicable state law."

     2.3 Cashless Exercise.

                  2.3.1  Determination of Amount.  In lieu of the payment of the
Exercise Price  multiplied by the number of Units for which this Purchase Option
is  exercisable  (and in lieu of being  entitled  to  receive  Common  Stock and
Warrants) in the manner required by Section 2.1, the Holder shall have the right
(but not the obligation) to convert any  exercisable but unexercised  portion of
this Purchase Option into Units ("Conversion  Right") as follows:  upon exercise
of the  Conversion  Right,  the  Company  shall  deliver to the Holder  (without
payment by the Holder of any of the Exercise Price in cash) that number of Units
(or that number of shares of Common Stock and Warrants comprising that number of
Units)  equal to the  quotient  obtained by dividing (x) the "Value" (as defined
below) of the portion of the Purchase  Option being converted by (y) the Current
Market  Value (as defined  below).  The  "Value" of the portion of the  Purchase
Option being  converted shall equal the remainder  derived from  subtracting (a)
(i) the Exercise  Price  multiplied by (ii) the number of Units  underlying  the
portion of this  Purchase  Option being  converted  from (b) the Current  Market
Value of a Unit multiplied by the number of Units  underlying the portion of the
Purchase Option being converted. As used herein, the term "Current Market Value"
per Unit at any date means:  (A) in the event that  neither the Units nor Public
Warrants are still  trading,  the  remainder  derived from  subtracting  (x) the
exercise  price of the  Warrants  multiplied  by the  number of shares of Common
Stock  issuable upon exercise of the Warrants  underlying  one Unit from (y) (i)
the Current  Market Price of the Common Stock  multiplied  by (ii) the number of
shares of Common Stock  underlying  one Unit,  which shall include the shares of
Common Stock  underlying  the Warrants  included in such Unit;  (B) in the event
that the Units,  Common Stock and Public Warrants are still trading,  (i) if the
Units are  listed on a  national  securities  exchange  or quoted on the  Nasdaq
National Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board (or successor

                                       2
<PAGE>

exchange),  the last sale price of the Units in the principal trading market for
the Units as reported by the  exchange,  Nasdaq or the NASD, as the case may be,
on the last trading day preceding the date in question; or (ii) if the Units are
not listed on a national  securities  exchange or quoted on the Nasdaq  National
Market,  Nasdaq  SmallCap  Market or the NASD OTC Bulletin  Board (or  successor
exchange),  but is traded in the residual  over-the-counter  market, the closing
bid price for Units on the last trading day  preceding  the date in question for
which such quotations are reported by the Pink Sheets,  LLC or similar publisher
of such  quotations;  and (C) in the event that the Units are not still  trading
but the Common Stock and Public Warrants underlying the Units are still trading,
the Current Market Price of the Common Stock plus the product of (x) the Current
Market Price of the Public Warrants and (y) the number of shares of Common Stock
underlying the Warrants  included in one Unit. The "Current  Market Price" shall
mean (i) if the Common Stock (or Public Warrants,  as the case may be) is listed
on a  national  securities  exchange  or quoted on the Nasdaq  National  Market,
Nasdaq SmallCap Market or NASD OTC Bulletin Board (or successor  exchange),  the
last sale  price of the  Common  Stock (or  Public  Warrants)  in the  principal
trading  market for the Common Stock as reported by the exchange,  Nasdaq or the
NASD,  as the  case  may be,  on the  last  trading  day  preceding  the date in
question;  (ii) if the Common Stock (or Public Warrants,  as the case may be) is
not listed on a national  securities  exchange or quoted on the Nasdaq  National
Market,  Nasdaq  SmallCap  Market or the NASD OTC Bulletin  Board (or  successor
exchange),  but is traded in the residual  over-the-counter  market, the closing
bid price for the Common  Stock (or Public  Warrants)  on the last  trading  day
preceding  the date in question  for which such  quotations  are reported by the
Pink Sheets, LLC or similar publisher of such quotations;  and (iii) if the fair
market value of the Common Stock cannot be determined  pursuant to clause (i) or
(ii) above, such price as the Board of Directors of the Company shall determine,
in good faith.  In the event the Public  Warrants have expired and are no longer
exercisable,  no "Value"  shall be attributed  to the Warrants  underlying  this
Purchase  Option.  Additionally,  in the  event  that  this  Purchase  Option is
exercised  pursuant  to this  Section  2.3 and the  Public  Warrants  are  still
trading,  the  "Value"  shall be reduced by the  difference  between the Warrant
Exercise Price and the exercise price of the Public  Warrants  multiplied by the
number of Warrants underlying the Units included in the portion of this Purchase
Option being converted.

                  2.3.2 Mechanics of Cashless  Exercise.  The Cashless  Exercise
Right  may be  exercised  by the  Holder  on any  business  day on or after  the
Commencement  Date and not later  than the  Expiration  Date by  delivering  the
Purchase  Option with the duly executed  exercise form attached  hereto with the
cashless  exercise  section  completed to the Company,  exercising  the Cashless
Exercise Right and specifying the total number of Units the Holder will purchase
pursuant to such Cashless Exercise Right.

                                       3
<PAGE>

3. Transfer.

          3.1  General Restrictions.  The  registered  Holder  of this  Purchase
Option,  by its  acceptance  hereof,  agrees  that it will not  sell,  transfer,
assign,  pledge or  hypothecate  this  Purchase  Option for a period of one year
following the Effective Date to anyone other than (i) EBC or an underwriter or a
selected dealer in connection with the Offering,  or (ii) a bona fide officer or
partner of EBC or of any such underwriter or selected  dealer.  On and after the
first anniversary of the Effective Date, transfers to others may be made subject
to compliance with or exemptions from  applicable  securities  laws. In order to
make any  permitted  assignment,  the Holder  must  deliver to the  Company  the
assignment form attached  hereto duly executed and completed,  together with the
Purchase Option and payment of all transfer taxes, if any, payable in connection
therewith.  The Company  shall within five  business days transfer this Purchase
Option on the books of the Company and shall  execute and deliver a new Purchase
Option  or  Purchase  Options  of  like  tenor  to the  appropriate  assignee(s)
expressly  evidencing  the  right to  purchase  the  aggregate  number  of Units
purchasable hereunder or such portion of such number as shall be contemplated by
any such assignment.

           3.2   Restrictions  Imposed by the Act. The  securities  evidenced by
this Purchase  Option shall not be transferred  unless and until (i) the Company
has  received the opinion of counsel for the Holder that the  securities  may be
transferred  pursuant  to an  exemption  from  registration  under  the  Act and
applicable  state  securities  laws, the availability of which is established to
the reasonable satisfaction of the Company (the Company hereby agreeing that the
opinion  of  Graubard  Miller  shall  be  deemed  satisfactory  evidence  of the
availability  of  an  exemption),   or  (ii)  a  registration   statement  or  a
post-effective   amendment  to  the  Registration  Statement  relating  to  such
securities  has  been  filed  by  the  Company  and  declared  effective  by the
Securities  and  Exchange   Commission  and  compliance  with  applicable  state
securities law has been established.

4.   New Purchase Options to be Issued.

          4.1  Partial  Exercise  or  Transfer. Subject to the  restrictions  in
Section 3 hereof,  this Purchase Option may be exercised or assigned in whole or
in part.  In the event of the exercise or assignment  hereof in part only,  upon
surrender  of this  Purchase  Option for  cancellation,  together  with the duly
executed  exercise or assignment  form and funds  sufficient to pay any Exercise
Price and/or transfer tax, the Company shall cause to be delivered to the Holder
without  charge a new Purchase  Option of like tenor to this Purchase  Option in
the name of the Holder evidencing the right of the Holder to purchase the number
of Units  purchasable  hereunder as to which this  Purchase  Option has not been
exercised or assigned.

          4.2  Lost  Certificate.  Upon  receipt  by  the  Company  of  evidence
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Purchase Option and of reasonably satisfactory indemnification or the posting of
a bond,  the Company  shall  execute and deliver a new  Purchase  Option of like
tenor and date. Any such new Purchase  Option executed and delivered as a result
of such loss,  theft,  mutilation or destruction  shall  constitute a substitute
contractual obligation on the part of the Company.

                                       4
<PAGE>

5.   Registration Rights.

          5.1     Demand Registration.

                  5.1.1  Grant  of  Right.  The  Company,  upon  written  demand
("Initial  Demand  Notice") of the  Holder(s)  of at least 50.1% of the Purchase
Options and/or the underlying Units and/or the underlying  securities ("Majority
Holders"),  agrees  to  register  on one  occasion,  all or any  portion  of the
Purchase Options  requested by the Majority Holders in the Initial Demand Notice
and all of the securities underlying such Purchase Options, including the Units,
Common  Stock,  the  Warrants  and the  Common  Stock  underlying  the  Warrants
(collectively, the "Registrable Securities"). On such occasion, the Company will
file a registration statement or a post-effective  amendment to the Registration
Statement covering the Registrable Securities within sixty days after receipt of
the Initial  Demand  Notice and use its best  efforts to have such  registration
statement or  post-effective  amendment  declared  effective as soon as possible
thereafter.  The demand for registration may be made at any time during a period
of five years beginning on the Effective Date. The Company  covenants and agrees
to give  written  notice of its  receipt  of any  Initial  Demand  Notice by any
Holder(s) to all other  registered  Holders of the Purchase  Options  and/or the
Registrable  Securities within ten days from the date of the receipt of any such
Initial Demand Notice.

                  5.1.2  Terms.  The  Company  shall bear all fees and  expenses
attendant to registering the Registrable  Securities,  including the expenses of
any  legal  counsel  selected  by the  Majority  Holders  to  represent  them in
connection  with the sale of the Registrable  Securities,  but the Holders shall
pay  any  and  all  underwriting  commissions.  The  Company  agrees  to use its
reasonable  best efforts to qualify or register the  Registrable  Securities  in
such States as are reasonably requested by the Majority Holder(s) (and any other
Holders whose Registrable  Securities are included in the Registration Statement
pursuant to Section 5.2 hereof);  provided,  however, that in no event shall the
Company be required to register the  Registrable  Securities in a State in which
such  registration  would cause (i) the Company to be obligated to qualify to do
business  in such State,  or would  subject the Company to taxation as a foreign
corporation   doing  business  in  such   jurisdiction  or  (ii)  the  principal
stockholders  of the Company to be  obligated  to escrow their shares of capital
stock of the  Company.  The Company  shall cause any  registration  statement or
post-effective  amendment  filed  pursuant to the demand  rights  granted  under
Section 5.1.1 to remain effective for a period of nine  consecutive  months from
the effective date of such registration statement or post-effective amendment.

          5.2     "Piggy-Back" Registration.

                  5.2.1  Grant of Right.  In  addition  to the  demand  right of
registration,  the Holders of the  Purchase  Options  shall have the right for a
period  of  seven  years  commencing  on the  Effective  Date,  to  include  the
Registrable  Securities as part of any other registration of securities filed by
the Company (other than in connection  with a transaction  contemplated  by Rule
145(a)  promulgated under the Act or pursuant to Form S-8);  provided,  however,
that if,  in the  written  opinion  of the  Company's  managing  underwriter  or
underwriters,  if any,  for such  offering,  the  inclusion  of the  Registrable
Securities,  when added to the securities being registered by the Company or the
selling  stockholder(s),  will  exceed  the  maximum  amount  of  the  Company's
securities which can be marketed (i) at a price reasonably related to their then
current market value,  and (ii) without  materially and adversely  affecting the
entire  offering,  then the  Company  will  still be  required  to  include  the
Registrable  Securities,  but may require the Holders to agree,  in writing,  to
delay the sale of all or any portion of the Registrable  Securities for a period
of 90 days from the effective date of the offering,  provided,  further, that if
the  sale of any  Registrable  Securities  is so  delayed,  then the  number  of
securities to be sold by all stockholders in such public offering during such 90
day period shall be  apportioned  pro rata among all such selling  stockholders,
including  all holders of the  Registrable  Securities,  according  to the total
amount  of  securities  of the  Company  owned  by  said  selling  stockholders,
including all holders of the Registrable Securities.

                                       5
<PAGE>

                  5.2.2  Terms.  The  Company  shall bear all fees and  expenses
attendant to registering the Registrable  Securities,  including the expenses of
any legal counsel  selected by the Holders to represent them in connection  with
the sale of the  Registrable  Securities  but the Holders  shall pay any and all
underwriting commissions related to the Registrable Securities.  In the event of
such a proposed  registration,  the Company  shall  furnish the then  Holders of
outstanding  Registrable  Securities  with not less than  fifteen  days  written
notice prior to the proposed date of filing of such registration statement. Such
notice  to  the  Holders  shall  continue  to  be  given  for  each   applicable
registration  statement filed (during the period in which the Purchase Option is
exercisable) by the Company until such time as all of the Registrable Securities
have been registered and sold. The holders of the Registrable  Securities  shall
exercise the  "piggy-back"  rights provided for herein by giving written notice,
within ten days of the receipt of the Company's  notice of its intention to file
a registration  statement.  The Company shall cause any  registration  statement
filed pursuant to the above "piggyback"  rights to remain effective for at least
nine  months from the date that the Holders of the  Registrable  Securities  are
first given the opportunity to sell all of such securities.

          5.3     Damages. Should the registration or the effectiveness  thereof
required by Sections 5.1 and 5.2 hereof be delayed by the Company or the Company
otherwise fails to comply with such  provisions,  the Company shall, in addition
to any other equitable or other relief available to the Holder(s), be liable for
any and all  incidental,  special and  consequential  damages  sustained  by the
Holder(s),  including,  but not limited  to, the loss of any profits  that might
have been  received  by the  holder  upon the sale of shares of Common  Stock or
Warrants (and shares of Common Stock  underlying the Warrants)  underlying  this
Purchase Option.

         5.4      General Terms.

                  5.4.1   Indemnification.   The  Company  shall  indemnify  the
Holder(s) of the Registrable  Securities to be sold pursuant to any registration
statement  hereunder and each person,  if any, who controls such Holders  within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934,  as amended  ("Exchange  Act"),  against all loss,  claim,  damage,
expense  or  liability  (including  all  reasonable  attorneys'  fees and  other
expenses  reasonably  incurred in investigating,  preparing or defending against
litigation, commenced or threatened, or any claim whatsoever whether arising out
of any action between the underwriter and the Company or between the underwriter
and any third party or otherwise) to which any of them may become  subject under
the Act, the Exchange Act or otherwise, arising from such registration statement
but only to the same extent and with the same effect as the provisions  pursuant
to which the Company  has agreed to  indemnify  the  underwriters  contained  in
Section 5 of the Underwriting  Agreement between the Company,  EBC and the other
underwriters  named  therein  dated the  Effective  Date.  The  Holder(s) of the
Registrable Securities to be sold pursuant to such registration  statement,  and
their successors and assigns,  shall severally,  and not jointly,  indemnify the
Company,  its officers and directors  and each person,  if any, who controls the
Company  within the  meaning  of  Section 15 of the Act or Section  20(a) of the
Exchange Act, against all loss, claim,  damage,  expense or liability (including
all  reasonable  attorneys'  fees and  other  expenses  reasonably  incurred  in
investigating,  preparing or defending  against any claim  whatsoever)  to which
they may become  subject under the Act, the Exchange Act or  otherwise,  arising
from information  furnished by or on behalf of such Holders, or their successors
or assigns, in writing, for specific inclusion in such registration statement to
the same extent and with the same effect as the provisions  contained in Section
5 of the Underwriting  Agreement  pursuant to which the underwriters have agreed
to indemnify the Company.

                                       6
<PAGE>

                  5.4.2 Exercise of Purchase Options.  Nothing contained in this
Purchase  Option shall be construed as requiring the Holder(s) to exercise their
Purchase Options or Warrants  underlying such Purchase Options prior to or after
the initial filing of any registration statement or the effectiveness thereof.

                  5.4.3  Documents  Delivered  to  Holders.  The  Company  shall
furnish  EBC,  as  representative  of the  Holders  participating  in any of the
foregoing  offerings,  a  signed  counterpart,  addressed  to the  participating
Holders,  of (i) an opinion of counsel to the Company,  dated the effective date
of  such  registration   statement  (and,  if  such  registration   includes  an
underwritten public offering, an opinion dated the date of the closing under any
underwriting  agreement related thereto), and (ii) a "cold comfort" letter dated
the effective date of such  registration  statement  (and, if such  registration
includes an underwritten public offering, a letter dated the date of the closing
under the underwriting  agreement) signed by the independent  public accountants
who have issued a report on the Company's financial  statements included in such
registration  statement,  in each case covering  substantially  the same matters
with  respect  to such  registration  statement  (and  the  prospectus  included
therein) and, in the case of such  accountants'  letter,  with respect to events
subsequent to the date of such financial statements,  as are customarily covered
in  opinions  of  issuer's  counsel and in  accountants'  letters  delivered  to
underwriters in underwritten  public offerings of securities.  The Company shall
also deliver promptly to EBC, as representative of the Holders  participating in
the offering, the correspondence and memoranda described below and copies of all
correspondence  between the Commission and the Company,  its counsel or auditors
and all memoranda  relating to discussions with the Commission or its staff with
respect to the registration  statement and permit EBC, as  representative of the
Holders, to do such investigation,  upon reasonable advance notice, with respect
to  information  contained in or omitted from the  registration  statement as it
deems reasonably necessary to comply with applicable securities laws or rules of
the  National   Association  of  Securities   Dealers,   Inc.   ("NASD").   Such
investigation  shall  include  access  to  books,  records  and  properties  and
opportunities  to discuss  the  business of the Company  with its  officers  and
independent auditors, all to such reasonable extent and at such reasonable times
and as often as EBC, as representative of the Holders, shall reasonably request.
The Company shall not be required to disclose any  confidential  information  or
other records to EBC, as representative of the Holders,  or to any other person,
until and unless such persons shall have entered into reasonable confidentiality
agreements (in form and substance reasonably  satisfactory to the Company), with
the Company with respect thereto.

                  5.4.4 Underwriting Agreement.  The Company shall enter into an
underwriting agreement with the managing underwriter(s), if any, selected by any
Holders  whose  Registrable  Securities  are being  registered  pursuant to this
Section 5, which  managing  underwriter  shall be  reasonably  acceptable to the
Company.  Such agreement shall be reasonably  satisfactory in form and substance
to the Company,  each Holder and such managing  underwriters,  and shall contain
such  representations,  warranties  and  covenants by the Company and such other
terms as are  customarily  contained  in  agreements  of that  type  used by the
managing underwriter. The Holders shall be parties to any underwriting agreement
relating to an  underwritten  sale of their  Registrable  Securities and may, at
their  option,  require  that  any or all the  representations,  warranties  and
covenants of the Company to or for the benefit of such  underwriters  shall also
be made to and for the  benefit  of such  Holders.  Such  Holders  shall  not be
required to make any  representations  or warranties  to or agreements  with the
Company or the underwriters  except as they may relate to such Holders and their
intended methods of  distribution.  Such Holders,  however,  shall agree to such
covenants  and   indemnification   and  contribution   obligations  for  selling
stockholders as are customarily contained in agreements of that type used by the
managing  underwriter.  Further,  such Holders shall execute appropriate custody
agreements and otherwise  cooperate fully in the preparation of the registration
statement  and other  documents  relating to any  offering in which they include
securities  pursuant to this  Section 5. Each Holder  shall also  furnish to the
Company such information  regarding itself,  the Registrable  Securities held by
it,  and the  intended  method of  disposition  of such  securities  as shall be
reasonably required to effect the registration of the Registrable Securities.

                                       7
<PAGE>

                  5.4.5 Rule 144 Sale.  Notwithstanding  anything  contained  in
this Section 5 to the contrary, the Company shall have no obligation pursuant to
Section 5.1 or 5.2 for the  registration  of Registrable  Securities held by any
Holder  (i) where such  Holder  would  then be  entitled  to sell under Rule 144
within any three-month period (or such other period prescribed under Rule 144 as
may be provided by amendment  thereof) all of the  Registrable  Securities  then
held by such Holder, and (ii) where the number of Registrable Securities held by
such Holder is within the volume  limitations  under  paragraph  (e) of Rule 144
(calculated as if such Holder were an affiliate within the meaning of Rule 144).

                  5.4.6 Supplemental  Prospectus.  Each Holder agrees, that upon
receipt of any notice from the Company of the happening of any event as a result
of which the  prospectus  included  in the  Registration  Statement,  as then in
effect,  includes  an untrue  statement  of a material  fact or omits to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading in light of the circumstances then existing,  such Holder
will immediately  discontinue  disposition of Registrable Securities pursuant to
the  Registration  Statement  covering such  Registrable  Securities  until such
Holder's receipt of the copies of a supplemental or amended prospectus,  and, if
so desired by the  Company,  such  Holder  shall  deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate  of
such  destruction)  all copies,  other than  permanent  file copies then in such
Holder's  possession,  of the prospectus  covering such  Registrable  Securities
current at the time of receipt of such notice.

                  5.4.7 Rule 144. The Company  covenants  that it shall file any
reports  required to be filed by it under the Act and the Exchange Act and shall
take such further action as the holders of Registrable Securities may reasonably
request,  all to the extent required from time to time to enable such holders to
sell  Registrable  Securities  without  registration  under the Act  within  the
limitations of the exemptions  provided by Rule 144, as such rule may be amended
from time to time,  or any similar rule or regulation  hereafter  adopted by the
Securities and Exchange Commission.

6.   Adjustments.

          6.1     Adjustments   to  Exercise  Price  and  Number of  Securities.
The Exercise Price and the number of Units  underlying the Purchase Option shall
be subject to adjustment from time to time as hereinafter set forth:

                  6.1.1 Stock  Dividends - Split-Ups.  If after the date hereof,
and subject to the  provisions of Section 6.4 below,  the number of  outstanding
shares of Common  Stock is increased  by a stock  dividend  payable in shares of
Common Stock or by a split-up of shares of Common Stock or other similar  event,
then,  on the  effective  date  thereof,  the  number of shares of Common  Stock
underlying  each of the  Units  purchasable  hereunder  shall  be  increased  in
proportion to such increase in outstanding  shares.  In such case, the number of
shares of Common Stock,  and the exercise price applicable  thereto,  underlying
the  Warrants  underlying  each of the  Units  purchasable  hereunder  shall  be
adjusted in  accordance  with the terms of the  Warrants.  For  example,  if the
Company  declares a two-for-one  stock dividend and at the time of such dividend
this  Purchase  Option is for the  purchase  of one Unit at $6.60 per whole Unit
(and each Warrant underlying the Units is exercisable for $5.00 per share), upon
effectiveness  of the dividend,  this Purchase  Option will be adjusted to allow
for the purchase of one Unit at $6.60 per Unit,  each Unit  entitling the holder
to receive two shares of Common  Stock and two  Warrants  each to  purchase  two
shares of Common Stock (for $2.50 per share).

                                       8
<PAGE>

                  6.1.2  Aggregation  of Shares.  If after the date hereof,  and
subject to the  provisions of Section 6.4, the number of  outstanding  shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other  similar  event,  then,  on the  effective  date
thereof,  the  number of shares of  Common  Stock  underlying  each of the Units
purchasable  hereunder  shall be decreased  in  proportion  to such  decrease in
outstanding  shares. In such case, the number of shares of Common Stock, and the
exercise price applicable  thereto,  underlying the Warrants  underlying each of
the Units  purchasable  hereunder shall be adjusted in accordance with the terms
of the Warrants.

                  6.1.3 Replacement of Securities upon  Reorganization,  etc. In
case of any  reclassification  or  reorganization  of the outstanding  shares of
Common  Stock other than a change  covered by Section  6.1.1 or 6.1.2  hereof or
that solely affects the par value of such shares of Common Stock, or in the case
of any merger or consolidation  of the Company with or into another  corporation
(other than a  consolidation  or merger in which the  Company is the  continuing
corporation and that does not result in any  reclassification  or reorganization
of the  outstanding  shares  of  Common  Stock),  or in the  case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved,  the Holder of this Purchase  Option shall have the right  thereafter
(until the  expiration  of the right of  exercise  of this  Purchase  Option) to
receive upon the exercise hereof,  for the same aggregate Exercise Price payable
hereunder  immediately  prior to such  event,  the kind and  amount of shares of
stock or other  securities or property  (including  cash)  receivable  upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution
following  any such sale or  transfer,  by a Holder  of the  number of shares of
Common Stock of the Company obtainable upon exercise of this Purchase Option and
the  underlying   Warrants   immediately   prior  to  such  event;  and  if  any
reclassification  also results in a change in shares of Common Stock  covered by
Section 6.1.1 or 6.1.2,  then such adjustment shall be made pursuant to Sections
6.1.1,  6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall
similarly  apply to successive  reclassifications,  reorganizations,  mergers or
consolidations, sales or other transfers.

                  6.1.4  Changes  in  Form  of  Purchase  Option.  This  form of
Purchase  Option  need not be changed  because of any  change  pursuant  to this
Section,  and  Purchase  Options  issued  after  such  change may state the same
Exercise  Price  and the same  number  of Units as are  stated  in the  Purchase
Options  initially  issued  pursuant to this  Agreement.  The  acceptance by any
Holder  of the  issuance  of new  Purchase  Options  reflecting  a  required  or
permissive  change  shall not be deemed  to waive  any  rights to an  adjustment
occurring after the Commencement Date or the computation thereof.

          6.2     [Intentionally Omitted]

                                       9
<PAGE>

         6.3 Substitute  Purchase  Option.  In case of any  consolidation of the
Company  with,  or merger of the Company  with,  or merger of the Company  into,
another  corporation (other than a consolidation or merger which does not result
in  any  reclassification  or  change  of the  outstanding  Common  Stock),  the
corporation  formed by such consolidation or merger shall execute and deliver to
the Holder a  supplemental  Purchase  Option  providing  that the holder of each
Purchase  Option  then  outstanding  or to be  outstanding  shall have the right
thereafter  (until the stated  expiration of such  Purchase  Option) to receive,
upon  exercise of such Purchase  Option,  the kind and amount of shares of stock
and other securities and property  receivable upon such consolidation or merger,
by a holder of the  number of shares of Common  Stock of the  Company  for which
such  Purchase  Option  might  have  been  exercised  immediately  prior to such
consolidation, merger, sale or transfer. Such supplemental Purchase Option shall
provide for adjustments which shall be identical to the adjustments  provided in
Section  6.  The  above  provision  of this  Section  shall  similarly  apply to
successive consolidations or mergers.

          6.4  Elimination  of Fractional  Interests.  The Company  shall not be
required to issue certificates  representing fractions of shares of Common Stock
or Warrants upon the exercise of the Purchase  Option,  nor shall it be required
to issue  scrip or pay cash in lieu of any  fractional  interests,  it being the
intent of the parties  that all  fractional  interests  shall be  eliminated  by
rounding  any fraction up to the nearest  whole  number of  Warrants,  shares of
Common Stock or other securities, properties or rights.

7.   Reservation  and Listing.  The Company shall at all times  reserve and keep
available out of its authorized  shares of Common Stock,  solely for the purpose
of issuance upon exercise of the Purchase Options or the Warrants underlying the
Purchase  Option,  such  number of shares of Common  Stock or other  securities,
properties or rights as shall be issuable upon the exercise thereof. The Company
covenants and agrees that, upon exercise of the Purchase  Options and payment of
the Exercise  Price  therefor,  all shares of Common Stock and other  securities
issuable upon such  exercise  shall be duly and validly  issued,  fully paid and
non-assessable  and not subject to  preemptive  rights of any  stockholder.  The
Company  further  covenants  and  agrees  that  upon  exercise  of the  Warrants
underlying the Purchase  Options and payment of the respective  Warrant exercise
price therefor,  all shares of Common Stock and other  securities  issuable upon
such exercise shall be duly and validly  issued,  fully paid and  non-assessable
and not subject to preemptive rights of any stockholder. As long as the Purchase
Options  shall be  outstanding,  the Company shall use its best efforts to cause
all (i) Units and shares of Common Stock  issuable upon exercise of the Purchase
Options,  (ii) Warrants issuable upon exercise of the Purchase Options and (iii)
shares of Common Stock  issuable upon  exercise of the Warrants  included in the
Units  issuable  upon exercise of the Purchase  Option to be listed  (subject to
official  notice of issuance) on all securities  exchanges (or, if applicable on
the Nasdaq National Market, SmallCap Market, OTC Bulletin Board or any successor
trading  market) on which the Units,  the  Common  Stock or the Public  Warrants
issued to the public in connection herewith may then be listed and/or quoted.

                                       10
<PAGE>

8.   Certain Notice Requirements.

          8.1     Holder's  Right to Receive  Notice.  Nothing  herein  shall be
construed  as  conferring  upon the  Holders  the right to vote or  consent as a
stockholder for the election of directors or any other matter,  or as having any
rights  whatsoever as a stockholder  of the Company.  If,  however,  at any time
prior to the expiration of the Purchase  Options and their exercise,  any of the
events  described  in  Section  8.2 shall  occur,  then,  in one or more of said
events,  the Company  shall give written  notice of such event at least  fifteen
days  prior to the  date  fixed as a  record  date or the  date of  closing  the
transfer  books  for the  determination  of the  stockholders  entitled  to such
dividend,  distribution,  conversion or exchange of  securities or  subscription
rights, or entitled to vote on such proposed dissolution,  liquidation,  winding
up or sale.  Such  notice  shall  specify  such  record  date or the date of the
closing  of the  transfer  books,  as  the  case  may  be.  Notwithstanding  the
foregoing,  the Company shall deliver to each Holder a copy of each notice given
to the other stockholders of the Company at the same time and in the same manner
that such notice is given to the stockholders.

          8.2     Events Requiring Notice. The Company shall be required to give
the notice  described  in this Section 8 in  connection  with one or more of the
following  events:  (i) if the Company shall take a record of the holders of its
shares of Common Stock for the purpose of  entitling  them to receive a dividend
or  distribution  payable  otherwise  than  in  cash,  or  a  cash  dividend  or
distribution  payable otherwise than out of retained  earnings,  as indicated by
the accounting  treatment of such dividend or  distribution  on the books of the
Company,  or (ii) the Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities  convertible
into or exchangeable for shares of capital stock of the Company,  or any option,
right or warrant to subscribe therefor,  or (iii) a dissolution,  liquidation or
winding up of the Company  (other than in  connection  with a  consolidation  or
merger)  or a sale  of all or  substantially  all of its  property,  assets  and
business shall be proposed.

          8.3     Notice  of  Change  in  Exercise  Price.  The  Company  shall,
promptly  after an event  requiring a change in the Exercise  Price  pursuant to
Section 6 hereof,  send notice to the  Holders of such event and change  ("Price
Notice").  The Price Notice shall  describe the event causing the change and the
method of calculating  same and shall be certified as being true and accurate by
the Company's President and Chief Financial Officer.

          8.4     Transmittal of Notices. All notices,  requests,  consents  and
other communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made when hand delivered,  or mailed by express mail or
private courier service: (i) If to the registered Holder of the Purchase Option,
to the address of such Holder as shown on the books of the  Company,  or (ii) if
to the Company, to the following address or to such other address as the Company
may designate by notice to the Holders:

                             Chardan China Acquisition Corp. III
                             625 Broadway
                             Suite 1111
                             San Diego, California 92101
                             Attn:   Jiangnan Huang, Chairman

                                       11
<PAGE>

9.   Miscellaneous.

          9.1     Amendments.  The  Company  and  EBC  may  from  time  to  time
supplement  or amend this  Purchase  Option  without the  approval of any of the
Holders in order to cure any  ambiguity,  to correct or supplement any provision
contained herein that may be defective or inconsistent with any other provisions
herein,  or to make any  other  provisions  in regard to  matters  or  questions
arising  hereunder  that the Company and EBC may deem necessary or desirable and
that the Company  and EBC deem shall not  adversely  affect the  interest of the
Holders. All other modifications or amendments shall require the written consent
of and be signed by the party against whom  enforcement of the  modification  or
amendment is sought.

          9.2     Headings.  The  headings  contained  herein  are  for the sole
purpose of  convenience  of reference,  and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this Purchase
Option.

10.  Entire  Agreement. This Purchase Option (together with the other agreements
and documents  being  delivered  pursuant to or in connection with this Purchase
Option)  constitutes the entire  agreement of the parties hereto with respect to
the  subject   matter  hereof,   and   supersedes   all  prior   agreements  and
understandings  of the parties,  oral and  written,  with respect to the subject
matter hereof.

          10.1    Binding Effect. This Purchase Option shall inure solely to the
benefit of and shall be binding  upon,  the  Holder  and the  Company  and their
permitted assignees,  respective successors,  legal representatives and assigns,
and no other  person  shall have or be  construed to have any legal or equitable
right,  remedy or claim  under or in  respect  of or by virtue of this  Purchase
Option or any provisions herein contained.

          10.2 Governing Law;  Submission to Jurisdiction.  This Purchase Option
shall be governed by and construed  and enforced in accordance  with the laws of
the State of New York, without giving effect to conflicts of law principles that
would result in the application of the substantive laws of another jurisdiction.
The  Company  hereby  agrees  that any action,  proceeding  or claim  against it
arising out of, or relating in any way to this Purchase  Option shall be brought
and  enforced in the courts of the State of New York or of the United  States of
America for the Southern  District of New York, and irrevocably  submits to such
jurisdiction,  which jurisdiction shall be exclusive.  The Company hereby waives
any objection to such exclusive  jurisdiction  and that such courts represent an
inconvenient  forum. Any process or summons to be served upon the Company may be
served by  transmitting a copy thereof by registered or certified  mail,  return
receipt requested,  postage prepaid, addressed to it at the address set forth in
Section 8 hereof.  Such mailing  shall be deemed  personal  service and shall be
legal and  binding  upon the  Company in any action,  proceeding  or claim.  The
Company and the Holder agree that the  prevailing  party(ies) in any such action
shall be entitled to recover  from the other  party(ies)  all of its  reasonable
attorneys'  fees and  expenses  relating  to such  action or  proceeding  and/or
incurred in connection with the preparation therefor.

          10.3   Waiver, Etc. The failure of the Company or the Holder to at any
time enforce any of the  provisions of this Purchase  Option shall not be deemed
or construed to be a waiver of any such provision,  nor to in any way affect the
validity of this  Purchase  Option or any  provision  hereof or the right of the
Company or any Holder to  thereafter  enforce  each and every  provision of this
Purchase Option. No waiver of any breach,  non-compliance or  non-fulfillment of
any of the  provisions  of this  Purchase  Option shall be effective  unless set
forth in a written  instrument  executed by the party or parties against whom or
which  enforcement  of such waiver is sought;  and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.

                                       12
<PAGE>

          10.4    Execution  in  Counterparts.   This  Purchase  Option  may  be
executed in one or more  counterparts,  and by the different  parties  hereto in
separate counterparts,  each of which shall be deemed to be an original, but all
of which taken together shall  constitute one and the same agreement,  and shall
become  effective when one or more  counterparts  has been signed by each of the
parties hereto and delivered to each of the other parties hereto.

          10.5    Exchange Agreement. As a condition of the Holder's receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete  exercise  of this  Purchase  Option by Holder,  if the Company and EBC
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding  Purchase  Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.

          10.6    Underlying  Warrants. At any time after exercise by the Holder
of this  Purchase  Option,  the Holder may exchange  his  Warrants  (with a $___
exercise  price) for Public  Warrants (with a $5.00 exercise price) upon payment
to the Company of the  difference  between the exercise price of his Warrant and
the exercise price of the Public Warrants.

                                       13
<PAGE>

          IN WITNESS WHEREOF,  the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the ____ day of __________, 2005.

                                           CHARDAN CHINA ACQUISITION CORP. III

                                           By:_________________________________
                                                Name:
                                                Title:

                                       14
<PAGE>

Form to be used to exercise Purchase Option:

Chardan China Acquisition Corp. III
625 Broadway
Suite 1111
San Diego, California 92101

Date:_________________, 200__

                  The undersigned hereby elects irrevocably to exercise all or a
portion of the within  Purchase  Option  and to  purchase  ____ Units of Chardan
China  Acquisition  Corp. III and hereby makes payment of $____________  (at the
rate of $_________ per Unit) in payment of the Exercise Price pursuant  thereto.
Please issue the Common Stock and Warrants as to which this  Purchase  Option is
exercised in accordance with the instructions given below.

                                                         or

                  The undersigned hereby elects irrevocably to convert its right
to purchase  _________  Units  purchasable  under the within  Purchase Option by
surrender of the  unexercised  portion of the attached  Purchase  Option (with a
"Value" based of $_______ based on a "Market  Price" of $_______).  Please issue
the  securities  comprising  the  Units  as to which  this  Purchase  Option  is
exercised in accordance with the instructions given below.

                                                  ------------------------------
                                                  Signature

                                                  ------------------------------
                                                  Signature Guaranteed

                  INSTRUCTIONS FOR REGISTRATION OF SECURITIES

Name_____________________________________________________________
                      (Print in Block Letters)

Address__________________________________________________________

                  NOTICE:  THE SIGNATURE TO THIS FORM MUST  CORRESPOND  WITH THE
NAME AS WRITTEN UPON THE FACE OF THE WITHIN PURCHASE OPTION IN EVERY  PARTICULAR
WITHOUT  ALTERATION  OR  ENLARGEMENT  OR ANY  CHANGE  WHATSOEVER,  AND  MUST  BE
GUARANTEED  BY A BANK,  OTHER THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A
FIRM HAVING MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.

                                       15
<PAGE>

Form to be used to assign Purchase Option:

                                   ASSIGNMENT

                  (To be executed by the registered  Holder to effect a transfer
of the within Purchase Option):

                  FOR VALUE RECEIVED,___________________________________________
does hereby sell, assign and transfer unto______________________________________
the right to purchase  __________ Units of Chardan China  Acquisition  Corp. III
("Company")  evidenced by the within Purchase  Option and does hereby  authorize
the Company to transfer such right on the books of the Company.

Dated:___________________, 200_

                                                  ------------------------------
                                                  Signature

                                                  ------------------------------
                                                  Signature Guaranteed

                  NOTICE:  THE SIGNATURE TO THIS FORM MUST  CORRESPOND  WITH THE
NAME AS WRITTEN UPON THE FACE OF THE WITHIN PURCHASE OPTION IN EVERY  PARTICULAR
WITHOUT  ALTERATION  OR  ENLARGEMENT  OR ANY  CHANGE  WHATSOEVER,  AND  MUST  BE
GUARANTEED  BY A BANK,  OTHER THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A
FIRM HAVING MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.

                                       16

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