Document:

Exhibit
4.3

     

    AMENDED
AND RESTATED

    CLASS
B WARRANT AGREEMENT

     

    Agreement
(this “Agreement”) made
as of July 9,
2009 between Pypo China Holdings Limited, an exempted company with limited
liability incorporated in the Cayman Islands, with its registered office at the
offices of Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand
Cayman, KY1-1104, (the “Company”), and Continental
Stock Transfer & Trust Company, a New York corporation, with offices at
Continental Stock Transfer & Trust Company, 17 Battery Place, 8th floor, New
York NY, 10004 (the “Warrant
Agent”).

     

    WHEREAS, Middle Kingdom
Alliance Corp., a Delaware corporation (“Middle Kingdom”), previously
conducted a public offering (“Public Offering”) of Series A
Units and Series B Units (collectively, the “Units”) and, in connection
therewith, determined to issue and deliver up to (i) 3,300,000 Class B Warrants
(plus an additional 495,000 Class B Warrants if the representative of the
underwriters exercise their over-allotment option) (the “Class B Public Warrants”) to
the public investors, and (ii) 330,000 Class B Warrants to I-Bankers Securities,
Inc. (the “Representative”) or their
designees (“Representative’s
Warrants” and, together with the Class B Public Warrants, the “IPO Warrants”), each of such IPO
Warrants evidencing the right of the holder thereof to purchase one share, par
value $0.001, of Middle Kingdom’s common stock (“Common Stock”) for $5.00,
subject to adjustment; and

     

    WHEREAS, the form, provision
and terms of the IPO Warrants were set forth in a Class B Warrant Agreement
between Middle Kingdom and the Warrant Agent dated as of December 19, 2006, as
amended (the “Original Class B
Warrant Agreement”); and

     

    WHEREAS, the Company has filed
with the Securities and Exchange Commission Registration Statement No 333-153492
on Form S-4 (the “Registration
Statement”) for the registration, under the Securities Act of 1933, as
amended (the “Act”) of,
among other securities, the IPO Warrants and the Ordinary Shares issuable upon
exercise of the IPO Warrants; and

     

    WHEREAS, Middle Kingdom has
entered into that certain Agreement and Plan of Merger, Conversion and Share
Exchange, dated September 5, 2008 (as amended, the “Exchange Agreement”) with Pypo
Digital Company Limited, an exempted company with limited liability incorporated
in the Cayman Islands, Arch Digital Holdings Limited, a British Virgin Islands
corporation (“Arch
BVI”), Capital Ally Investments Limited, a British Virgin Islands
corporation (“Capital
Ally”), and various other parties set forth on the signature pages to the
Exchange Agreement. Pursuant to the Exchange Agreement, Middle Kingdom has
merged with and into its wholly owned subsidiary MK Arizona Corp., an Arizona
corporation (“MK
Arizona”), and following such merger, MK Arizona has converted to and
registered by way of continuation and continued its existence as the
Company.  As a result of these transactions (the “Business Combination”), among
other things, the Company assumed each outstanding Class B Warrant of Middle
Kingdom, thereby entitling each holder thereof to purchase an equivalent number
of ordinary shares of the Company, par value US$0.001 per share (“Ordinary Shares”);
and

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    WHEREAS, pursuant to the
Exchange Agreement the Company will issue 1,700,000 Class B Warrants to Arch BVI
and 1,700,000 Class B Warrants to Capital Ally (the “Exchange Warrants,” and,
together with the IPO Warrants, the “Warrants”), with each Exchange
Warrant evidencing the right of the holder thereof to purchase one Ordinary
Share for $5.00, subject to adjustment as described herein; and

     

    WHEREAS, the Company desires
the Warrant Agent to act on behalf of the Company, and the Warrant Agent is
willing to so act, in connection with the issuance, registration, transfer,
exchange, redemption and exercise of the Warrants; and

     

    WHEREAS, the Company desires
to update the Original Class B Warrant Agreement to reflect the consummation of
the transactions contemplated by the Exchange Agreement, and provide for the
form and provisions of the Warrants, the terms upon which they shall be issued
and exercised, and the respective rights, limitation of rights, and immunities
of the Company, the Warrant Agent, and the holders of the Warrants;
and

     

    WHEREAS, all acts and things
have been done and performed which are necessary to make the Warrants, when
executed on behalf of the Company and countersigned by or on behalf of the
Warrant Agent, as provided herein, the valid, binding and legal obligations of
the Company, and to authorize the execution and delivery of this
Agreement.

     

    NOW, THEREFORE, in consideration of
the mutual agreements herein contained, the parties hereto agree as
follows:

     

    1.           Appointment
of Warrant Agent.  The Company hereby appoints
the Warrant Agent to act as agent for the Company for the Warrants, and the
Warrant Agent hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth in this
Agreement.

     

    2.           Warrants.

     

    2.1         Form of
Warrant.  Warrants may be issued in
registered form only, and shall, subject to Section 2.4 hereof, be in
substantially the form of Exhibit
A hereto, the provisions of
which are incorporated herein and shall be signed by, or bear the facsimile
signature of, the Chief
Executive Officer, Chairman of the Board, Chief Financial Officer or any Senior Vice President of the
Company and shall, if the Company has a seal, bear a facsimile of the Company’s
seal. In the event the person whose facsimile signature has been placed upon any
Warrant shall have ceased to serve in the capacity in which such person signed
the Warrant before such Warrant is issued, it may be issued with the same effect
as if he or she had not ceased to be such at the date of
issuance.

     

    2.2         Effect of
Countersignature.  Unless and until
countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall
be invalid and of no effect and may not be exercised by the holder
thereof.

     

    2.3         Registration.

     

    2.3.1    Warrant
Register. The Warrant Agent shall maintain books
(“Warrant
Register”), for the
registration of original issuance and the registration of transfer of the
Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall
issue and register the Warrants in the names of the respective holders thereof
in such denominations and otherwise in accordance with instructions
delivered to the Warrant
Agent by the Company.

     

    
      
         

      

      
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    2.3.2    Registered
Holder.  Prior to
due presentment for registration of transfer of any Warrant, the Company and the
Warrant Agent may deem and treat the person in whose name such Warrant shall be
registered upon the Warrant Register (“registered
holder”), as the absolute
owner of such Warrant and of each Warrant represented thereby (notwithstanding
any notation of ownership or other writing on the Warrant Certificate made by
anyone other than the Company or the Warrant Agent), for the purpose of any
exercise thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the
contrary.

     

    2.4         IPO Warrants
and Exchange Warrants.  The IPO Warrants shall have
substantially the same terms and be in substantially the same form as the
Exchange Warrants. For the avoidance of doubt, the IPO Warrants, whether or not replaced
with the form of Warrant attached hereto, shall have the rights as set forth in the form of
Warrant attached hereto pursuant to Section 4.4 of the Original Class B Warrant
Agreement, and shall hereafter be governed by the terms of this
Agreement.

     

    3.          Terms and
Exercise of Warrants.

     

    3.1         Warrant
Price.  Each
Warrant shall, when countersigned by the Warrant Agent, entitle the registered
holder thereof, subject to the provisions of such Warrant and of this Warrant
Agreement, to purchase from the Company the number of Ordinary Shares stated
therein, at the price of $5.00 per whole share, subject to the adjustments
provided in Section 4 hereof and in the last sentence of this
Section 3.1. The term “Warrant Price” as used in
this Warrant Agreement refers to the price per share at which Ordinary Shares
may be purchased at the time a Warrant is exercised. The Company in its sole
discretion may lower the Warrant Price at any time prior to the Expiration
Date.

     

    3.2         Duration of
Warrants.  A
Warrant may be exercised only during the period (“Exercise
Period”) commencing on
_July 9,
2009_, 2009 and terminating
at 5:00 p.m., New York City time on the earlier to occur of (i) December 13,
2013 or (ii) the date fixed for redemption of the Warrants as provided in
Section 6 of this Agreement (“Expiration
Date”). Except with respect
to the right to receive the Redemption Price (as set forth in Section 6
hereunder), each Warrant not exercised on or before the Expiration Date shall
become void, and all rights thereunder and all rights in respect thereof under
this Agreement shall cease at the close of business on the Expiration Date. The
Company in its sole discretion may extend the duration of the Warrants by
delaying the Expiration Date. Notwithstanding the foregoing, a Warrant may
expire unexercised regardless of whether a registration statement is currently
effective under the Act, with respect to the Ordinary Shares
issuable upon exercise of the Warrants.

     

    
      
         

      

      
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    3.3         Exercise of
Warrants.

     

    3.3.1    Payment.  Subject to the provisions
of the Warrant and this Warrant Agreement, a Warrant, when countersigned by the
Warrant Agent, may be exercised by the registered holder thereof by surrendering
it, at the office of the Warrant Agent, or at the office of its successor as
Warrant Agent, in the Borough of Manhattan, City and State of New York, with the
subscription form, as set forth in the Warrant, duly executed, and (i) by paying
in full, in lawful money of the United States, in cash, good certified check or
good bank draft payable to the order of the Company (or as otherwise agreed to
by the Company), the Warrant Price for each full Ordinary Share as to which the
Warrant is exercised and any and all applicable taxes due in connection with the
exercise of the Warrant, the exchange of the Warrant for the Ordinary Shares,
and the issuance of the Ordinary Shares or (ii) in the event that the Board of
Directors of the Company, in their sole discretion, determine that the Warrants
may be exercised on a “cashless basis”, by surrendering his or her Warrant for
that number of Ordinary Shares equal to the quotient obtained by dividing (x)
the product of the number of Ordinary Shares underlying the Warrant, multiplied
by the difference between the Warrant Price and the “Fair Market Value” (defined
below) by (y) the Fair Market Value. The “Fair Market Value” shall mean the
average reported last sale price of the Ordinary Shares for the 10 trading days
ending on the third business day prior to the date on which the notice of
redemption is sent to holders of Warrant pursuant to Section 6 hereof or in
connection with the foregoing sentence, the date of exercise of the Warrant.
Notwithstanding the
foregoing, at any time commencing one year after the commencement of the
Exercise Period, if no registration statement is effective permitting the sale
of the Ordinary Shares underlying the Warrants, the Warrants may be exercised on
a “cashless” basis. In no
event will the registered holder of a Warrant be entitled to receive a net cash
settlement in lieu of physical settlement in Ordinary
Shares.

     

    3.3.2    Issuance of
Certificates.  As
soon as practicable after the exercise of any Warrant and the clearance of the
funds in payment of the Warrant Price, the Company shall (i) enter the name of
the registered holder of such Warrant (or such other name or names as may be
directed by him, her or it) in the register of members of the Company as the holder of that number of
Ordinary Shares to which
he, she or it is entitled and (ii) issue to the registered holder of such
Warrant a certificate or certificates for such number of Ordinary Shares,
registered in such name or names as may be directed by him, her or it, and if
such Warrant shall not have been exercised in full, a new countersigned Warrant
for the number of shares as to which such Warrant shall not have been exercised.
Notwithstanding the foregoing, the Company shall not be obligated to deliver any
securities pursuant to the exercise of a Warrant unless a registration statement
under the Act with respect to the Ordinary Shares underlying such Warrant is
effective. Warrants may not be exercised by, or securities issued to, any
registered holder in any state in which such exercise would be
unlawful.

     

    3.3.3    Valid
Issuance.  All
Ordinary Shares issued upon the proper exercise of a Warrant in conformity with
this Agreement shall be validly issued, fully paid and
nonassessable.

     

    3.3.4    Date of
Issuance.  Each
person in whose name any such certificate for Ordinary Shares is issued shall
for all purposes be deemed to have become the holder of record of such shares on
the date on which the Warrant was surrendered and payment of the Warrant Price
was made, irrespective of the date of delivery of such certificate, except that,
if the date of such surrender and payment is a date when the register of members
of the Company is closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which the
register of members is open.

     

    
      
         

      

      
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    3.3.5     Warrant
Solicitation and Warrant Solicitation Fee.

     

    (a)           The Company has engaged the
Representative, on a non-exclusive basis, as its agents for the solicitation of
the exercise of the Warrants. The Company, at its cost, will (i) assist the
Representative with respect to such solicitation, if requested by the
Representative, and (ii) provide the Representative, and direct the Company’s
transfer agent and the Warrant Agent to deliver to the Representative, lists of
the record and, to the extent known, beneficial owners of the Warrants. The
Company hereby instructs the Warrant Agent to cooperate with the Representative
in every respect in connection with the Representative’s solicitation
activities, including, but not limited to, providing to the Representative, at
the Company’s cost, a list of record holders of the Warrants and circulating a
prospectus or offering circular disclosing the compensation arrangements
referenced in Section 3.3.5(b) below to holders of the Warrants at the time of
exercise of the Warrants. In addition to the conditions set forth in Section
3.3.5(b), the Representative shall accept payment of the warrant solicitation
fee provided in Section 3.3.5(b) only if they have provided bona fide services
to the Company in connection with the exercise of the Warrants and only to the
extent that an investor who exercises his Warrants specifically designates, in
writing, that the Representative solicited his exercise. In addition to
soliciting, either orally or in writing, the exercise of Warrants by a Warrant
holder, such services may also include disseminating information, either orally
or in writing, to Warrant holders about the Company or the market for the
Company’s securities, or assisting in the processing of the exercise of
Warrants.

     

    (b)           In each instance in which a Warrant is
exercised, the Warrant Agent shall promptly give written notice of such exercise
to the Company and the Representative (“Warrant Agent’s
Exercise Notice”). If, upon
the exercise of any Warrant more than one year from the effective date of the
Registration Statement, (i) the market price of the Company’s Common Stock is
greater than the Warrant Price, (ii) disclosure of compensation arrangements
between the Company and the Representative with respect to the solicitation of
the exercise of the Warrants was made both at the time of the Public Offering
and at the time of exercise (by delivery of the Prospectus or as otherwise
required by applicable law, rule or regulation), (iii) the holder of the Warrant
confirms in writing that the exercise of the Warrant was solicited by the
Representative, (iv) the Warrant was not held in a discretionary account, and
(v) the solicitation of the exercise of the Warrant was not in violation of
Regulation M (as such rule or any successor rule may be in effect as of such
time of exercise) promulgated under the Securities Exchange Act of 1934, as
amended, then the Warrant Agent, simultaneously with the distribution of the
Common Stock underlying the Warrants so exercised in accordance with the
instructions from the Company following receipt of the proceeds to the Company
received upon exercise of such Warrant(s), shall, on behalf of the Company, pay
a fee of 5% of the Warrant Price to the Representative, provided that the
Representative deliver to the Warrant Agent within ten (10) business days from
the date on which the Representative has received the Warrant Agent’s Exercise
Notice, a certificate that the conditions set forth the preceding clauses (ii),
(iii), (iv) and (v) have been satisfied. Notwithstanding the foregoing, no fee
will be paid to the Representative with respect to the exercise by the
Underwriters or their affiliates or the Company’s officers or directors of
Warrants purchased by them upon exercise of the Representative’s Warrants and
still held by any of the foregoing for their own account. The Representative and
the Company may at any time during business hours, examine the records of the
Warrant Agent, including its ledger of original Warrant certificates returned to
the Warrant Agent upon exercise of Warrants.

     

    (c)           The provisions of this Section 3.3.5.
may not be modified, amended or deleted without the prior written consent of the
Representative.

     

    
      
         

      

      
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    4.          Adjustments.

     

    4.1         Share
Dividends—Split-Ups.  If after the date hereof,
and subject to the provisions of Section 4.6 below, the number of outstanding
Ordinary Shares is increased by a share dividend payable in Ordinary Shares, or
by a split-up of the Ordinary Shares, or other similar event, then, on the
effective date of such share dividend, split-up or similar event, the number of
Ordinary Shares issuable on exercise of each Warrant shall be increased in
proportion to such increase in the outstanding Ordinary
Shares.

     

    4.2         Aggregation
of Shares.  If
after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding Ordinary
Shares is decreased by a consolidation, combination, reverse stock split or
reclassification of the Ordinary Shares or other similar event, then, on the
effective date of such consolidation, combination, reverse stock split,
reclassification or similar event, the number of Ordinary Shares issuable on
exercise of each Warrant shall be decreased in proportion to such decrease in
the outstanding Ordinary Shares.

     

    4.3         Adjustments
in Exercise Price.  Whenever the number of
Ordinary Shares purchasable upon the exercise of the Warrants is adjusted, as
provided in Section 4.1 and 4.2 above, the Warrant Price shall be
adjusted (to the nearest cent) by multiplying such Warrant Price immediately
prior to such adjustment by a fraction (x) the numerator of which shall be the
number of Ordinary Shares purchasable upon the exercise of the Warrants
immediately prior to such adjustment, and (y) the denominator of which shall be
the number of Ordinary Shares so purchasable immediately
thereafter.

     

    4.4         Replacement
of Securities upon Reorganization, etc.  In case of any
reclassification or reorganization of the outstanding Ordinary Shares (other
than a change covered by Section 4.1 or 4.2 hereof or that solely affects the par
value of such Ordinary Shares), or in the case of any consolidation of the
Company with or into another corporation (other than a consolidation or merger
in which the Company is the continuing corporation and that does not result in
any reclassification or reorganization of the outstanding Ordinary Shares), or
in the case of any merger or sale or conveyance to another corporation or entity
of the assets or other property of the Company as an entirety or substantially
as an entirety in connection with which the Company is dissolved, the Warrant
holders shall thereafter have the right to purchase and receive, upon the basis
and upon the terms and conditions specified in the Warrants and in lieu of the
Ordinary Shares of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented thereby, the kind and
amount of shares or other securities or property (including cash) receivable
upon such reclassification, reorganization, merger or consolidation, or upon a
dissolution following any such sale or transfer, that the Warrant holder would
have received if such Warrant holder had exercised his, her or its Warrant(s)
immediately prior to such event; and if any reclassification also results in a
change in the Ordinary Shares covered by Section 4.1 or 4.2, then such adjustment shall be made
pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of this Section
4.4 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.

     

    4.5         Notices of
Changes in Warrant.  Upon every adjustment of
the Warrant Price or the number of shares issuable upon exercise of a Warrant,
the Company shall give written notice thereof to the Warrant Agent, which notice
shall state the Warrant Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of a Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Upon the
occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4 then, in any such event, the Company
shall give written notice to the Warrant holder, at the last address set forth
for such holder in the warrant register, of the record date or the effective
date of the event. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of such event.

     

    
      
         

      

      
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    4.6         No
Fractional Shares.  Notwithstanding any
provision contained in this Warrant Agreement to the contrary, the Company shall
not issue fractional shares upon exercise of Warrants. If, by reason of any
adjustment made pursuant to this Section 4, the holder of any Warrant would be
entitled, upon the exercise of such Warrant, to receive a fractional interest in
a share, the Company shall, upon such exercise, round up to the nearest whole
number the number of the Ordinary Share to be issued to the Warrant
holder.

     

    4.7         Form of
Warrant.  The
form of Warrant need not be changed because of any adjustment pursuant to this
Section 4 and Warrants issued after such
adjustment may state the same Warrant Price and the same number of shares as is
stated in the Warrants initially issued pursuant to this Agreement. However, the
Company may at any time in its sole discretion make any change in the form of
Warrant that the Company may deem appropriate and that does not affect the
substance thereof, and any Warrant thereafter issued or countersigned, whether
in exchange or substitution for an outstanding Warrant or otherwise, may be in
the form as so changed.

     

    5.        
  Transfer and
Exchange of Warrants.

     

    5.1         Registration
of Transfer.  The
Warrant Agent shall register the transfer, from time to time, of any outstanding
Warrant upon the Warrant Register, upon surrender of such Warrant for transfer,
properly endorsed with signatures properly guaranteed and accompanied by
appropriate instructions for transfer. Upon any such transfer, a new Warrant
representing an equal aggregate number of Warrants shall be issued and the old
Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall
be delivered by the Warrant Agent to the Company from time to time upon
request.

     

    5.2         Procedure
for Surrender of Warrants.  Warrants may be surrendered
to the Warrant Agent, together with a written request for exchange or transfer,
and thereupon the Warrant Agent shall issue in exchange therefor one or more new
Warrants as requested by the registered holder of the Warrants so surrendered,
representing an equal aggregate number of Warrants; provided, however, that in
the event that a Warrant surrendered for transfer bears a restrictive legend,
the Warrant Agent shall not cancel such Warrant and issue new Warrants in
exchange therefor until the Warrant Agent has received an opinion of counsel
acceptable to the Company stating that such transfer may be made and indicating
whether the new Warrants must also bear a restrictive
legend.

     

    5.3         Fractional
Warrants.  The
Warrant Agent shall not be required to effect any registration of transfer or
exchange which will result in the issuance of a warrant certificate for a
fraction of a warrant.

     

    5.4         Service
Charges.  No
service charge shall be made for any exchange or registration of transfer of
Warrants.

     

    5.5         Warrant
Execution and Countersignature.  The Warrant Agent is hereby
authorized to countersign and to deliver, in accordance with the terms of this
Agreement, the Warrants required to be issued pursuant to the provisions of this
Section 5, and the Company, whenever required by
the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on
behalf of the Company for such purpose.

     

    
      
         

      

      
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    6.       
   Redemption.

     

    6.1         Redemption.  Subject to Section
6.4 hereof, the outstanding Warrants may be
redeemed, at the option of the Company, at any time after they become
exercisable and prior to their expiration, at the office of the Warrant Agent,
upon the notice referred to in Section 6.2, at the price of $0.01 per Warrant
(“Redemption
Price”), provided that the
last sales price of the Ordinary Shares has been at least $16.00 per share, on
each of twenty (20) trading days within any thirty (30) trading day period
ending on the third business day prior to the date on which notice of redemption
is given (“Measurement
Period”). Notwithstanding
the foregoing, the Company may not exercise its redemption rights unless during
the Measurement Period and from the end of the Measurement Period through the
redemption date, the Company has an effective registration statement with a
current prospectus on file with the SEC pursuant to which the Ordinary Shares
underlying the Warrants may be sold.

     

    6.2         Date Fixed
for, and Notice of, Redemption.  In the event the Company
shall elect to redeem all of the Warrants, the Company shall fix a date for the
redemption. Notice of redemption shall be mailed by first class mail, postage
prepaid, by the Company not less than 30 days prior to the date fixed for
redemption to the registered holders of the Warrants to be redeemed at their
last addresses as they shall appear on the registration books. Any notice mailed
in the manner herein provided shall be conclusively presumed to have been duly
given whether or not the registered holder received such
notice.

     

    6.3         Exercise
After Notice of Redemption.  The Warrants may be
exercised in accordance with Section 3 of this Agreement at any time after
notice of redemption shall have been given by the Company pursuant to Section
6.2 hereof and prior to the time and date
fixed for redemption. On and after the redemption date, the record holder of the
Warrants shall have no further rights except to receive, upon surrender of the
Warrants, the Redemption Price.

     

    6.4         Outstanding
Warrants Only.  The Company understands
that the redemption rights provided for by this Section 6 apply only to
outstanding Warrants. To the extent a person holds rights to purchase Warrants,
such purchase rights shall not be extinguished by redemption. However, once such
purchase rights are exercised, the Company may redeem the Warrants issued upon
such exercise provided that the criteria for redemption is
met.

     

    7.     
     Other
Provisions Relating to Rights of Holders of Warrants.

     

    7.1         No Rights as
Shareholder.  A
Warrant does not entitle the registered holder thereof to any of the rights of a
shareholder of the Company, including, without limitation, the right to receive
dividends, or other distributions, exercise any preemptive rights, to vote or to
consent or to receive notice as a shareholder in respect of the meetings of
shareholders or the election of directors of the Company or any other
matter.

     

    7.2         Lost,
Stolen, Mutilated, or Destroyed Warrants.  If any Warrant is lost,
stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such
terms as to indemnity or otherwise as they may in their discretion impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination, tenor, and date as the Warrant so lost,
stolen, mutilated, or destroyed. Any such new Warrant shall constitute a
substitute contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable
by anyone.

    
      
         

      

      
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    7.3         Reservation
of Ordinary Shares.  The Company shall at all
times reserve and keep available a number of its authorized but unissued
Ordinary Shares that will be sufficient to permit the exercise in full of all
outstanding Warrants issued pursuant to this Agreement.

     

    7.4         Registration
of Ordinary Shares  The Company agrees that it
shall use its best efforts to maintain the effectiveness of the Registration
Statement until the expiration of the IPO Warrants in accordance with the
provisions of this Agreement.

     

    8.          Concerning
the Warrant Agent and Other Matters.

     

    8.1         Payment of
Taxes.  The
Company will from time to time promptly pay all taxes and charges that may be
imposed upon the Company or the Warrant Agent in respect of the issuance or
delivery of Ordinary Shares upon the exercise of Warrants, but the Company shall
not be obligated to pay any transfer taxes in respect of the Warrants or such
shares.

     

    8.2         Resignation,
Consolidation or Merger of Warrant Agent.

     

    8.2.1    Appointment
of Successor Warrant Agent.  The Warrant Agent, or any
successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving sixty (60) days’
notice in writing to the Company. If the office of the Warrant Agent becomes
vacant by resignation or incapacity to act or otherwise, the Company shall
appoint in writing a successor Warrant Agent in place of the Warrant Agent. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such resignation or incapacity by the Warrant
Agent or by the holder of the Warrant (who shall, with such notice, submit his
Warrant for inspection by the Company), then the holder of any Warrant may apply
to the Supreme Court of the State of New York for the County of New York for the
appointment of a successor Warrant Agent at the Company’s cost. Any successor
Warrant Agent, whether appointed by the Company or by such court, shall be a
corporation organized and existing under the laws of the State of New York, in
good standing and having its principal office in the Borough of Manhattan, City
and State of New York, and authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Warrant Agent shall be vested with
all the authority, powers, rights, immunities, duties, and obligations of its
predecessor Warrant Agent with like effect as if originally named as Warrant
Agent hereunder, without any further act or deed; but if for any reason it
becomes necessary or appropriate, the predecessor Warrant Agent shall execute
and deliver, at the expense of the Company, an instrument transferring to such
successor Warrant Agent all the authority, powers, and rights of such
predecessor Warrant Agent hereunder; and upon request of any successor Warrant
Agent the Company shall make, execute, acknowledge, and deliver any and all
instruments in writing for more fully and effectually vesting in and confirming
to such successor Warrant Agent all such authority, powers, rights, immunities,
duties, and obligations.

     

    8.2.2    Notice of
Successor Warrant Agent.  In the event a successor
Warrant Agent shall be appointed, the Company shall give notice thereof to the
predecessor Warrant Agent and the transfer agent for the Ordinary Share not
later than the effective date of any such appointment.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    8.2.3    Merger or
Consolidation of Warrant Agent.  Any corporation into which
the Warrant Agent may be merged or with which it may be consolidated or any
corporation resulting from any merger or consolidation to which the Warrant
Agent shall be a party to and shall be the successor Warrant Agent under this
Agreement without any further act.

     

    8.3         Fees and
Expenses of Warrant Agent.

     

    8.3.1    Remuneration.  The Company agrees to pay
the Warrant Agent reasonable remuneration for its services as such Warrant Agent
hereunder and will reimburse the Warrant Agent upon demand for all expenditures
that the Warrant Agent may reasonably incur in the execution of its duties
hereunder.

     

    8.3.2    Further
Assurances.  The
Company agrees to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and other
acts, instruments, and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing of the provisions of this
Agreement.

     

    8.4         Liability of
Warrant Agent.

     

    8.4.1    Reliance on
Company Statement.  Whenever in the performance
of its duties under this Warrant Agreement, the Warrant Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a statement signed by the
Chief Executive Officer, Chief Financial Officer or Secretary of the Company and
delivered to the Warrant Agent. The Warrant Agent may rely upon such statement
for any action taken or suffered in good faith by it pursuant to the provisions
of this Agreement.

     

    8.4.2    Indemnity.  The Warrant Agent shall be
liable hereunder only for its own negligence, willful misconduct or bad faith.
The Company agrees to indemnify the Warrant Agent and save it harmless against
any and all liabilities, including judgments, costs and reasonable counsel fees,
for anything done or omitted by the Warrant Agent in the execution of this
Agreement, except as a result of the Warrant Agent’s negligence, willful
misconduct, or bad faith.

     

    8.4.3    Exclusions.  The Warrant Agent shall
have no responsibility with respect to the validity of this Agreement or with
respect to the validity or execution of any Warrant (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Warrant; nor shall
it be responsible to make any adjustments required under the provisions of
Section 4 hereof or responsible for the manner,
method, or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment; nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Ordinary Shares to be issued pursuant to this Agreement or
any Warrant or as to whether any Ordinary Shares will when issued be valid and
fully paid and nonassessable.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    8.5           Acceptance
of Agency.  The
Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same upon the terms and conditions herein set forth and among
other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys
received by the Warrant Agent for the purchase of Ordinary Shares through the
exercise of Warrants.

     

    9.          Miscellaneous
Provisions.

     

    9.1           Successors.  All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Warrant
Agent shall bind and inure to the benefit of their respective successors and
assigns.

     

    9.2           Notices.  Any notice, statement or
demand authorized by this Warrant Agreement to be given or made by the Warrant
Agent or by the holder of any Warrant to or on the Company shall be sufficiently
given when so delivered if by hand or overnight delivery or if sent by certified
mail or private courier service within five days after deposit of such notice,
postage prepaid, addressed (until another address is filed (less any warrant solicitation fee due
to the Representative pursuant to Section 3.3.5 herein) in writing by the Company with the
Warrant Agent), as follows:

     

    Pypo
China Holdings Limited

    South
3/F

    Chang’ An
XingRong Center

    No. 1
NaoShiKou Street

    XiCheng
District

    Beijing,
PRC

    Attn: Kuo
Zhang, Chairman of the Board of Directors

    

    Any
notice, statement or demand authorized by this Agreement to be given or made by
the holder of any Warrant or by the Company to or on the Warrant Agent shall be
sufficiently given when so delivered if by hand or overnight delivery or if sent
by certified mail or private courier service within five days after deposit of
such notice, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company), as follows:

    

    Continental
Stock Transfer & Trust Co

    17
Battery Place, 8th floor

    New York
NY 10004

    Tel:
(212) 845-3201

    Fax:
(212) 509-5150

    Attn:
Compliance Department

    

    with a
copy in either case to:

    

    Latham
& Watkins

    41st
Floor

    One
Exchange Square

    8
Connaught Place, Central

    Hong
Kong

    Attn:
David T. Zhang, Esq.

    
      
         

      

      
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    9.3           Applicable
Law.  The
validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the laws of the State of New York, without
giving effect to conflict of laws.  The Company hereby agrees that any
action, proceeding or claim against it arising out of or relating in any way to
this Agreement shall be brought and enforced in the courts of the State of
New York or the United States District
Court for the Southern
District of New York, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive.  The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum.  Any such process or summons to be served
upon the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at
the address set forth in Section 9.2 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action,
proceeding or claim.

     

    9.4           Persons
Having Rights under this Agreement.  Nothing in this Agreement expressed and
nothing that may be implied from any of the provisions hereof is intended, or
shall be construed, to confer upon, or give to, any person or corporation other
than the parties hereto and the registered holders of the Warrants and, for the
purposes of Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof, the Representative,
any right, remedy, or claim under or by reason of this Warrant Agreement or of
any covenant, condition, stipulation, promise, or agreement hereof. The
Representative shall be deemed to be a third-party beneficiary of this Agreement
with respect to Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof. All covenants,
conditions, stipulations, promises, and agreements contained in this Warrant
Agreement shall be for the sole and exclusive benefit of the parties hereto (and
the Representative with respect to the Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2
hereof) and their successors and assigns and of the registered holders of the
Warrants.

     

    9.5           Examination
of the Warrant Agreement.  A copy of this Agreement
shall be available at all reasonable times at the office of the Warrant Agent in
the Borough of Manhattan, City and State of New York, for inspection by the
registered holder of any Warrant. The Warrant Agent may require any such holder
to submit his Warrant for inspection by it.

     

    9.6           Counterparts.  This Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.

     

    9.7           Effect of
Headings.  The
Section headings herein are for convenience only and are not part of this
Warrant Agreement and shall not affect the interpretation
thereof.

     

    [Signature Page
Follows]

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as
of the day and year first above written.

     

    
      
        
          
            	 
      	
                    PYPO
      CHINA HOLDINGS LIMITED

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ David A. Rapaport

                  
	 
      	
                    Name: 

                  	
                    David A. Rapaport

                  
	 
      	
                    Title:

                  	
                    Secretary

                  
	 
      	 
      	 
      
	 
      	
                    CONTINENTAL
      STOCK TRANSFER & 

                    TRUST
      COMPANY

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/Alexandra Albrecht

                  
	 
      	
                    Name:

                  	
                    Alexandra Albrecht

                  
	 
      	
                    Title:

                  	
                    Vice
President

                  

          

        

      

    

    
       

      Signature
Page to Class B Warrant Agreement

       

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    FORM OF CLASS B WARRANT
CERTIFICATEUnassociated Document

     

    COMMON
STOCK WARRANT

    RINO
INTERNATIONAL CORPORATION

     

    
    

     

    
      	Warrant Shares:
      _______ 	Initial Exercise
      Date: ______, 20___
	 	Issue Date: December
      __, 2009
	 	 

    

     

    THIS
COMMON STOCK WARRANT (the “Warrant”) certifies
that, for value received, _____________ (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after ________ (the “Initial Exercise
Date”) and
on or prior to the close of business on _________ (the “Termination Date”)
but not thereafter, to subscribe for and purchase from RINO International
Corporation, a Nevada corporation (the “Company”), up to
______ shares (the “Warrant Shares”) of
Common Stock.  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

     

    Section
1.            Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the “Purchase Agreement”),
dated December 2, 2009, among the Company and the purchasers signatory
thereto.

     

    Section
2.             Exercise.

     

    a)           Exercise of
Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto along with payment of the aggregate
Exercise Price of the shares thereby purchased by wire transfer or cashier’s
check drawn on a United States bank or, if available, pursuant to the cashless
exercise procedure specified in Section 2(c) below.  Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has purchased all of the
Warrant Shares available hereunder and the Warrant has been exercised in full,
in which case, the Holder shall surrender this Warrant to the Company for
cancellation when the final Notice of Exercise is delivered to the
Company.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.  The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such
purchases.  The Company shall deliver any objection to any Notice of
Exercise Form within 1 Business Day of receipt of such notice.  The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face
hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    b)           Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $34.50, subject to adjustment
under Section 3 of this Warrant (the “Exercise
Price”).

     

    c)           Cashless
Exercise.  If at the time of exercise hereof there is no
effective registration statement registering, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the Holder
and all of the Warrant Shares are not then registered for resale by Holder into
the market at market prices from time to time on an effective registration
statement for use on a continuous basis (or the prospectus contained therein is
not available for use), then this Warrant may also be exercised, in whole or in
part, at such time by means of a “cashless exercise” in which the Holder shall
be entitled to receive a certificate for the number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (X)] by (A), where:

     

    
      
        	
                 
      

              	
                (A)
      = the VWAP on the Trading Day immediately preceding the date on which
      Holder elects to exercise this Warrant by means of a “cashless exercise,”
      as set forth in the applicable Notice of Exercise;

              
	 	 
	 	

                (B)
      = the Exercise Price of this Warrant, as adjusted hereunder;
      and

              
	 	 
	 	

                (X)
      = the number of Warrant Shares that would be issuable upon exercise of
      this Warrant in accordance with the terms of this Warrant if such exercise
      were by means of a cash exercise rather than a cashless
      exercise.

              

      

    

    
 

    “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC
Bulletin Board is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the
OTC Bulletin Board and if prices for the Common Stock are then reported in the
“Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined in good faith by
the board of directors of the Company.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      d)           Mechanics of
Exercise.

    

     

    i.      Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through
its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is then a participant in such system and either (A) there is an
effective Registration Statement permitting the issuance of the Warrant Shares
to or resale of the Warrant Shares by Holder or (B) this Warrant is being
exercised via cashless exercise, and otherwise by physical delivery to the
address specified by the Holder in the Notice of Exercise by the date that is
three (3) Trading Days after the latest of (A) the delivery to the Company of
the Notice of Exercise Form, (B) surrender of this Warrant (if required), and
(C) payment of the aggregate Exercise Price as set forth above (including by
cashless exercise, if permitted) (such date, the “Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the first date on which all of the foregoing have been delivered to the
Company.  The Warrant Shares shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been exercised, with payment to the Company of the Exercise
Price (or by cashless exercise, if permitted) and all taxes required to be paid
by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of
such shares, having been paid.

     

    ii.          Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

     

    iii.         Right to Rescind Warrant
Exercise.  If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the
Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date,
then, the Holder will have the right to rescind such exercise.

     

    iv.         Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise.  In
addition to any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to an exercise on or
before the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock (the “Delivered Warrant
Shares”) so purchased exceeds (y) the amount obtained by multiplying (1)
the number of Warrant Shares that the Company was required to deliver to the
Holder in connection with the exercise at issue times (2) the price at which the
sell order giving rise to such purchase obligation was executed (it being
understood that at such point the Company’s obligation to deliver such
certificate (and issue such Warrant Shares) with respect to the Delivered
Warrant Shares shall terminate), and (B) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares for
which such exercise was not honored (in which case such exercise shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise and
delivery obligations hereunder.  For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to an attempted exercise of shares of Common Stock with an aggregate
sale price giving rise to such purchase obligation of $10,000, under clause (A)
of the immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of
the Company, evidence of the amount of such loss.

     

    
      
        
        

      

      
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    v.         No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole
share.

     

    vi.         Charges, Taxes and
Expenses.  Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

     

    
      
        
        

      

      
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    vii.         Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

     

    e)           Holder’s Exercise
Limitations.  A Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that
after giving effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with the Holder or
any of the Holder’s Affiliates), would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below).  For purposes of the
foregoing sentence, the number of shares of Common Stock beneficially owned by
the Holder and its Affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised portion of
this Warrant beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any
other  Common Stock Equivalents) subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by
the Holder or any of its Affiliates.  Except as set forth in the preceding
sentence, for purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder, it being acknowledged by the Holder that
the Company is not representing to the Holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and the Holder is solely
responsible for any schedules required to be filed in accordance
therewith.   To the extent that the limitation contained in this
Section 2(e) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable shall be in the
sole discretion of the Holder, and the submission of a Notice of Exercise shall
be deemed to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is exercisable, in each
case subject to the Beneficial Ownership Limitation, and the Company shall have
no obligation to verify or confirm the accuracy of such
determination.   In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder.  For purposes of this Section 2(e), in determining the
number of outstanding shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a
more recent public announcement by the Company or (C) a more recent written
notice by the Company or the Transfer Agent setting forth the number of shares
of Common Stock outstanding.  In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by the Holder or
its Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported.  The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant.  The Holder, upon not
less than 61 days’ prior notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 2(e) shall continue to
apply.  Any such increase or decrease will not be effective until the
61st
day after such notice is delivered to the Company.  The provisions of
this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(e) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Section
3.            Certain
Adjustments.  The Exercise Price and the number of Warrant
Shares shall be adjusted from time to time such that the aggregate Exercise
Price of this Warrant shall remain unchanged as follows:

     

    a)           Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise makes a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares or (iv)
issues by reclassification of shares of the Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event.  Any adjustment made
pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.  If any dividend or distribution of the type
described in this Section is declared but not so paid or made, the Exercise
Price and number of Warrant Shares shall again be adjusted to the Exercise Price
and number of Warrant Shares that would have been in effect if such dividend or
distribution had not been so declared.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    b)           [RESERVED]

     

    c)           Subsequent Rights
Offerings.  If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to the Holders) entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the VWAP on the record
date mentioned below, then, the Exercise Price shall be multiplied by a
fraction, of which the denominator shall be the number of shares of the Common
Stock outstanding on the date of issuance of such rights, options or warrants
plus the number of additional shares of Common Stock offered for subscription or
purchase, and of which the numerator shall be the number of shares of the Common
Stock outstanding on the date of issuance of such rights, options or warrants
plus the number of shares which the aggregate offering price of the total number
of shares so offered (assuming receipt by the Company in full of all
consideration payable upon exercise of such rights, options or warrants) would
purchase at such VWAP.  Such adjustment shall be made whenever such
rights, options or warrants are issued, and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such rights, options or warrants. If any dividend or distribution of the type
described in this Section is declared but not so paid or made, the Exercise
Price and number of Warrant Shares shall again be adjusted to the Exercise Price
and number of Warrant Shares that would have been in effect if such dividend or
distribution had not been so declared.

     

    d)           Pro Rata
Distributions.  If the Company, at any time while this Warrant
is outstanding, shall distribute to all holders of Common Stock (and not to the
Holders) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than the Common Stock (which shall be subject to Section 3(c)), then in each
such case the Exercise Price shall be adjusted by multiplying the Exercise Price
in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the then
per share fair market value at such record date of the portion of such assets or
evidence of indebtedness or rights or warrants so distributed applicable to one
outstanding share of the Common Stock as determined by the Board of Directors in
good faith.  In either case the adjustments shall be described in a
statement provided to the Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one share
of Common Stock.  Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    e)           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company, directly or indirectly, in one or more related transactions effects any
merger or consolidation of the Company with or into another Person, (ii) the
Company, directly or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially all of its
assets in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or
property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property, (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination), in each
case in which the holders of Common Stock of the Company shall be entitled to
receive stock, other securities, property or assets (including cash or any
combination thereof) with respect to or in exchange for their Common Stock (each
a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, the number of shares of
Common Stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by
a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction.  For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction.

     

    f)           Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

     

    g)           Notice to
Holder.

     

    i.      Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall within five (5) Trading Days mail to the
Holder a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such
adjustment.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    ii.           Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified (or as promptly as possible after the establishment of
such record date or effective date to the extent such record date or effective
date is established 20 calendar days prior to such record date or effective
date), a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or warrants, or if a
record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or
warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to mail such notice or any defect therein or in the
mailing thereof shall not affect the validity of the corporate action required
to be specified in such notice.  The Holder shall remain entitled to
exercise this Warrant during the period commencing on the date of such notice to
the effective date of the event triggering such notice  except as may
otherwise be expressly set forth herein.

     

    Section
4.             Transfer of
Warrant.

     

    a)           Transferability.  This
Warrant and all rights hereunder (including, without limitation, any
registration rights) are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  The Warrant, if properly
assigned in accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    b)           New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney.  Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated
as of its issuance date and shall be identical with this Warrant except as to
the number of Warrant Shares issuable pursuant thereto.

     

    c)           Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

     

    Section
5.                                Miscellaneous.

     

    a)           No Rights as Stockholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights, dividends or other rights as a stockholder of the Company
prior to the exercise hereof as set forth in Section 2(d)(i).

     

    b)           Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     

    c)           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then, such action may be taken or such right may be exercised
on the next succeeding Business Day.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    d)           Authorized
Shares.

     

    The
Company covenants that, during the period the Warrant is outstanding, it will
use its commercially reasonable efforts reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this
Warrant.  The Company shall use its commercially reasonable efforts to
ensure that the issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant.  The Company will
take all such commercially reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed.  The Company covenants that all
Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

     

    The
Company will (i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may be,
necessary to enable the Company to perform its obligations under this
Warrant.

     

    Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

     

    e)           Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.

     

    f)           Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered and the Holder does not utilize cashless exercise,
will have restrictions upon resale imposed by state and federal securities
laws.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    g)           Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

     

    h)           Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

     

    i)           Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

     

    j)           Remedies.  The
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant.  The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law
would be adequate.

     

    k)           Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder.  The provisions of this
Warrant are intended to be for the benefit of any Holder from time to time of
this Warrant and shall be enforceable by the Holder or holder of Warrant
Shares.

     

    l)           Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

     

    m)           Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

     

    n)           Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

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

    

    

    (Signature
Pages Follow)

     

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.

     

     

    
      
        	 	

                RINO
      INTERNATIONAL CORPORATION

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

      

    

    

    
 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    NOTICE
OF EXERCISE

    

    TO:           RINO
INTERNATIONAL CORPORATION

    

    (1)           The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

     

    (2)           Payment
shall take the form of (check applicable box):

     

    o in lawful money of the
United States; or

     

    o [if permitted] the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).

     

    (3)           Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

     

    _______________________________

    

    

    The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

    

    _______________________________

    

    _______________________________

    

    _______________________________

    

    

    [SIGNATURE
OF HOLDER]

    

    Name of
Investing Entity:
________________________________________________________________________

     

    Signature of Authorized Signatory of
Investing Entity:
_________________________________________________

     

    Name of
Authorized Signatory:
___________________________________________________________________

     

    Title of
Authorized Signatory:
____________________________________________________________________

     

    Date:
________________________________________________________________________________________

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    ASSIGNMENT
FORM

    

    (To
assign the foregoing warrant, execute

    this form
and supply required information.

    Do not
use this form to exercise the warrant.)

    

    FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to

     

    

    _______________________________________________
whose address is

    

    _______________________________________________________________.

    

    

    

    _______________________________________________________________

    

    Dated:  ______________,
_______

    

    

     

    
      	
              Holder’s
      Signature:

            	 	 	 
	 	 	 	 
	
              Holder’s
      Address: 

            	 	 	 
	 	 	 	 
	 	 	 	 

    

     

      

    Signature
Guaranteed:  ___________________________________________

    

    

    NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

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