Document:

SECURITIES
      ESCROW AGREEMENT

    

    This
      Escrow Agreement (the “Agreement”),
      dated
      as of June 11, 2008, is entered into by and among China Advanced Construction
      Materials Group, Inc., a Delaware corporation (the “Company”),
      the
      individual signatories hereto on Schedule A (each an “Investor”
and
      collectively, the “Investors”),
      Professional
      Offshore Opportunity Fund, Ltd.,
      as
      representative of the Investors (the “Investor
      Representative”),
      Xianfu Han and Weili
      He
      (collectively, the “Stockholders”)
      and
      American Stock Transfer & Trust Company (hereinafter referred to as the
“Escrow
      Agent”).
      All
      capitalized terms used but not defined herein shall have the meanings assigned
      them in the Subscription Agreement, between the Company and each Investor in
      the
      Offering. 

    

    BACKGROUND

    

    The
      Company is selling investment units (“Units”),
      each
      consisting of (i) one share of the Company’s Series A Convertible Preferred
      Stock, par value $.001 per share, each share of which will be convertible into
      four (4) shares of the Company’s Common Stock, par value $.001 per share (the
“Common
      Stock”)
      and
      (ii) a warrant to purchase two (2) shares of Common Stock, par value $.001
      per
      share. As an inducement to the Investors to enter into the Subscription
      Agreement, the Stockholders have agreed to place the Escrow Shares (as defined
      below) into escrow for the benefit of the Investors in the event the Company
      fails to satisfy the Performance Thresholds (as defined below). Pursuant to
      the
      terms of the Offering, as described in the Company’s
      Private Placement Memorandum (“PPM”)
      dated
      March 17, 2008, as amended on April 11, 2008, May 21, 2008 and May 28, 2008
      and
      in the Consent to Modification and Amendment Agreement of the PPM dated as
      of
      the date hereof,
      the
      Company, the Stockholders and the Investor Representative have agreed to
      establish an escrow account (the “Escrow
      Account”
on
      the
      terms and conditions set forth in this Agreement and the Escrow Agent has agreed
      to act as escrow agent pursuant to the terms and conditions of this Agreement.
      

    

    AGREEMENT

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises of the parties and the terms and conditions
      hereof, the parties hereby agree as follows: 

     

    1. Appointment
      of Investor Representative.
      The
      Investors hereby appoint the Investor Representative to act on their collective
      behalf with respect to all matters within the scope of this agreement, and
      the
      Investor Representative hereby accepts such appointment. All decisions of the
      Investor Representative with respect to the subject matter of this Agreement
      shall be binding on the Investors absent fraud or willful
      misconduct.

     

    2. Appointment
      of Escrow Agent.
      The
      Investor Representative on behalf of the Investors, the Stockholders and the
      Company hereby appoint American Stock Transfer & Trust Company as escrow
      agent to act in accordance with the terms and conditions set forth in this
      Agreement, and the Escrow Agent hereby accepts such appointment and agrees
      to
      establish the Escrow Account on the terms and subject to the conditions
      hereinafter set forth.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3. Establishment
      of Escrow.
      Upon
      the execution of this Agreement, the Stockholders shall deliver to the Escrow
      Agent stock certificates evidencing 3,500,000 shares in the aggregate of the
      Company’s Common Stock, which shares shall be transferred into the name of the
      Escrow Agent (collectively, the “Escrow
      Shares”)
      along
      with stock powers executed in blank. Notwithstanding the foregoing transfer,
      the
      Stockholders shall have the right to vote the Escrow Shares until such time
      as
      they are eligible for transfer to the Investors pursuant to the terms of this
      Agreement. The Company shall take all steps to assure that the Escrow Shares
      are
      transferred on the books and records of the Company into the name of the Escrow
      Agent.

     

    4. Representations
      of the Stockholders.
      The
      Stockholders hereby represent and warrant to the Investors and the Investor
      Representative as follows: 

     

    4.1 The
      Escrow Shares are validly issued, fully paid and nonassessable shares of the
      Company. The Stockholders are the record and beneficial owners of the Escrow
      Shares and have good title to the Escrow Shares, free and clear of all pledges,
      liens, claims and encumbrances, except encumbrances created by this Agreement
      and the Lock-Up Agreements entered into with the Stockholders, and the Escrow
      Agent shall hereafter have good record title to such shares. There are no
      restrictions on the ability of the Stockholders to transfer the Escrow Shares
      to
      the Escrow Agent or for the Escrow Agent to transfer the Escrow Shares to the
      Investors, except as stated herein. There are no restrictions on the ability
      of
      the Stockholders enter into this Agreement other than transfer restrictions
      under applicable federal and state securities laws. Upon any delivery of Escrow
      Shares to the Investors hereunder, the Investors will acquire good and valid
      title to the Escrow Shares, free and clear of any pledges, liens, claims and
      encumbrances.

     

    4.2 The
      performance of this Agreement and compliance with the provisions hereof will
      not
      violate any provision of any applicable law and will not conflict with or result
      in any breach of any of the terms, conditions or provisions of, or constitute
      a
      default under, or result in the creation or imposition of any lien, charge
      or
      encumbrance upon, any of the properties or assets of the Stockholders pursuant
      to the terms of the certificate of incorporation or by-laws of the Company
      or
      any indenture, mortgage, deed of trust or other agreement or instrument binding
      upon the Stockholders or affecting the Escrow Shares. No notice to, filing
      with,
      or authorization, registration, consent or approval of any governmental
      authority or other person is necessary for the execution, delivery or
      performance of this Agreement or the consummation of the transactions
      contemplated hereby by the Stockholders. 

     

    5. Disbursement
      of Escrow Shares.
      

     

    5.1 For
      purposes of this Agreement, “Net Income” means net income as defined under
      United States generally accepted accounting principles (“GAAP”),
      consistently applied, for the Company, except that there shall be assumed each
      year that there are dividends payable on each share of outstanding Series A
      Preferred Stock at the annual rate of nine
      percent (9%)
      (which
      amount of dividends, to the extent paid by the Company,
      shall be
      added back (if and to the extent previously subtracted in the calculation of
      Net
      Income in accordance with GAAP) to Net Income prior to determining if the
      Performance Thresholds (defined below) have been satisfied) and that,
      other
      than in the fiscal year (“FY08”)
      ending
      June 30, 2008 for which Net Income shall be calculated on a pre-tax
      basis,
      the
      Company’s income is subject to tax at an assumed twenty-five
      percent (25%)
      rate,
      and provided, however, that the Company’s Net Income shall be increased by any
      non-cash charges incurred as a result of the Offering (due to non-cash
      amortization on warrants and loss from change in fair value of the Warrants
      charged to the Company’s results of operation, if any, and if and to the extent
      previously subtracted in the calculation of Net Income in accordance with GAAP).
      The Company’s Net Income for FY08 and fiscal year (“FY09”)
      ending
      June 30, 2009 shall also be increased by any cash and non-cash charges related
      to the share exchange agreement dated April
      29,
      2008, by and among the Company, Xin Ao Construction Materials, Inc., a company
      incorporated under the laws of the British Virgin Islands (“BVI-ACM”),
      and
      each of the shareholders of BVI-ACM, and this Offering, including but not
      limited to the following: attorney’s fees, professional fees, consulting fees,
      edgar filing fees, auditing fees and any liquidated damages pursuant to Section
      7.1 of the Subscription Agreements.

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    5.2 The
      Company has established the following financial performance thresholds
      (collectively, the “Performance
      Thresholds”):
      (i)
      $5,200,000 of Net Income (calculated
      on a pre-tax basis solely with respect to FY08) for
      FY08
      (the
“FY08
      Threshold”),
      (ii)
      $9,000,000 of Net Income for FY09 (the “FY09
      Threshold”)
      and
      (iii) Net Income equal to or
      greater
      than the Company’s Net Income for the fiscal year ending June 30, 2009, for the
      fiscal year (“FY10”)
      ending
      June 30, 2010 (the “FY10
      Threshold”).
      The
      Company will provide the Investor Representative with its audited financial
      statements for FY08, FY09 and FY10, prepared in accordance with US GAAP,
      consistently applied with its financial statements for the fiscal year ending
      June 30, 2007, on or before September 30, 2008, September 30, 2009 and September
      30, 2010, respectively (the “Due
      Date”),
      along
      with a certification from the Company’s Chief Financial Officer calculating Net
      Income for such year as provided above, and a letter from the Company’s auditors
      confirming the accuracy of the CFO’s calculation, so as to allow the Investor
      Representative the opportunity to evaluate whether the Performance Threshold
      has
      been attained each year. 

     

    5.3 If
      the
      Company’s Net Income (as calculated pursuant to Section
      5.1
      above)
      for any one of FY08, FY09 or FY10 is less than 100% of the applicable
      Performance Threshold, respectively, then the Performance Threshold will be
      deemed not to have been achieved and all of the Escrow Shares shall be forfeited
      by the Shareholders and delivered by the Escrow Agent to the Investors (pro
      rata
      based on the number of Units purchased by each Investor in the Offering as
      shown
      on Exhibit A). The Investor Representative shall provide written instructions
      to
      the Escrow Agent, with copies to the Company and the Stockholders, instructing
      the Escrow Agent to deliver to the Investors, at the addresses set forth on
      Exhibit A, within ten (10) business days following delivery of the Investor
      Representative’s notice pursuant to this Section
      5.3,
      certificates registered in the name of each Investor, subject to Section
      5.6
      below
      and provided that the Escrow Agent has received such certificates from the
      Company’s transfer agent, evidencing the Investor’s pro rata portion of the
      Escrow Shares, and the Escrow Agent shall make such delivery to the Investors
      if
      no objection is received from the Stockholders. 

     

    5.4 If
      the
      Escrow Shares remain in the Escrow Account after the Investor Representative
      has
      had the opportunity to evaluate whether or not the Company has attained the
      FY10
      Performance Threshold, then all of the Escrow Shares remaining in the Escrow
      Account shall be delivered to the Stockholders, in proportion to the amount
      contributed by each, and the Investor Representative shall provide written
      instructions to the Escrow Agent instructing the Escrow Agent to deliver the
      Escrow Shares to the Stockholders within ten (10) business days following
      delivery of the financial statements for FY10 to the Investor
      Representative.

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    5.5 In
      the
      event that any Escrow Shares are to be delivered to the Investors pursuant
      to
      this Section
      5,
      the
      Company shall use best efforts to promptly cause the Escrow Shares to be
      delivered to the Investors, including causing its transfer agent promptly to
      issue the certificates in the names of the Investors and causing its securities
      counsel to provide any written instruction required by its transfer agent or
      the
      Escrow Agent in a timely manner so that the issuances and delivery contemplated
      above can be achieved within ten (10) business days following delivery of the
      applicable financial statements to the Investor Representative and so that
      the
      Escrow Shares can be delivered without restrictive legend so long as six (6)
      months have passed since the date of this Agreement. 

     

    5.6 Notwithstanding
      anything to the contrary herein, those Investors that became holders of
      Preferred Stock pursuant to the Offering shall be entitled to their pro rata
      portion of the Escrow Shares at the time of any distribution of Escrow Shares,
      regardless of whether they have subsequently transferred their Preferred Stock;
      provided, however, if an Investor has entered into a written agreement
      evidencing such Investor’s transfer and assignment of all its rights and
      obligations under this Agreement, and has provided written notice to the Company
      and the Escrow Agent of such transfer in accordance with Section
      14
      below (a
“Notice
      of Transfer”),
      then
      in the event that any Escrow Shares are to be delivered to the Investors in
      accordance with this Section
      5,
      the
      Company shall direct its transfer agent to issue the certificates in the names
      of the transferee(s) and the Escrow Shares shall be delivered by the Escrow
      Agent to the transferee(s) as set forth in the Investor’s Notice of Transfer.

     

    6. Investment
      Intent; Limited Transferability of Escrow Shares.

     

    6.1 By
      accepting the Escrow Shares, each Investor represents to the Company that it
      understands that the Escrow Shares have not been registered for sale under
      Federal or state securities laws and are being delivered to the Investor
      pursuant to one or more exemptions from the registration requirements of such
      securities laws. Each Investor understands that it must bear the economic risk
      of its investment the Escrow Shares and hold such securities for an indefinite
      period of time, as such securities have not been registered under Federal or
      state securities laws and therefore cannot be sold unless subsequently
      registered under such laws, unless an exemption from such registration is
      available. Each Investor further represents to the Company, by accepting the
      Escrow Shares, that it has full power and authority to accept the Escrow Shares
      and make the representations set forth herein.

     

    6.2 Each
      Investor, by its acceptance of the Escrow Shares, represents to the Company
      that
      it is acquiring the Escrow Shares for its own account for investment and not
      with a view to, or for sale in connection with, any distribution thereof in
      violation of the Securities Act of 1933, as amended (the “Act”).
      Each
      Investor agrees, by acceptance of the Escrow Shares, that such shares will
      not
      be sold or otherwise transferred unless (i) a registration statement with
      respect to such transfer is effective under the Act and any applicable state
      securities laws or (ii) such sale or transfer is made pursuant to one or more
      exemptions from the Act. 

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    6.3 Each
      Investor, by its acceptance of the Escrow Shares, acknowledges that the Escrow
      Shares may not be sold, transferred, assigned or hypothecated by the Investor
      except in compliance with the provisions of the Act and the applicable state
      securities “blue sky” laws, and is so transferable only upon the books of the
      Company which it shall cause to be maintained for such purpose.

     

    7. Duration.
      This
      Agreement shall terminate on the distribution of all the Escrow Shares in
      accordance with Section
      5
      above.

     

    8. Interpleader.
      Should
      any controversy arise among the parties hereto with respect to this Agreement
      or
      with respect to the right to receive the Escrow Shares, the Escrow Agent shall
      have the right to consult counsel and/or to institute an appropriate
      interpleader action to determine the rights of the parties. The Escrow Agent
      is
      also hereby authorized to institute an appropriate interpleader action upon
      receipt of a written letter of direction executed by the parties so directing
      Escrow Agent. If the Escrow Agent is directed to institute an appropriate
      interpleader action, it shall institute such action not prior to thirty (30)
      days after receipt of such letter of direction and not later than sixty (60)
      days after such date. Any interpleader action instituted in accordance with
      this
Section
      8
      shall be
      filed in any court of competent jurisdiction in New York, New York, and the
      Escrow Shares in dispute shall be deposited with the court and in such event
      Escrow Agent shall be relieved of and discharged from any and all obligations
      and liabilities under and pursuant to this Agreement with respect to the Escrow
      Shares. 

     

    9. Exculpation
      and Indemnification of Escrow Agent.
      

     

    9.1 The
      Escrow Agent is not a party to, and is not bound by or charged with notice
      of
      any agreement out of which this escrow may arise. The Escrow Agent acts under
      this Agreement as a depositary only and is not responsible or liable in any
      manner whatsoever for the sufficiency, correctness, genuineness or validity
      of
      the subject matter of the escrow, or any part thereof, or for the form or
      execution of any notice given by any other party hereunder, or for the identity
      or authority of any person executing any such notice. The Escrow Agent will
      have
      no duties or responsibilities other than those expressly set forth herein.
      The
      Escrow Agent will be under no liability to anyone by reason of any failure
      on
      the part of any party hereto (other than the Escrow Agent) or any maker,
      endorser or other signatory of any document to perform such person’s or entity’s
      obligations hereunder or under any such document. Except for this Agreement
      and
      instructions to the Escrow Agent pursuant to the terms of this Agreement, the
      Escrow Agent will not be obligated to recognize any agreement between or among
      any or all of the persons or entities referred to herein, notwithstanding its
      knowledge thereof. 

     

    9.2 The
      Escrow Agent will not be liable for any action taken or omitted by it, or any
      action suffered by it to be taken or omitted, in good faith and in the exercise
      of its own best judgment, and may rely conclusively on, and will be protected
      in
      acting upon, any order, notice, demand, certificate, or opinion or advice of
      counsel (including counsel chosen by the Escrow Agent), statement, instrument,
      report or other paper or document (not only as to its due execution and the
      validity and effectiveness of its provisions, but also as to the truth and
      acceptability of any information therein contained) which is reasonably believed
      by Escrow Agent to be genuine and to be signed or presented by the proper person
      or persons. The duties and responsibilities of the Escrow Agent hereunder shall
      be determined solely by the express provisions of this Agreement and no other
      or
      further duties or responsibilities shall be implied, including, but not limited
      to, any obligation under or imposed by any laws of the State of New York upon
      fiduciaries. 

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    9.3 The
      Escrow Agent will be indemnified and held harmless, jointly and severally,
      by
      the Company and the Stockholders from and against any expenses, including
      reasonable attorneys’ fees and disbursements, damages or losses suffered by the
      Escrow Agent in connection with any claim or demand, which, in any way, directly
      or indirectly, arises out of or relates to this Agreement or the services of
      Escrow Agent hereunder; except, that if the Escrow Agent is guilty of willful
      misconduct, fraud or gross negligence under this Agreement, then the Escrow
      Agent will bear all losses, damages and expenses arising as a result of such
      willful misconduct, fraud or gross negligence. Promptly after the receipt by
      the
      Escrow Agent of notice of any such demand or claim or the commencement of any
      action, suit or proceeding relating to such demand or claim, the Escrow Agent
      will notify the other parties hereto in writing. For the purposes hereof, the
      terms “expense” and “loss” will include all amounts paid or payable to satisfy
      any such claim or demand, or in settlement of any such claim, demand, action,
      suit or proceeding settled with the express written consent of the parties
      hereto, and all costs and expenses, including, but not limited to, reasonable
      attorneys’ fees and disbursements, paid or incurred in investigating or
      defending against any such claim, demand, action, suit or proceeding. The
      provisions of this Section
      9
      shall
      survive the termination of this Agreement. 

     

    10. Fees
      and Expenses.
      The
      Company will pay the Escrow Agent $_________ for all services rendered by the
      Escrow Agent hereunder. In addition, the Company agrees to reimburse the Escrow
      Agent for any reasonable expenses incurred in connection with this Agreement,
      including, but not limited to, reasonable counsel fees of one counsel.

     

    11. Resignation
      of Escrow Agent.
      At any
      time, upon ten (10) days’ written notice to the Company, the Escrow Agent may
      resign and be discharged from its duties as escrow agent hereunder. As soon
      as
      practicable after its resignation, the Escrow Agent will promptly turn over
      to a
      successor escrow agent appointed by the Company the Escrow Shares held hereunder
      upon presentation of a document appointing the new escrow agent and evidencing
      its acceptance thereof. If, by the end of the 10-day period following the giving
      of notice of resignation by the Escrow Agent, the Company shall have failed
      to
      appoint a successor escrow agent, the Escrow Agent may interplead the Escrow
      Shares into the registry of any court having jurisdiction. 

     

    12. Records.
      The
      Escrow Agent shall maintain accurate records of all transactions hereunder.
      Promptly after the termination of this Agreement or as may reasonably be
      requested by the parties hereto from time to time before such termination,
      the
      Escrow Agent shall provide the parties hereto, as the case may be, with a
      complete copy of such records, certified by the Escrow Agent to be a complete
      and accurate account of all such transactions. The authorized representatives
      of
      each of the parties hereto shall have access to such books and records at all
      reasonable times during normal business hours upon reasonable notice to the
      Escrow Agent. 

     

    13. Registration
      Rights.
      If any
      Escrow Shares are distributed to the Investors hereunder, but counsel for the
      Company is unable to opine that the Escrow Shares may be delivered to the
      Investors free of restrictive legend, then the Investors shall have the right
      to
      participate in the registration rights granted to
      them
      in connection with their purchase of the Units pursuant to Article VII of the
      Subscription Agreement. By executing this Agreement, the Company agrees to
      comply with the provisions in Article VII of the Subscription Agreement. The
      Company shall also engage Counsel to timely provide the opinion required under
      this Section.

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    14. Notice.
      All
      notices, communications and instructions required or desired to be given under
      this Agreement must be in writing and shall be deemed to be duly given if sent
      by registered or certified mail, return receipt requested, or overnight courier
      to the following addresses: 

     

    If
      to
      Escrow Agent:

    American
      Stock Transfer & Trust Company

    59
      Maiden
      Lane

    New
      York,
      NY 10038

    Attention:
      Herbert Lemmer

    

    If
      to the
      Company or the Stockholders: 

    

    China
      Advanced Construction Materials Group, Inc.

    Yingu
      Plaza, 9
      Beisihuanxi Road, Suite 1708 

    Haidian
      District, Beijing 100080

    Attention:
      Xianfu
      Han, Chief Executive Officer

    

    With
      a
      copy to:

    Anslow
      +
      Jaclin, LLP

    195
      Route
      9 South, Suite 204

    Manalapan,
      NJ 07726

    Attention:
      Richard Anslow, Esq.

    

    If
      to the
      Investor Representative: 

    

    Professional
      Offshore Opportunity Fund, Ltd.

    1400
      Old
      Country Road

    Suite
      206

    Westbury,
      NY 11590

    Attention:
      Howard B. Berger, Manager

    

    or
      to
      such other address and to the attention of such other person as any of the
      above
      may have furnished to the other parties in writing and delivered in accordance
      with the provisions set forth above. 

     

    15. Execution
      in Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but all of which together shall constitute one and the same
      instrument. Facsimile execution and delivery of this Agreement is legal, valid
      and binding for all purposes. 

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    16. Assignment
      and Modification.
      This
      Agreement and the rights and obligations hereunder of any of the parties hereto
      may not be assigned without the prior written consent of the other parties
      hereto. Subject to the foregoing, this Agreement will be binding upon and inure
      to the benefit of each of the parties hereto and their respective successors
      and
      permitted assigns. No other person will acquire or have any rights under, or
      by
      virtue of, this Agreement. No portion of the Escrow Shares shall be subject
      to
      interference or control by any creditor of any party hereto, or be subject
      to
      being taken or reached by any legal or equitable process in satisfaction of
      any
      debt or other liability of any such party hereto prior to the disbursement
      thereof to such party hereto in accordance with the provisions of this
      Agreement. This Agreement may be changed or modified only in writing signed
      by
      all of the parties hereto. 

     

    17. Applicable
      Law.
      This
      Agreement shall be governed by and construed with the laws of the State of
      New
      York applicable to contracts made and to be performed therein. Any litigation
      concerning the subject matter of this Agreement shall be exclusively prosecuted
      in the state or federal courts located in New York, New York, and all parties
      consent to the excusive jurisdiction and venue of those courts. 

     

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

     

    19. Attorneys’
      Fees.
      If any
      action at law or in equity, including an action for declaratory relief, is
      brought to enforce or interpret the provisions of this Agreement, the prevailing
      party shall be entitled to recover reasonable attorneys’ fees from the other
      party (unless such other party is the Escrow Agent), which fees may be set
      by
      the court in the trial of such action or may be enforced in a separate action
      brought for that purpose, and which fees shall be in addition to any other
      relief that may be awarded. 

    

    [Signature
      Page Follows]

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
      and
      year first above written.

     

    
      	
              AMERICAN
                STOCK TRANSFER & TRUST COMPANY

            	 
	 	 	 
	
              By:

            	
              /s/
                Herbert J. Lemmer

            	 
	 	
              Name:
                Herbert J. Lemmer

            	 
	 	
              Title:
                Vice President

            	 
	 	 	 
	
              CHINA
                ADVANCED CONSTRUCTION MATERIALS GROUP, INC.

            	 
	 	 	 
	
              By:

            	
              /s/
                Xianfu Han

            	 
	 	
              Name:
                Xianfu Han

            	 
	 	
              Title:
                Chief Executive Officer

            	 
	 	 	 
	
              PROFESSIONAL
                OFFSHORE OPPORTUNITY FUND, LTD.

            	 
	 	 	 
	
              By:
                

            	
              /s/
                Howard Berger

            	 
	 	
              Name:
                Howard Berger

            	 
	 	
              Title:
                Manager

            	 
	 	 	 
	
              STOCKHOLDERS:

            	 
	 	 	 
	 /s/
              Xianfu Han	 
	 Xianfu
              Han, in his individual capacity	 
	 	 	 
	 /s/
              Weili He	 
	 Weili
              He, in his individual capacity	 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      A

     

    Investor
      Signature Page

     

    The
      undersigned hereby (i)
      agrees
      to the
      annexed Securities Escrow Agreement, (ii)
      consents
      to the
      appointment of the Investor Representative, and (iii)
      states
      that
      next to the
      undersigned’s
      name
      below is the number of Units purchased by the
      undersigned
      in
      _______ 2008 and the dollar amount invested by the
      undersigned.

     

    
      	
              Signature:
                ________________________________

            
	
              Name:
                ___________________________________

            
	
              Entity
                Name: ______________________________

            
	
              Number
                of Units Purchased: __________________

            
	
              Amount
                of Investment (in USD): _______________

            
	
              Tax
                Id. No.:
                _______________________________THIS
      WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED
      FOR
      INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW. THIS WARRANT AND SUCH
      SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE PLEDGED, TRANSFERRED OR
      HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR DELIVERY OF AN OPINION
      OF
      COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
      OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE
      ACT
      OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT.

     

    CHINA
      ADVANCED CONSTRUCTION MATERIALS GROUP, INC.

     

    Warrant
      for the Purchase of Shares of Common Stock

    

    
      	
              No.
                2008-[ ]

            	
              _________
                Shares

            
	 	 

    

    

    FOR
      VALUE
      RECEIVED, CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC., a Delaware
      corporation (the “Company”),
      hereby certifies that [________________], its designee or its permitted assigns
      is entitled to purchase from the Company, at any time or from time to time
      commencing on June 11, 2008 (the “Issuance
      Date”)
      and
      prior to 5:00 P.M., New York City time, on June 10, 2013 (the “Exercise
      Period”),
      [________________] fully paid and non-assessable shares of common stock, $0.001
      par value per share, of the Company for a purchase price per share of $2.40.
      Hereinafter, (i) said common stock, $0.001 par value per share, of the Company,
      is referred to as the “Common
      Stock”;
      (ii)
      the shares of the Common Stock (subject to adjustment as set forth herein)
      purchasable hereunder or under any other Warrant (as hereinafter defined) are
      referred to as the “Warrant
      Shares”;
      (iii)
      the aggregate purchase price payable for the Warrant Shares purchasable
      hereunder is referred to as the “Aggregate
      Warrant Price”;
      (iv)
      the price payable (initially $2.40 per share subject to adjustment as set forth
      herein) for each of the Warrant Shares hereunder is referred to as the
“Per
      Share Warrant Price”;
      (v)
      this Warrant, all similar Warrants issued on the date hereof and all warrants
      hereafter issued in exchange or substitution for this Warrant or such similar
      Warrants are referred to as the “Warrants”;
      (vi)
      the holder of this Warrant is referred to as the “Holder”
and
      the
      holder of this Warrant and all other Warrants and Warrant Shares are referred
      to
      as the “Holders”
and
      Holders of more than fifty percent (50%) of the Warrant Shares then issuable
      upon exercise of then outstanding Warrants are referred to as the “Majority
      of the Holders”)
      and
      (vii) the then Current Market Price per share of the Common Stock (the
“Current
      Market Price”)
      shall
      be deemed to be the last reported sale price of the Common Stock (as reported
      by
      Bloomberg Financial Markets) on the Trading Day (as defined below) immediately
      prior to such date or, in case no such reported sales take place on such day,
      the average of the last reported bid and ask prices of the Common Stock on
      such
      day, in either case on the principal national securities exchange on which
      the
      Common Stock is admitted to trading or listed, including the Nasdaq Global
      Select Market, the Nasdaq Global Market, and Nasdaq Capital Market (collectively
      “NASDAQ”),
      or
      other similar organization, or, if the Common Stock is not reported on a
      national securities exchange, the per share sale price for the Common Stock
      in
      the over-the-counter market as reported by the OTC Bulletin Board (the
“OTCBB”)
      or
      another over-the-counter market, or if not so available, the fair market value
      of the Common Stock as determined in good faith by the Company’s Board of
      Directors. A “Trading
      Day”
shall
      mean any day on which shares of the Company’s Common Stock are sold on the
      respective exchanges listed above. The Aggregate Warrant Price is not subject
      to
      adjustment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This
      Warrant is one of the Warrants to purchase Common Stock issued pursuant to
      a
      Subscription Agreement (the “Subscription
      Agreement”)
      between the Company and the Subscriber named therein in connection with a
      private placement by the Company of Units, each consisting on one share of
      Series A Convertible Preferred Stock (the “Preferred
      Stock”)
      and
      one Warrant, as further described in the Company’s Private Placement Memorandum
      dated March 17, 2008, as amended on April 11, 2008, May 21, 2008 and May 28,
      2008 and in the Consent to Modification and Amendment Agreement to the PPM
      dated
      as of the date hereof. By acceptance of this Warrant, the Holder agrees to
      comply with all applicable provisions of the Subscription
      Agreement.

     

    
      	
              1.

            	
              Exercise
                of Warrant.

            

    

     

    (a) Except
      as
      set forth in Section
      1(d)
      below,
      this Warrant may be exercised in whole at any time, or in part from time to
      time, by the Holder during the Exercise Period by the surrender of this Warrant
      (with the exercise notice, in the form attached hereto (the “Exercise
      Notice”),
      duly
      executed) at the address set forth in Section
      10(a)
      hereof,
      together with proper payment of the Aggregate Warrant Price, or the
      proportionate part thereof if this Warrant is exercised in part, with payment
      for the Warrant Shares made by certified or official bank check payable to
      the
      order of, or wire transfer of immediately available funds to, the Company;
      or

     

    (b) If
      this
      Warrant is exercised in part, this Warrant must be exercised for a number of
      whole shares of the Common Stock and the Holder is entitled to receive a new
      Warrant covering the Warrant Shares that have not been exercised and setting
      forth the proportionate part of the Aggregate Warrant Price applicable to such
      Warrant Shares. Upon surrender of this Warrant in connection with the exercise
      of this Warrant pursuant to the terms hereof, the Company will (i) issue a
      certificate or certificates in the name of the Holder for the largest number
      of
      whole shares of the Common Stock to which the Holder shall be entitled upon
      such
      exercise and, if this Warrant is exercised in whole, no fractional shares of
      Common Stock are to be issued, but rather the number of shares of Common Stock
      to which the Holder shall be entitled shall be rounded up to the nearest whole
      number, and (ii) deliver the other securities and properties receivable upon
      the
      exercise of this Warrant, or the proportionate part thereof, if this Warrant
      is
      exercised in part, pursuant to the provisions of this Warrant. 

     

    (c) Notwithstanding
      anything contained herein to the contrary, the Holder may, in its sole
      discretion, exercise this Warrant, in lieu of making the cash payment otherwise
      contemplated to be made to the Company upon such exercise in payment of the
      Aggregate Warrant Price, and elect instead to receive upon such exercise the
      “Net
      Number”
of
      shares of Common Stock determined according to the following formula (a
“Cashless
      Exercise”):

     

    Net
      Number = (A
      x
      B) - (A x C)

                                        B

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    For
      purposes of the foregoing formula:

     

    
      	 	
              A=
                

            	
              the
                total number of shares with respect to which this Warrant is then
                being
                exercised.

            

    

     

    
      	 	
              B=
                

            	
              the
                average of the Current Market Prices of the shares of Common Stock
                for the
                five Trading Days ending on the date immediately preceding the date
                of the
                written notice of exercise.

            

    

     

    
      	
            	C=	
              the
                Per Share Warrant Price then in effect for the applicable Warrant
                Shares
                at the time of such exercise.

            

    

     

    (d) Notwithstanding
      anything herein to the contrary, in no event shall the Holder have the right
      or
      be required to exercise this Warrant to the extent, and only to the extent,
      that
      as a result of such exercise, the aggregate number of shares of Common Stock
      beneficially owned by the Holder, its affiliates and any “group” (as defined in
      accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
      and the rules promulgated thereunder (the “Exchange
      Act”))
      of
      which the Holder may be deemed to be a party (collectively the “Affiliates”)
      would
      exceed 9.99% of the outstanding shares of the Common Stock immediately after
      giving effect to such exercise. For purposes of this Section, beneficial
      ownership shall be calculated in accordance with Sections 13(d) and Section
      16(a) of the Exchange Act. The provisions of this Section
      1(d)
      may be
      waived by a Holder as to itself (and solely as to itself) upon not less than
      sixty-five (65) days prior written notice to the Company. For purposes of this
      Warrant, in determining the number of outstanding shares of Common Stock, the
      Holder may rely upon the number of outstanding shares of Common Stock as
      reflected in the Company’s most recent annual or quarterly report on Form 10-K
      or Form 10-Q, respectively.

     

    (e) Upon
      exercise of this Warrant, the Company shall promptly (but in no event later
      than
      five (5) Trading Days after the date the Exercise Notice is delivered to the
      Company (the “Exercise
      Date”))
      issue
      or cause to be issued and cause to be delivered to or upon the written order
      of
      the Holder (together with such other transfer documentation as may be reasonably
      requested by the Company) and in such name or names as the Holder may designate
      (provided that, if the Registration Statement is not effective and the Holder
      directs the Company to deliver a certificate for the Warrant Shares in a name
      other than that of the Holder or an Affiliate of the Holder, it shall deliver
      to
      the Company on the Exercise Date an opinion of counsel reasonably satisfactory
      to the Company to the effect that the issuance of such Warrant Shares in such
      other name may be made pursuant to an available exemption from the registration
      requirements of the Act and all applicable state securities or blue sky laws),
      a
      certificate for the Warrant Shares issuable upon such exercise, free of
      restrictive legends, unless a registration statement covering the resale of
      the
      Warrant Shares and naming the Holder as a selling stockholder thereunder is
      not
      then effective or the Warrant Shares are not freely transferable without volume
      restrictions pursuant to Rule 144(b) under the Act. The Holder, or any person
      permissibly so designated by the Holder to receive Warrant Shares, shall be
      deemed to have become the holder of record of such Warrant Shares as of the
      Exercise Date. If the Warrant Shares are to be issued free of all restrictive
      legends, the Company shall, upon the written request of the Holder, use its
      best
      efforts to deliver, or cause to be delivered, Warrant Shares hereunder
      electronically through The Depository Trust Company or another established
      clearing corporation performing similar functions, if available; provided,
      that,
      the Company may, but will not be required to, change its transfer agent if
      its
      current transfer agent cannot deliver Warrant Shares electronically through
      such
      a clearing corporation.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (f) If
      by the
      close of the fifth (5th)
      Trading
      Day after delivery of an Exercise Notice, the Company fails to deliver to the
      Holder a certificate representing the required number of Warrant Shares in
      the
      manner required pursuant to Section
      1,
      and if
      after such fifth Trading Day and prior to the receipt of such Warrant Shares,
      the Holder purchases (in an open market transaction or otherwise) 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, within three (3) Trading Days after the Holder’s request and
      in the Holder’s sole discretion, either (1) pay in cash to the Holder an amount
      equal to the Holder’s total purchase price (including brokerage commissions, if
      any) for the shares of Common Stock so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such Warrant Shares) shall terminate or (2) promptly honor its obligation to
      deliver to the Holder a certificate or certificates representing such Warrant
      Shares and pay cash to the Holder in an amount equal to the excess (if any)
      of
      the Buy-In Price over the product of (A) such number of Warrant Shares, times
      (B) the closing bid price of a share of Common Stock on the date of
      exercise.

     

    (g) To
      the
      extent permitted by law, the Company’s obligations to issue and deliver Warrant
      Shares in accordance with the terms hereof are absolute and unconditional,
      irrespective of any action or inaction by the Holder to enforce the same, any
      waiver or consent with respect to any provision hereof. Nothing herein shall
      limit the Holder’s right to pursue any other remedies available to it hereunder,
      at law or in equity including, without limitation, a decree of specific
      performance and/or injunctive relief with respect to the Company’s failure to
      timely deliver certificates representing shares of Common Stock upon exercise
      of
      this Warrant as required pursuant to the terms hereof.

     

    
      	
              2.

            	
              Reservation
                of Warrant Shares; Listing.
                The Company agrees that, prior to the expiration of this Warrant,
                the
                Company shall at all times (a) have authorized and in reserve, and
                shall
                keep available, solely for issuance and delivery upon the exercise
                of this
                Warrant, one hundred twenty (120%) percent of the shares of the Common
                Stock receivable upon the exercise of this Warrant, free and clear
                of all
                restrictions on sale or transfer, other than under Federal or state
                securities laws, and free and clear of all preemptive rights and
                rights of
                first refusal and (b) if the Company hereafter lists its Common Stock
                on
                any national securities exchange, including NASDAQ, use its commercially
                reasonable efforts to keep the Warrant Shares authorized for listing
                on
                such exchange upon notice of issuance. The Company covenants that
                all
                Warrant Shares so issuable and deliverable shall, upon issuance and
                the
                payment of the applicable Per Share Warrant Price in accordance with
                the
                terms hereof, be duly and validly authorized, issued and fully paid
                and
                nonassessable. The Company will take all such action as may be necessary
                to assure that such shares of Common Stock may be issued as provided
                herein without violation of any applicable law or regulation, or
                of any
                requirements of any securities exchange or automated quotation system
                upon
                which the Common Shares may be listed. Pursuant to the terms of the
                Subscription Agreement, the Company shall seek to have the Warrants
                listed
                on the OTCBB.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              3.

            	
              Certain
                Adjustments.

            

    

     

    (a) Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding: (i) pays a stock
      dividend or otherwise make 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)(“Common
      Stock Equivalents”),
      (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 Per Share Warrant Price shall be multiplied by a fraction
      the
      numerator of which shall be the number of shares of Common Stock (excluding
      treasury shares, if any) outstanding immediately before such event and the
      denominator of which shall be the number of shares of Common Stock outstanding
      immediately after such event and the number of shares issuable upon exercise
      of
      this Warrant shall be proportionately adjusted. Any adjustment made pursuant
      to
      this Section
      3(a)
      shall
      become effective at the close of business on the record date for the
      determination of stockholders entitled to receive such dividend or distribution
      and shall become effective at the close of business on the effective date in
      the
      case of a subdivision, combination or re-classification. Any adjustment in
      the
      Per Share Warrant Price in accordance with this Section
      3(a)
      shall
      also effect a proportionate adjustment in the Threshold Price (defined
      below).

     

    (b) Subsequent
      Equity Sales.
      If the
      Company, at any time while this Warrant is outstanding, shall sell or grant
      any
      option to purchase or sell or grant any right to reprice its securities, or
      otherwise dispose of or issue (or announce any offer, sale, grant or any option
      to purchase or other disposition) any Common Stock or Common Stock Equivalents
      entitling any Person to acquire shares of Common Stock, at an effective price
      per share less than $2.00 (the “Threshold
      Price”)
      (provided that in the event the Company issues any warrants entitling any Person
      to acquire shares of Common Stock, the Threshold Price with respect to such
      warrants shall equal $2.40) per share of Common Stock (such lower price, the
      “Base
      Share Price”
and
      such issuances collectively, a “Dilutive
      Issuance”)
      (if
      the holder of the Common Stock or Common Stock Equivalents so issued shall
      at
      any time, whether by operation of purchase price adjustments, reset provisions,
      floating conversion, exercise or exchange prices or otherwise, or due to
      warrants, options or rights per share which are issued in connection with such
      issuance, be entitled to receive shares of Common Stock at an effective price
      per share which is less than the Threshold Price, such issuance shall be deemed
      to have occurred for less than the Threshold Price on such date of the Dilutive
      Issuance), then the Per Share Warrant Price shall be reduced and only reduced
      to
      equal the Base Share Price and the number of Warrant Shares issuable hereunder
      shall be increased such that the aggregate Per Share Warrant Price payable
      hereunder, after taking into account the decrease in the Per Share Warrant
      Price, shall be equal to the aggregate Per Share Warrant Price prior to such
      adjustment. Such adjustment shall be made whenever such Common Stock or Common
      Stock Equivalents are issued. Notwithstanding the foregoing, no adjustments
      shall be made, paid or issued under this Section
      3(b)
      in
      respect of an Exempt Issuance. The Company shall notify the Holder in writing,
      no later than the Trading Day following the issuance of any Common Stock or
      Common Stock Equivalents subject to this Section
      3(b),
      indicating therein the applicable issuance price, or applicable reset price,
      exchange price, conversion price and other pricing terms in accordance with
      Section
      3(e)
      below
      (such notice the “Dilutive
      Issuance Notice”).
      For
      purposes of clarification, whether or not the Company provides a Dilutive
      Issuance Notice pursuant to this Section
      3(b),
      upon
      the occurrence of any Dilutive Issuance, after the date of such Dilutive
      Issuance the Holder is entitled to receive a number of Warrant Shares based
      upon
      the Base Share Price regardless of whether the Holder accurately refers to
      the
      Base Share Price in the Notice of Exercise. As used herein, the term
“Exempt
      Issuance”
shall
      mean (i) any issuance, sale, grant or award of any Common Stock, option or
      right
      to purchase Common Stock, or any security convertible into or exchangeable
      for
      Common Stock issued or issuable to any officer, director, employee, consultant
      or advisor of the Company pursuant to a bona fide option or equity incentive
      plan or other agreement or arrangement duly adopted by the Company, in
      consideration for services rendered or to be rendered to the Company by such
      officer, director, employee, consultant or advisor and (ii) any issuance of
      Preferred Stock or of Common Stock underlying the Preferred Stock and
      Warrants.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) In
      case
      of any capital reorganization or reclassification, or any consolidation or
      merger to which the Company is a party other than a merger or consolidation
      in
      which the Company is the continuing corporation, or in case of any sale or
      conveyance to another entity of all or substantially all of the assets of the
      Company, or in the case of any statutory exchange of securities with another
      corporation (including any exchange effected in connection with a merger of
      a
      third corporation into the Company but excluding any exchange of securities
      or
      merger with another corporation in which the Company is a continuing corporation
      and that does not result in any reclassification of or similar change in the
      Common Stock), the Holder of this Warrant shall have the right thereafter to
      receive on the exercise of this Warrant the kind and amount of securities,
      cash
      or other property which the Holder would have owned or have been entitled to
      receive immediately after such reorganization, reclassification, consolidation,
      merger, statutory exchange, sale or conveyance had this Warrant been exercised
      immediately prior to the effective date of such reorganization,
      reclassification, consolidation, merger, statutory exchange, sale or conveyance
      and in any such case, if necessary, appropriate adjustment shall be made in
      the
      application of the provisions set forth in this Section
      3
      with
      respect to the rights and interests thereafter of the Holder of this Warrant
      to
      the end that the provisions set forth in this Section
      3
      shall
      thereafter correspondingly be made applicable, as nearly as may reasonably
      be,
      in relation to any shares of stock or other securities or property thereafter
      deliverable on the exercise of this Warrant. The above provisions of this
Section
      3(c)
      shall
      similarly apply to successive reorganizations, reclassifications,
      consolidations, mergers, statutory exchanges, sales or conveyances. The Company
      shall require the issuer of any shares of stock or other securities or property
      thereafter deliverable on the exercise of this Warrant to be responsible for
      all
      of the agreements and obligations of the Company hereunder. Notice of any such
      reorganization, reclassification, consolidation, merger, statutory exchange,
      sale or conveyance and of said provisions so proposed to be made, shall be
      mailed to the Holders of the Warrants not less than twenty (20) days prior
      to
      such event. A sale of all or substantially all of the assets of the Company
      for
      a consideration consisting primarily of securities shall be deemed a
      consolidation or merger for the foregoing purposes.

     

    (d) No
      adjustment in the Per Share Warrant Price shall be required unless such
      adjustment would require an increase or decrease of at least $0.01 per share
      of
      Common Stock; provided,
      however,
      that
      any adjustments which by reason of this Section
      3(d)
      are not
      required to be made shall be carried forward and taken into account in any
      subsequent adjustment; provided,
      further,
      however, that adjustments shall be required and made in accordance with the
      provisions of this Section
      3
      (other
      than this Section
      3(d))
      not
      later than such time as may be required in order to preserve the tax-free nature
      of a distribution, if any, to the Holder of this Warrant or Common Stock
      issuable upon the exercise hereof. All calculations under this Section
      3
      shall be
      made to the nearest cent or to the nearest 1/100th of a share, as the case
      may
      be. Anything in this Section
      3
      to the
      contrary notwithstanding, the Company shall be entitled to make such reductions
      in the Per Share Warrant Price, in addition to those required by this
Section
      3,
      as it
      in its discretion shall deem to be advisable in order that any stock dividend,
      subdivision of shares or distribution of rights to purchase stock or securities
      convertible or exchangeable for stock hereafter made by the Company to its
      stockholders shall not be taxable.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e) Whenever
      the Per Share Warrant Price or the number of Warrant Shares is adjusted as
      provided in this Section
      3
      and upon
      any modification of the rights of a Holder of Warrants in accordance with this
      Section
      3,
      the
      Company shall promptly prepare a brief statement of the facts requiring such
      adjustment or modification and the manner of computing the same and cause copies
      of such certificate to be mailed to the Holders of the Warrants. The Company
      may, but shall not be obligated to unless requested by a Majority of the
      Holders, obtain, at its expense, a certificate of a firm of independent public
      accountants of recognized standing selected by the Board of Directors (who
      may
      be the regular auditors of the Company) setting forth the Per Share Warrant
      Price and the number of Warrant Shares in effect after such adjustment or the
      effect of such modification, a brief statement of the facts requiring such
      adjustment or modification and the manner of computing the same and cause copies
      of such certificate to be mailed to the Holders of the Warrants.

     

    (f) If
      the
      Board of Directors of the Company shall declare any dividend or other
      distribution with respect to the Common Stock other than a cash distribution
      out
      of earned surplus, the Company shall mail notice thereof to the Holders of
      the
      Warrants not less than ten (10) days prior to the record date fixed for
      determining stockholders entitled to participate in such dividend or other
      distribution.

     

    (g) If,
      as a
      result of an adjustment made pursuant to this Section
      3,
      the
      Holder of any Warrant thereafter surrendered for exercise shall become entitled
      to receive shares of two or more classes of capital stock or shares of Common
      Stock and other capital stock of the Company, the Board of Directors (whose
      determination shall be conclusive and shall be described in a written notice
      to
      the Holder of any Warrant promptly after such adjustment) shall determine,
      in
      good faith, the allocation of the adjusted Per Share Warrant Price between
      or
      among shares or such classes of capital stock or shares of Common Stock and
      other capital stock.

     

    (h) Upon
      the
      expiration of any rights, options, warrants or conversion privileges with
      respect to the issuance of which an adjustment to the Per Share Warrant Price
      had been made, if such option, right, warrant or conversion shall not have
      been
      exercised, the number of Warrant Shares purchasable upon exercise of this
      Warrant, to the extent this Warrant has not then been exercised, shall, upon
      such expiration, be readjusted and shall thereafter be such as they would have
      been had they been originally adjusted (or had the original adjustment not
      been
      required, as the case may be) on the basis of (A) the fact that Common Stock,
      if
      any, actually issued or sold upon the exercise of such rights, options, warrants
      or conversion privileges, and (B) the fact that such shares of Common Stock,
      if
      any, were issued or sold for the consideration actually received by the Company
      upon such exercise plus the consideration, if any, actually received by the
      Company for the issuance, sale or grant of all such rights, options, warrants
      or
      conversion privileges whether or not exercised; provided,
      however,
      that no
      such readjustment shall have the effect of decreasing the number of Warrant
      Shares purchasable upon exercise of this Warrant by an amount in excess of
      the
      amount of the adjustment initially made in respect of the issuance, sale or
      grant of such rights, options, warrants or conversion privileges.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i) In
      case
      any event shall occur as to which the other provisions of this Section
      3
      are not
      strictly applicable but as to which the failure to make any adjustment would
      not
      fairly protect the purchase rights represented by this Warrant in accordance
      with the essential intent and principles of the adjustments set forth in this
      Section
      3
      then, in
      each such case, the Board of Directors of the Company shall in good faith
      determine the adjustment, if any, on a basis consistent with the essential
      intent and principles established herein, necessary to preserve the purchase
      rights represented by the Warrants. Upon such determination, the Company will
      promptly mail a copy thereof to the Holder of this Warrant and shall make the
      adjustments described therein.

     

    
      	
              4.

            	
              Fully
                Paid Stock; Taxes.
                The shares of the Common Stock represented by each and every certificate
                for Warrant Shares delivered on the exercise of this Warrant shall,
                subject to compliance by the Holder with the terms hereof, at the
                time of
                such delivery, be duly authorized, validly issued and outstanding,
                fully
                paid and nonassessable, and not subject to preemptive rights or rights
                of
                first refusal imposed by any agreement to which the Company is a
                party,
                and the Company will take all such actions as may be necessary to
                assure
                that the par value, if any, per share of the Common Stock is at all
                times
                equal to or less than the then Per Share Warrant Price. The Company
                shall
                pay, when due and payable, any and all Federal and state stamp, original
                issue or similar taxes which may be payable in respect of the issue
                of any
                Warrant Share or any certificate thereof to the extent required because
                of
                the issuance by the Company of such
                security.

            

    

     

    
      	
              5.

            	
              Registration
                Under Act.
                The Holder shall have the right to participate in the registration
                rights
                granted to purchasers of the Units (as defined in the Subscription
                Agreement) pursuant to Article VII of the Subscription Agreement.
                By
                acceptance of this Warrant, the Holder agrees to comply with the
                provisions in Article VII of the Subscription
                Agreement.

            

    

     

    
      	
              6.

            	
              Investment
                Intent; Limited Transferability.

            

    

     

    (a) By
      accepting this Warrant, the Holder represents to the Company that it understands
      that this Warrant and any securities obtainable upon exercise of this Warrant
      have not been registered for sale under Federal or state securities laws and
      are
      being offered and sold to the Holder pursuant to one or more exemptions from
      the
      registration requirements of such securities laws. In the absence of an
      effective registration of such securities or an exemption therefrom, any
      certificates for such securities shall bear the legend set forth on the first
      page hereof. The Holder understands that it must bear the economic risk of
      its
      investment in this Warrant and hold any securities obtainable upon exercise
      of
      this Warrant for an indefinite period of time, as this Warrant and such
      securities have not been registered under Federal or state securities laws
      and
      therefore cannot be sold unless subsequently registered under such laws, unless
      an exemption from such registration is available. The Holder further represents
      to the Company, by accepting this Warrant, that it has full power and authority
      to accept this Warrant and make the representations set forth
      herein.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) The
      Holder, by its acceptance of this Warrant, represents to the Company that it
      is
      acquiring this Warrant and will acquire any securities obtainable upon exercise
      of this Warrant for its own account for investment and not with a view to,
      or
      for sale in connection with, any distribution thereof in violation of the Act.
      The Holder agrees, by acceptance of this Warrant, that this Warrant and any
      such
      securities will not be sold or otherwise transferred unless (i) a registration
      statement with respect to such transfer is effective under the Act and any
      applicable state securities laws or (ii) such sale or transfer is made pursuant
      to one or more exemptions from the Act. 

     

    (c) In
      addition to the limitations set forth in Section
      1
      and in
      accordance with the legend on the first page hereof, this Warrant may not be
      sold, transferred, assigned or hypothecated by the Holder except in compliance
      with the provisions of the Act and the applicable state securities “blue sky”
laws, and is so transferable only upon the books of the Company which it shall
      cause to be maintained for such purpose. The Company may treat the registered
      Holder of this Warrant as it appears on the Company’s books at any time as the
      Holder for all purposes. The Company shall permit any Holder of a Warrant or
      its
      duly authorized attorney, upon written request during ordinary business hours,
      to inspect and copy or make extracts from its books showing the registered
      Holders of Warrant. All Warrants issued upon the transfer or assignment of
      this
      Warrant will be dated the same date as this Warrant, and all rights of the
      holder thereof shall be identical to those of the Holder unless, in each case,
      otherwise prohibited by applicable law.

     

    (d) The
      Holder has been afforded (i) the opportunity to ask such questions as it has
      deemed necessary of, and to receive answers from, representatives of the Company
      concerning the terms and conditions of the Warrants or the exercise of the
      Warrants; and (ii) the opportunity to request such additional information which
      the Company possesses or can acquire without unreasonable effort or
      expense.

     

    (e) The
      Holder did not (i) receive or review any advertisement, article, notice or
      other
      communication published in a newspaper or magazine or similar media or broadcast
      over television or radio, whether closed circuit, or generally available; or
      (ii) attend any seminar, meeting or investor or other conference whose attendees
      were, to such Holder’s knowledge, invited by any general solicitation or general
      advertising.

     

    (f) The
      Holder is an “accredited investor” within the meaning of Regulation D under the
      Act. Such Holder is acquiring the Warrants for its own account and not with
      a
      present view to, or for sale in connection with, any distribution thereof in
      violation of the registration requirements of the Act, without prejudice,
      however, to such Holder’s right, subject to the provisions of the Subscription
      Agreement and this Warrant, at all times to sell or otherwise dispose of all
      or
      any part of such Warrants and Warrant Shares.

     

    (g) Either
      by
      reason of such Holder’s business or financial experience or the business or
      financial experience of its professional advisors (who are unaffiliated with
      and
      who are not compensated by the Company or any affiliate, finder or selling
      agent
      of the Company, directly or indirectly), such Holder has the capacity to protect
      such Holder’s interests in connection with the transactions contemplated by this
      Warrant and the Subscription Agreement. The Holder, by its acceptance of this
      Warrant, represents to the Company that it is able to fend for itself, can
      bear
      the economic risk of its investment and has such knowledge and experience in
      financial or business matters that it is capable of evaluating the merits and
      risks of the investment in this Warrant. Holder also represents it has not
      been
      organized for the purpose of acquiring this Warrant.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              7.

            	
              Optional Redemption.

            

    

     

    (a) In
      the
      event that the Current Market Price of the Common Stock for any twenty (20)
      of
      the last thirty (30) consecutive Trading Days on the principal national
      securities exchange on which the Common Stock is admitted to trading or listed,
      including the NASDAQ, or other similar organization, or, if the Common Stock
      is
      not reported on a national securities exchange, the per share sale price for
      the
      Common Stock in the over-the-counter market as reported by the OTCBB or another
      over-the-counter market is at least $5.00 per share (subject to adjustment
      for
      any stock splits, combinations, or similar events with respect to the Common
      Stock after the original issuance date of this Warrant) (the “Redemption
      Price”)
      and the
      average daily trading volume of the Common Stock is no less than 100,000 shares
      per day during such 30-day period,
      the
      Company shall be entitled to redeem all, but not less than all, of the Warrant
      Shares at a per Warrant Share redemption price of $0.01, at any time after
      the
      completion of such thirty (30) consecutive trading day period by providing
      thirty (30) business days’ written notice to the Holders. The Holder agrees to
      return the certificate representing the redeemed Warrants to the Company upon
      their redemption (or evidence reasonably satisfactory to the Company of the
      loss, theft, destruction or mutilation of this Warrant in accordance with
Section
      8
      hereof).

     

    (b) Notwithstanding
      Section
      7(a)
      hereof,
      for so long as any Warrant Shares are not subject to a registration statement
      declared effective by the SEC or are not otherwise permitted to be immediately
      sold, in whole, pursuant to an exemption to registration for such resale,
      including pursuant to Rule 144(b) of the Act, the Company shall not be entitled
      to exercise its redemption rights pursuant to Section
      7(a)
      above.

     

    
      	
              8.

            	
              Loss,
                etc., of Warrant.
                Upon receipt of evidence reasonably satisfactory to the Company of
                the
                loss, theft, destruction or mutilation of this Warrant, and of indemnity
                reasonably satisfactory to the Company, if lost, stolen or destroyed,
                and
                upon surrender and cancellation of this Warrant, if mutilated, the
                Company
                shall execute and deliver to the Holder a new Warrant of like date,
                tenor
                and denomination.

            

    

     

    
      	
              9.

            	
              Warrant
                Holder Not Stockholder.
                This Warrant does not confer upon the Holder any right to vote on
                or
                receive dividends or consent to or receive notice as a stockholder
                of the
                Company, as such, in respect of any matters whatsoever, nor any other
                rights or liabilities as a stockholder, prior to the exercise hereof;
                this
                Warrant does, however, require certain notices to Holders as set
                forth
                herein.

            

    

     

    
      	
              10.

            	
              Communication.
                No notice or other communication under this Warrant shall be effective
                or
                deemed to have been given unless, the same is in writing and is mailed
                by
                first-class mail, postage prepaid, or via recognized overnight courier
                with confirmed receipt, addressed
                to:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (a) the
      Company at China Advanced Construction Materials Group, Inc., Yingu
      Plaza, 9
      Beisihuanxi Road, Suite 1708, Haidian
      District,
      Beijing
      100080 PRC, Attention: Chief Executive Officer, or other such address as the
      Company has designated in writing to the Holder; or

     

    (b) the
      Holder at the address last furnished to the Company in writing by the
      Holder.

     

    
      	
              11.

            	
              Headings.
                The headings of this Warrant have been inserted as a matter of convenience
                and shall not affect the construction
                hereof.

            

    

     

    
      	
              12.

            	
              Applicable
                Law.
                This Warrant will be governed by and interpreted in accordance with
                the
                laws of the State of Delaware without regard to the principles of
                conflict
                of laws. The Holder hereby submit to the exclusive jurisdiction of
                the
                United States federal and state courts located in the State of New
                York
                with respect to any dispute arising under this Agreement or the
                transactions contemplated hereby or
                thereby.

            

    

     

    
      	
              13.

            	
              Amendment,
                Waiver, etc.
                Except as expressly provided herein, neither this Warrant nor any
                term
                hereof may be amended, waived, discharged or terminated other than
                by a
                written instrument signed by the party against whom enforcement of
                any
                such amendment, waiver, discharge or termination is sought; provided,
                however, that any provision hereof may be amended, waived, discharged
                or
                terminated upon the written consent of the Company and the Majority
                of the
                Holders and such amendment, waiver, discharge or termination shall
                be
                effective with respect to the Company and all
                Holders.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be signed by the undersigned duly authorized
      officer, this 11th
      day of
      June, 2008.

    

    
      	
              CHINA
                ADVANCED CONSTRUCTION 

              MATERIALS
                GROUP, INC.

            
	 	 
	 	 
	
              By:

            	 
	 	
              Name:
                

            
	 	
              Title:
                Chief Executive Officer

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM
      OF EXERCISE NOTICE 

     

    (To
      be executed by the Holder to exercise the right to

    purchase
      shares of Common Stock under the foregoing Warrant)

     

    Ladies
      and Gentlemen:

     

    
      	
              (1)

            	
              The
                undersigned is the Holder of Warrant No. __________ (the “Warrant”)
                issued by China Advanced Construction Materials Group, Inc., a Delaware
                corporation (the “Company”).
                Capitalized terms used herein and not otherwise defined herein have
                the
                respective meanings set forth in the Warrant.

            

    

     

    
      	
              (2)

            	
              The
                undersigned hereby exercises its right to purchase __________ Warrant
                Shares pursuant to the Warrant.

            

    

     

    
      	
              (3)

            	
              The
                Holder intends that payment of the Exercise Price shall be made as
                (check
                one):

            

    

     

    
      	 	
              o

            	
              Cash
                Exercise 

            

    

     

    
      	 	
              o

            	
              “Cashless
                Exercise” under Section
                1(c)
                in
                accordance with the terms of the
                Warrant.

            

    

     

    
      	
              (4)

            	
              If
                the Holder has elected a Cash Exercise, the Holder shall pay the
                sum of
                $_______ to the Company in accordance with the terms of the
                Warrant.

            

    

     

    
      	
              (5)

            	
              Pursuant
                to this Exercise Notice, the Company shall deliver to the Holder
                _____________ Warrant Shares in accordance with the terms of the
                Warrant.

            

    

     

    Dated:_______________,
      _____ 

     

    Name
      of
      Holder: ___________________________

     

    By:__________________________________

     

    Name:
      _______________________________

     

    Title:
      _______________________________

     

    (Signature
      must conform
      in
      all respects to name of Holder as specified on the face of the
      Warrant)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED _______________ (“Assignor”)
      hereby
      sells, assigns and transfers unto ____________________ (“Transferee”)
      the
      foregoing Warrant and all rights evidenced thereby, and does irrevocably
      constitute and appoint _____________________, attorney, to transfer said Warrant
      on the books of China Advanced Construction Materials Group, Inc. By acceptance
      of the foregoing Warrant, Transferee shall become a Holder under said Warrant
      and subject to the rights, obligations and representations of Holder set forth
      in said Warrant.

    

    
      	
              ASSIGNOR:

            	 
	 	 
	
              Dated:_______________________

            	
              Signature:____________________________

            
	 	 
	 	
              Address:_____________________________

            
	 	 
	 	 
	
              TRANSFEREE:

            	 
	 	 
	
              Dated:_______________________

            	
              Signature:____________________________

            
	 	 
	 	
              Address:_____________________________

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    PARTIAL
      ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED _______________ (“Assignor”)
      hereby
      assigns and transfers unto ____________________ (“Transferee”)
      the
      right to purchase _______ shares of Common Stock, par value $0.001 per share,
      of
      China Advanced Construction Materials Group, Inc. covered by the foregoing
      Warrant, and a proportionate part of said Warrant and the rights evidenced
      thereby, and does irrevocably constitute and appoint ____________________,
      attorney, to transfer such part of said Warrant on the books of China Advanced
      Construction Materials Group, Inc. By acceptance of the proportionate part
      of
      foregoing Warrant, Transferee shall become a Holder under said proportionate
      part of said Warrant and subject to the rights, obligations and representations
      of Holder set forth in said Warrant.

    

    
      	
              ASSIGNOR:

            	 
	 	 
	
              Dated:_______________________

            	
              Signature:____________________________

            
	 	 
	 	
              Address:_____________________________

            
	 	 
	 	 
	
              TRANSFEREE:

            	 
	 	 
	
              Dated:_______________________

            	
              Signature:____________________________

            
	 	 
	 	
              Address:_____________________________

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