Exhibit 10.4

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the
19th day of December, 2006, by and among, Middle Kingdom Alliance Corporation, a
corporation organized under the laws of Delaware (the “Company”), and the
undersigned parties listed under Investor on the signature page hereto (each, an
“Investor” and collectively, the “Investors”).

WHEREAS, the Investors purchased Series A Units, consisting of one share of
Company common stock (“Common Stock”) and five Class A warrants, in a private
placement made in accordance with Section 4(2) under the Securities Act of 1933
prior to the Company’s public offering;

WHEREAS, the Investors also purchased additional shares of the Company’s Common
Stock prior to its public offering;

WHEREAS, the Investors currently hold all of the issued and outstanding
securities of the Company; and

WHEREAS, the Investors and the Company desire to enter into this Agreement to
provide the Investors with certain rights relating to the registration of the
Common Stock, Class A warrants and Common Stock underlying the Class A warrants
held by them;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. DEFINITIONS. The following capitalized terms used herein have the following
meanings:

“Agreement” means this Agreement, as amended, restated, supplemented, or
otherwise modified from time to time.

“Commission” means the Securities and Exchange Commission, or any other federal
agency then administering the Securities Act or the Exchange Act.

“Company” is defined in the preamble to this Agreement.

“Demand Registration” is defined in Section 2.1.1.

“Demanding Holder” is defined in Section 2.1.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.

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“Form S-1” is defined in Section 2.3.

“Indemnified Party” is defined in Section 4.3.

“Indemnifying Party” is defined in Section 4.3.

“Investor” is defined in the preamble to this Agreement.

“Investor Indemnified Party” is defined in Section 4.1.

“Maximum Number of Shares” is defined in Section 2.1.4.

“Notices” is defined in Section 6.3.

“Common Stock” shall mean common stock of the Company, par value $0.001 per
share.

“Piggy-Back Registration” is defined in Section 2.2.1.

“Register,” “registered” and “registration” mean a registration effected by
preparing and filing a registration statement in compliance with the
requirements of the Securities Act, and the applicable rules and regulations
promulgated thereunder, and such registration statement becoming effective.

“Registrable Securities” means the Common Stock owned or held by Investors, the
Class A warrants owned or held by Investors, and the Common Stock underlying the
Class A warrants owned or held by Investors. Registrable Securities includes any
warrants, Common Stock or other securities of the Company issued as a dividend
or other distribution with respect to or in exchange for or in replacement of
such Common Stock, Class A warrants or Common Stock underlying the Class A
warrants. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when: (a) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been sold, transferred, disposed
of or exchanged in accordance with such Registration Statement; (b) such
securities shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration under the Securities Act; (c) such securities shall have ceased to
be outstanding, or (d) the Registrable Securities are salable under Rule 144(k)
in the opinion of counsel to the Company.

“Registration Statement” means the registration statements filed by the Company
with the Commission in compliance with the Securities Act and the rules and
regulations promulgated thereunder for a public offering and sale of securities
of the Company (other than a registration statement on Form S-4 or Form S-8, or
their successors, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another entity).

“Release Date” means the date on which the Common Stock or Class A warrants are
disbursed from escrow pursuant to Section 3 of that certain Securities Escrow
Agreement dated as of December 19, 2006 by and among the parties hereto and
Continental Stock Transfer & Trust Company.

 

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“Repurchase Right” is defined in Section 6.10.2.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be
in effect at the time.

“Underwriter” means a securities dealer who purchases any Registrable Securities
as principal in an underwritten offering and not as part of such dealer’s
market-making activities.

2. REGISTRATION RIGHTS.

2.1 Demand Registration.

2.1.1 Request for Registration. At any time and from time to time on or after
the Release Date, the holders of a minimum thirty percent (30%) interest of the
Registrable Securities held by the Investors or the transferees of the
Investors, may make a written demand for registration under the Securities Act
of all or part of their Registrable Securities (a “Demand Registration”). Any
demand for a Demand Registration shall specify the number of Registrable
Securities proposed to be sold and the intended method(s) of distribution
thereof. The Company will notify in writing all holders of Registrable
Securities of the demand, and each holder of Registrable Securities who wishes
to include all or a portion of such holder’s Registrable Securities in the
Demand Registration (each such holder including Registrable Securities in such
registration, a “Demanding Holder”) shall so notify the Company in writing
within fifteen (15) days after the receipt by the holder of the notice from the
Company. Upon any such request, the Demanding Holders shall be entitled to have
their Registrable Securities included in the Demand Registration, subject to
Section 2.1.4 and the provisos set forth in Section 3.1.1. The Company shall not
be obligated to effect more than an aggregate of three (3) Demand Registrations
under this Section 2.1.1 in respect of Registrable Securities.

2.1.2 Effective Registration. A registration will not count as a Demand
Registration until the Registration Statement filed with the Commission with
respect to such Demand Registration has been declared effective and the Company
has complied with all of its obligations under this Agreement with respect
thereto; provided, however, that if, after such Registration Statement has been
declared effective, the offering of Registrable Securities pursuant to a Demand
Registration is interfered with by any stop order or injunction of the
Commission or any other governmental agency or court or if the prospectus
included in such Registration Statement is no longer effective, the Registration
Statement with respect to such Demand Registration will be deemed not to have
been declared effective, unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of
the Demanding Holders thereafter elect to continue the offering; provided,
further, that the Company shall not be obligated to file a second Registration
Statement until a Registration Statement that has been filed is counted as a
Demand Registration or is terminated or withdrawn.

2.1.3 Underwritten Offering. If a minimum thirty percent (30%) interest of the
Demanding Holders so elect and such holders so advise the Company as part of
their written demand for a Demand Registration, the offering of such Registrable
Securities pursuant to such

 

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Demand Registration shall be in the form of an underwritten offering. In such
event, the right of any holder to include its Registrable Securities in such
registration shall be conditioned upon such holder’s participation in such
underwriting and the inclusion of such holder’s Registrable Securities in the
underwriting to the extent provided herein. All Demanding Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the Underwriter or Underwriters
selected for such underwriting by a majority-in-interest of the holders
initiating the Demand Registration.

2.1.4 Reduction of Offering. If the managing Underwriter or Underwriters for a
Demand Registration that is to be an underwritten offering advises the Company
and the Demanding Holders in writing that the dollar amount or number of
Registrable Securities which the Demanding Holders desire to sell, taken
together with all other Common Stock or other securities which the Company
desires to sell and the Common Stock, if any, as to which registration has been
requested pursuant to written contractual piggy-back registration rights held by
other shareholders of the Company who desire to sell, exceeds the maximum dollar
amount or maximum number of shares that can be sold in such offering without
adversely affecting the proposed offering price, the timing, the distribution
method, or the probability of success of such offering (such maximum dollar
amount or maximum number of shares, as applicable, the “Maximum Number of
Shares”), then the Company shall include in such registration: (i) first, the
Registrable Securities as to which Demand Registration has been requested by the
Demanding Holders (pro rata in accordance with the number of Registrable
Securities which such Demanding Holder has requested be included in such
registration, regardless of the number of Registrable Securities held by each
Demanding Holder) that can be sold without exceeding the Maximum Number of
Shares; (ii) second, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clause (i), the Common Stock or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Shares; (iii) third, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clauses (i) and (ii), the
Common Stock for the account of other persons that the Company is obligated to
register pursuant to written contractual arrangements with such persons and that
can be sold without exceeding the Maximum Number of Shares; and (v) fourth, to
the extent that the Maximum Number of Shares have not been reached under the
foregoing clauses (i), (ii), and (iii), the Common Stock that other shareholders
desire to sell that can be sold without exceeding the Maximum Number of Shares.

2.1.5 Withdrawal. If a majority-in-interest of the Demanding Holders disapprove
of the terms of any underwriting or are not entitled to include all of their
Registrable Securities in any offering, such majority-in-interest of the
Demanding Holders may elect to withdraw from such offering by giving written
notice to the Company and the Underwriter or Underwriters of their request to
withdraw prior to the effectiveness of the Registration Statement filed with the
Commission with respect to such Demand Registration. If the majority-in-interest
of the Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, then such registration shall not count as a Demand Registration
provided for in this Section 2.1.

2.2 Piggy-Back Registration.

 

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2.2.1 Piggy-Back Rights. If at any time on or after the Release Date the Company
proposes to file a Registration Statement under the Securities Act with respect
to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into, equity securities, by the
Company for its own account or for shareholders of the Company for their account
(or by the Company and by shareholders of the Company including, without
limitation, pursuant to Section 2.1), other than a Registration Statement on
Form S-8 or S-4 or (i) filed in connection with any employee stock option or
other benefit plan, (ii) for an exchange offer or offering of securities solely
to the Company’s existing shareholders, or (iii) for a dividend reinvestment
plan, then the Company shall (x) give written notice of such proposed filing to
the holders of Registrable Securities as soon as practicable but in no event
less than twenty (20) days before the anticipated filing date, which notice
shall describe the amount and type of securities to be included in such
offering, the intended method(s) of distribution, and the name of the proposed
Managing Underwriter or Underwriters, if any, of the offering, and (y) offer to
the holders of Registrable Securities in such notice the opportunity to register
the sale of such number of shares of Registrable Securities as such holders may
request in writing within ten (10) days following receipt of such notice (a
“Piggy-Back Registration”). The Company shall cause such Registrable Securities
to be included in such registration and shall use its best efforts to cause the
managing Underwriter or Underwriters of a proposed underwritten offering to
permit the Registrable Securities requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Company and to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method(s) of distribution
thereof. All holders of Registrable Securities proposing to distribute their
securities through a Piggy-Back Registration that involves an Underwriter or
Underwriters shall enter into an underwriting agreement in customary form with
the Underwriter or Underwriters selected for such Piggy-Back Registration.

2.2.2 Reduction of Offering. If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an underwritten offering advises the
Company and the holders of Registrable Securities in writing that the dollar
amount or number of Common Stock which the Company desires to sell, taken
together with Common Stock or other securities, if any, as to which registration
has been demanded pursuant to written contractual arrangements with persons
other than the holders of Registrable Securities hereunder, the Registrable
Securities as to which registration has been requested under this Section 2.2,
and the Common Stock or other securities, if any, as to which registration has
been requested pursuant to the written contractual piggy-back registration
rights of other shareholders of the Company, exceeds the Maximum Number of
Shares, then the Company shall include in any such registration:

(a) If the registration is undertaken for the Company’s account: (A) first, the
Common Stock or other securities that the Company desires to sell that can be
sold without exceeding the Maximum Number of Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (i), the securities, if any, including the Registrable Securities, as to
which registration has been requested pursuant to written contractual piggy-back
registration rights of security holders (pro rata in accordance with the number
of securities which each such person has actually requested to be included in
such registration, regardless of the number of securities with respect to which
such persons have the right to request such inclusion) that can be sold without
exceeding the Maximum Number of Shares; and (ii) if the registration is a
“demand” registration undertaken at the demand of persons

 

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other than the holders of Registrable Securities pursuant to written contractual
arrangements with such persons, (w) first, the Common Stock for the account of
the demanding persons that can be sold without exceeding the Maximum Number of
Shares; (x) second, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clause (1), the Common Stock or other securities
that the Company desires to sell that can be sold without exceeding the Maximum
Number of Shares; and (y) third, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clauses (w) and (x), the Registrable
Securities as to which registration has been requested under this Section 2.2
(pro rata in accordance with the number of Registrable Securities held by each
such holder); and (z) fourth, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clauses (w), (x) and (y), the Common
Stock, if any, as to which registration has been requested pursuant to written
contractual piggy-back registration rights which other shareholders desire to
sell that can be sold without exceeding the Maximum Number of Shares.

2.2.3 Withdrawal. Any holder of Registrable Securities may elect to withdraw
such holder’s request for inclusion of Registrable Securities in any Piggy-Back
Registration by giving written notice to the Company of such request to withdraw
prior to the effectiveness of the Registration Statement. The Company may also
elect to withdraw a registration statement at any time prior to the
effectiveness of the Registration Statement. Notwithstanding any such
withdrawal, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as
provided in Section 3.3.

2.3 Registrations on Form S-3. The holders of Registrable Securities may at any
time and from time to time, request in writing that the Company register the
resale of any or all of such Registrable Securities on Form S-3 or any similar
short-form registration which may be available at such time (“Form S-3”);
provided, however, that the Company shall not be obligated to effect such
request through an underwritten offering. Upon receipt of such written request,
the Company will promptly give written notice of the proposed registration to
all other holders of Registrable Securities, and, as soon as practicable
thereafter, effect the registration of all or such portion of such holder’s or
holders’ Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other holder or holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration pursuant to this Section 2.3: (i) if Form S-3 is not available for
such offering; or (ii) if the holders of the Registrable Securities, together
with the holders of any other securities of the Company entitled to inclusion in
such registration, propose to sell Registrable Securities and such other
securities (if any) at any aggregate price to the public of less than $500,000.
Registrations effected pursuant to this Section 2.3 shall not be counted as
Demand Registrations effected pursuant to Section 2.1.

3. REGISTRATION PROCEDURES.

3.1 Filings; Information. Whenever the Company is required to effect the
registration of any Registrable Securities pursuant to Section 2, the Company
shall use its best efforts to effect the registration and sale of such
Registrable Securities in accordance with the intended method(s) of distribution
thereof as expeditiously as practicable, and in connection with any such
request:

3.1.1 Filing Registration Statement. The Company shall, as expeditiously as
possible and in any event within sixty (60) days after receipt of a request for
a Demand Registration pursuant to Section 2.1, prepare and file with the
Commission a Registration Statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of all Registrable Securities to be registered
thereunder in accordance with the intended method(s) of distribution thereof,
and shall use its best efforts to cause such Registration Statement to become
and remain effective for the period required by Section 3.1.3; provided,
however, that the Company shall have the right to defer any Demand Registration
for up to thirty (30) days, and any Piggy-Back Registration for such period as
may be applicable to deferment of any demand registration to which such
Piggy-Back Registration relates, in each case if the Company shall furnish to
the holders a certificate signed by the Chief Executive Officer of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, it would be materially detrimental to the Company and its shareholders
for such Registration Statement to be effected at such time; provided further,
however, that the Company shall not have the right to exercise the right set
forth in the immediately preceding proviso more than once in any 365-day period
in respect of a Demand Registration hereunder. In no event will the holder of
Registrable Securities be entitled to receive a net-cash settlement in lieu of
physical settlement in shares of Common Stock, regardless of whether the Common
Stock is registered pursuant to an effective registration statement.

 

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3.1.2 Copies. The Company shall, prior to filing a Registration Statement or
prospectus, or any amendment or supplement thereto, furnish without charge to
the holders of Registrable Securities included in such registration, and such
holders’ legal counsel, copies of such Registration Statement as proposed to be
filed, each amendment and supplement to such Registration Statement (in each
case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each
preliminary prospectus), and such other documents as the holders of Registrable
Securities included in such registration or legal counsel for any such holders
may request in order to facilitate the disposition of the Registrable Securities
owned by such holders.

3.1.3 Amendments and Supplements. The Company shall prepare and file with the
Commission such amendments, including post-effective amendments, and supplements
to such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective and in
compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such Registration Statement.

3.1.4 Notification. After the filing of a Registration Statement, the Company
shall promptly, and in no event more than two (2) business days after such
filing, notify the holders of Registrable Securities included in such
Registration Statement of such filing, and shall further notify such holders
promptly and confirm such advice in writing in all events within two
(2) business days of the occurrence of any of the following: (i) when such
Registration Statement becomes effective; (ii) when any post-effective amendment
to such Registration Statement becomes effective; (iii) the issuance or
threatened issuance by the Commission of any stop order (and the Company shall
take all actions required to prevent the entry of such stop order or to

 

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remove it if entered); and (iv) any request by the Commission for any amendment
or supplement to such Registration Statement or any prospectus relating thereto
or for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and promptly make
available to the holders of Registrable Securities included in such Registration
Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement
thereto, including documents incorporated by reference, the Company shall
furnish to the holders of Registrable Securities included in such Registration
Statement and to the legal counsel for any such holders, copies of all such
documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents
and comment thereon, and the Company shall not file any Registration Statement
or prospectus or amendment or supplement thereto, including documents
incorporated by reference, to which such holders or their legal counsel shall
reasonably object.

3.1.5 State Securities Laws Compliance. The Company shall use its best efforts
to (i) register or qualify the Registrable Securities covered by the
Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action necessary to cause such
Registrable Securities covered by the Registration Statement to be registered
with or approved by such other governmental authorities as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the holders of
Registrable Securities included in such Registration Statement to consummate the
disposition of such Registrable Securities in such jurisdictions; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph 3.1.5 or subject itself to taxation in any such
jurisdiction.

3.1.6 Agreements for Disposition. The Company shall enter into customary
agreements (including, if applicable, an underwriting agreement in customary
form) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities. The
representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the
extent applicable, shall also be made to and for the benefit of the holders of
Registrable Securities included in such registration statement. No holder of
Registrable Securities included in such registration statement shall be required
to make any representations or warranties in the underwriting agreement except
as required by law and, if applicable, with respect to such holder’s
organization, good standing, authority, title to Registrable Securities, lack of
conflict of such sale with such holder’s material agreements and organizational
documents, and with respect to written information relating to such holder that
such holder has furnished such information in writing expressly for inclusion in
such Registration Statement.

3.1.7 Cooperation. The principal executive officer of the Company, the principal
financial officer of the Company, the principal accounting officer of the
Company and

 

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all other officers and members of the management of the Company shall cooperate
fully in any offering of Registrable Securities hereunder, which cooperation
shall include, without limitation, the preparation of the Registration Statement
with respect to such offering and all other offering materials and related
documents, and participation in meetings with Underwriters, attorneys,
accountants and potential investors.

3.1.8 Records. The Company shall make available for inspection by the holders of
Registrable Securities included in such Registration Statement, any Underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information requested by any of them in connection with such
Registration Statement.

3.1.9 Opinions and Comfort Letters. The Company shall furnish to each holder of
Registrable Securities included in any Registration Statement a signed
counterpart, addressed to such holder, of (i) any opinion of counsel to the
Company delivered to any Underwriter and (ii) any comfort letter from the
Company’s independent public accountants delivered to any Underwriter. In the
event no legal opinion is delivered to any Underwriter, the Company shall
furnish to each holder of Registrable Securities included in such Registration
Statement, at any time that such holder elects to use a prospectus, an opinion
of counsel to the Company to the effect that the Registration Statement
containing such prospectus has been declared effective and that no stop order is
in effect.

3.1.10 Earnings Statement. The Company shall comply with all applicable rules
and regulations of the Commission and the Securities Act, and make available to
its shareholders, as soon as practicable, an earnings statement covering a
period of twelve (12) months, beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder.

3.1.11 Listing. The Company shall use its best efforts to cause all Registrable
Securities included in any registration to be listed on such exchanges or
otherwise designated for trading in the same manner as similar securities issued
by the Company are then listed or designated or, if no such similar securities
are then listed or designated, in a manner satisfactory to the holders of a
majority of the Registrable Securities included in such registration.

3.2 Obligation to Suspend Distribution. Upon receipt of any notice from the
Company of the happening of any event of the kind described in
Section 3.1.4(iv), or, in the case of a resale registration on Form S-3 pursuant
to Section 2.3 hereof, upon any suspension by the Company, pursuant to a written
insider trading compliance program adopted by the Company’s Board of Directors,
of the ability of all “insiders” covered by such program to transact in the
Company’s securities because of the existence of material non-public
information, each holder of Registrable Securities included in any registration
shall immediately discontinue disposition of such Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such holder receives the supplemented or amended prospectus contemplated
by

 

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Section 3.1.4(iv) or the restriction on the ability of “insiders” to transact in
the Company’s securities is removed, as applicable, and, if so directed by the
Company, each such holder will deliver to the Company all copies, other than
permanent file copies then in such holder’s possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice.

3.3 Registration Expenses. The Company shall bear all costs and expenses
incurred in connection with any Demand Registration pursuant to Section 2.1, any
Piggy-Back Registration pursuant to Section 2.2, and any registration on Form
S-3 effected pursuant to Section 2.3, and all expenses incurred in performing or
complying with its other obligations under this Agreement, whether or not the
Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities);
(iii) printing expenses; (iv) the Company’s internal expenses (including,
without limitation, all salaries and expenses of its officers and employees);
(v) the fees and expenses incurred in connection with the listing of the
Registrable Securities as required by Section 3.1.11; (vi) National Association
of Securities Dealers, Inc. fees; (vii) fees and disbursements of counsel for
the Company and fees and expenses for independent certified public accountants
retained by the Company (including the expenses or costs associated with the
delivery of any opinions or comfort letters requested pursuant to
Section 3.1.9); (viii) the fees and expenses of any special experts retained by
the Company in connection with such registration and (ix) the fees and expenses
of one legal counsel selected by the holders of a majority-in-interest of the
Registrable Securities included in such registration. The Company shall have no
obligation to pay any underwriting discounts or selling commissions attributable
to the Registrable Securities being sold by the holders thereof, which
underwriting discounts or selling commissions shall be borne by such holders.
Additionally, in an underwritten offering, all selling shareholders and the
Company shall bear the expenses of the underwriter pro rata in proportion to the
respective amount of shares each is selling in such offering.

3.4 Information. The holders of Registrable Securities shall provide such
information as may reasonably be requested by the Company, or the managing
Underwriter, if any, in connection with the preparation of any Registration
Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company’s obligation to comply with federal
and applicable state securities laws.

4. INDEMNIFICATION AND CONTRIBUTION.

4.1 Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Investor and each other holder of Registrable Securities, and each
of their respective officers, employees, affiliates, directors, partners,
members, attorneys and agents, and each person, if any, who controls an Investor
and each other holder of Registrable Securities (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an
“Investor Indemnified Party”), from and against any expenses, losses, judgments,
claims, damages or liabilities, whether joint or several, arising out of or
based upon any untrue statement (or allegedly untrue statement) of a material
fact contained in any Registration Statement under which the sale of such
Registrable Securities was registered under the Securities

 

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Act, any preliminary prospectus, final prospectus or summary prospectus
contained in the Registration Statement, or any amendment or supplement to such
Registration Statement, or arising out of or based upon any omission (or alleged
omission) to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or any violation by the Company of
the Securities Act or any rule or regulation promulgated thereunder applicable
to the Company and relating to action or inaction required of the Company in
connection with any such registration; and the Company shall promptly reimburse
the Investor Indemnified Party for any legal and any other expenses reasonably
incurred by such Investor Indemnified Party in connection with investigating and
defending any such expense, loss, judgment, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such expense, loss, claim, damage or liability arises out of or
is based upon any untrue statement or allegedly untrue statement or omission or
alleged omission made in such Registration Statement, preliminary prospectus,
final prospectus, or summary prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in
writing, by such selling holder expressly for use therein. The Company also
shall indemnify any Underwriter of the Registrable Securities, their officers,
affiliates, directors, partners, members and agents and each person who controls
such Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.

4.2 Indemnification by Holders of Registrable Securities. Each selling holder of
Registrable Securities will, in the event that any registration is being
effected under the Securities Act pursuant to this Agreement of any Registrable
Securities held by such selling holder, indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any), and each other
person, if any, who controls such selling holder or such underwriter within the
meaning of the Securities Act, against any losses, claims, judgments, damages or
liabilities, whether joint or several, insofar as such losses, claims,
judgments, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or allegedly untrue statement of a
material fact contained in any Registration Statement under which the sale of
such Registrable Securities was registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained in the
Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or the alleged
omission to state a material fact required to be stated therein or necessary to
make the statement therein not misleading, if the statement or omission was made
in reliance upon and in conformity with information furnished in writing to the
Company by such selling holder expressly for use therein, and shall reimburse
the Company, its directors and officers, and each such controlling person for
any legal or other expenses reasonably incurred by any of them in connection
with investigation or defending any such loss, claim, damage, liability or
action. Each selling holder’s indemnification obligations hereunder shall be
several and not joint and shall be limited to the amount of any net proceeds
actually received by such selling holder.

4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any person
of any notice of any loss, claim, damage or liability or any action in respect
of which indemnity may be sought pursuant to Section 4.1 or 4.2, such person
(the “Indemnified Party”) shall, if a claim in respect thereof is to be made
against any other person for indemnification hereunder, notify such other person
(the “Indemnifying Party”) in writing of the loss, claim, judgment,

 

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damage, liability or action; provided, however, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying Party may have to
such Indemnified Party hereunder, except and solely to the extent the
Indemnifying Party is actually prejudiced by such failure. If the Indemnified
Party is seeking indemnification with respect to any claim or action brought
against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume control of the defense thereof
with counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control of
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that in any action in
which both the Indemnified Party and the Indemnifying Party are named as
defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all
liability arising out of such claim or proceeding.

4.4 Contribution.

4.4.1 If the indemnification provided for in the foregoing Sections 4.1, 4.2 and
4.3 is unavailable to any Indemnified Party in respect of any loss, claim,
damage, liability or action referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage, liability or action in such proportion as is appropriate to
reflect the relative fault of the Indemnified Parties and the Indemnifying
Parties in connection with the actions or omissions which resulted in such loss,
claim, damage, liability or action, as well as any other relevant equitable
considerations. The relative fault of any Indemnified Party and any Indemnifying
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
Indemnified Party or such Indemnifying Party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

4.4.2 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding Section 4.4.1.
The amount paid or payable by an Indemnified Party as a result of any loss,
claim, damage, liability or action referred to in the immediately preceding

 

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paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no holder of Registrable
Securities shall be required to contribute any amount in excess of the dollar
amount of the net proceeds (after payment of any underwriting fees, discounts,
commissions or taxes) actually received by such holder from the sale of
Registrable Securities which gave rise to such contribution obligation. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

5. UNDERWRITING AND DISTRIBUTION.

5.1 Rule 144. The Company covenants that it shall file all reports required to
be filed by it under the Securities Act and the Exchange Act and shall take such
further action as the holders of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, as
such Rules may be amended from time to time, or any similar Rule or regulation
hereafter adopted by the Commission.

6. MISCELLANEOUS.

6.1 Other Registration Rights. The Company represents and warrants that no
person, other than a holder of the Registrable Securities, I-Bankers Securities,
Inc., Newbridge Securities Corp. and Westminster Securities Corp. or its
designees has any right to require the Company to register any shares of the
Company’s capital stock for sale or to include shares of the Company’s capital
stock in any registration filed by the Company for the sale of shares of capital
stock for its own account or for the account of any other person.

6.2 Assignment; No Third Party Beneficiaries. This Agreement and the rights,
duties and obligations of the Company hereunder may not be assigned or delegated
by the Company in whole or in part. This Agreement and the rights, duties and
obligations of the holders of Registrable Securities hereunder may be freely
assigned or delegated by such holder of Registrable Securities in conjunction
with and to the extent of any transfer of Registrable Securities by any such
holder. This Agreement and the provisions hereof shall be binding upon and shall
inure to the benefit of each of the parties and their respective successors and
the permitted assigns of the Investor or holder of Registrable Securities or of
any assignee of the Investor or holder of Registrable Securities. This Agreement
is not intended to confer any rights or benefits on any persons that are not
party hereto other than as expressly set forth in Article 4 and this
Section 6.2.

6.3 Notices. All notices, demands, requests, consents, approvals or other
communications (collectively, “Notices”) required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be personally served, delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on the
date of

 

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service or transmission if personally served or transmitted by telegram, telex
or facsimile; provided, that if such service or transmission is not on a
business day or is after normal business hours, then such notice shall be deemed
given on the next business day. Notice otherwise sent as provided herein shall
be deemed given on the next business day following timely delivery of such
notice to a reputable air courier service with an order for next-day delivery.

To the Company:

Middle Kingdom Alliance Corporation

333 Sandy Springs Circle

Suite 223

Atlanta, GA 30328

Attn: David A. Rapaport, Esq.

Tel: (404) 257-9150

Fax: (404) 257-9125

with a copy to:

Cozen O’Connor

The Army & Navy Club Building

1627 I Street, NW, Suite 1100

Washington, DC 20006

Attn: Ralph V. De Martino

Tel: (202) 912-4800

Fax:(866) 741-8182

To an Investor, to:

High Capital Funding LLC

333 Sandy Springs Circle

Ste 230

Atlanta, GA 30328

David A. Rapaport

333 Sandy Springs Circle

Ste 230

Atlanta, GA 30328

Fred A. Brasch

333 Sandy Springs Circle

Ste 230

Atlanta, GA 30328

Bernard Jerome Tanenbaum III Family Trust

333 Sandy Springs Circle

Ste 223

Atlanta, GA 30328

 

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Gedeon International Limited

c/o Stonehage SA

Puits Godet 12

P.O. Box 126

2005 Neuchatel

Switzerland

Attention: Michael Marks

Supreme Ocean Development Limited

c/o ATC Trustees (BVI) Limited

2nd Floor, Abbott Building

P.O. Box 933

Road Town

Tortola

British Virgin Islands

Attention: Allan Shu Cheuk Lam

MTP Holdings Ltd.

Room 804, Hong Kong Plaza

283 Huaihai Zhong Road

Shanghai 200021, P.R. China

Allan Shu Cheuk Lam

82-9133 Bayview Avenue

Richmond Hill

Ontario L4B 4V6

Canada

Anthony Ng

Cathay Forest Products Corp.

5650 Yonge St., Ste. 1500

Toronto, Ontario

Canada M2M 4G3

6.4 Severability. This Agreement shall be deemed severable, and the invalidity
or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision
hereof. Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto intend that there shall be added as a part of this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.

6.5 Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.

 

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6.6 Entire Agreement. This Agreement (including all agreements entered into
pursuant hereto and all certificates and instruments delivered pursuant hereto
and thereto) constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the
parties, whether oral or written.

6.7 Modifications and Amendments. No amendment, modification or termination of
this Agreement shall be binding upon any party unless executed in writing by
such party.

6.8 Titles and Headings. Titles and headings of sections of this Agreement are
for convenience only and shall not affect the construction of any provision of
this Agreement.

6.9 Waivers and Extensions. Any party to this Agreement may waive any right,
breach or default which such party has the right to waive, provided that such
waiver will not be effective against the waiving party unless it is in writing,
is signed by such party, and specifically refers to this Agreement. Waivers may
be made in advance or after the right waived has arisen or the breach or default
waived has occurred. Any waiver may be conditional. No waiver of any breach of
any agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.

6.10 Remedies.

6.10.1 Specific Performance. Each of the parties acknowledges and agrees that
the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other parties shall be entitled to an injunction or injunctions (without the
necessity of posting a bond or other security) to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of the United
States or any state or other foreign court or governmental body having
jurisdiction over the parties and the matter, in addition to any other remedy to
which they may be entitled, at law or in equity.

6.10.2 Repurchase Obligation. In the event that the Company breaches its
obligations under Section 2 or Section 3 of this Agreement, the Investors shall
have the right to cause the Company to purchase the Registrable Securities that
were the subject of such breach (the “Repurchase Right”), as follows:

(a) In the event an Investor wishes to exercise its Repurchase Right, the
Investor shall notify the Company in writing of the alleged breach of Section 2
or Section 3 and the Registrable Securities that were the subject of such
breach.

(b) In the event that the Company does not remedy or cure such breach within
thirty (30) days of the receipt of the written notice set out in
Section 6.10.2(a) above, then the Company shall be irrevocably obligated to
purchase from the Investor the Registrable Securities that were the subject of
such breach. The closing of such repurchase shall take place within sixty (60)
days of such notice.

 

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(c) The purchase price for the Registrable Securities to be repurchased pursuant
to the exercise of this Repurchase Right shall be equal to the average of the
closing prices for the applicable Registrable Securities for the last 20 trading
days prior to the day that the closing of the repurchase of such Registrable
Securities is to occur hereunder.

(d) If the Company is unable to purchase all Registrable Securities required to
be purchased hereunder due to legal or contractual restrictions (as evidenced by
the opinion letter of outside counsel to the Company acceptable to the Investors
which shall attach the relevant law, regulation and/or contract), Registrable
Securities shall be repurchased (on a pro rata basis from the holders of the
Registrable Securities based upon the Common Stock equivalents) from time to
time within thirty (30) days after such legal or contractual restriction is
lifted, to the extent the Company is legally permitted to do so, and the
obligations of the Company under this Section 6.10.2 will be a continuing
obligation until the Company’s repurchase of all such Registrable Securities.

(e) On each date (including any subsequent purchase closing date if multiple
purchases result from the application of Section 6.10.2(d)) that a purchase is
to occur hereunder, the closing shall occur at the Company’s principal office.
At the closing, to the extent applicable, the Investor shall deliver the
Registrable Securities being sold, duly endorsed in blank, accompanied by such
supporting documents as may be necessary to pass to the Company good title to
the Registrable Securities, free and clear of all liens (other than restrictions
under applicable securities laws). In consideration therefor, the Company shall
deliver to the Investor immediately available funds equal to the aggregate
purchase price as determined hereunder. If the Company fails to purchase the
Registrable Securities on any closing date, it shall pay interest to each
Investor for the period commencing on the date of such closing and ending on the
date such purchase is made equal to the lesser of the US dollar prime rate by
Citibank N.A. for such period (broken down to shorter periods if relevant) plus
four percent (4%) or the maximum amount permitted under applicable law.

(f) At any time prior to the sale of any Registrable Securities under this
Section 6.10.2, the Investor may withdraw its notice, without impairing its
right to exercise its rights pursuant to this Section 6.10.2 at a later date.

6.11 Remedies Cumulative. In the event that the Company fails to observe or
perform any covenant or agreement to be observed or performed under this
Agreement, the Investor or any other holder of Registrable Securities may
proceed to protect and enforce its rights by suit in equity or action at law,
whether for specific performance of any term contained in this Agreement or for
an injunction against the breach of any such term or in aid of the exercise of
any power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to
post a bond. None of the rights, powers or remedies conferred under this
Agreement shall be mutually exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.

6.12 Governing Law. This Agreement shall be governed by, interpreted under, and
construed in accordance with the internal laws of the State of Delaware
applicable to agreements

 

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made and to be performed within the State of Delaware, without giving effect to
any choice-of-law provisions thereof that would compel the application of the
substantive laws of any other jurisdiction.

6.13 Waiver of Trial by Jury. Each party hereby irrevocably and unconditionally
waives the right to a trial by jury in any action, suit, counterclaim or other
proceeding (whether based on contract, tort or otherwise) arising out of,
connected with or relating to this Agreement, the transactions contemplated
hereby, or the actions of the Investor in the negotiation, administration,
performance or enforcement hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be executed and delivered by their duly authorized representatives as of the
date first written above.

 

  MIDDLE KINGDOM ALLIANCE CORP.

By:

 

/s/ Bernard J. Tanenbaum III

  Bernard J. Tanenbaum III, CEO   INVESTORS  

/s/ David A. Rapaport

  High Capital Funding LLC   By:  

/s/ David A. Rapaport

  David A. Rapaport  

/s/ Fred A. Brasch

  Fred A. Brasch  

/s/ Bernard J. Tanenbaum III

  Bernard Jerome Tanenbaum III Family Trust   By: Bernard J. Tanenbaum III  

/s/ [Illegible]

  Gedeon International Limited   By:  

/s/ Allan Shu Cheuk Lam

  Supreme Ocean Development Limited   By: Allan Shu Cheuk Lam  

/s/ Alex Chun Yao

  MTP Holdings Ltd.   By:  

/s/ Allan Shu Cheuk Lam

  Allan Shu Cheuk Lam  

/s/ Anthony Ng

  Anthony Ng

 

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