Document:

Unassociated Document

    

    

    
      
        

      

    
 

    
      	
              Exclusive
                Service Agreement

            

    

    

    

    

    
      
 

    

    among

     

    Beijing
      China Broadband Network Technology Co., Ltd.

    

     

    Jinan
      Guangdian Jiahe Digital Television Co., Ltd.

     

    and

     

    Jinan
      Broadcast &Televison Information Network Center 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Table
      of Contents

    
 

    
      	
              Article

            	
              Page

            
	 	 	 
	
              RECITALS

            	
              3

            
	 	
               

            
	
              1.

            	
              DEFINITIONS
                AND INTERPRETATIONS

            	
              3

            
	 	 	
               

            
	
              2.

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              5

            
	 	 	
               

            
	
              3.

            	
              SERVICES
                PROVIDED BY PARTY A TO PARTY B AND PARTY C

            	
              5

            
	 	 	
               

            
	
              4.

            	
              SERVICES
                PROVIDED BY PARTY B AND PARTY C TO PARTY A

            	
              6

            
	 	 	
               

            
	
              5.

            	
              NON-COMPETITION

            	
              7

            
	 	 	
               

            
	
              6.

            	
              FEES
                AND PAYMENT TERMS

            	
              7

            
	 	 	
               

            
	
              7.

            	
              FINANCIAL
                MANAGEMENT

            	
              8

            
	 	 	
               

            
	
              8.

            	
              EFFECTIVE
                DATE, BREACH AND TERMINATION

            	
              9

            
	 	 	
               

            
	
              9.

            	
              GOVERNING
                LAW AND DISPUTE RESOLUTION

            	
              11

            
	 	 	
               

            
	
              10.
                

            	
              MISCELLANEOUS
                PROVISIONS

            	
              12

            

    

     

     

    
      
        Exclusive
          Service Agreement 

        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

    
       

      THIS
        EXCLUSIVE SERVICE AGREEMENT
        (Agreement)
        is made
        on this [•]
        day
        of
        December 2006 in the People's Republic of China ("PRC")
        

      

      by
        and among:

      

      Beijing
        China Broadband Network Technology Co., Ltd.,
        a
        limited company existing under the laws of the PRC, (Party
        A);

      

      Jinan
        Guangdian Jiahe Digital Television Co., Ltd.,
        a
        limited company existing under the laws of the PRC, with its registered address
        at Jinan,
        PRC and
        its legal representative is Jiang Bin, a PRC resident
        (Party
        B);

      

      and

      

      Jinan
        Broadcast &Televison Information Network Center,
        a
        limited company existing under the laws of the PRC, with its registered address
        at [•],
        PRC (Party
        C)

      

      (individually
        a Party
        and
        collectively the Parties).

      

      

      RECITALS

      

      	A.  	
              Party
                A is engaged in the provision of access services including wired
                or
                wireless broadcast/television broadband, digital private lines, web-based
                internet content, consulting services, software, systems integration,
                work
                for hire and other digital television value-added
                businesses;

            

      

      	B.  	
              Party
                B and Party C are engaged in the Business ( as defined below) and
                have
                obtained the necessary permit for the lawful operation of its
                Business;

            

      

      	C.  	
              Party
                A is willing to provide, and Party B and Party C are willing to accept,
                technical services in relation to Party B and Party C 's Business;
                Party B
                and Party C are willing to provide, and Party A is willing to accept,
                backup services in relation to Party B and Party C 's
                Business.

            

       

      NOW,
        THEREFORE,
        THE
        PARTIES AGREE AS FOLLOWS:

      

      
        	
                1.

              	
                DEFINITIONS
                  AND INTERPRETATIONS

              

      

      

      1.1 Definitions.
        Unless
        otherwise indicated, the following terms in this Agreement shall have the
        meanings set forth below:

      

      
        
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                Effective
                  Date

              	
                the
                  effective date of this Agreement, which shall be the date first
                  indicated
                  above;

              
	 	 	 
	 	
                Event
                  of Breach

              	
                as
                  defined in Article 8.3 below;

              
	 	 	 
	 	
                Business

              	
                access
                  services with respect to wired or wireless broadcasting/television
                  broadband, digital private lines and website as well as internet
                  content
                  services and internet value-added services, and other wired or
                  digital
                  television value-added businesses as agreed upon by the Parties;
                  

              
	 	 	 
	 	
                Financial
                  Statements

              	
                cash
                  flow statements, balance sheets, profit and loss statements and
                  any other
                  financial statements relating to the Business,
                  which shall be prepared in accordance with international accounting
                  standards;

              
	 	 	 
	 	
                PRC
                  Law

              	
                all
                  laws and regulations of the PRC which are applicable upon and after
                  the
                  date of signing of this Agreement;

              
	 	 	 
	 	
                Project
                  Account

              	
                as
                  defined in Article 7.1.1;

              
	 	 	 
	 	
                RMB

              	
                Renminbi,
                  the lawful currency of the PRC.

              

      

      

      1.2  Interpretations.
        

      

      1.2.1 The
        headings herein are for reference purposes only and do not affect the meaning
        or
        interpretation of any provision hereof. 

      

      1.2.2 Any
        reference herein to an Article or Appendix is to an article or appendix of
        this
        Agreement. The use of the plural shall include the use of the singular, and
        vice
        versa. The use of the masculine shall include the use of the feminine, and
        vice
        versa.

      

      1.2.3 Unless
        otherwise indicated, a reference herein to a day, month or year is to a calendar
        day, month or year. A reference to a business day is to a day on which
        commercial banks are open for business in both the PRC and Germany.

      

      
        
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                2.

              	
                REPRESENTATIONS
                  AND WARRANTIES

              

      

      

      2.1 Parties.
        Each
        Party represents and warrants that, as of the date of signing
        hereof:

      

      2.1.1 it
        has
        full power and authority to execute and deliver this Agreement and to perform
        its responsibilities and obligations hereunder; and

      

      2.1.2 it
        shall
        maintain as strictly confidential the provisions and existence of this Agreement
        and any information relating to the Business of the other Party to which
        it
        might have access during the performance of this Agreement, including without
        limitation customer database, financial and business development plans, market
        research and other information deemed to be confidential by such other
        Party.

       

      2.2 Party
        B. 
        Party B
        represents and warrants that, as of the date of signing hereof, it has obtained
        and will maintain the validity of all permits from the relevant governmental
        authorities necessary for the lawful operation of its business and its
        performance of this Agreement.

      

      2.3 Party
        C. 
        Party C
        represents and warrants that, as of the date of signing hereof it has obtained,
        and will maintain the validity of, all permits from the relevant governmental
        authorities necessary for the lawful operation of its business and its
        performance of this Agreement. 

      

      
        	
                3.

              	
                SERVICES
                  PROVIDED BY PARTY A TO PARTY B AND PARTY
                  C

              

      

      

      3.1  Exclusivity.
        Party
        B
        and Party C warrant to Party A that during the promotion of the interactive
        digital television businesses, priority will be given to Party A’s internet
        access service (IP or CM) as the circuit .

      

      Party
        B
        and Party C agree to retain Party A as its exclusive services provider with
        respect to CM broadband access services. Specifically, Party B and Party
        C
        (including for purposes of this Article any of its Affiliates and Subsidiaries)
        shall not retain any third party to provide services with respect to CM
        broadband access services, which are the same as or similar to those provided
        by
        Party A under this Agreement.

      

      3.2   Business-Related
        Services. Party
        A
        undertakes to provide various technical services to Party B and Party C
        including but not limited to, assisting Party B and Party C in the
        following:

      

      
        
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            5

          
            

          

        

        
          
          

        

      

      3.2.1 Party
        A
        will provide internet access services (IP or CM) when Party B and Party C
        promote their interactive digital television business;

      

      3.2.2 entering
        into an exclusive cooperation agreement with Party B and Party C with respect
        to
        access services of CM broadband; Party A will use current CM and CMTS terminal
        equipment and will implement new CM terminals in an effort to provide the
        relevant services to Party B and Party C;

      

      3.2.3 provide
        technical troubleshooting assistance, software support, and other technical
        services;

      

      3.2.4 provide
        application software for servers and provide for the continued development,
        upgrading, and implementation of application software for
        customers;

      

      3.2.5 provide
        training services to technical support personnel of Party B and Party C and
        consulting services with respect to the Business;

      

      3.2.6 any
        other
        reasonable technical services as required by Party B and Party C;

      

      

      
        	
                4.

              	
                SERVICES
                  PROVIDED BY PARTY B AND PARTY C TO PARTY
                  A

              

      

      

      4.1 Exclusivity.
        Party
        B
        and Party C shall contribute and share resources, including but not limited
        to,
        governmental authorizations, and customer data records.

       

      4.2 Business-Related
        Services.

      

      4.2.1 Party
        B
        and Party C will afford all necessary support, assistance, and preferential
        treatment to Party A, including but not limited to, Party B’ s preferential
        treatment to Party A with respect to circuit, channel, CM physical transmission
        systems, and optical access networks used in the wired TV network;

      

      4.2.2 Party
        B
        and Party C will afford preferential treatment to Party A with respect to
        the
        use of equipment rooms, business offices, project services facilities, and
        customer service centers;

      

      
        
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      4.2.3 Party
        B
        and Party C will contribute and share resources including, but not limited
        to,
        governmental authorizations and customer data records;

      

      4.2.4 Party
        B
        and Party C will maintain the network of CM and CMTS terminal equipment used
        by
        Party A. 

      

      
        	
                5.

              	
                NON-COMPETITION
                  

              

      

      

      5.1 Party
        B
        and Party C shall not directly or indirectly or cause its respective
        shareholders to directly or indirectly(through agency or other methods)
        encourage or ask for any invitation from, accept suggestions of, consult
        or
        negotiate with, or provide any information to any other individual or entity
        related to any transaction or services under this Agreement.

      

      5.2 If
        Party
        B or Party C or any of their shareholders, are in receipt of suggestions
        or
        other information with respect to any aspect of the Business from third party,
        Party B and Party C must immediately notify the contents of such information
        to
        Party A immediately. Party B and Party C shall ensure that their shareholders
        comply with Article 5. Party B and C will be liable for any breach of this
        Article by their shareholders. 

      

      
        	
                6.

              	
                FEES
                  AND PAYMENT TERMS

              

      

      

      6.1 
        Service
        fees and payment terms provided by Party B and Party C to Party
        A.
        In
        consideration for the all services provided by Party B and Party C to Party
        A,
        Party A shall pay Party B and Party C as a lump sum, on an annual basis,
        the
        Service Fee in the amount of 30, 0000 RMB for the first 3 years. The Service
        Fees from the 4th
        year and
        on shall be agreed upon by Parties. 

      

      The
        Service Fee shall be remitted in full, in RMB to Party B and Party C's
        designated bank account within 3 months after the last day of the preceding
        year. 

       

      6.2 
        Service
        fees and payment terms provided by Party A to Party B and Party
        C.
        In
        consideration for services rendered, licenses and training provided by Party
        A
        to Party B, Party B shall pay Party A a lump sum, on a monthly basis, the
        service fees which shall be of an amount equivalent to revenue before tax
        (deducting business taxes). 

      

      
        
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      If
        Party
        A and Party B require adjusting the arrangement of revenue flow, for instance,
        to pay all the revenues before tax to Party A after deducting direct expenses
        (telecommunication broadband fees), Party B shall try its best to cooperate
        with
        Party A to implement specific revenue flow mechanism. 

      

      The
        Service Fee shall be remitted in full, in RMB, to Party A's designated bank
        account within 30 days after the last day of the proceeding month. Party
        B shall
        also provide to Party A at such time the relevant Financial Statements for
        that
        month as well as any other relevant documents and/or information regarding
        the
        calculation of the Service Fee amount.

      

      6.3 
        Other
        fees. The
        Parties hereby expressly agree that there shall not be any other payment
        obligations arising from the service requirements, other than the services
        fees
        expressly stipulated to in Articles 6.1 and 6.2.

      

      
        	
                7.

              	
                FINANCIAL
                  MANAGEMENT 

              

      

      

      7.1 Project
        Account. The
        Parties agree that, in the interests of clarity, all receivables and payables
        relating to the Business that are generated or incurred during the term of
        this
        Agreement shall be only remitted to and withdrawn from the same dedicated
        bank
        account, in accordance with the following provisions:

      

      7.1.1  within
        30
        days after the Effective Date, Party B shall open a RMB bank account in its
        name
        for use specifically in respect of the Business (the “Project
        Account”);

      

      7.1.2  the
        Project Account shall be opened at the Beijing branch of a bank agreed to
        by the
        Party A and Party B, and shall be set up such that the personal seals of
        1
        representative from each of the Parties are required in order for money to
        be
        deposited or withdrawn from it, which representatives shall be appointed
        by the
        Parties in writing within 10 days after the Effective Date;

      

      7.1.3  the
        Project Account shall be used for the sole purpose of receiving proceeds
        from
        Party B and Party C and/or effecting payments relating to the Business;
        and

      

      7.1.4  Party
        A
        and Party B may request from the relevant bank at any time a statement of
        the
        activities on the Project Account.

      

      
        
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      7.2 
        Records.
        Party
        B
        agrees to maintain comprehensive financial records (including the Financial
        Statements) in respect of the Business, which shall be kept at its registered
        office in Jinan, PRC and shall be available for Party A's inspection at such
        times as Party A may reasonably request in writing. 

      

      7.3 Annual
        Statement. Within
        30
        days after the end of each financial year, Party B shall provide to Party A
        comprehensive Financial Statements for such financial year. Each Financial
        Statement, together with the financial records described in Article 7.2 above,
        shall be subject to an independent audit conducted by a reputable accounting
        firm registered in the PRC approved by Party A, at Party A's sole
        expense.

      

      7.4 
        Financial
        Statements. Within
        10
        days after a written request for such from Party A, Party B shall also provide
        to Party A Financial Statements. 

       

      
        	
                8.

              	
                EFFECTIVE
                  DATE, BREACH
                  AND TERMINATION

              

      

      

      8.1 Effective
        Date. This
        Agreement shall enter into effect from the Effective Date and shall continue
        with full force and effect until the earlier of either:

      

      8.1.1 the
        20th
        anniversary hereof; or

      

      8.1.2 its
        termination by either Party in accordance with Article 8.4 below.

      

      8.2 Extension.
        The term
        of this Agreement may be extended within 60 days before its expiration pursuant
        to Party A’s notice to Party B and Party C indicating its intent to extend the
        term. The extension term shall be determined by Party A and clearly stated
        the
        abovementioned notice. The Party B and Party C shall agree to such extended
        term
        unconditionally, under the condition that the term cannot not exceed 10 years.
        

      

      8.3 Breach.
        The
        occurrence of any one or more of the following events shall constitute a
        breach
        of this Agreement (an “Event
        of Breach”):

      

      8.3.1 either
        of
        the Parties has failed to perform any of its obligations hereunder , thus
        causing substantial losses to the other Party, and such obligation was not
        waived in writing by the other Party; 

      

      
        
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      8.3.2 either
        of
        the Parties is in breach of the terms hereof, and such breach has not been
        remedied for a period of 10 days after receipt of the other Party's written
        notice requesting such remedy; and

      

      8.3.3 any
        representation or warranty made by either of the Parties herein proves to
        be
        false or misleading in any material respect.

      

      8.4 Termination.
        This
        Agreement will terminate automatically upon its expiration, unless terminated
        prematurely under either of the following circumstances, namely:

      

      8.4.1 by
        the
        non-breaching Party with 30 days' written notice upon the occurrence of an
        Event
        of Breach; or

      

      8.4.2 with
        the
        mutual written consent of the Parties.

      

      8.5 Post
        Termination.
        Upon the
        termination of this Agreement by either Party:

      

      8.5.1 the
        licenses granted hereunder shall cease with immediate effect; and 

      

      8.5.2 any
        outstanding fees or other amounts payable hereunder by either Party to other
        Parties shall become due within 10 days after the date of delivery of an
        invoice
        for the same. 

      

      8.6 Survival.
        The
        following obligations shall survive the termination of this Agreement for
        any
        reason:

      

      8.6.1 the
        confidentiality undertakings set forth in Article 2.1.2 above, which shall
        continue indefinitely after the date of termination (unless the disclosure
        of
        confidential information has already entered the public domain or was made
        pursuant to a court order or law of relevant jurisdiction); and

      

      8.6.2 the
        obligation of the Service Fee, which shall continue for as long as any
        receivables generated from the relevant services during this Agreement are
        outstanding.

      

      
        
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                9.

              	
                GOVERNING
                  LAW AND DISPUTE RESOLUTION

              

      

      

      9.1 Governing
        Law.
        The
        execution, validity, interpretation and implementation of this Agreement
        and the
        settlement of disputes under it shall be governed by PRC Law. Where PRC Law
        is
        silent on a particular matter relating to this Agreement, reference shall
        be
        made to general international commercial practice. 

      

      9.2 Interpretation.
        If any
        dispute arises in connection with the interpretation of any provisions of
        this
        Agreement, the Parties shall determine the true intention of those provisions
        by
        making reference to the wording of this Agreement, the relevant Articles,
        the
        objective of the Agreement, commercial practice and the principle of good
        faith.

      

      9.3 Consultation.
        If any
        dispute arises in connection with this Agreement, the Parties shall attempt
        in
        the first instance to resolve such dispute through friendly consultation
        or
        mediation.

      

      9.4 Arbitration.
        If
        the
        dispute cannot be resolved in the above manner within 30 days after the
        commencement of consultations, either Party may submit the dispute to
        arbitration as follows:

      

      9.4.1 all
        disputes arising out of or in connection with this Agreement shall
        be
        submitted to the China Chamber of International Commerce for arbitration
        in
        Beijing under the its rules and by a sole arbitrator appointed in accordance
        with those rules;

      

      9.4.2
         the
        arbitration shall be conducted in the Chinese and English languages, with
        the
        arbitral award final and binding upon both Parties. Unless otherwise determined
        by the arbitrator, the cost of arbitration shall be borne by the losing Party.
        Any award rendered by the arbitrator shall be enforced by any court having
        jurisdiction upon the losing Party or its assets, in accordance with the
        Convention
        on the Recognition and Enforcement of Foreign Arbitral Awards
        (1958);
        and

      

      9.4.3 when
        any
        dispute is submitted to arbitration, except for the matters under dispute,
        the
        Parties shall continue to perform this Agreement.

      

      
        
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                10.
                  

              	
                MISCELLANEOUS
                  PROVISIONS

              

      

      

      10.1 Notices
        and Delivery. All
        notices and communications between the Parties shall be made in writing and
        in
        the Chinese or English language
        by facsimile transmission, delivery in person (including courier service)
        or
        registered airmail letter to the appropriate correspondence addresses set
        forth
        below:

      

      Party
        A

       

      Beijing
        China Broadband Network Technology Co., Ltd.

      

      Address: 

      

      Tel: 

      Fax: 

      Attn: 

      

      Party
        B

      

      Jinan
        Guangdian Jiahe Digital Television Co., Ltd.

      

      Address:  

      Tel: 

      Fax :  

      Attn:  

      

      Party
        C

      

      Jinan
        Broadcast &Televison Information Network Center 

      

      Address:  

      Tel: 

      Fax :  

      Attn:  

      

      10.2 Timing.
        The
        time
        of receipt of the notice or communication shall be deemed to be:

      

      10.2.1 if
        by
        facsimile transmission, at the time displayed in the corresponding transmission
        record, unless such facsimile is sent after 5:00 p.m. or on a non-business
        day
        in the place where it is received, in which case the date of receipt shall
        be
        deemed to be the following business day;

      

      10.2.2 if
        in
        person (including express mail), on the date that the receiving Party signs
        for
        the document; or

      

      
        
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      10.2.3 if
        by
        registered mail, on the 10th
        day
        after the date that is printed on the receipt of the registered
        mail.

      

      10.3 Amendments.
        The
        provisions of this Agreement may not be waived, modified or amended except
        by an
        instrument in writing signed by both Parties (which instrument shall be attached
        as an Appendix hereto).

      

      10.4 No
        Waiver. Failure
        or delay on the part of either Party to exercise any right under this Agreement
        shall not operate as a waiver thereof.

      

      10.5 Severability.
        The
        invalidity of any provision of this Agreement shall not affect the validity
        of
        any other provision of this Agreement which is unrelated to that
        provision.

      

      10.6 Binding
        Effect.
        This
        Agreement is legally binding upon the Parties and enforceable in accordance
        with
        its terms and conditions. Appendices shall form an integral part of this
        Agreement and shall be legally binding upon the Parties.

      

      10.7
         Successors.
        This
        Agreement shall be binding upon the Parties and upon their respective successors
        and assigns (if any).

      

      10.8 Assignment.
        Either
        Party may not assign or otherwise transfer its rights or obligations under
        this
        Agreement without the prior written consent of other Parties.

      

      10.9
         Entire
        Agreement.
        This
        Agreement and any Appendices hereto constitute the entire agreement between
        the
        Parties and supersede
        all
        prior discussions, negotiations
        and
        agreements. 

      

      10.10 Language
        and Versions. This
        Agreement is executed in 3 sets of originals, with each set comprising 1
        Chinese
        and 1 English version. Each Party shall retain 1 set of originals. The 2
        language versions shall have equal validity and the wording of each version
        shall be deemed to carry the same meaning. In the event of any discrepancy
        between the wordings of the 2 versions, such discrepancy shall be interpreted
        according to the purpose of this Agreement.

      

      [The
        space below has been intentionally left blank.]

      

      
        
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      IN
        WITNESS WHEREOF,
        the
        Parties hereto have executed or caused this Agreement to be executed by their
        duly authorised representatives (as the case may be) as of the date first
        indicated above. 

      

      For
        and on behalf of

      Beijing
        China Broadband Network Technology Co., Ltd.]

       

      
        
          	
                  Name

                	
                  :

                	 	 	 
	 	 	 	 	 
	
                  Title

                	
                  :

                	 	 	 
	 	 	 	 	 
	
                  Signature

                	
                  :

                	 	            
                  	 
	 	 	 	 	 
	
                  Company
                    Seal

                	
                  :

                	 	 	 

        

        

        For
          and on behalf of 

        

        Jinan
          Guangdian Jiahe Digital Television Co., Ltd.

        
 

        
          
            	
                    Name

                  	
                    :

                  	 	 	 
	 	 	 	 	 
	
                    Title

                  	
                    :

                  	 	 	 
	 	 	 	 	 
	
                    Signature

                  	
                    :

                  	 	                
                    	 
	 	 	 	 	 
	
                    Company
                      Seal

                  	
                    :

                  	 	 	 

          

        

        

        For
          and on behalf of

        Jinan
          Broadcast & Television Information Network Center

         

        
          
            	
                    Name

                  	
                    :

                  	 	 	 
	 	 	 	 	 
	
                    Title

                  	
                    :

                  	 	 	 
	 	 	 	 	 
	
                    Signature

                  	
                    :

                  	 	                
                    	 
	 	 	 	 	 
	
                    Company
                      Seal

                  	
                    :

                  	 	 	 

          

          

          
            
              Exclusive
                Service Agreement 

              
              

            

            
              Page
                14UNDER
      NASD RULE 2710(g) AND SUBJECT TO LIMITED EXCEPTIONS, THIS WARRANT AND THE
      UNDERLYING SHARES OF COMMON STOCK SHALL NOT BE SOLD DURING THE INITIAL PUBLIC
      OFFERING OF THE COMPANY'S COMMON STOCK (THE "PUBLIC OFFERING") OR SOLD,
      TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED, OR BE THE SUBJECT OF ANY
      HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT
      IN
      THE EFFECTIVE ECONOMIC DISPOSITION OF THIS WARRANT OR THE SECURITIES UNDERLYING
      THIS WARRANT BY ANY PERSON FOR A PERIOD OF 180 DAYS IMMEDIATELY FOLLOWING THE
      DATE OF EFFECTIVENESS OR COMMENCEMENT OF SALES OF THE PUBLIC
      OFFERING.

     

    THE
      WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK ISSUABLE
      HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE SOLD,
      OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION
      UNDER THE ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL,
      IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT
      THAT
      REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE
      SALE OF SUCH SECURITIES IS MADE PURSUANT TO SEC RULE 144.

     

    WARRANT
      TO PURCHASE COMMON STOCK

    OF

    CHINA
      SHENGHUO PHARMACEUTICAL HOLDINGS, INC.

     

    
      	NO. ________
              	
              ___,
                2007

            

    

     

    THIS
      CERTIFIES THAT,
      for
      $[0.001 * SHARES SOLD IN OFFERING (excluding over-allotment shares)] and other
      valuable consideration received by CHINA
      SHENGHUO PHARMACEUTICAL HOLDINGS, INC.,
      a
      Delaware corporation (the “Company”),
      WESTPARK
      CAPITAL, INC.,
      or its
      permitted registered assigns (“Holder”),
      is
      entitled, subject to the terms and conditions of this Warrant, at any time
      or
      from time to time after the issuance date of this Warrant (the “Effective
      Date”)
      [NOTE:
      THE ISSUANCE DATE WILL BE THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT,
      THUS
      THE EXPIRATION DATE WILL BE THE 5TH
      ANNIVERSARY OF THE EFFECTIVE DATE], and before 5:00 p.m. Pacific Time on the
      fifth (5th)
      anniversary of the Effective Date (the “Expiration
      Date”),
      to
      purchase from the Company, [___________] shares of Common Stock of the Company
      at a price per share equal to $[120% OF THE OFFERING PRICE] (the “Purchase
      Price”).
      Both
      the number of shares of Common Stock purchasable upon exercise of this Warrant
      and the Purchase Price are subject to adjustment and change as provided herein.
      

     

    1.  CERTAIN
      DEFINITIONS.
      As used
      in this Warrant the following terms shall have the following respective
      meanings:

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

    1.1  “Fair
      Market Value”
of
      a
      share of Common Stock as of a particular date shall mean:

     

    (a)  If
      traded
      on a securities exchange, the Fair Market Value shall be deemed to be the
      average of the closing prices of the Common Stock of the Company on such
      exchange or market over the five (5) trading days ending immediately prior
      to
      the applicable date of valuation;

     

    (b)  If
      actively traded over-the-counter, the Fair Market Value shall be deemed to
      be
      the average of the closing bid prices over the thirty (30)-day period ending
      immediately prior to the applicable date of valuation; and

     

    (c)  If
      there
      is no active public market, the Fair Market Value shall be the value thereof,
      as
      agreed upon by the Company and the Holder; provided,
      however,
      that if
      the Company and the Holder cannot agree on such value, such value shall be
      determined by an independent valuation firm experienced in valuing businesses
      such as the Company and jointly selected in good faith by the Company and the
      Holder. Fees and expenses of the valuation firm shall be paid for in equal
      proportions by the Company and the Holder.

     

    1.2  “Registered
      Holder”
shall
      mean any Holder in whose name this Warrant is registered upon the books and
      records maintained by the Company.

     

    1.3  “Warrant”
as
      used
      herein, shall include this Warrant and any warrant delivered in substitution
      or
      exchange therefor as provided herein.

     

    1.4  “Common
      Stock”
shall
      mean the Common Stock of the Company and any other securities at any time
      receivable or issuable upon exercise of this Warrant.

     

    2.  EXERCISE
      OF WARRANT.

     

    2.1  Payment.
      Subject
      to compliance with the terms and conditions of this Warrant and applicable
      securities laws, this Warrant may be exercised, in whole or in part at any
      time
      or from time to time, on or before the Expiration Date by the delivery
      (including, without limitation, delivery by facsimile) of the form of Notice
      of
      Exercise attached hereto as Exhibit A
      (the
“Notice
      of Exercise”),
      duly
      executed by the Holder, at the principal office of the Company, and as soon
      as
      practicable after such date, surrendering 

     

    (a)  this
      Warrant at the principal office of the Company, and

     

    (b)  payment,
      (i) in cash (by check) or by wire transfer, (ii) by cancellation by
      the Holder of indebtedness of the Company to the Holder; or (iii) by a
      combination of (i) and (ii), of an amount equal to the product obtained by
      multiplying the number of shares of Common Stock being purchased upon such
      exercise by the then effective Purchase Price (the “Exercise
      Amount”).

     

    2.2  Net
      Issue Exercise.
      In lieu
      of the payment methods set forth in Section
      2.1(b)
      above,
      the Holder may elect to exchange all or some of this Warrant for shares of
      Common Stock equal to the value of the amount of the Warrant being exchanged
      on
      the date of exchange. If Holder elects to exchange this Warrant as provided
      in
      this Section
      2.2,
      Holder
      shall tender to the Company the Warrant for the amount being exchanged, along
      with written notice of Holder’s election to exchange some or all of the Warrant,
      and the Company shall issue to Holder the number of shares of the Common Stock
      computed using the following formula:

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              X
                =

            	
              Y
                (A-B)

            
	 	
              A

            
	
              Where:
                X =

            	
              the
                number of shares of Common Stock to be issued to
                Holder.

            
	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable under the amount of
                the
                Warrant being exchanged (as adjusted to the date of such
                calculation).

            
	
              A
                =

            	
              the
                Fair Market Value of one share of the Common Stock on the date that
                the
                relevant Notice of Exercise is received by the Company.

            
	
              B
                =

            	
              Purchase
                Price (as adjusted to the date of such
                calculation).

            

    

     

    2.3  Stock
      Certificates; Fractional Shares.
      As soon
      as practicable on or after the date of any exercise of this Warrant, the Company
      shall issue and deliver to the person or persons entitled to receive the same
      a
      certificate or certificates for the number of whole shares of Common Stock
      issuable upon such exercise, together with cash in lieu of any fraction of
      a
      share equal to such fraction of the current Fair Market Value of one whole
      share
      of Common Stock as of such date of exercise. No fractional shares or scrip
      representing fractional shares shall be issued upon an exercise of this
      Warrant.

     

    2.4  Partial
      Exercise; Effective Date of Exercise.
      In case
      of any partial exercise of this Warrant, the Company shall cancel this Warrant
      upon surrender hereof and shall execute and deliver a new Warrant of like tenor
      and date for the balance of the shares of Common Stock purchasable hereunder.
      This Warrant shall be deemed to have been exercised immediately prior to the
      close of business on the date of its surrender for exercise as provided above.
      The person entitled to receive the shares of Common Stock issuable upon exercise
      of this Warrant shall be treated for all purposes as the holder of record of
      such shares as of the close of business on the date the Holder is deemed to
      have
      exercised this Warrant.

     

    2.5  Vesting.
      This
      Warrant shall vest fully upon issuance.

     

    3.  VALID
      ISSUANCE; TAXES.
      All
      shares of Common Stock issued upon the exercise of this Warrant shall be validly
      issued, fully paid and nonassessable, and the Company shall pay all taxes and
      other governmental charges that may be imposed in respect of the issue or
      delivery thereof. The Company shall not be required to pay any tax or other
      charge imposed in connection with any transfer involved in the issuance of
      any
      certificate for shares of Common Stock in any name other than that of the
      Registered Holder of this Warrant, and in such case the Company shall not be
      required to issue or deliver any stock certificate or security until such tax
      or
      other charge has been paid, or it has been established to the Company’s
      reasonable satisfaction that no tax or other charge is due.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    4.  ADJUSTMENT
      OF PURCHASE PRICE AND NUMBER OF SHARES.
      The
      number of shares of Common Stock issuable upon exercise of this Warrant (or
      any
      shares of stock or other securities or property receivable or issuable upon
      exercise of this Warrant) and the Purchase Price are subject to adjustment
      upon
      occurrence of the following events:

     

    4.1  Adjustment
      for Stock Splits, Stock Subdivisions or Combinations of Shares.
      The
      Purchase Price of this Warrant shall be proportionally decreased and the number
      of shares of Common Stock issuable upon exercise of this Warrant (or any shares
      of stock or other securities at the time issuable upon exercise of this Warrant)
      shall be proportionally increased to reflect any stock split or subdivision
      of
      the Company’s Common Stock. The Purchase Price of this Warrant shall be
      proportionally increased and the number of shares of Common Stock issuable
      upon
      exercise of this Warrant (or any shares of stock or other securities at the
      time
      issuable upon exercise of this Warrant) shall be proportionally decreased to
      reflect any combination of the Company’s Common Stock.

     

    4.2  Adjustment
      for Dividends or Distributions of Stock or Other Securities or
      Property.
      In case
      the Company shall make or issue, or shall fix a record date for the
      determination of eligible holders entitled to receive, a dividend or other
      distribution with respect to the Common Stock (or any shares of stock or other
      securities at the time issuable upon exercise of the Warrant) payable in (a)
      securities of the Company or (b) assets (excluding cash dividends), then, in
      each such case, the Holder of this Warrant on exercise hereof at any time after
      the consummation, effective date or record date of such dividend or other
      distribution, shall receive, in addition to the shares of Common Stock (or
      such
      other stock or securities) issuable on such exercise prior to such date, and
      without the payment of additional consideration therefor, the securities or
      such
      other assets of the Company to which such Holder would have been entitled upon
      such date if such Holder had exercised this Warrant on the date hereof and
      had
      thereafter, during the period from the date hereof to and including the date
      of
      such exercise, retained such shares and all such additional securities or other
      assets distributed with respect to such shares as aforesaid during such period
      giving effect to all adjustments called for by this Section
      4.

     

    4.3  Reclassification.
      If the
      Company, by reclassification of securities or otherwise, shall change any of
      the
      securities as to which purchase rights under this Warrant exist into the same
      or
      a different number of securities of any other class or classes, this Warrant
      shall thereafter represent the right to acquire such number and kind of
      securities as would have been issuable as the result of such change with respect
      to the securities that were subject to the purchase rights under this Warrant
      immediately prior to such reclassification or other change, and the Purchase
      Price therefor shall be appropriately adjusted, all subject to further
      adjustment as provided in this Section
      4.
      No
      adjustment shall be made pursuant to this Section
      4.3
      upon any
      conversion or redemption of the Common Stock which is the subject of
Section
      4.5.

     

    4.4  Adjustment
      for Capital Reorganization, Merger or Consolidation.
      In case
      of any capital reorganization of the capital stock of the Company (other than
      a
      combination, reclassification, exchange or subdivision of shares otherwise
      provided for herein), or any merger or consolidation of the Company with or
      into
      another corporation, or the sale of all or substantially all the assets of
      the
      Company then, and in each such case, as a part of such reorganization, merger,
      consolidation, sale or transfer, lawful provision shall be made so that the
      Holder of this Warrant shall thereafter be entitled to receive upon exercise
      of
      this Warrant, during the period specified herein and upon payment of the
      Purchase Price then in effect, the number of shares of stock or other securities
      or property of the successor corporation resulting from such reorganization,
      merger, consolidation, sale or transfer that a holder of the shares deliverable
      upon exercise of this Warrant would have been entitled to receive in such
      reorganization, consolidation, merger, sale or transfer if this Warrant had
      been
      exercised immediately before such reorganization, merger, consolidation, sale
      or
      transfer, all subject to further adjustment as provided in this Section
      4.
      The
      foregoing provisions of this Section
      4.4
      shall
      similarly apply to successive reorganizations, consolidations, mergers, sales
      and transfers and to the stock or securities of any other corporation that
      are
      at the time receivable upon the exercise of this Warrant. If the per-share
      consideration payable to the Holder hereof for shares in connection with any
      such transaction is in a form other than cash or marketable securities, then
      the
      value of such consideration shall be determined in good faith by the Company’s
      Board of Directors. In all events, appropriate adjustment (as determined in
      good
      faith by the Company’s Board of Directors) shall be made in the application of
      the provisions of this Warrant with respect to the rights and interests of
      the
      Holder after the transaction, to the end that the provisions of this Warrant
      shall be applicable after that event, as near as reasonably may be, in relation
      to any shares or other property deliverable after that event upon exercise
      of
      this Warrant.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    4.5  Conversion
      of Common Stock.
      In case
      all or any portion of the authorized and outstanding shares of Common Stock
      of
      the Company are redeemed or converted or reclassified into other securities
      or
      property pursuant to the Company’s Certificate of Incorporation or otherwise, or
      the Common Stock otherwise ceases to exist, then, in such case, the Holder
      of
      this Warrant, upon exercise hereof at any time after the date on which the
      Common Stock is so redeemed or converted, reclassified or ceases to exist (the
      “Termination
      Date”),
      shall
      receive, in lieu of the number of shares of Common Stock that would have been
      issuable upon such exercise immediately prior to the Termination Date, the
      securities or property that would have been received if this Warrant had been
      exercised in full and the Common Stock received thereupon had been
      simultaneously converted immediately prior to the Termination Date, all subject
      to further adjustment as provided in this Warrant. Additionally, the Purchase
      Price shall be immediately adjusted to equal the quotient obtained by dividing
      (x) the aggregate Purchase Price of the maximum number of shares of Common
      Stock
      for which this Warrant was exercisable immediately prior to the Termination
      Date
      by (y) the number of shares of Common Stock of the Company for which this
      Warrant is exercisable immediately after the Termination Date, all subject
      to
      further adjustment as provided herein.

     

    5.  CERTIFICATE
      AS TO ADJUSTMENTS.
      In each
      case of any adjustment in the Purchase Price, or number or type of shares
      issuable upon exercise of this Warrant, the Chief Financial Officer or
      Controller of the Company shall compute such adjustment in accordance with
      the
      terms of this Warrant and prepare a certificate setting forth such adjustment
      and showing in detail the facts upon which such adjustment is based, including
      a
      statement of the adjusted Purchase Price. The Company shall promptly send (by
      facsimile and by either first class mail, postage prepaid or overnight delivery)
      a copy of each such certificate to the Holder.

     

    6.  LOSS
      OR MUTILATION.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the ownership
      of
      and the loss, theft, destruction or mutilation of this Warrant, and of indemnity
      reasonably satisfactory to it, and (in the case of mutilation) upon surrender
      and cancellation of this Warrant, the Company will execute and deliver in lieu
      thereof a new Warrant of like tenor as the lost, stolen, destroyed or mutilated
      Warrant.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    7.  RESERVATION
      OF COMMON STOCK.
      The
      Company hereby covenants that at all times there shall be reserved for issuance
      and delivery upon exercise of this Warrant such number of shares of Common
      Stock
      or other shares of capital stock of the Company as are from time to time
      issuable upon exercise of this Warrant and, from time to time, will take all
      steps necessary to amend its Certificate of Incorporation to provide sufficient
      reserves of shares of Common Stock issuable upon exercise of this Warrant.
      All
      such shares shall be duly authorized, and when issued upon such exercise, shall
      be validly issued, fully paid and non-assessable, free and clear of all liens,
      security interests, charges and other encumbrances or restrictions on sale
      and
      free and clear of all preemptive rights, except encumbrances or restrictions
      arising under federal or state securities laws. Issuance of this Warrant shall
      constitute full authority to the Company’s Officers who are charged with the
      duty of executing stock certificates to execute and issue the necessary
      certificates for shares of Common Stock upon the exercise of this
      Warrant.

     

    8.  TRANSFER
      AND EXCHANGE.
      Subject
      to the terms and conditions of this Warrant and compliance with all applicable
      securities laws, this Warrant and all rights hereunder may be transferred to
      any
      Registered Holder’s parent, subsidiary or affiliate, or, if the Registered
      Holder is a partnership, to any partner of such Registered Holder, in whole
      or
      in part, on the books of the Company maintained for such purpose at the
      principal office of the Company referred to above, by the Registered Holder
      hereof in person, or by duly authorized attorney, upon surrender of this Warrant
      properly endorsed and upon payment of any necessary transfer tax or other
      governmental charge imposed upon such transfer. Upon any permitted partial
      transfer, the Company will issue and deliver to the Registered Holder a new
      Warrant or Warrants with respect to the shares of Common Stock not so
      transferred. Each taker and holder of this Warrant, by taking or holding the
      same, consents and agrees that when this Warrant shall have been so endorsed,
      the person in possession of this Warrant may be treated by the Company, and
      all
      other persons dealing with this Warrant, as the absolute owner hereof for any
      purpose and as the person entitled to exercise the rights represented hereby,
      any notice to the contrary notwithstanding; provided,
      however,
      that
      until a transfer of this Warrant is duly registered on the books of the Company,
      the Company may treat the Registered Holder hereof as the owner for all
      purposes. Notwithstanding anything to the contrary, this Warrant and the Common
      Stock issued or issuable upon exercise hereof, shall be subject to the
      restrictions on transfer contained in NASD Rule 2710(g) and may not be sold
      during the offering pursuant to which such Warrant was issued, or sold,
      transferred, assigned, pledged, or hypothecated, or be the subject of any
      hedging, short sale, derivative, put, or call transaction that would result
      in
      the effective economic disposition of the securities by any person for a period
      of 180 days immediately following the Effective Date, except as provided in
      subparagraph (g)(2) of NASD Rule 2710.

     

    9.  RESTRICTIONS
      ON TRANSFER.
      The
      Holder, by acceptance hereof, agrees that, absent an effective registration
      statement filed with the Securities and Exchange Commission (the “SEC”)
      under
      the Securities Act of 1933, as amended (the “Securities
      Act”)
      covering the disposition or sale of this Warrant or the Common Stock issued
      or
      issuable upon exercise hereof, as the case may be, and registration or
      qualification under applicable state securities laws, such Holder will not
      sell,
      transfer, pledge, or hypothecate any or all of this Warrant or such Common
      Stock, as the case may be, unless either (i) the Company has received an opinion
      of counsel, in form and substance reasonably satisfactory to the Company, to
      the
      effect that such registration is not required in connection with such
      disposition or (ii) the sale of such securities is made pursuant to SEC Rule
      144. Further, the Holder agrees that this Warrant and the Common Stock issued
      or
      issuable upon exercise hereof (including any shares issuable upon an adjustment
      hereunder), shall not be sold during the offering, or sold, transferred,
      assigned, pledged, or hypothecated, or be the subject of any hedging, short
      sale, derivative, put, or call transaction that would result in the effective
      economic disposition of the securities by any person for a period of 180 days
      immediately following the date of effectiveness or commencement of sales of
      the
      public offering of the Company pursuant to Registration Statement 333-137689
      on
      Form SB-2, as amended, except as provided in Rule 2710(g)(2) of the NASD
      Manual.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    10.  COMPLIANCE
      WITH SECURITIES LAWS.
      By
      acceptance of this Warrant, the Holder hereby represents, warrants and covenants
      that any shares of stock purchased upon exercise of this Warrant shall be
      acquired for investment only and not with a view to, or for sale in connection
      with, any distribution thereof; that the Holder has had such opportunity as
      such
      Holder has deemed adequate to obtain from representatives of the Company such
      information as is necessary to permit the Holder to evaluate the merits and
      risks of its investment in the Company; that the Holder is able to bear the
      economic risk of holding such shares as may be acquired pursuant to the exercise
      of this Warrant for an indefinite period; that the Holder understands that
      the
      shares of stock acquired pursuant to the exercise of this Warrant will not
      be
      registered under the Securities Act (unless otherwise required pursuant to
      exercise by the Holder of the registration rights, if any, granted to the
      Registered Holder) and will be “restricted securities” within the meaning of
      Rule 144 under the Securities Act and that the exemption from registration
      under
      Rule 144 will not be available for at least one (1) year from the date of
      exercise of this Warrant, subject to any special treatment by the SEC for
      exercise of this Warrant pursuant to Section
      2.2,
      and
      even then will not be available unless a public market then exists for the
      stock, adequate information concerning the Company is then available to the
      public, and other terms and conditions of Rule 144 are complied with; and that
      all stock certificates representing shares of stock issued to the Holder upon
      exercise of this Warrant or upon conversion of such shares may have affixed
      thereto a legend substantially in the following form:

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY
      STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
      RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
      AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
      THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
      FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
      OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
      SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE
      IS
      IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
      LAWS.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    11.  REGISTRATION
      RIGHTS. All
      shares of Common Stock issuable upon exercise of this Warrant shall be
“Registrable
      Securities”
or
      such
      other definition of securities entitled to registration rights pursuant to
      Exhibit
      C
      to this
      Warrant.

     

    12.  NO
      RIGHTS OR LIABILITIES AS STOCKHOLDERS.
      This
      Warrant shall not entitle the Holder to any voting rights or other rights as
      a
      stockholder of the Company. In the absence of affirmative action by such Holder
      to purchase Common Stock by exercise of this Warrant or Common Stock upon
      conversion thereof, no provisions of this Warrant, and no enumeration herein
      of
      the rights or privileges of the Holder hereof shall cause such Holder hereof
      to
      be a stockholder of the Company for any purpose.

     

    13.  [Reserved]

     

    14.  NOTICES.
      Except
      as may be otherwise provided herein, all notices, requests, waivers and other
      communications made pursuant to this Agreement shall be in writing and shall
      be
      conclusively deemed to have been duly given (a) when hand delivered to the
      other
      party; (b) when received when sent by facsimile at the address and number set
      forth below; (c) three business days after deposit in the U.S. mail with first
      class or certified mail receipt requested postage prepaid and addressed to
      the
      other party as set forth below; or (d) the next business day after deposit
      with
      a national overnight delivery service, postage prepaid, addressed to the parties
      as set forth below with next-business-day delivery guaranteed, provided that
      the
      sending party receives a confirmation of delivery from the delivery service
      provider.

     

    
      	
              To
                the Company:

            	
              To
                the Holder:

            
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

    

    Each
      person making a communication hereunder by facsimile shall promptly confirm
      by
      telephone to the person to whom such communication was addressed each
      communication made by it by facsimile pursuant hereto but the absence of such
      confirmation shall not affect the validity of any such communication. A party
      may change or supplement the addresses given above, or designate additional
      addresses, for purposes of this Section
      13
      by
      giving the other party written notice of the new address in the manner set
      forth
      above.

     

    15.  HEADINGS.
      The
      headings in this Warrant are for purposes of convenience in reference only,
      and
      shall not be deemed to constitute a part hereof.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    16.  LAW
      GOVERNING.
      This
      Warrant shall be construed and enforced in accordance with, and governed by,
      the
      laws of the State of California, with regard to conflict of law principles
      of
      such state.

     

    17.  NO
      IMPAIRMENT.
      The
      Company will not, by amendment of its Certificate of Incorporation or bylaws,
      or
      through reorganization, consolidation, merger, dissolution, issue or sale of
      securities, sale of assets or any other voluntary action, avoid or seek to
      avoid
      the observance or performance of any of the terms of this Warrant, but will
      at
      all times in good faith assist in the carrying out of all such terms and in
      the
      taking of all such action as may be necessary or appropriate in order to protect
      the rights of the Registered Holder of this Warrant against impairment. Without
      limiting the generality of the foregoing, the Company (a) will not increase
      the
      par value of any shares of stock issuable upon the exercise of this Warrant
      above the amount payable therefor upon such exercise, and (b) will take all
      such
      action as may be necessary or appropriate in order that the Company may validly
      and legally issue fully paid and nonassessable shares of Common Stock upon
      exercise of this Warrant.

     

    18.  NOTICES
      OF RECORD DATE.
      In
      case:

     

    18.1  the
      Company shall take a record of the holders of its Common Stock (or other stock
      or securities at the time receivable upon the exercise of this Warrant), for
      the
      purpose of entitling them to receive any dividend or other distribution, or
      any
      right to subscribe for or purchase any shares of stock of any class or any
      other
      securities or to receive any other right; or

     

    18.2  of
      any
      consolidation or merger of the Company with or into another corporation, any
      capital reorganization of the Company, any reclassification of the capital
      stock
      of the Company, or any conveyance of all or substantially all of the assets
      of
      the Company to another corporation in which holders of the Company’s stock are
      to receive stock, securities or property of another corporation; or

     

    18.3  of
      any
      voluntary dissolution, liquidation or winding-up of the Company; or

     

    18.4  of
      any
      redemption or conversion of all outstanding Common Stock;

     

    then,
      and
      in each such case, the Company will mail or cause to be mailed to the Registered
      Holder of this Warrant a notice specifying, as the case may be, (i) the date
      on
      which a record is to be taken for the purpose of such dividend, distribution
      or
      right, or (ii) the date on which such reorganization, reclassification,
      consolidation, merger, conveyance, dissolution, liquidation, winding-up,
      redemption or conversion is to take place, and the time, if any is to be fixed,
      as of which the holders of record of Common Stock or (such stock or securities
      as at the time are receivable upon the exercise of this Warrant), shall be
      entitled to exchange their shares of Common Stock (or such other stock or
      securities), for securities or other property deliverable upon such
      reorganization, reclassification, consolidation, merger, conveyance,
      dissolution, liquidation or winding-up. The Company shall use all reasonable
      efforts to ensure such notice shall be delivered at least thirty (30) days
      prior
      to the date therein specified.

     

    19.  SEVERABILITY.
      If any
      term, provision, covenant or restriction of this Warrant is held by a court
      of
      competent jurisdiction to be invalid, void or unenforceable, the remainder
      of
      the terms, provisions, covenants and restrictions of this Warrant shall remain
      in full force and effect and shall in no way be affected, impaired or
      invalidated.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    20.  COUNTERPARTS.
      For the
      convenience of the parties, any number of counterparts of this Warrant may
      be
      executed by the parties hereto and each such executed counterpart shall be,
      and
      shall be deemed to be, an original instrument.

     

    21.  NO
      INCONSISTENT AGREEMENTS.
      The
      Company will not on or after the date of this Warrant enter into any agreement
      with respect to its securities which is inconsistent with the rights granted
      to
      the Holders of this Warrant or otherwise conflicts with the provisions hereof.
      The rights granted to the Holders hereunder do not in any way conflict with
      and
      are not inconsistent with the rights granted to holders of the Company’s
      securities under any other agreements, except rights that have been
      waived.

     

    22.  SATURDAYS,
      SUNDAYS AND HOLIDAYS.
      If the
      Expiration Date falls on a Saturday, Sunday or legal holiday, the Expiration
      Date shall automatically be extended until 5:00 p.m. the next business
      day.

     

    23.  ENTIRE
      AGREEMENT.
      This
      Warrant contains the sole and entire agreement and understanding of the parties
      with respect to the entire subject matter of this Warrant, and any and all
      prior
      discussions, negotiations, commitments and understandings, whether oral or
      otherwise, related to the subject matter of this Warrant are hereby merged
      herein.

     

    [Signatures
      appear on following page.]

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

     

     

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Warrant as of the Effective Date.

     

    

     

    
      	
              WESTPARK
                CAPITAL, INC.

               

               

               

               

            	 	
              CHINA
                SHENGHUO PHARMACEUTICAL HOLDINGS, INC.

            
	
              By:
                

            	 	
              By:
                 

            
	
              Its:
                

            	
               

            	
              Its:
                

            

    

    

     

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    SIGNATURE
      PAGE TO WARRANT TO PURCHASE COMMON STOCK

     

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    NOTICE
      OF EXERCISE

    (To
      be
      executed upon exercise of Warrant)

    To:
      China
      Shenghuo Pharmaceutical Holdings, Inc.

     

    The
      undersigned hereby irrevocably elects to exercise the right of purchase
      represented by the within Warrant Certificate for, and to purchase thereunder,
      the securities of the Company, as provided for therein, and (check the
      applicable box):

     

    
      	r 	
              tenders
                herewith payment of the exercise price in full in the form of cash
                or a
                certified or official bank check in same-day funds in the amount
                of
                $____________ for _________ such securities.

            
	 	 
	r 	
              elects
                the [Net Issue Exercise][Easy Sale Exercise] option pursuant to Section
                2.2 of the Warrant, and accordingly requests delivery of a net of
                ______________ of such securities.

            

    

     

    Please
      issue a certificate or certificates for such securities in the name of, and
      pay
      any cash for any fractional share to (please print name, address and social
      security number):

     

    
      	
              Name:

            	 
	
              Address:

            	 
	
              Signature:

            	 

    

    

     

    Note:
      The
      above signature should correspond exactly with the name on the first page of
      this Warrant Certificate or with the name of the assignee appearing in the
      assignment form below.

     

    If
      said
      number of shares shall not be all the shares purchasable under the within
      Warrant Certificate, a new Warrant Certificate is to be issued in the name
      of
      said undersigned for the balance remaining of the shares purchasable thereunder
      rounded up to the next higher whole number of shares.

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    ASSIGNMENT

    (To
      be
      executed only upon assignment of Warrant Certificate)

     

    For
      value
      received, hereby sells, assigns and transfers unto ____________________________
      the within Warrant Certificate, together with all right, title and interest
      therein, and does hereby irrevocably constitute and appoint
      ____________________________ attorney, to transfer said Warrant Certificate
      on
      the books of the within-named Company with respect to the number of Warrants
      set
      forth below, with full power of substitution in the premises:

     

    
      	
              Name(s)
                of Assignee(s)

            	
              Address

            	
              #
                of Warrants

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

    

    

     

    And
      if
      said number of Warrants shall not be all the Warrants represented by the Warrant
      Certificate, a new Warrant Certificate is to be issued in the name of said
      undersigned for the balance remaining of the Warrants registered by said Warrant
      Certificate.

     

    
      	
              Dated:

            	 
	
              Signature:

            	 

    

    

     

    Notice:
      The signature to the foregoing Assignment must correspond to the name as written
      upon the face of this security in every particular, without alteration or any
      change whatsoever; signature(s) must be guaranteed by an eligible guarantor
      institution (banks, stock brokers, savings and loan associations and credit
      unions with membership in an approved signature guarantee medallion program)
      pursuant to Securities and Exchange Commission Rule 17Ad-15.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

     

    EXHIBIT
      C

    1. REGISTRATION
      RIGHTS.

     

     

    1.1 Definitions.
      For
      purposes of this Section 1:

     

    
      	 	
              (a)

            	
              Registration.
                The terms “register,”
                “registered,”
                and “registration”
                refer to a registration effected by preparing and filing a registration
                statement in compliance with the Securities Act of 1933, as amended,
                (the
                “Securities
                Act”),
                and the declaration or ordering of effectiveness of such registration
                statement

            

    

     

    
      	 	
              (b)

            	
              Registrable
                Securities.
                The term “Registrable
                Securities”
                means: (1) any Common Stock of the Company issued or to be issued
                upon
                exercise of the Warrant and (2) any shares of Common Stock of the
                Company issued as (or issuable upon the conversion or exercise of
                any
                warrant, right or other security which is issued as) a dividend or
                other
                distribution with respect to, or in exchange for or in replacement
                of, any
                shares of Common Stock described in clause (1) of this subsection
                (b).
                Notwithstanding the foregoing, “Registrable Securities” shall exclude any
                Registrable Securities sold by a person in a transaction in which
                rights
                under this Section 1
                are not assigned in accordance with this Warrant or any Registrable
                Securities sold in a public offering, whether sold pursuant to
                Rule 144 promulgated under the Securities Act, or in a registered
                offering, or otherwise or securities which can be sold in accordance
                with
                Rule 144(k) promulgated under the Securities
                Act..

            

    

     

    
      	 	
              (c)

            	
              Registrable
                Securities Then Outstanding.
                The number of shares of “Registrable
                Securities then outstanding”
                shall mean the number of shares of Common Stock of the Company that
                are
                Registrable Securities and (l) are then issued and outstanding or
                (2) are
                then issuable pursuant to an exercise of the Warrant or pursuant
                to
                conversion of securities issuable pursuant to an exercise of the
                Warrant.

            

    

     

    
      	 	
              (d)

            	
              Holder.
                For purposes of this Section 1,
                the term “Holder”
                means any person owning of record Registrable Securities or any permitted
                assignee of record of such Registrable Securities to whom rights
                under
                this Section 1
                have been duly assigned in accordance with this
                Warrant.

            

    

     

    
      	 	
              (e)

            	
              Form.
                The term “Form”
                means any form under the Securities Act for the registration of securities
                as is in effect on the date hereof or any successor registration
                form
                under the Securities Act subsequently adopted by the SEC which permits
                inclusion or incorporation of substantial information by reference
                to
                other documents filed by the Company with the
                SEC.

            

    

     

    
      	 	
              (f)

            	
              SEC.
                The term “SEC”
                or “Commission”
                means the U.S. Securities and Exchange
                Commission.

            

    

     

     

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

     

    
      	 	
              1.2

            	
              Piggyback
                Registrations.
                The Company shall notify all Holders of Registrable Securities in
                writing
                at least thirty (30) days prior to filing any registration statement
                under
                the Securities Act for purposes of effecting a public offering of
                securities of the Company (including, but not limited to, registration
                statements relating to secondary offerings of securities of the Company,
                but excluding
                registration statements relating to any registration under Section 1.3,
                below, or to any employee benefit plan or a corporate reorganization)
                and
                will afford each such Holder an opportunity to include in such
                registration statement all or any part of the Registrable Securities
                then
                held by such Holder. Each Holder desiring to include in any such
                registration statement all or any part of the Registrable Securities
                held
                by such Holder shall within fifteen (15) days after receipt of the
                above-described notice from the Company, so notify the Company in
                writing,
                and in such notice shall inform the Company of the number of Registrable
                Securities such Holder wishes to include in such registration statement.
                If a Holder decides not to include all of its Registrable Securities
                in
                any registration statement thereafter filed by the Company, such
                Holder
                shall nevertheless continue to have the right to include any Registrable
                Securities in any subsequent registration statement or registration
                statements as may be filed by the Company with respect to offerings
                of its
                securities, all upon the terms and conditions set forth
                herein.

            

    

     

    
      	 	
              (a)

            	
              Underwriting.
                If a registration statement under which the Company gives notice
                under
                this Section 1.2
                is
                for an underwritten offering, then the Company shall so advise the
                Holders
                of Registrable Securities. In such event, the right of any such Holder’s
                Registrable Securities to be included in a registration pursuant
                to this
                Section 1.2
                shall be conditioned upon such Holder’s participation in such underwriting
                and the inclusion of such Holder’s Registrable Securities in the
                underwriting to the extent provided herein. All Holders proposing
                to
                distribute their Registrable Securities through such underwriting
                shall
                enter into an underwriting agreement in customary form with the managing
                underwriter or underwriters selected for such underwriting (including
                a
                market stand-off agreement of up to 180 days if required by such
                underwriters). Notwithstanding any other provision of this Exhibit
                C, if
                the managing underwriter(s) determine(s) in good faith that marketing
                factors require a limitation of the number of shares to be underwritten,
                then the Company shall include in such offering (i) first, all the
                securities the Company proposes to register for its own account,
                and (ii)
                second, Holder’s Registrable Securities and other shares of Common Stock
                of the Company requested to be included by other investors having
                written
                registration rights agreements with the Company respecting such shares
                (“Other
                Registrable Securities”),
                with Holder and each such investor proposing to sell such shares
                participating in such registration on a pro
                rata
                basis, such participation to be based upon the number of shares of
                Registrable Securities and Other Registrable Securities then held
                by the
                Holder and each such investor, respectively; provided,
                however,
                that the right of the underwriters to exclude shares (including
                Registrable Securities) from the registration and underwriting as
                described above shall be restricted so that all shares that are not
                Registrable Securities or Other Registrable Securities and are held
                by any
                other person, including, without limitation, any person who is an
                employee
                or officer of the Company (or any subsidiary of the Company) shall
                first
                be excluded from such registration and underwriting before any Registrable
                Securities and Other Registrable Securities are so excluded. If any
                Holder
                disapproves of the terms of any such underwriting, such Holder may
                elect
                to withdraw therefrom by written notice to the Company and the
                underwriter(s), delivered at least ten (10) business days prior to
                the
                effective date of the registration statement. Any Registrable Securities
                excluded or withdrawn from such underwriting shall be excluded and
                withdrawn from the registration. For any Holder that is a partnership,
                the
                Holder and the partners and retired partners of such Holder, or the
                estates and family members of any such partners and retired partners
                and
                any trusts for the benefit of any of the foregoing persons, and for
                any
                Holder that is a corporation, the Holder and all corporations that
                are
                affiliates of such Holder, shall be deemed to be a single “Holder,” and
                any pro
                rata
                reduction with respect to such “Holder” shall be based upon the aggregate
                amount of shares carrying registration rights owned by all entities
                and
                individuals included in such “Holder,” as defined in this
                sentence.

            

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

            	
              Expenses.
                All expenses incurred in connection with a registration pursuant
                to this
                Section 1.2
                (excluding underwriters’ and brokers’ discounts and commissions relating
                to shares sold by the Holders and legal fees of counsel for the Holders),
                including, without limitation all federal and “blue sky” registration,
                filing and qualification fees, printers’ and accounting fees, and fees and
                disbursements of counsel for the Company, shall be borne by the
                Company.

            

    

     

    
      	 	
              (c)

            	
              No
                Limit on Registrations.
                Except as otherwise provided herein, there shall be no limit on the
                number
                of times the Holders may request registration of Registrable Securities
                under this Section 1.2,
                provided however, that such registration rights shall terminate of
                the
                seventh anniversary of the Effective
                Date.

            

    

     

    
      	 	
              1.3

            	
              Form
                Registration.
                In case the Company shall at any time during the period ending on
                the
                fifth anniversary of the Effective Date, receive from any Holder
                or
                Holders of a majority of all Registrable Securities then outstanding
                a
                written request or requests that the Company effect a registration
                on Form
                and any related qualification or compliance with respect to all or
                a part
                of the Registrable Securities owned by such Holder or Holders, then
                the
                Company will:

            

    

     

    
      	 	
              (a)

            	
              Notice.
                Promptly give written notice of the proposed registration and the
                Holder’s
                or Holders’ request therefor, and any related qualification or compliance,
                to all other Holders of Registrable Securities;
                and

            

    

     

    
      	 	
              (b)

            	
              Registration.
                As soon as practicable, effect such registration and all such
                qualifications and compliances as may be so requested and as would
                permit
                or facilitate the sale and distribution of all or such portion of
                such
                Holders or Holders’ Registrable Securities as are specified in such
                request, together with all or such portion of the Registrable Securities
                of any other Holder or Holders joining in such request as are specified
                in
                a written request given within twenty (20) days after the Company
                provides
                the notice contemplated by Section 1.3(a);
                provided,
                however,
                that the Company shall not be obligated to effect any such registration,
                qualification or compliance pursuant to this Section 1.3:

            

    

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
            	
              (1)

            	
              [intentionally
                deleted];

            

    

     

    
      	 	
              (2)

            	
              if
                the Holders, together with the holders of any other securities of
                the
                Company entitled to inclusion in such registration, propose to sell
                Registrable Securities and such other securities (if any) at an aggregate
                price to the public of less than
                $1,000,000;

            

    

     

    
      	 	
              (3)

            	
              if
                the Company shall furnish to the Holders a certificate signed by
                the
                President or Chief Executive Officer of the Company stating that
                in the
                good faith judgment of the Board of Directors of the Company, it
                would be
                materially detrimental to the Company and its shareholders for such
                Form
                Registration to be effected at such time, in which event the Company
                shall
                have the right to defer the filing of the Form Registration statement
                no
                more than once during any twelve month period for a period of not
                more
                than ninety (90) days after receipt of the request of the Holder
                or
                Holders under this Section 1.3;

            

    

     

    
      	 	
              (4)

            	
              if
                the Company has, within the six (6) month period preceding the date
                of
                such request, already effected a registration under the Securities
                Act
                other than a registration from which the Registrable Securities of
                Holders
                have been excluded (with respect to all or any portion of the Registrable
                Securities the Holders requested be included in such registration)
                pursuant to the provisions of Section 1.2(a);
                or

            

    

     

    
      	 	
              (5)

            	
              in
                any particular jurisdiction in which the Company would be required
                to
                qualify to do business or to execute a general consent to service
                of
                process in effecting such registration, qualification or
                compliance.

            

    

     

    
      	 	
              (c)

            	
              Expenses.
                The Company shall pay all expenses incurred in connection with one
                registration requested pursuant to this Section 1.3,
                (excluding underwriters’ or brokers’ discounts and commissions relating to
                shares sold by the Holders and legal fees of counsel for the Holders
                and
                excluding expenses required to be paid by a Holder pursuant to
                Section
                1.4(g)
                below), including without limitation federal and “blue sky” registration,
                filing and qualification fees, printers’ and accounting fees, and fees and
                disbursements of counsel.

            

    

     

    
      	 	
              (d)

            	
              [Intentionally
                deleted].

            

    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (e)

            	
              Limit
                on Registrations.
                The Holders shall be entitled to request registration of Registrable
                Securities under this Section 1.3
                on
                one (1) occasion.

            

    

     

    
      	 	
              1.4

            	
              Obligations
                of the Company.
                Whenever required to effect the registration of any Registrable Securities
                under this Warrant the Company shall, as expeditiously as reasonably
                possible:

            

    

     

    
      	 	
              (a)

            	
              Registration
                Statement.
                Prepare and file with the SEC a registration statement with respect
                to
                such Registrable Securities and use its commercially reasonable efforts
                to
                cause such registration statement to become effective, provided,
                however,
                that the Company shall not be required to keep any such registration
                statement effective for more than ninety (90)
                days.

            

    

     

    
      	 	
              (b)

            	
              Amendments
                and Supplements.
                Prepare and file with the SEC such amendments and supplements to
                such
                registration statement and the prospectus used in connection with
                such
                registration statement as may be necessary to comply with the provisions
                of the Securities Act with respect to the disposition of all securities
                covered by such registration
                statement.

            

    

     

    
      	 	
              (c)

            	
              Prospectuses.
                Furnish to the Holders such number of copies of a prospectus, including
                a
                preliminary prospectus, in conformity with the requirements of the
                Securities Act, and such other documents as they may reasonably request
                in
                order to facilitate the disposition of the Registrable Securities
                owned by
                them that are included in such
                registration.

            

    

     

    
      	 	
              (d)

            	
              Blue
                Sky.
                Use its commercially reasonable efforts to register and qualify the
                securities covered by such registration statement under such other
                securities or Blue Sky laws of such states as shall be reasonably
                requested by the Holders, provided that the Company shall not be
                required
                in connection therewith or as a condition thereto to qualify to do
                business or to file a general consent to service of process in any
                such
                states or jurisdictions.

            

    

     

    
      	 	
              (e)

            	
              Underwriting.
                In the event of any underwritten public offering, enter into and
                perform
                its obligations under an underwriting agreement in usual and customary
                form, with the managing underwriter(s) of such offering. Each Holder
                participating in such underwriting shall also enter into and perform
                its
                obligations under such an
                agreement.

            

    

     

    
      	 	
              (f)

            	
              Notification.
                Notify each Holder of Registrable Securities covered by such registration
                statement at any time when a prospectus relating thereto is required
                to be
                delivered under the Securities Act of the happening of any event
                as a
                result of which the prospectus included in such 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 the light of the
                circumstances then existing.

            

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (g)

            	
              Opinion
                and Comfort Letter.
                Furnish, at the request of any Holder requesting registration of
                Registrable Securities, on the date that such Registrable Securities
                are
                delivered to the underwriters for sale, if such securities are being
                sold
                through underwriters, (i) an opinion, dated as of such date, of the
                counsel representing the Company for the purposes of such registration,
                in
                form and substance as is customarily given to underwriters in an
                underwritten public offering and reasonably satisfactory to a majority
                in
                interest of the Holders requesting registration, addressed to the
                underwriters, if any, and (ii) a “comfort” letter dated as of such date,
                from the independent certified public accountants of the Company,
                in form
                and substance as is customarily given by independent certified public
                accountants to underwriters in an underwritten public offering and
                reasonably satisfactory to a majority in interest of the Holders
                requesting registration, addressed to the underwriters, if any, provided
                however, that the Company’s obligation to obtain a “comfort” letter shall
                be limited to commercially reasonable efforts.

            

    

     

    
      	 	
              1.5

            	
              Furnish
                Information.
                It shall be a condition precedent to the obligations of the Company
                to
                take any action pursuant to Sections
                1.2
                or
                1.3
                that the selling Holders shall furnish to the Company such information
                regarding themselves, the Registrable Securities held by them, and
                the
                intended method of disposition of such securities as shall be required
                to
                timely effect the Registration of their Registrable
                Securities.

            

    

     

    
      	 	
              1.6

            	
              Indemnification.
                In the event any Registrable Securities are included in a registration
                statement under Sections
                1.2
                or
                1.3:

            

    

     

    
      	 	
              (a)

            	
              By
                the Company.
                To the extent permitted by law; the Company will indemnify and hold
                harmless each Holder, the partners, officers and directors of each
                Holder,
                any underwriter (as determined in the Securities Act) for such Holder
                and
                each person, if any, who controls such Holder or underwriter within
                the
                meaning of the Securities Act or the Securities Exchange Act of 1934,
                as
                amended, (the “1934
                Act”),
                against any losses, claims, damages, or Liabilities (joint or several)
                to
                which they may become subject under the Securities Act, the 1934
                Act or
                other federal or state law, insofar as such losses, claims, damages,
                or
                liabilities (or actions in respect thereof) arise out of or are based
                upon
                any of the following statements, omissions or violations (collectively
                a
                “Violation”):

            

    

     

    
      	 	
              (i)

            	
              any
                untrue statement or alleged untrue statement of a material fact contained
                in such registration statement, including any preliminary prospectus
                or
                final prospectus contained therein or any amendments or supplements
                thereto;

            

    

     

    
      	 	
              (ii)

            	
              the
                omission or alleged omission to state therein a material fact required
                to
                be stated therein, or necessary to make the statements therein not
                misleading, or

            

    

     

    
      
        
        

      

      
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              (iii)

            	
              any
                violation or alleged violation by the Company of the Securities Act,
                the
                1934 Act, any federal or state securities law or any rule or regulation
                promulgated under the Securities Act, the 1934 Act or any federal
                or state
                securities law in connection with the offering covered by such
                registration statement;

            

    

     

    and
      the
      Company will reimburse each such Holder, partner, officer or director,
      underwriter or controlling person for any legal or other expenses reasonably
      incurred by them, as incurred, in connection with investigating or defending
      any
      such loss, claim, damage, liability or action; provided, however,
      that
      the indemnity agreement contained in this subsection 1.6(a) shall not apply
      to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of the Company (which consent
      shall not be unreasonably withheld), nor shall the Company be liable in any
      such
      case for any such loss, claim, damage, liability or action to the extent that
      it
      arises out of or is based upon a Violation which occurs in reliance upon and
      in
      conformity with written information furnished expressly for use in connection
      with such registration by such Holder, partner, officer, director, underwriter
      or controlling person of such Holder.

     

    
      	 	
              (b)

            	
              By
                Selling Holders.
                To the extent permitted by law, each selling Holder will indemnify
                and
                hold harmless the Company, each of its directors, each of its officers
                who
                have signed the registration statement, each person, if any, who
                controls
                the Company within the meaning of the Securities Act, any underwriter
                and
                any other Holder selling securities under such registration statement
                or
                any of such other Holder’s partners, directors or officers or any person
                who controls such Holder within the meaning of the Securities Act
                or the
                1934 Act, against any losses, claims, damages or liabilities (joint
                or
                several) to which the Company or any such director, officer, controlling
                person, underwriter or other such Holder, partner or director, officer
                or
                controlling person of such other Holder may become subject under
                the
                Securities Act, the 1934 Act or other federal or state law, insofar
                as
                such losses, claims, damages or liabilities (or actions in respect
                thereto) arise out of or are based upon any Violation, in each case
                to the
                extent (and only to the extent) that such Violation occurs in reliance
                upon and in conformity with written information furnished by such
                Holder
                expressly for use in connection with such registration; and each
                such
                Holder will reimburse any legal or other expenses reasonably incurred
                by
                the Company or any such director, officer, controlling person, underwriter
                or other Holder, partner, officer, director or controlling person
                of such
                other Holder in connection with investigating or defending any such
                loss,
                claim, damage, liability or action: provided,
                however,
                that the indemnity agreement contained in this Section
                1.6(b)
                shall not apply to amounts paid in settlement of any such loss, claim,
                damage, liability or action if such settlement is effected without
                the
                consent of the Holder, which consent shall not be unreasonably withheld;
                and provided,
                further,
                that the total amounts payable in indemnity by a Holder under this
                Section 1.6(b)
                in
                respect of any Violation shall not exceed the net proceeds received
                by
                such Holder in the registered offering out of which such Violation
                arises.

            

    

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (c)

            	
              Notice.
                Promptly after receipt by an indemnified party under this Section 1.6
                of
                notice of the commencement of any action (including any governmental
                action), such indemnified party will, if a claim in respect thereof
                is to
                be made against any indemnifying party under this Section 1.6,
                deliver to the indemnifying party a written notice of the commencement
                thereof and the indemnifying party shall have the right to participate
                in,
                and, to the extent the indemnifying party so desires, jointly with
                any
                other indemnifying party similarly noticed, to assume the defense
                thereof
                with counsel mutually satisfactory to the parties; provided,
                however,
                that an indemnified party shall have the right to retain its own
                counsel,
                with the fees and expenses to be paid by the indemnifying party,
                if
                representation of such indemnified party by the counsel retained
                by the
                indemnifying party would be inappropriate due to actual or potential
                conflict of interests between such indemnified party and any other
                party
                represented by such counsel in such proceeding. The failure to deliver
                written notice to the indemnifying party within a reasonable time
                of the
                commencement of any such action shall relieve such indemnifying party
                of
                liability to the indemnified party under this Section 1.6
                to
                the extent the indemnifying party is prejudiced as a result thereof,
                but
                the omission so to deliver written notice to the indemnified party
                will
                not relieve it of any liability that it may have to any indemnified
                party
                otherwise than under this Section 1.6.

            

    

     

    
      	 	
              (d)

            	
              Defect
                Eliminated in Final Prospectus.
                The foregoing indemnity agreements of the Company and Holders are
                subject
                to the condition that, insofar as they relate to any Violation made
                in a
                preliminary prospectus but eliminated or remedied in the amended
                prospectus on file with the SEC at the time the registration statement
                in
                question becomes effective or the amended prospectus filed with the
                SEC
                pursuant to SEC Rule 424(b) (the “Final
                Prospectus”),
                such indemnity agreement shall not inure to the benefit of any person
                if a
                copy of the Final Prospectus was timely furnished to the indemnified
                party
                and was not furnished to the person asserting the loss, liability,
                claim
                or damage at or prior to the time such action is required by the
                Securities Act.

            

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (e)

            	
              Contribution.
                In order to provide for just and equitable contribution to joint
                liability
                under the Securities Act in any case in which either (i) any Holder
                exercising rights under this Warrant, or any controlling person of
                any
                such Holder, makes a claim for indemnification pursuant to this
                Section 1.6
                but it is judicially determined (by the entry of a final judgment
                or
                decree by a court of competent jurisdiction and the expiration of
                time to
                appeal or the denial of the last right of appeal) that such
                indemnification may not be enforced in such case notwithstanding
                the fact
                that this Section 1.6
                provides for indemnification in such case, or (ii) contribution under
                the Securities Act may be required on the part of any such selling
                Holder
                or any such controlling person in circumstances for which indemnification
                is provided under this Section 1.6;
                then, and in each such case, the Company and such Holder will contribute
                to the aggregate losses, claims, damages or liabilities to which
                they may
                be subject (after contribution from others) in such proportion as
                is
                appropriate to reflect the relative fault of the Company on the one
                hand
                and the Holder on the other in connection with the statements or
                omissions
                or other matters which resulted in such losses, claims, damages,
                liabilities or expenses (or actions in respect thereof), as well
                as any
                other relevant equitable considerations. The relative fault shall
                be
                determined by reference to, among other things, in the case of an
                untrue
                statement, whether the untrue statement relates to information supplied
                by
                the Company on the one hand or the Holder on the other and the parties'
                relative intent, knowledge, access to information and opportunity
                to
                correct or prevent such untrue statement. The Company and the Holders
                agree that it would not be just and equitable if contribution pursuant
                to
                this subsection (e) were determined by pro rata allocation (even
                if the
                Holders were treated as one entity for such purpose) or by any other
                method of allocation which does not take into account the equitable
                considerations referred to above in this subsection (e). Provided,
                however,
                that, in any such case: (A) no such Holder will be required to contribute
                any amount in excess of the public offering price of all such Registrable
                Securities offered and sold by such Holder pursuant to such registration
                statement; and (B) no person or entity guilty of fraudulent
                misrepresentation (within the meaning of Section 11(f) of the
                Securities Act) will be entitled to contribution from any person
                or entity
                who was not guilty of such fraudulent
                misrepresentation.

            

    

     

    
      	 	
              1.7

            	
              Termination
                of the Company’s Obligations.
                The Company shall have no obligations pursuant to Sections
                1.2
                and 1.3
                with respect to any Registrable Securities proposed to be sold by
                a Holder
                in a registration pursuant to (a) Section 1.2
                more than seven years or (b) Section
                1.3
                more than five years, respectively, after the date of this Warrant,
                or,
                if, in the opinion of counsel to the Company, all such Registrable
                Securities proposed to be sold by a Holder may then be sold under
                Rule 144
                in one transaction without exceeding the volume limitations
                thereunder.

            

    

    

     

    
      
        
        

      

      
        9

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