Convertible Promissory Note

THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.

FOR VALUE RECEIVED, Benda Pharmaceutical, Inc., a Delaware corporation (the “ Company ”) with its principal executive office at Changjiang Tower, 23 ^rd Floor, No.1 Minquan Road, Wuhan, Hubei province, People’s Republic of China , promises to pay to the order of _________________ (the “ Holder ”) or registered assigns, the principal amount of ___________________ ($________) (the “ Principal Amount ”), together with accrued interest on the unpaid Principal Amount from time to time outstanding from the date hereof until the earlier of (i) April __, 2009 (the “ Maturity Date ”), and (ii) the date the Holder elects to exercise its right to convert this Note, together with accrued and unpaid interest, and other fees and obligations outstanding under this Note (the “ Obligations ”), in accordance with the provisions hereof; and (iii) April 15, 2007 if the Sibiono Transaction has not closed. This Note may not be prepaid, in whole or in part, without the prior written consent of the Holder.   This Note is payable in lawful money of the United States of America and in same day funds, without abatement, reduction, deduction, counterclaim, recoupment, defense or setoff, to Holder at such account as Holder may designate. Interest on the outstanding Principal Amount shall accrue at a rate per annum computed in accordance with Section 1 hereof and shall be payable to the Holder in accordance herewith.

1   Computation of Interest .

A.   Base Interest Rate . Subject to subsections 1B below, until such time that the Holder elects to exercise its Conversion Right, the Note shall bear interest at the rate of four percent (4%) per annum calculated on the basis of the actual number of days elapsed and a year of 365 days. Interest shall be payable in cash, semi-annually in arrears, on the last Business Day of each June and December.

B.   Penalty Interest. In the event the Note is not repaid on the Maturity Date, or upon the occurrence of an Event of Default (after expiration of any applicable cure periods), the rate of interest applicable to the unpaid Principal Amount shall be adjusted to fifteen percent (15%) per annum (the “ Default Rate ”), whether by acceleration or otherwise.

2   Covenants of Company

A.   Affirmative Covenants . The Company covenants and agrees that, so long as any portion of the Principal Amount, accrued but unpaid interest or other Obligations hereunder remain outstanding, it will comply with its covenants and other obligations under the Investment Agreement and the other Transaction Documents (as defined in the Investment Agreement).

B.   Negative Covenants . The Company covenants and agrees that, so long as any portion of the Principal Amount, accrued but unpaid interest or other Obligations hereunder remain outstanding, it will observe the following negative covenants set forth in this Section 2B:

(i)   Liquidation, Dissolution . Unless it receives the prior written consent of the Holder, the Company will not liquidate or dissolve;

(ii)   Sales of Assets . Unless it receives the prior written consent of the Holder, the Company will not, and will not allow any of its Subsidiaries to sell, transfer, lease or otherwise dispose of all or substantially all of its properties or assets to any person or entity; provided   that this clause shall not restrict any disposition made in the ordinary course of business and consisting of

(a)   capital goods which are obsolete or have no remaining useful life; or

(b)   finished goods inventories;

(iii)   Negative Pledge . Unless it receives the prior written consent of the Holder, the Company will not, and will not allow any Subsidiary to, hereafter create, incur, assume or suffer to exist any mortgage, pledge, hypothecation, assignment, security interest, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any financing lease) (each, a “ Lien ”) upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:

(a)   Liens granted to secure indebtedness incurred to finance the acquisition (whether by purchase or capitalized lease) of tangible assets to be owned by the Company, but only on the assets acquired with the proceeds of such indebtedness;

(b)   Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

(c)   Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue or being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

(d)   Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety or appeal bonds;

(e)   judgment Liens in existence less than 60 days after the entry thereof or with respect to which execution has been stayed; and

(f)   present outstanding loans as follows: (i) $2,000,000 RMB bank loan through the Company’s subsidiaries domiciled in the People’s Republic of China (“PRC Subs”); and (ii) the Company is presently negotiating a $10,000,000 RMB bank loan with China Everbright Bank to support the PRC Subs operations which would require securitization of the Company’s and/or PRC Subs assets.

(iv)   Senior Indebtedness . The Company hereby agrees that it will not issue any indebtedness with rights that are senior to this Note.

A.   Within five (5) business days of the occurrence of any one or more of the following Events of Default (after any applicable cure period), the Company shall give written notice to the Holder of the Event of Default (the “ Default Notice ”). After receipt of the Default Notice, if such Event of Default shall continue, the Holder may, by written notice (the “ Acceleration Notice ”) to the Company, declare all the entire outstanding Principal Amount and accrued but unpaid interest, to be immediately due and payable within five (5) Business Days (the “ Default Notice Period ”). If within the Default Notice Period the Company cures the Event of Default in a manner acceptable to the Holder, the Acceleration Notice will be deemed rescinded and the Event of Default will be deemed to no longer exist and any rights and remedies of Holder pertaining to such Event of Default will be of no further force or effect.

B.   The term “ Event of Default ” shall mean any of the events set forth in this Section 3B:

(i)   Non-Payment of Obligations . The Company shall default in the payment of the outstanding Principal Amount, and accrued but unpaid interest under this Note as and when the same shall become due and payable, whether by acceleration or otherwise, and such default remains uncured for a period of ten (10) days following receipt by the Company of written notice from Holder demanding payment of such amount.

(ii)   Non-Performance of Affirmative Covenants . The Company shall default in the due observance or performance of any covenant set forth in Section 2A, which default shall continue uncured for a period of ten (10) days following receipt by the Company of written notice from Holder of the Company’s failure to perform such covenant.

(iii)   Failure to Observe Negative Covenants . The Company shall default in the due observance of any negative covenant set forth in Section 2B, which failure can not be cured within ten (10) days following receipt by the Company of written notice from Holder of the Company’s failure to observe such negative covenant.

(iv)   Bankruptcy, Insolvency, etc.

(a)   a resolution is passed or an order of a court of competent jurisdiction is made that the Company be wound up or dissolved otherwise than for the purposes of, or pursuant to and followed by a consolidation, amalgamation, merger or other corporate reorganization (a “Corporate Transaction”), the terms of which have previously been approved in writing by the Required Holder Majority;

(b)   a resolution is passed or an order of a court of competent jurisdiction is made for the winding up or dissolution of any Subsidiary of the Company, except (i) for the purposes of or pursuant to and followed by a Corporate Transaction with or into the Company or any other Subsidiary, (ii) for the purposes of or pursuant to and followed by a Corporate Transaction (other than as described in (i) above) the terms of which shall have previously been approved by the Required Holder Majority, or (iii) by way of a voluntary winding up or dissolution where there are surplus assets in such subsidiary and such surplus assets attributable to the Company and/or any other subsidiary are distributed to the Company and/or any such other subsidiary;

(c)   a trustee, receiver, or other custodian is appointed over the whole or a substantial part of the assets or undertaking of the Company or any Subsidiary;

(d)   a distress, execution or seizure order before judgment is levied or enforced upon or sued out against the whole or a substantial part of the property of the Company or any Subsidiary (as the case may be) and is not discharged within forty (40) days thereof;

(e)   the Company or any Subsidiary is unable to pay its debts as and when they fall due, or the Company or any Subsidiary shall initiate or consent to proceedings relating to itself under any applicable bankruptcy, reorganization or insolvency law or make an assignment for the benefit of, or enter into any composition with, its creditors;

(f)   proceedings shall have been initiated against the Company or any Subsidiary under any applicable bankruptcy, reorganization or insolvency law and such proceedings shall not have been discharged or stayed within a period of sixty (60) days;

(g)   the Company shall take any corporate or other action authorizing, or in furtherance of, any of the foregoing.

4.   Conversion of Note.

A.   Conversion Right; Conversion Price . Subject to the terms and conditions hereof, at any time prior to the Maturity Date, while any portion of the Principal Amount is outstanding under this Note, the Holder shall have the right, but not the obligation, to convert the outstanding Principal Amount, together with all accrued but unpaid interest thereon (the “ Conversion Right ”), into shares of Company Common Stock. The number of shares of Company Common Stock the Holder shall be entitled to receive upon exercise of a Conversion Right shall be the quotient determined by dividing (i) the amount of the Note to be converted as set forth in the “Conversion Notice” (defined below) divided by (ii) the “ Conversion Price ” of $0.555 (subject to adjustment as set forth in herein).

B.   Mechanics of Conversion . In order to exercise its Conversion Right, the Holder shall deliver written notice, in the form attached hereto as Exhibit A (the " Conversion Notice "), of the Holder's election to convert this Note and surrender the Note to the Company. If the Note is converted in part only, the Company shall execute and deliver to the Holder, at the expense of the Company, a new Note in Principal Amount equal to the unconverted portion of the Principal Amount. On or before the first (1 ^st ) Business Day following the date on which the Company has received each of the Conversion Notice, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Conversion Notice to the Holder and the Company's transfer agent (the " Transfer Agent "). On or before the third (3 ^rd ) Business Day following the date on which the Company has received the Conversion Notice (the " Share Delivery Date "), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (" DTC ") Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of Note Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by over