Document:

Exhibit
10.5

    

    NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED
BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

    

    
      	
              Principal
      Amount: $___________

            	
              Issue
      Date: January ___,
      2010              

            

    

    

    SECURED CONVERTIBLE
PROMISSORY NOTE

    

    FOR VALUE
RECEIVED, CHINA YONGXIN PHARMACEUTICALS, INC., a Delaware corporation
(hereinafter called “Borrower”), hereby promises to
pay to the order of __________________________________,
________________________________________________ (the “Holder”), without demand, the
sum of ________________________________________________ Dollars ($_________)
(“Principal Amount”),
with interest accruing thereon, on January ___, 2011 (the “Maturity Date”), if not sooner
paid.

    

    This Note
has been entered into pursuant to the terms of a subscription agreement among
the Borrower, the Holder and certain other holders (the “Other Holders”) of convertible
promissory notes (the “Other
Notes”), dated of even date herewith (the “Subscription
Agreement”).  Unless otherwise separately defined herein, all
capitalized terms used in this Note shall have the same meaning as is set forth
in the Subscription Agreement.  The following terms shall apply to
this Note:

    

    ARTICLE
I

    

    GENERAL
PROVISIONS

    

    1.1           Interest
Rate.   Interest payable on this Note shall accrue at the
annual rate of ten percent (10%) and be payable on the Maturity Date,
accelerated or otherwise, when the principal and remaining accrued but unpaid
interest shall be due and payable, or sooner as described below.

    

    1.2           Payment Grace
Period.  The Borrower shall not have any grace period to pay
any monetary amounts due under this Note.  After the Maturity Date and
during the pendency of an Event of Default (as described in Article IV), a
default interest rate of fifteen percent (15%) per annum shall be in
effect.

    

    1.3           Conversion
Privileges.  The Conversion Rights set forth in Article II shall
remain in full force and effect immediately from the date hereof and until the
Note is paid in full regardless of the occurrence of an Event of
Default.  This Note shall be payable in full on the Maturity Date,
unless previously converted into Common Stock in accordance with Article
II hereof.

    

    1.4           Pari
Passu.   All payments made on this Note and the Other
Notes and except as otherwise set forth herein all actions taken by the Borrower
with respect to this Note and the Other Notes, including but not limited to
optional redemption, shall be made and taken pari passu with respect
to this Note and the Other Notes.

    

     1.5          Miscellaneous.   Interest
on this Note shall be calculated on the basis of a 360-day year and the actual
number of days elapsed.  Principal and interest on this Note and other
payments in connection with this Note shall be payable at the Holder’s offices
as designated above in lawful money of the United States of America in
immediately available funds without set-off, deduction or
counterclaim.  Upon assignment of the interest of Holder in this Note,
Borrower shall instead make its payment pursuant to the assignee’s instructions
upon receipt of written notice thereof.

    
      
         

      

      
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    ARTICLE
II

    

    CONVERSION
RIGHTS

    

    The
Holder shall have the right to convert the principal and any interest due under
this Note into Shares of the Borrower's Common Stock, $0.001 par value per share
(“Common Stock”) as set
forth below.

    

    2.1.          Conversion into the
Borrower's Common Stock.

    

    (a)           The
Holder shall have the right from and after the date of the issuance of this Note
and then at any time until this Note is fully paid, to convert any outstanding
and unpaid principal portion of this Note, and accrued interest, at the election
of the Holder (the date of giving of such notice of conversion being a “Conversion Date”) into fully
paid and non-assessable shares of Common Stock as such stock exists on the date
of issuance of this Note, or any shares of capital stock of Borrower into which
such Common Stock shall hereafter be changed or reclassified, at the conversion
price as defined in Section
2.1(b) hereof, determined as provided herein.  Upon
delivery to the Borrower of a completed Notice of Conversion, a form of which is
annexed hereto as Exhibit A, Borrower
shall issue and deliver to the Holder within three (3) business days after the
Conversion Date (such third day being the “Delivery Date”) that number of
shares of Common Stock for the portion of the Note converted in accordance with
the foregoing.  The number of shares of Common Stock to be issued upon
each conversion of this Note shall be determined by dividing that portion of the
principal of the Note and interest, if any, to be converted, by the Conversion
Price.

    

    (b)           Subject
to adjustment as provided in Section
2.1(c) hereof, the conversion price (“Conversion Price”) per share
shall be $0.20.

    

    (c)           
The Conversion Price and number and kind of shares or other securities to be
issued upon conversion determined pursuant to Section 2.1(a), shall
be subject to adjustment from time to time upon the happening of certain events
while this conversion right remains outstanding, as follows:

    

    A.           Merger, Sale of Assets,
etc.  If (A) the Borrower effects any merger
or  consolidation of the Borrower with or into another entity, (B) the
Borrower effects any sale of all or substantially all of its assets in one or a
series of related transactions,  (C) any tender offer or exchange
offer (whether by the Borrower or another entity) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, (D) the Borrower consummates a stock
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one
or more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and
14(d) of the 1934 Act) is or shall become the “beneficial owner” (as defined in
Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Borrower, or (F) the Borrower effects any reclassification
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 (other than a reverse merger)  (in any such case, a
“Fundamental  Transaction”), this
Note, as to the unpaid principal portion thereof and accrued interest thereon,
if any, shall thereafter be deemed to evidence the right to convert into such
number and kind of shares or other securities and property as would have been
issuable or distributable on account of such Fundamental Transaction, upon or
with respect to the securities subject to the conversion right immediately prior
to such Fundamental Transaction.  The foregoing provision shall
similarly apply to successive Fundamental Transactions of a similar nature by
any such successor or purchaser.  Without limiting the generality of
the foregoing, the anti-dilution provisions of this Section shall apply to such
securities of such successor or purchaser after any such Fundamental
Transaction.

     

    
      
         

      

      
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    B.           Reclassification,
etc.  If the Borrower at any time shall, by reclassification or
otherwise, change the Common Stock into the same or a different number of
securities of any class or classes that may be issued or outstanding, this Note,
as to the unpaid principal portion thereof and accrued interest thereon, shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock immediately prior to such
reclassification or other change.

    

    C.           Stock Splits, Combinations
and Dividends.  If the shares of Common Stock are subdivided or
combined into a greater or smaller number of shares of Common Stock, or if a
dividend is paid on the Common Stock in shares of Common Stock, the Conversion
Price shall be proportionately reduced in case of subdivision of shares or stock
dividend or proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of Common Stock
outstanding immediately after such event bears to the total number of shares of
Common Stock outstanding immediately prior to such event.

    

    D.           Share
Issuance.   So long as this Note is outstanding, if the
Borrower shall issue any Common Stock except for the Excepted Issuances (as
defined in the Subscription Agreement), prior to the complete conversion or
payment of this Note, for a consideration per share that is less than the
Conversion Price that would be in effect at the time of such issue, then, and
thereafter successively upon each such issuance, the Conversion Price shall be
reduced to such other lower issue price.  For purposes of this
adjustment, the issuance of any security or debt instrument of the Borrower
carrying the right to convert such security or debt instrument into Common Stock
or of any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Conversion Price upon the issuance of the above-described
security, debt instrument, warrant, right, or option and again upon the issuance
of shares of Common Stock upon exercise of such conversion or purchase rights if
such issuance is at a price lower than the then applicable Conversion Price.
Common Stock issued or issuable by the Borrower for no consideration will be
deemed issuable or to have been issued for $0.001 per share of Common
Stock.  The reduction of the Conversion Price described in this
paragraph is in addition to the other rights of the Holder described in the
Subscription Agreement.

    

    (d)           When
ever the Conversion Price is adjusted pursuant to Section
2.1(c) above, the Borrower shall promptly but not later than the
third day after the effectiveness of the adjustment, provide notice to the
Holder setting forth the Conversion Price after such adjustment and setting
forth a statement of the facts requiring such adjustment.  Failure to
provide the foregoing notice is an Event of Default under this
Note.

     

    
      
         

      

      
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    (e)           During
the period the conversion right exists, Borrower will reserve from its
authorized and unissued Common Stock not less than an amount of Common Stock
equal to 130% of the amount of shares of Common Stock issuable upon the full
conversion of this Note.  Borrower represents that upon issuance, such
shares will be duly and validly issued, fully paid and
non-assessable.  Borrower agrees that its issuance of this Note shall
constitute full authority to its officers, agents, and transfer agents who are
charged with the duty of executing and issuing stock certificates to execute and
issue the necessary certificates for shares of Common Stock upon the conversion
of this Note.

    

    2.2          Method of
Conversion.  This Note may be converted by the Holder in whole
or in part as described in Section
2.1(a) hereof and the Subscription Agreement.  Upon
partial conversion of this Note, a new Note containing the same date and
provisions of this Note shall, at the request of the Holder, be issued by the
Borrower to the Holder for the principal balance of this Note and interest which
shall not have been converted or paid.

    

    2.3.         Maximum
Conversion.  The Holder shall not be entitled to convert on a
Conversion Date that amount of the Note in connection with that number of shares
of Common Stock which would be in excess of the sum of (i) the number of shares
of Common Stock beneficially owned by the Holder and its affiliates on a
Conversion Date, (ii) any Common Stock issuable in connection with the
unconverted portion of the Note, and (iii) the number of shares of Common
Stock issuable upon the conversion of the Note with respect to which the
determination of this provision is being made on a Conversion Date, which would
result in beneficial ownership by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock of the Borrower on such
Conversion Date.  For the purposes of the provision to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder.  Subject to the foregoing, the Holder shall not be
limited to aggregate conversions of 4.99%.  The Holder shall have the
authority and obligation to determine whether the restriction contained in
this Section
2.3 will limit any conversion hereunder and to the extent that the
Holder determines that the limitation contained in this Section applies, the
determination of which portion of the Notes are convertible shall be the
responsibility and obligation of the Holder.  The Holder may waive the
conversion limitation described in this Section 2.3, in whole
or in part, upon and effective after 61 days prior written notice to the
Borrower to increase such percentage to up to 9.99%.

    

    ARTICLE
III

    

    OPTIONAL
REDEMPTION

    

    3.1.         Optional
Redemption.  Except as described in this Section 3.1, at any
time, the Borrower will have the option of prepaying the entire outstanding
Principal Amount of this Note that has not been converted (“Optional Redemption”) by
paying to the Holder a sum of money equal to the Redemption Amount described
below.  Borrower’s election to exercise its right to prepay must be by
notice in writing (“Notice of
Redemption”).  The “Redemption Amount” shall equal
one hundred and ten percent (110%) of the entire outstanding Principal Amount
being redeemed in connection with such Optional Redemption, together with all
interest accrued on this Note, if any, and all other amounts then payable
hereunder or pursuant to the Subscription Agreement.  The Notice of
Redemption shall specify the date for such Optional Redemption (the “Redemption Payment Date”),
which date shall be not less than ten business days after the date of the Notice
of Redemption.  A Notice of Redemption shall not be effective with
respect to any portion of the principal amount under this Note for which the
Holder has a pending election to convert or for which a Conversion Notice is
properly given prior to the Redemption Payment Date.  On the
Redemption Payment Date, the Redemption Amount, less any portion of the
Redemption Amount against which the Holder has previously exercised its rights
pursuant to Section 2.1, shall be paid in good funds to the Holder. In the
event the Borrower fails to timely pay the Redemption Amount on the Redemption
Payment Date as set forth herein, then (i) at the Holder’s election, such Notice
of Redemption will be null and void or Holder may enforce the Notice of
Redemption, (ii) Borrower will not have the right to deliver another Notice of
Redemption, and (iii) Borrower’s failure may be deemed by Holder to be a
non-curable Event of Default.  A Notice of Redemption must
be given to all other Holders with respect to Other Notes contemporaneously
with the giving of a Notice of Redemption to the Holder.

    

    3.2.         Fundamental
Transaction.  Upon the occurrence of a Fundamental Transaction,
then in addition to the Holder’s rights described in Section 2.1(c)(A) until
twenty (20) business days after the Borrower notifies the Holder of the
occurrence of the Fundamental Transaction, the Holder may elect to accelerate
the Maturity Date as of the date of the Fundamental Transaction and receive as
payment for the then outstanding Principal Amount, and any other amount owed to
the Holder pursuant to the Transaction Documents.

    

    3.3.         Redemption.  This
Note may not be prepaid, redeemed or called without the consent of the Holder
except as described in this Note or the Subscription Agreement.

     

    
      
         

      

      
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    ARTICLE
IV

    

    EVENT
OF DEFAULT

    

    The
occurrence of any of the following events of default ("Event of Default") shall, at
the option of the Holder hereof, make all sums of principal and interest then
remaining unpaid hereon and all other amounts payable hereunder immediately due
and payable, upon demand, without presentment or grace period, all of which
hereby are expressly waived, except as set forth below:

    

    4.1           Failure to Pay Principal
or
Interest.  The Borrower fails to pay any installment of
principal, interest or other sum due under this Note when due.

    

    4.2           Breach of
Covenant.  The Borrower or any Subsidiary breaches any material
covenant or other term or condition of the Subscription Agreement, Transaction
Documents or this Note in any material respect and such breach, if subject to
cure, continues for a period of ten (10) business days after written notice to
the Borrower from the Holder.

    

    4.3           Breach of
Representations
and Warranties.  Any material representation or warranty of the
Borrower made herein, in the Subscription Agreement, Transaction Documents, or
in any agreement, statement or certificate given in writing pursuant hereto or
in connection therewith shall be false or misleading in any material respect as
of the date made and the Closing Date.

    

    4.4           Liquidation.   Any
dissolution, liquidation or winding up of Borrower or any Subsidiary or any
substantial portion of its business.

     

    4.5           Cessation of
Operations.   Any cessation of operations by Borrower or
its Subsidiary as a whole.

     

    4.6           Maintenance of
Assets.   The failure by Borrower or any Subsidiary to
maintain any material intellectual property rights, personal, real property or
other assets which are necessary to conduct its business (whether now or in the
future) and such breach is not cured with fifteen (15) business days after
written notice to the Borrower from the Holder.

    

    4.7           Receiver or
Trustee.  The Borrower or any Subsidiary shall make an
assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed.

    

    4.8           Judgments.  Any
money judgment, writ or similar final process shall be entered or made in a
non-appealable adjudication against Borrower or any Subsidiary or any of its
property or other assets for more than $200,000, unless stayed vacated or
satisfied within thirty (30) days.

    

    4.9           Bankruptcy.  Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings or
relief under any bankruptcy law or any law, or the issuance of any notice in
relation to such event, for the relief of debtors shall be instituted by or
against the Borrower or any Subsidiary.

    

    4.10         Delisting.   Delisting
of the Common Stock from any Principal Market; failure to comply with the
requirements for continued listing on a Principal Market for a period of fifteen
(15) consecutive trading days; or notification from a Principal Market that the
Borrower is not in compliance with the conditions for such continued listing on
such Principal Market.

    

    4.11         Non-Payment.   A
default by the Borrower or any Subsidiary under any one or more obligations in
an aggregate monetary amount in excess of $200,000 for more than twenty days
after the due date, unless the Borrower or such Subsidiary is contesting the
validity of such obligation in good faith and has segregated cash funds equal to
not less than one-half of the contested amount.

    

    4.12         Stop
Trade.  An SEC or judicial stop trade order or Principal Market
trading suspension that lasts for ten (10) or more consecutive trading
days.

     

    
      
         

      

      
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    4.13         Failure to Deliver Common
Stock or Replacement Note.  Borrower's failures to timely
deliver Common Stock to the Holder pursuant to and in the form required by this
Note, Sections 7 and 11 of the Subscription Agreement, and the Warrant or, if
required, a replacement Note following a partial conversion.

    

    4.14         Reservation
Default.   Failure by the Borrower to have reserved for
issuance upon conversion of the Note or upon exercise of the Warrants issued in
connection with the Subscription Agreement, the number of shares of Common Stock
as required in the Subscription Agreement, this Note and the Warrants which is
not cured within 30 business days of such breach.

    

    4.15         Financial Statement
Restatement.  The restatement after the date hereof of any
financial statements filed by the Borrower with the Securities and Exchange
Commission for any date or period from two years prior to the Issue Date of this
Note and until this Note is no longer outstanding, if the result of such
restatement would, by comparison to the unrestated financial statements, have
constituted a Material Adverse Effect.

    

    4.16         Reverse
Splits.   The Borrower effectuates a reverse split of its
Common Stock without twenty (20) days prior written notice to the
Holder.

    

    4.17         Event Described in
Subscription Agreement.  The occurrence of an Event of Default
as described in the Subscription Agreement or any other Transaction Document
that, if susceptible to cure, is not cured during any designated cure period or
longer period described in this Article IV.

    

    4.18         Executive Officers Breach of
Duties.  Any of Borrower’s named executive officers or
directors is convicted of a violation of securities laws, or a settlement in
excess of $250,000 is reached by any such officer or director relating to a
violation of securities laws, breach of fiduciary duties or
self-dealing.

    

    4.19         Notification
Failure.   A failure by Borrower to notify Holder of any
material event of which Borrower is obligated to notify Holder pursuant to the
terms of this Note or any other Transaction Document.

    

    4.20         Cross
Default.  A default by the Borrower of a material term,
covenant, warranty or undertaking of any other agreement to which the Borrower
and Holder are parties, or the occurrence of a event of default under any such
other agreement to which Borrower and Holder are parties which is not cured
after any required notice and/or cure period.

    

    4.21         Other Note
Default.   The occurrence of an Event of Default under any
Other Note.

    

    ARTICLE
V

    

    SECURITY
INTEREST

    

    5.           Security Interest/Waiver of
Automatic Stay.   This Note is secured by a security
interest granted to the Holder pursuant to a Security Agreement, as delivered by
Borrower to Holder.  The Borrower acknowledges and agrees that should
a proceeding under any bankruptcy or insolvency law be commenced by or against
the Borrower, or if any of the Collateral (as defined in the Security Agreement)
should become the subject of any bankruptcy or insolvency proceeding, then the
Holder should be entitled to, among other relief to which the Holder may be
entitled under the Transaction Documents and any other agreement to which the
Borrower and Holder are parties (collectively, "Loan Documents") and/or
applicable law, an order from the court granting immediate relief from the
automatic stay pursuant to 11 U.S.C. Section 362 to permit the Holder to
exercise all of its rights and remedies pursuant to the Loan Documents and/or
applicable law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY
IMPOSED BY 11 U.S.C. SECTION 362.  FURTHERMORE, THE BORROWER EXPRESSLY
ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION
OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION,
11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN
ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES
UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW.  The Borrower hereby
consents to any motion for relief from stay that may be filed by the Holder in
any bankruptcy or insolvency proceeding initiated by or against the
Borrower and, further, agrees not to file any opposition to any motion for
relief from stay filed by the Holder.  The Borrower represents,
acknowledges and agrees that this provision is a specific and material aspect of
the Loan Documents, and that the Holder would not agree to the terms of the Loan
Documents if this waiver were not a part of this Note. The Borrower further
represents, acknowledges and agrees that this waiver is knowingly, intelligently
and voluntarily made, that neither the Holder nor any person acting on
behalf of the Holder has made any representations to induce this waiver, that
the Borrower has been represented (or has had the opportunity to he represented)
in the signing of this Note and the Loan Documents and in the making of this
waiver by independent legal counsel selected by the Borrower and that the
Borrower has discussed this waiver with counsel.

    
      
         

      

      
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    ARTICLE
VI

    

    MISCELLANEOUS

    

    6.1           Failure or Indulgence Not
Waiver.  No failure or delay on the part of the Holder hereof
in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

     

    6.2           Notices.  All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the first business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be: (i) if to the Borrower to: China
Yongxin Pharmaceuticals, Inc., 927 Canada Court, City of Industry, CA 91748,
Attn: Yongxin Liu, CEO, facsimile: (626) 581-9138, with a copy to: Richardson
& Patel, LLP, 10900 Wilshire Blvd., Suite 500, Los Angeles, CA 90024, Attn:
Ryan Hong, Esq., facsimile: (310) 208-1154, and (ii) if to the Holder, to the
name, address and facsimile number set forth on the front page of this Note,
with a copy by fax only to Grushko & Mittman, P.C., 551 Fifth Avenue, Suite
1601, New York, New York 10176, facsimile: (212) 697-3575.

     

    6.3           Amendment
Provision.  The term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or
supplemented.

     

    6.4           Assignability.  This
Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and
assigns.  The Borrower may not assign its obligations under this
Note.

     

    6.5           Cost of
Collection.  If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys’ fees.

     

    
      
         

      

      
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    6.6           Governing
Law.  This Note shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of
laws principles that would result in the application of the substantive laws of
another jurisdiction.  Any action brought by either party against the
other concerning the transactions contemplated by this Agreement must be brought
only in the civil or state courts of New York or in the federal courts located
in the State and county of New York.  Both parties and the individual
signing this Agreement on behalf of the Borrower agree to submit to the
jurisdiction of such courts.  The prevailing party shall be entitled
to recover from the other party its reasonable attorney's fees and
costs.  In the event that any provision of this Note is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or unenforceability of any other provision of this Note.
Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Borrower in any other
jurisdiction to collect on the Borrower's obligations to Holder, to realize on
any collateral or any other security for such obligations, or to enforce a
judgment or other decision in favor of the Holder.  This Note shall be deemed an
unconditional obligation of Borrower for the payment of money and, without
limitation to any other remedies of Holder, may be enforced against Borrower by
summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213
or any similar rule or statute in the jurisdiction where enforcement is
sought.  For purposes of such rule or statute, any other document or
agreement to which Holder and Borrower are parties or which Borrower
delivered to Holder, which may be convenient
or necessary to determine Holder’s rights hereunder or
Borrower’s obligations to Holder are deemed a
part of this Note, whether or not such other document or agreement was delivered
together herewith or was executed apart from this Note.

     

    6.7           Maximum
Payments.  Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum rate permitted by applicable law.  In the event
that the rate of interest required to be paid or other charges hereunder exceed
the maximum rate permitted by applicable law, any payments in excess of such
maximum rate shall be credited against amounts owed by the Borrower to the
Holder and thus refunded to the Borrower.

     

    6.8           Non-Business
Days.   Whenever any payment or any action to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due or action shall be required on the
next succeeding business day and, for such payment, such next succeeding day
shall be included in the calculation of the amount of accrued interest payable
on such date.

     

    6.9           Shareholder
Status.  The Holder shall not have rights as a shareholder of
the Borrower with respect to unconverted portions of this
Note.  However, the Holder will have the rights of a shareholder of
the Borrower with respect to the Shares of Common Stock to be received after
delivery by the Holder of a Conversion Notice to the Borrower.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by an authorized officer as of the
____ day of January, 2010.

    

    
      
        	
                CHINA
      YONGXIN PHARMACEUTICALS, INC.

              
	 
      	 
      
	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

    

    
      
        	
                WITNESS:

              	 
      
	 
      	 
      
	 
      	 
      

      

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    NOTICE OF
CONVERSION

    

    (To be
executed by the Registered Holder in order to convert the Note)

    

    The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by CHINA YONGXIN PHARMACEUTICALS, INC. on
January ___, 2010 into Shares of Common Stock of CHINA YONGXIN PHARMACEUTICALS,
INC. (the “Borrower”) according to the conditions set forth in such Note, as of
the date written below.

    

    Date of
Conversion:____________________________________________________________________

    

    Conversion
Price:______________________________________________________________________

    

    Number of
Shares of Common Stock Beneficially Owned on the Conversion Date: Less than 5%
of the outstanding Common Stock of CHINA YONGXIN PHARMACEUTICALS,
INC.

    

    Shares To
Be
Delivered:_________________________________________________________________

    

    Signature:____________________________________________________________________________

    

    Print
Name:__________________________________________________________________________

    

    Address:_____________________________________________________________________________

    

       ____________________________________________________________________________

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    Schedule

    

    The Notes
dated January 22, 2010 are substantially identical in all material respects
except as to the holder and the note principal amount.

     

    
      
        
          
            
              	
                      Holder

                    	 
      	
                      Note

                      Principal

                      Amount

                    	 
      
	
                      Excalibur
      Special Opportunities LP

                    	 
      	
                      $

                    	
                      300,000.00

                    	 
      
	
                      Dana
      Katzenmeier

                    	 
      	
                      $

                    	
                      50,000.00

                    	 
      
	
                      Fourth
      Street Holdings, LP

                    	 
      	
                      $

                    	
                      100,000.00

                    	 
      
	
                      Robert
      B. Prag

                    	 
      	
                      $

                    	
                      100,000.00

                    	 
      
	
                      Peter
      B. Tentler

                    	 
      	
                      $

                    	
                      50,000.00

                    	 
      
	
                      Richardson
      & Patel LLP

                    	 
      	
                      $

                    	
                      100,000.00

                    	 
      
	
                      TOTAL

                    	 
      	
                      $

                    	
                      700,000.00

                    	 
      

            

          

        

      

    

    

    The Notes
dated March 4, 2010, are substantially identical in all material respects except
as to the holder and the note principal amount.

     

    
      
        
          
            
              	
                      Holder

                    	 
      	
                      Note

                      Principal

                      Amount

                    	 
      
	
                      Marc
      Freeman

                    	 
      	
                      $

                    	
                      75,000.00

                    	 
      
	
                      Paul
      T. Mannion Jr.

                    	 
      	
                      $

                    	
                      25,000.00

                    	 
      
	
                      Linda
      Hecter

                    	 
      	
                      $

                    	
                      25,000.00

                    	 
      
	
                      TOTAL

                    	 
      	
                      $

                    	
                      125,000.00

                    	 
      

            

          

        

      

    

    

    The Notes
dated May 3, 2010, are substantially identical in all material respects except
as to the holder and the note principal amount.

    

    
      
        
          
            
              	
                      Holder

                    	 
      	
                      Note

                      Principal

                      Amount

                    	 
      
	
                      Excalibur
      Special Opportunities LP

                    	 
      	
                      $

                    	
                      100,000.00

                    	 
      
	
                      Dana
      Katzenmeier

                    	 
      	
                      $

                    	
                      25,000.00

                    	 
      
	
                      Fourth
      Street Holdings, LP

                    	 
      	
                      $

                    	
                      40,000.00

                    	 
      
	
                      Robert
      B. Prag

                    	 
      	
                      $

                    	
                      50,000.00

                    	 
      
	
                      Peter
      B. Tentler

                    	 
      	
                      $

                    	
                      25,000.00

                    	 
      
	
                      Paul
      T. Mannion Jr.

                    	 
      	
                      $

                    	
                      10,000.00

                    	 
      
	
                      TOTAL

                    	 
      	
                      $

                    	
                      250,000.00

                    	 
      

            

          

        

      

    

    

     The
text of the Notes is incorporated by reference from Exhibit 10.2 to the
Company’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 26, 2010.

    
      
         

      

      
        11Exhibit
10.6

    

    NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE
SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

    

    
      	 
      	
              Right
      to Purchase __________ shares of Common Stock of China Yongxin
      Pharmaceuticals, Inc. (subject to adjustment as provided
      herein)

            

    

    

    COMMON
STOCK PURCHASE WARRANT

    

    No.
2010-A-001                                                                                     Issue
Date: January ___, 2010

    CHINA
YONGXIN PHARMACEUTICALS, INC., a corporation organized under the laws of the
State of Delaware (the “Company”), hereby certifies
that, for value received, _______________________________,
____________________________________________, or its assigns (the “Holder”), is entitled, subject
to the terms set forth below, to purchase from the Company at any time after the
Issue Date until 5:00 p.m., E.S.T on three years after the Issue Date (the
“Expiration Date”), up
to __________ fully paid and non-assessable shares of Common Stock at a per
share purchase price of $0.50.  The aforedescribed purchase price
per share, as adjusted from time to time as herein provided, is referred to
herein as the “Purchase
Price.”  The number and character of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided
herein.  The Company may reduce the Purchase Price for some or all of
the Warrants, temporarily or permanently, provided such reduction is made as to
all outstanding Warrants for all Holders of such
Warrants.  Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Subscription Agreement (the
“Subscription
Agreement”), dated as of January ___, 2010, entered into by the Company,
the Holder and the other signatories thereto.

    

    As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

     

    (A)           The
term “Company” shall
mean China Yongxin Pharmaceuticals, Inc., a Delaware corporation, and any
corporation which shall succeed or assume the obligations of China Yongxin
Pharmaceuticals, Inc. hereunder.

     

    (B)           The
term “Common Stock”
includes (i) the Company's Common Stock, $0.001 par value per share, as
authorized on the date of the Subscription Agreement, and (ii) any other
securities into which or for which any of the securities described in
(i) may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.

     

    (C)           For
purposes of this Warrant, the “Fair Market Value” of a
share of Common Stock as of a particular date (the “Determination Date”) shall
mean:

     

    (a)           If
the Company's Common Stock is traded on an exchange or is quoted on the NASDAQ
Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New
York Stock Exchange or the American Stock Exchange, LLC, then the average
of the closing sale prices of the Common Stock for the five (5) Trading Days
immediately prior to (but not including) the Determination
Date;

    

    
      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    

     

     (b)           If
the Company's Common Stock is not traded on an exchange or on the NASDAQ Global
Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York
Stock Exchange or the American Stock Exchange, Inc., but is traded on the OTC
Bulletin Board or in the over-the-counter market or Pink Sheets, then the
average of the closing bid and ask prices reported for the five (5) Trading
Days immediately prior to (but not including) theDetermination
Date;

     

    (c)           Except
as provided in clause (d)  below and Section 3.1, if the
Company's Common Stock is not publicly traded, then as the Holder and the
Company agree, or in the absence of such an agreement, by arbitration in
accordance with the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided; or

     

    (d)           If
the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to
the Company's charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.

     

    (D)           The
term “Other Securities”
refers to any stock (other than Common Stock) and other securities of the
Company or any other person (corporate or otherwise) which the holder of the
Warrant at any time shall be entitled to receive, or shall have received, on the
exercise of the Warrant, in lieu of or in addition to Common Stock, or which at
any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant toSection 4 or
otherwise.

     

    (E)           The
term “Warrant
Shares” shall mean the Common Stock issuable upon exercise of this
Warrant.

     

    1.           Exercise of
Warrant.

     

    1.1.           Number of Shares Issuable
upon Exercise.  From and after the Issue Date through and
including the Expiration Date, the Holder hereof shall be entitled to receive,
upon exercise of this Warrant in whole in accordance with the terms
of Section 1.2 or
upon exercise of this Warrant in part in accordance with Section 1.3,
shares of Common Stock of the Company, subject to adjustment pursuant
to Section 4 below
and Section
12(b) of the Subscription Agreement.

     

    1.2.           Full
Exercise.  This Warrant may be exercised in full by the Holder
hereof by delivery to the Company of an original or facsimile copy of
the form of subscription attached as Exhibit A hereto
(the “Subscription Form”) duly executed by
such Holder and delivery within two days thereafter of payment, in cash, wire
transfer or by certified or official bank check payable to the order of the
Company, in the amount obtained by multiplying the number of shares of Common
Stock for which this Warrant is then exercisable by the Purchase Price then in
effect.  The original Warrant is not required to be surrendered to the
Company until it has been fully exercised.

     

    1.3.           Partial
Exercise.  This Warrant may be exercised in part (but not for a
fractional share) by delivery of a Subscription Form in the manner and at the
place provided in Section 1.2, except
that the amount payable by the Holder on such partial exercise shall be the
amount obtained by multiplying (a) the number of whole shares of Common
Stock designated by the Holder in the Subscription Form by (b) the Purchase
Price then in effect.  On any such partial exercise,provided the
Holder has surrendered the original Warrant, the Company, at its expense, will
forthwith issue and deliver to or upon the order of the Holder hereof a new
Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may request, the
whole number of shares of Common Stock for which such Warrant may still be
exercised.

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

     

    1.4.           Automatic
Exercise.   In the event this Warrant is exercisable
pursuant to the provisions of Section 2 hereof on a cashless basis as of the
close of the last trading day on or before the Expiration Date, then this
Warrant, to the extent not previously unexercised and subject to the limitation
in Section 10 of this Warrant shall be deemed to have been automatically
exercised without the requirement of any notice or delivery of the Subscription
Form, pursuant to the terms of Section 2.  Such Expiration Date will
be deemed the exercise date for purposes of determining the Warrant Share
Delivery Date and similar terms hereof.

     

    1.5.           Company
Acknowledgment.  The Company will, at the time of the exercise
of the Warrant, upon the request of the Holder hereof, acknowledge in writing
its continuing obligation to afford to such Holder any rights to which such
Holder shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

     

    1.6.           Delivery of Stock
Certificates, etc. on Exercise. The
Company agrees that, provided the full purchase price listed in the Subscription
Form is received as specified in Section 1.2, the
shares of Common Stock purchased upon exercise of this Warrant shall be deemed
to be issued to the Holder hereof as the record owner of such shares as of the
close of business on the date on which delivery of a Subscription Form shall
have occurred and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in
any event within five (5) business days thereafter (“Warrant Share Delivery Date”),
the Company at its expense (including the payment by it of any applicable issue
taxes) will cause to be issued in the name of and delivered to the
Holder hereof, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct in compliance with applicable securities
laws, a certificate or certificates for the number of duly and validly issued,
fully paid and non-assessable shares of Common Stock (or Other Securities)
to which such Holder shall be entitled on such exercise, plus, in lieu of any
fractional share to which such Holder would otherwise be entitled, cash equal to
such fraction multiplied by the then Fair Market Value of one full share of
Common Stock, together with any other stock or other securities and property
(including cash, where applicable) to which such Holder is entitled upon such
exercise pursuant to Section 1 or
otherwise.  The Company understands that a delay in the delivery
of the Warrant Shares after the Warrant Share Delivery Date could result in
economic loss to the Holder.  As compensation to the Holder for such
loss, the Company agrees to pay (as liquidated damages and not as a penalty) to
the Holder for late issuance of Warrant Shares upon exercise of this
Warrant the proportionate amount of $100 per business day after the Warrant
Share Delivery Date for each $10,000 of Purchase Price of Warrant Shares for
which this Warrant is exercised which are not timely delivered.  The
Company shall pay any payments incurred under this Section in immediately
available funds upon demand.  Furthermore, in addition to any other
remedies which may be available to the Holder, in the event that the Company
fails for any reason to effect delivery of the Warrant Shares by the Warrant
Share Delivery Date, the Holder may revoke all or part of the relevant Warrant
exercise by delivery of a notice to such effect to the Company, whereupon the
Company and the Holder shall each be restored to their respective positions
immediately prior to the exercise of the relevant portion of this Warrant,
except that the liquidated damages described above shall be payable through the
date notice of revocation or rescission is given to the Company.

     

    1.7.           Buy-In.   In
addition to any other rights available to the Holder, if the Company fails to
deliver to a Holder the Warrant Shares as required pursuant to this Warrant
after the Warrant Share Delivery Date and the Holder or a broker on the Holder’s
behalf, purchases (in an open market transaction or otherwise) shares of common
stock to deliver in satisfaction of a sale by such Holder of the Warrant Shares
which the Holder was entitled to receive from the Company (a “Buy-In”), then the Company
shall pay in cash to the Holder (in addition to any remedies available to
or elected by the Holder) the amount by which (A) the Holder's total purchase
price (including brokerage commissions, if any) for the shares of common stock
so purchased exceeds (B) the aggregate Purchase Price of the Warrant
Shares required to have been delivered together with interest thereon
at a rate of 15% per annum, accruing until such amount and any accrued interest
thereon is paid in full (which amount shall be paid as liquidated damages and
not as a penalty).  For example, if a Holder purchases shares of
Common Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to $10,000 of Purchase Price of Warrant Shares to have been received
upon exercise of this Warrant,the Company shall be required to pay the Holder
$1,000, plus interest. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In.

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

     

    2.           Cashless
Exercise.

     

    (a)           Payment
upon exercise may be made at the option of the Holder either in (i) cash, wire
transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants in accordance with
Section (b) below or (iii) by a combination of any of the
foregoing methods, for the number of Common Stock specified in such form (as
such exercise number shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the holder per the terms of this
Warrant) and the holder shall thereupon be entitled to receive the number of
duly authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided
herein.  Notwithstanding the immediately preceding sentence, payment
upon exercise may be made in the manner described in Section 2(b) below
commencing one hundred and eighty (180) days after the Issue Date, only with
respect to Warrant Shares not included for
unrestricted public resale in an effective Registration Statement on the date
notice of exercise is given by the Holder.

     

    (b)           Subject
to the provisions herein to the contrary, if the Fair Market Value of one share
of Common Stock is greater than the Purchase Price (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash, the holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by delivery of a properly endorsed
Subscription Form delivered to the Company by any means described in Section 13, in which
event the Company shall issue to the holder a number of shares of Common Stock
computed using the following formula:

     

    X=           Y (A-B)

                    A

    

    Where                      X=           the
number of shares of Common Stock to be issued to the Holder

    

    
      	 
      	
              Y=

            	
              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

            

    

     

    
      	 
      	
              A=

            	
              Fair
      Market Value

            

    

     

    
      	 
      	
              B=

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

            

    

     

    For
purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction in the manner described above shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the
Subscription Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.           Adjustment for Reorganization,
Consolidation, Merger, etc.

    

    3.1.           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
entity, (B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another entity) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, (D) the Company consummates a
stock purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, or spin-off) with one or more
persons or entities whereby such other persons or entities acquire more than the
50% of the outstanding shares of Common Stock (not including any shares of
Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the “beneficial owner” (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Company, or (F) the Company effects any reclassification 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 (in any such case, 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, (a) upon exercise of this Warrant, 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 upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. For purposes of any such exercise, the
determination of the Purchase 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 Purchase 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. To the extent necessary to effectuate
the foregoing provisions, any successor to the Company or surviving entity in
such Fundamental Transaction shall issue to the Holder a new warrant consistent
with the foregoing provisions and evidencing the Holder's right to exercise such
warrant into Alternate Consideration. The terms of any agreement pursuant to
which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this Section 3.1 and
insuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
“Black-Scholes Value”
shall be determined in accordance with the Black-Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg L.P. using (i) a price per share of
Common Stock equal to the VWAP of the Common Stock for the Trading Day
immediately preceding the date of consummation of the applicable Fundamental
Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the remaining term of this Warrant as of the date of
such request and (iii) an expected volatility equal to the 100 day volatility
obtained from the HVT function on Bloomberg L.P. determined as of the Trading
Day immediately following the public announcement of the applicable Fundamental
Transaction.

    

    3.2.           Continuation of
Terms.  Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in
this Section 3, this
Warrant shall continue in full force and effect and the terms hereof shall be
applicable to the Other Securities and property receivable on the exercise of
this Warrant after the consummation of such reorganization, consolidation or
merger or the effective date of dissolution following any such transfer, as the
case may be, and shall be binding upon the issuer of any Other Securities,
including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not
such person shall have expressly assumed the terms of this Warrant as provided
in Section 4.

      

    3.3           Share
Issuance.  Until the Expiration Date, if the Company shall
issue any Common Stock except for the Excepted Issuances (as defined in the
Subscription Agreement), prior to the complete exercise of this Warrant for a
consideration less than the Purchase Price then in effect at the time of such
issuance then, and thereafter successively upon each such issuance,
the Purchase Price shall be reduced to such other lower price for then
outstanding Warrants.  For purposes of this adjustment, the issuance
of any security or debt instrument of the Company carrying the right to convert
such security or debt instrument into Common Stock or of any warrant, right or
option to purchase Common Stock shall result in an adjustment to the Purchase
Price upon the issuance of the above-described security, debt instrument,
warrant, right, or option if such issuance is at a price lower than the Purchase
Price in effect upon such issuance and again at any time upon any actual,
permitted, optional, or allowed issuances of shares of Common Stock upon any
actual, permitted, optional, or allowed exercise of such conversion or purchase
rights if such issuance is at a price lower than the Purchase Price in effect
upon any actual, permitted, optional, or allowed issuance.  Common
Stock issued or issuable by the Company for no consideration will be deemed
issuable or to have been issued for $0.001 per share of Common
Stock.  The reduction of the Purchase Price described in this Section
3.3 is in addition to the other rights of the Holder described in the
Subscription Agreement.

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    4.           Extraordinary Events
Regarding Common Stock.  In the event that the Company shall
(a) issue additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of Common Stock, then, in each such event,
the Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The
number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof, be entitled to receive shall be adjusted to
a number determined by multiplying the number of shares of Common Stock that
would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 4) be in
effect, and (b) the denominator is the Purchase Price in effect on the date of
such exercise.

     

    5.           Certificate as to
Adjustments.  In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of the
Warrants, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to the Holder of the Warrant and any Warrant Agent
of the Company (appointed pursuant to Section 10 hereof).

     

    6.           Reservation of Stock, etc.
Issuable on Exercise of Warrant; Financial
Statements.   The Company will at all times reserve and
keep available, solely for issuance and delivery on the exercise of the
Warrants, all shares of Common Stock (or Other Securities) from time to time
issuable on the exercise of the Warrant.  This Warrant entitles the
Holder hereof, upon written request, to receive copies of all financial and
other information distributed or required to be distributed to the holders of
the Company's Common Stock.

      

    7.           Assignment; Exchange of
Warrant.  Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any
registered holder hereof (a "Transferor"). On the surrender
for exchange of this Warrant, with the Transferor's endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form")
and together with an opinion of counsel reasonably satisfactory to the Company
that the transfer of this Warrant will be in compliance with applicable
securities laws, the Company will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face or faces of the Warrant so surrendered by the
Transferor.

     

    8.           Replacement of
Warrant.  On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    9.           Maximum
Exercise.  The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of
Common Stock which would be in excess of the sum of (i) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates on an
exercise date, and (ii) the number of shares of Common Stock issuable upon
the exercise of this Warrant with respect to which the determination of this
limitation is being made on an exercise date, which would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock on such date.  For the purposes of
the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the 1934 Act and Rule
13d-3 thereunder.  Subject to the foregoing, the Holder shall not be
limited to aggregate exercises which would result in the issuance of more than
4.99%.  The restriction described in this paragraph may be
waived, in whole or in part, upon sixty-one (61) days prior notice from the
Holder to the Company to increase such percentage to up to 9.99%, but not in
excess of 9.99%.  The Holder may decide whether to convert a
Convertible Note or exercise this Warrant to achieve an actual 4.99% or up
to 9.99% ownership position as described above, but not in excess of
9.99%.

     

    10.           Warrant
Agent.  The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the
purpose of issuing Common Stock (or Other Securities) on the exercise of this
Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 7, and
replacing this Warrant pursuant to Section 8, or
any of the foregoing, and thereafter any such issuance, exchange or replacement,
as the case may be, shall be made at such office by such Warrant
Agent.

     

    11.           Transfer on the Company's
Books.  Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.

     

    12.           Warrant Exercise
Compensation.   The Company has agreed to pay to
StreetCapital Corp., the Broker identified in the Subscription Agreement (“Broker”) Warrant Exercise
Compensation as described in the Subscription Agreement, equal to four percent
(4%) of the cash proceeds payable to the Company upon exercise of the
Warrant.  The Holder of the Warrant has no obligation or
responsibility to pay Warrant Exercise Compensation.

      

    13.           Notices.   All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be:  if to the Company,
to: China Yongxin Pharmaceuticals, Inc., 927 Canada Court, City
of Industry, CA 91748, Attn: Yongxin Liu, CEO,facsimile: (626)
581-9138, with a copy to: Richardson & Patel, LLP, 10900 Wilshire Blvd.,
Suite 500, Los Angeles, CA 90024, Attn: Ryan Hong, Esq., facsimile: (310)
208-1154, (ii) if to the Holder, to the address and facsimile number listed on
the first paragraph of this Warrant, with a copy by fax only to: Grushko &
Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176,
facsimile: (212) 697-3575, and (iii) if to the Broker, to: StreetCapital Corp.,
300 Colonial Center Parkway, Suite 260, Roswell, GA 30076, Attn: Vince Sbarra,
facsimile: (678) 353-2188.

     

    14.           Law Governing This
Warrant.  This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws.  Any action brought by either party against the
other concerning the transactions contemplated by this Warrant shall be brought
only in the state courts of New York or in the federal courts located in the
state and county of New York.  The parties to this Warrant hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non
conveniens.  The Company and Holder waive trial by
jury.  The prevailing party shall be entitled to recover from the
other party its reasonable attorney's fees and costs.  In the event
that any provision of this Warrant or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.   Each party hereby
irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Agreement
or any other Transaction Document by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof.  Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by
law.

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

     

    
      
        
          
            	 
      	
                    CHINA
      YONGXIN

                    PHARMACEUTICALS,
      INC.

                  	 
      
	 
      	 
      	 
      	 
      
	 
      	
                    By: 

                  	 
      	 
      
	 
      	 
      	
                    Name:

                  	 
      
	 
      	 
      	
                    Title:

                  	 
      

          

        

      

    

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

    Exhibit
A

    

    FORM OF
SUBSCRIPTION

    (to be
signed only on exercise of Warrant)

    

    TO:
CHINAYONGXIN PHARMACEUTICALS, INC.

    

    The
undersigned, pursuant to the provisions set forth in the attached Warrant (No.
2009-A-001), hereby irrevocably elects to purchase (check applicable
box):

    

    ___        
__________ shares of the Common Stock covered by such Warrant; or

    

    
      	
              ___

            	
              the
      maximum number of shares of Common Stock covered by such Warrant pursuant
      to the cashless exercise procedure set forth in Section 2 of the
      Warrant.

            

    

    

    The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant, which is $ ___________. Such
payment takes the form of (check applicable box or boxes):

    

    ___         $__________
in lawful money of the United States; and/or

    

    ___         the
cancellation of such portion of the attached Warrant as is exercisable for a
total of ___ shares of
Common Stock (using a Fair Market Value of $_____ per share for purposes of this
calculation); and/or

    

    
      	
              ___

            	
              the
      cancellation of such number of shares of Common Stock as is necessary, in
      accordance with the formula set forth in Section 2 of the Warrant, to
      exercise this Warrant with respect to the maximum number of shares of
      Common Stock purchasable pursuant to the cashless exercise procedure set
      forth in Section 2.

            

    

    

    The
undersigned requests that the certificates for such shares be issued in the name
of, and delivered pursuant to the DTC instructions below or to
___________________________ whose address is
____________________________________________________________________

    ____________________________________________________________________________.

    

    The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the "Securities Act"), or pursuant to an exemption from registration
under the Securities Act.

    

    DTC
Instructions:
_______________________________________________________________

    ______________________________________________________________________________

    ______________________________________________________________________________

     

    
      
        
          
            
              
                	
                        Dated: 

                      	
                             

                      	 
      	 
      	
                            

                      	 
      
	 
      	 
      	 
      	 
      	
                        (Signature
      must conform to name of holder

                      	 
      
	 
      	 
      	 
      	 
      	
                        as
      specified on the face of the Warrant)

                      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
                          

                      	 
      
	 
      	 
      	 
      	 
      	
                          

                      	 
      
	 
      	 
      	 
      	 
      	
                        (Address)

                      	 
      

              

            

          

        

      

    

     

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    Exhibit
B

    

    FORM OF
TRANSFEROR ENDORSEMENT

    (To be
signed only on transfer of Warrant)

    

    For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading "Transferees" the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of CHINA YONGXIN PHARMACEUTICALS, INC. to which the within Warrant relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of CHINA
YONGXIN PHARMACEUTICALS, INC. with full power of substitution in the
premises.

    

    
      
        
          
            
              
                
                  	
                          Transferees

                        	 	
                          Percentage Transferred

                        	 	
                          Number Transferred

                        
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Dated: 

                                  	
                                         

                                  	 
      	 
      	
                                        

                                  	 
      
	 
      	 
      	 
      	 
      	
                                    (Signature
      must conform to name of holder

                                  	 
      
	 
      	 
      	 
      	 
      	
                                    as
      specified on the face of the Warrant)

                                  	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                                    Signed
      in the presence of:

                                  	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                                      

                                  	 
      	 
      	
                                      

                                  	 
      
	
                                    (Name) 

                                  	 
      	 
      	
                                      

                                  	 
      
	 
      	 
      	 
      	 
      	
                                    (Address)

                                  	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                                    ACCEPTED
      AND AGREED:

                                  	 
      	 
      	 
      	 
      
	
                                    [TRANSFEREE]

                                  	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                      

                                  	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    (Name)   

                                  	 
      	 
      	
                                      

                                  	 
      
	 
      	 
      	 
      	
                                    (address)

                                  	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    Schedule

     

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

     

    The
Warrants dated January 22, 2010, are substantially identical in all material
respects except as to the warrant holder and the number of shares for which
warrant can be exercised.

    

      	
              Holder

            	 
      	
              Shares for

              which

              Warrant

              can be

              Exercised

            	 
      
	
              Excalibur
      Special Opportunities LP

            	 
      	 
      	
              1,500,000

            	 
      
	
              Dana
      Katzenmeier

            	 
      	 
      	
              250,000

            	 
      
	
              Fourth
      Street Holdings, LP

            	 
      	 
      	
              500,000

            	 
      
	
              Robert
      B. Prag

            	 
      	 
      	
              500,000

            	 
      
	
              Peter
      B. Tentler

            	 
      	 
      	
              250,000

            	 
      
	
              Richardson
      & Patel LLP

            	 
      	 
      	
              500,000

            	 
      
	
              TOTAL:

            	 
      	 
      	
              3,500,000

            	 
      

    

     

    The
warrants dated March 4, 2010, are substantially identical in all material
respects except as to the warrant holder and the number of shares for which
warrant can be exercised.

     

    
      
        
          
            
              
                	
                        Holder

                      	 
      	
                        Shares for

                        which

                        Warrant

                        can
      be

                        Exercised

                      	 
      
	
                        Marc
      Freeman

                      	 
      	 
      	
                        375,000

                      	 
      
	
                        Paul
      T. Mannion Jr.

                      	 
      	 
      	
                        125,000

                      	 
      
	
                        Linda
      Hecter

                      	 
      	 
      	
                        125,000

                      	 
      
	
                        TOTAL

                      	 
      	 
      	
                        625,000

                      	 
      

              

            

          

        

      

    

     

    The
warrants dated May 3, 2010, are substantially identical in all material respects
except as to the warrant holder and the number of shares for which warrant can
be exercised.

    

    
      
        
          
            
              
                	
                         Holder

                      	 
      	
                        Shares for

                        which

                        Warrant

                        can
      be

                        Exercised

                      	 
      
	
                        Excalibur
      Special Opportunities LP

                      	 
      	 
      	
                        500,000

                      	 
      
	
                        Dana
      Katzenmeier

                      	 
      	 
      	
                        125,000

                      	 
      
	
                        Fourth
      Street Holdings, LP

                      	 
      	 
      	
                        200,000

                      	 
      
	
                        Robert
      B. Prag

                      	 
      	 
      	
                        250,000

                      	 
      
	
                        Peter
      B. Tentler

                      	 
      	 
      	
                        125,000

                      	 
      
	
                        Paul
      T. Mannion Jr.

                      	 
      	 
      	
                        50,000

                      	 
      
	
                        TOTAL

                      	 
      	 
      	
                        1,250,000

                      	 
      

              

            

          

        

      

    

    

    The text
of the Warrants is incorporated by reference from Exhibit 10.3 to the Company’s
Current Report on Form 8-K filed with the Securities and Exchange Commission on
January 26, 2010.

     

    
      
        
           

        

        
          11

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