Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of October 31, 2008, by and among Lihua International. Inc., a Delaware
corporation (the “Company”) and each of the several purchasers signatory hereto
(each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).

This Agreement is being entered into pursuant to the Securities Purchase
Agreement, dated as of the date hereof, between the Company and each Purchaser
(the “Purchase Agreement”).

The Company and each Purchaser hereby agrees as follows:

1.  Definitions
 
Capitalized terms used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

“Advice” shall have the meaning set forth in Section 6(d).

“Broadband Warrants” means the warrants to purchase up to 250,000 shares of
Common Stock in the aggregate issued by the Company to Broadband Capital
Management LLC, as placement agent, and/or its employees.

“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means the Common Stock, $0.0001 par value per share, of the
Company and any other Common Stock into which such stock may hereafter be
changed.

“Conversion Shares” means the shares of Common Stock issuable upon conversion of
outstanding shares of Preferred Shares.

“Demand Notice” shall have the meaning set forth in Section 2A(a).

“Effectiveness Date” means, with respect to the Initial Registration Statement
required to be filed hereunder, the 150th calendar day following the date hereof
(or, in the event the Company receives a “full review” of its Initial
Registration Statement by the Commission, the 180th calendar day following the
date hereof) and with respect to any additional Registration Statements which
may be required pursuant to Section 3(c) or 2A, the 60th calendar day following
the date on which an additional Registration Statement is required to be filed
hereunder; provided, however, that in the event the Company is notified by the
Commission that one or more of the above Registration Statements will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the fifth Trading
Day following the date on which the Company is so notified if such date precedes
the dates otherwise required above.

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

“Event” shall have the meaning set forth in Section 2(b).

“Event Date” shall have the meaning set forth in Section 2(b).

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“Filing Date” means, with respect to the Initial Registration Statement required
hereunder, the 45th calendar day following the date hereof and, with respect to
any additional Registration Statements which may be required pursuant to Section
3(c), the earliest practical date on which the Company is permitted by SEC
Guidance to file such additional Registration Statement related to the
Registrable Securities.

“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.

“Indemnified Party” shall have the meaning set forth in Section 5(c).

“Indemnifying Party” shall have the meaning set forth in Section 5(c).

“Initial Registration Statement” means the initial Registration Statement
covering the Registrable Securities filed pursuant to Section 2(a) of this
Agreement.

“Initiating Purchasers” shall have the meaning set forth in Section 2A(a).

“Original Shareholders” means Michael Rapp, Philip Wagenheim. Clifford Chapman,
Penumbra Worldwide LTD., Gerald Scott Klayman, Charles Allen, Ari Raskas, Jeff
Appel and Corby Hocker.
 
“Listing Penalty and Escrow Securities” shall have the meaning set forth in
Section 2A(a).

“Losses” shall have the meaning set forth in Section 5(a).

“National Stock Exchange” means, the Nasdaq Capital Market, the Nasdaq Global
Market, the Nasdaq Global Select Market, the American Stock Exchange or the New
York Stock Exchange.

“Penumbra Warrants” means the warrants to purchase 250,000shares of Common Stock
issued by the Company to Penumbra Worldwide Ltd. and/or its employees.

"Person" means an individual or a corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.

“Plan of Distribution” shall have the meaning set forth in Section 2(a).

“Preferred Shares” means shares of the Company’s Series A Convertible Preferred
Stock, par value $0.0001 per share, purchased by the Purchasers pursuant to the
Purchase Agreement.

"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated by the Commission pursuant to
the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

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“Registrable Securities” means (a) all of the Conversion Shares, (b) all Warrant
Shares, (c) any additional shares of Common Stock issuable in connection with
any anti-dilution provisions in the Series A Certificate of Designation or the
Warrants, (d) the shares of Common Stock underlying the Broadband Warrants; (e)
the shares of Common Stock underlying the Penumbra Warrants; (f) the shares of
Common Stock owned by the Original Shareholders; (g) any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing; and (h), in the event that a
Demand Notice is delivered to the Company to register the Listing Penalty and
Escrow Securities disbursed to the purchasers, such Listing Penalty and Escrow
Securities shall be considered Registrable Securities.

“Registration Statement” means any registration statement required to be filed
hereunder pursuant to Section 2(a) and any additional registration statements
contemplated by Section 3(c), including (in each case) the Prospectus,
amendments and supplements to any such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in
any such registration statement.

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

“SEC Guidance” means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the Commission staff, including the SEC’s
Manual of Publicly Available Telephone Interpretations D.29, and (ii) the
Securities Act.
 
“Trading Day” means (a) a day on which the Common Stock is traded on a National
Stock Exchange, or (b) if the Common Stock is not traded on a National Stock
Exchange, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices); provided,
however , that in the event that the Common Stock is not listed or quoted as set
forth in (a) or (b) hereof, then Trading Day shall mean any day except Saturday,
Sunday and any day which shall be a legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.

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2.  Shelf Registration

(a)  On or prior to each Filing Date, the Company shall prepare and file with
the Commission a Registration Statement covering the resale of all of the
Registrable Securities that are not then registered on an effective Registration
Statement for an offering to be made on a continuous basis. Each Registration
Statement filed hereunder shall be on Form S-3 (except if the Company is not
then eligible to register for resale the Registrable Securities on Form S-3, in
which case such registration shall be on another appropriate form in accordance
herewith) and shall contain (unless otherwise directed by at least an 85%
majority in interest of the Holders) substantially the “Plan of Distribution”
attached hereto as Annex A. In the event that the Commission does not permit the
Company to register in any Registration Statement all of the Registrable
Securities pursuant to Rule 415, the Company shall amend such Registration
Statement to register such maximum portion as permitted by SEC Guidance
(provided that the Company shall use diligent efforts to advocate with the
Commission for the registration of all of the Registrable Securities in
accordance with the SEC Guidance, including without limitation, the Manual of
Publicly Available Telephone Interpretations D.29) that are not then registered
on an effective Registration Statement. Subject to the terms of this Agreement,
the Company shall use its best efforts to cause a Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the applicable Effectiveness Date, and
shall use its best efforts to keep such Registration Statement continuously
effective under the Securities Act until all Registrable Securities covered by
such Registration Statement have been sold, or may be sold without volume or
manner-of-sale restrictions pursuant to Rule 144 and, without the requirement
for the Company to be in compliance with the current public information
requirement under Rule 144, as determined by the counsel to the Company pursuant
to a written opinion letter to such effect, addressed and acceptable to the
Transfer Agent and the affected Holders (the “Effectiveness Period”). The
Company shall submit a request for acceleration of effectiveness of a
Registration Statement as of 5:00 p.m. New York City time on or before the fifth
Trading Day following the Commission’s notice to the Company that the Commission
will not be reviewing the Registration Statement. The Company shall immediately
notify the Holders by e-mail of the effectiveness of a Registration Statement on
the same Trading Day that the Company telephonically confirms effectiveness with
the Commission. The Company shall, by 9:30 a.m. New York City time on the
Trading Day after the effective date of such Registration Statement, file a
final Prospectus with the Commission as required by Rule 424. Failure to so
notify the Holders within one (1) Trading Day of such notification of
effectiveness or failure to file a final Prospectus as foresaid shall be deemed
an Event under Section 2(b). Notwithstanding any other provision of this
Agreement and subject to the payment of liquidated damages pursuant to Section
2(b)(iii), if any SEC Guidance sets forth a limitation on the number of
Registrable Securities permitted to be registered on a particular Registration
Statement (and notwithstanding that the Company used diligent efforts to
advocate with the Commission for the registration of all or a greater portion of
Registrable Securities), unless otherwise directed in writing by a Holder as to
its Registrable Securities, the number of Registrable Securities to be
registered on such Registration Statement will be reduced in the following order
(1) by the total number of shares underlying the Broadband Warrants and the
Penumbra Warrants, on a pro-rata basis, (2) by the shares of Common Stock owned
by the Original Shareholders, on a pro-rata basis, and (3) pro-rata among all
other Holders, and unless otherwise directed in writing by a Holder as to its
Registrable Securities, the number of Registrable Securities to be registered on
such Registration Statement will first be reduced by Registrable Securities
represented by the Warrant Shares (applied, in the case that some Warrant Shares
may already be registered, to the Holders on a pro rata basis based on the total
number of unregistered Warrant Shares held by such Holders), and second by
Registrable Securities represented by the Conversion Shares (applied, in the
case that some Conversion Shares may already be registered, to the Holders on a
pro rata basis based on the total number of unregistered Shares held by such
Holders).

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(b)  If: (i) the Initial Registration Statement is not filed on or prior to its
Filing Date (or if the Company files the Initial Registration Statement without
affording the Holders the opportunity to review and comment on the same as
required by Section 3(a) herein, the Company shall be deemed to have not
satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration of a Registration Statement in accordance
with Rule 461 promulgated by the Commission pursuant to the Securities Act,
within five Trading Days of the date that the Company is notified (orally or in
writing, whichever is earlier) by the Commission that such Registration
Statement will not be “reviewed” or will not be subject to further review, or
(iii) prior to the Effectiveness Date of a Registration Statement, the Company
fails to file a pre-effective amendment and otherwise respond in writing to
comments made by the Commission in respect of such Registration Statement within
15 calendar days after the receipt of comments by or notice from the Commission
that such amendment is required in order for such Registration Statement to be
declared effective, or (iv) the Registration Statement registering for resale
all of the Registrable Securities is not declared effective by the Commission by
the Effectiveness Date of the Initial Registration Statement, or (v) after the
effective date of a Registration Statement, such Registration Statement ceases
for any reason to remain continuously effective as to all Registrable Securities
included in such Registration Statement, or the Holders are otherwise not
permitted to utilize the Prospectus therein to resell such Registrable
Securities (subject to the periods set forth in Section 3(k)), for more than 15
consecutive calendar days or more than an aggregate of 20 calendar days (which
need not be consecutive calendar days) during any 12-month period, or (vi) the
Company shall fail for any reason to satisfy the current public information
requirement under Rule 144 as to the applicable Registrable Securities, or (vii)
if, after twelve months from the date hereof or such earlier time that the
Company’s Common Stock is quoted or listed and trading on a National Stock
Exchange, the Common Stock fails to be quoted or is delisted from a National
Stock Exchange for any reason for more than three (3) Trading Days in the
aggregate (any such failure or breach being referred to as an “Event”, and for
purposes of clauses (i), (iv), (vi) and (vii), the date on which such Event
occurs, and for purpose of clause (ii) the date on which such fifth Trading Day
is exceeded, and for the purpose of clause (iii) the date which such 15 calendar
day period is exceeded, and for purpose of clause (v) the date on which such 15
or 20 calendar day period, as applicable, is exceeded being referred to as
“Event Date”), then, in addition to any other rights the Holders may have
hereunder or under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay
to each Holder; provided that such Holder (or any successor or assign) is still
a beneficial owner of the Preferred Shares, Conversion Shares, Warrants, or
Warrant Shares, an amount in cash, as partial liquidated damages and not as a
penalty, equal to 1.0% of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for any unregistered Registrable Securities
then held by such Holder. Liquidated damages payable by the Company pursuant to
this Section 2 shall be payable on an Event Date and the first (1st) Trading Day
of each thirty (30) day period following an Event Date, provided, however, that
such liquidated damages shall not exceed 10% of the aggregate purchase price
paid by the Holders. The parties agree that the Company shall not be liable for
liquidated damages under this Agreement with respect to any Registrable
Securities that the Company was not permitted to include on such Registration
Statement due solely to the Commission’s application of Rule 415. If the Company
fails to pay any partial liquidated damages pursuant to this Section in full
within seven days after the date payable, the Company will pay interest thereon
at a rate of 18% per annum (or such lesser maximum amount that is permitted to
be paid by applicable law) to the Holder, accruing daily from the date such
partial liquidated damages are due until such amounts, plus all such interest
thereon, are paid in full. The partial liquidated damages pursuant to the terms
hereof shall apply on a daily pro rata basis for any portion of a month prior to
the cure of an Event.
 
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2A. Demand Registrations.

(a) At any time following the date on which all Registrable Securities have been
registered for resale pursuant to Section 2 hereof, a Purchaser or Purchasers
owning, in the aggregate, at least a 50% majority in interest (the “Initiating
Purchasers”) of the Listing Penalty Shares (as defined in the Securities
Purchase Agreement) or the Escrow Shares (as defined in the Securities Escrow
Agreement) (collectively, the “Listing Penalty and Escrow Securities”) may
request that the Company file a Registration Statement providing for the resale
of all Listing Penalty and Escrow Securities then held by the Initiating
Purchasers by giving written notice to the Company (the “Demand Notice”). The
Demand Notice shall describe the number of Listing Penalty and Escrow Securities
intended to be disposed of and the intended method of disposition. The Company
shall then prepare and file with the Commission a “resale” Registration
Statement providing for the resale of all Listing Penalty and Escrow Securities
included in the Demand Notice for an offering to be made on a continuous basis
pursuant to Rule 415. Each such Registration Statement shall cover to the extent
allowable under the Securities Act and the rules promulgated thereunder
(including Rules 415 and 416), such indeterminate number of additional shares of
Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Listing Penalty and Escrow Securities. The
Company shall (i) not permit any securities other than the Listing Penalty and
Escrow Securities and any other unregistered Registrable Securities to be
included in any such Registration Statement, provided that such securities shall
be registered in accordance with the cutback provisions in Section 2(a) above;
and (ii) use its reasonable best efforts to cause any such Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event prior to the applicable
Effectiveness Date, and to keep any such Registration Statement continuously
effective under the Securities Act until such date as is the earlier of: (x) the
date when all Registrable Securities covered by such Registration Statement have
been sold; or (y) the date on which the Listing Penalty and Escrow Securities
may be sold without any restriction pursuant to Rule 144 as determined by the
counsel to the Company pursuant to a written opinion letter, addressed to the
Company’s transfer agent to such effect.
 
(b) In the event that the Company is unable to register for resale under Rule
415 of Regulation C under the Securities Act all of the Listing Penalty and
Escrow Securities on any of the Registration Statements that it has agreed to
file pursuant to the first sentence of Section 2A(a) due to limits imposed by
the Commission’s interpretation of Rule 415 of Regulation C under the Securities
Act, the Company will file a Registration Statement under the Securities Act
with the Commission covering the resale by the Purchasers of such lesser amount
of the Listing Penalty and Escrow Securities as the Company is able to register
pursuant to the Commission’s interpretation of Rule 415 of Regulation C under
the Securities Act and use its reasonable best efforts to have such Registration
Statement become effective as promptly as possible, and, when permitted to do so
by the Commission, to file subsequent registration statement(s) under the
Securities Act with the Commission covering the resale of any Listing Penalty
and Escrow Securities that were omitted from its prior Registration Statements
filed with the Commission pursuant to this Section 2A(b) and use its reasonable
best efforts to have such registration declared effective as promptly as
possible. In furtherance of the Company’s obligations set forth in the preceding
sentence, the parties hereby agree that in the event that any Purchaser shall
deliver to the Company a written notice at any time after the later of: (x) the
date which is six months after the effectiveness date of the most recent
registration statement filed pursuant to Section 2A hereof; or (y) the date on
which all Listing Penalty and Escrow Securities registered on all of the prior
Registration Statements filed pursuant to Section 2A hereof are sold, that the
Company shall file, within 30 days following the date receipt of such written
notice, an additional Registration Statement registering any Listing Penalty and
Escrow Securities that were the subject of the applicable Demand Notice that
were omitted from such Registration Statement.

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3.  Registration Procedures.

In connection with the Company’s registration obligations hereunder, the Company
shall:

(a)  Not less than three (3) Trading Days prior to the filing of each
Registration Statement and not less than one (1) Trading Day prior to the filing
of any related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall (i) furnish to each Holder copies of all such
documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of such
Holders, and (ii) cause its officers and directors, counsel and independent
registered public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to each Holder, to
conduct a reasonable investigation within the meaning of the Securities Act. The
Company shall not file a Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities shall reasonably object in good faith, provided that, the
Company is notified of such objection in writing no later than three (3) Trading
Days after the Holders have been so furnished copies of a Registration Statement
or one (1) Trading Day after the Holders have been so furnished copies of any
related Prospectus or amendments or supplements thereto.
 
(b)  (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities, (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and, as so supplemented or amended, to be filed
pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any
comments received from the Commission with respect to a Registration Statement
or any amendment thereto and provide as promptly as reasonably possible to the
Holders true and complete copies of all correspondence from and to the
Commission relating to a Registration Statement (provided that, the Company may
excise any information contained therein which would constitute material
non-public information as to any Holder which has not executed a confidentiality
agreement with the Company), and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
during the applicable period in accordance (subject to the terms of this
Agreement) with the intended methods of disposition by the Holders thereof set
forth in such Registration Statement as so amended or in such Prospectus as so
supplemented.

(c)  If the number of Registrable Securities at any time exceeds 100% of the
number of shares of Common Stock then registered in a Registration Statement,
then the Company shall file as soon as reasonably practicable, but in any case
prior to the applicable Filing Date, an additional Registration Statement
covering the resale by the Holders of not less than the number of such
Registrable Securities which are not then registered. If at any time prior to
the filing of an additional Registration Statement a Demand Notice is delivered
to the Company to file the Listing Penalty and Escrow Securities, then such
additional Registration Statement shall also include the Listing Penalty and
Escrow Securities.
 
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(d)  Notify the Holders of Registrable Securities to be sold (which notice
shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes
have been made) as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than one Trading Day prior to such filing) and (if requested by
any such Person) confirm such notice in writing no later than one Trading Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed,
(B) when the Commission notifies the Company whether there will be a “review” of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement, and (C) with respect to a Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information, (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose, (v) of the occurrence of any event or passage of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any 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, in light of the circumstances under which they were
made, not misleading and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may
be material and that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided that, any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further,
that notwithstanding each Holder’s agreement to keep such information
confidential, each such Holder makes no acknowledgement that any such
information is material, non-public information.
 
(e)  Use its best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order stopping or suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
 
(f)  Furnish to each Holder, without charge, at least one conformed copy of each
such Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that any such item which is available
on the EDGAR system need not be furnished in physical form.
 
(g)  Subject to the terms of this Agreement, the Company hereby consents to the
use of such Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto,
except after the giving of any notice pursuant to Section 3(d).
 
(h)   The Company shall cooperate with any broker-dealer through which a Holder
proposes to resell its Registrable Securities in effecting a filing with the
FINRA Corporate Financing Department pursuant to NASD Rule 2710, as requested by
any such Holder, and the Company shall pay the filing fee required by such
filing within two (2) Trading Days of request therefor.

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(i)  Prior to any resale of Registrable Securities by a Holder, the Company
shall use its commercially reasonable efforts to register or qualify or
cooperate with the selling Holders in connection with the registration or
qualification (or exemption from the registration or qualification) of such
Registrable Securities for the resale by the Holder under the securities or Blue
Sky laws of such jurisdictions within the United States as any Holder reasonably
requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each Registration
Statement; provided, that, the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified,
subject the Company to any material tax in any such jurisdiction where it is not
then so subject or file a general consent to service of process in any such
jurisdiction.

(j)  If requested by a Holder, cooperate with such Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holder may request.
 
(k)  Upon the occurrence of any event contemplated by Section 3(d), as promptly
as reasonably possible under the circumstances taking into account the Company’s
good faith assessment of any adverse consequences to the Company and its
stockholders of the premature disclosure of such event, prepare a supplement or
amendment, including a post-effective amendment, to a Registration Statement or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with clauses
(iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus. The Company will use its best efforts to
ensure that the use of the Prospectus may be resumed as promptly as is
practicable. The Company shall be entitled to exercise its right under this
Section 3(k) to suspend the availability of a Registration Statement and
Prospectus, for a period not to exceed 30 calendar days (which need not be
consecutive days) in any 12 month period.
 
(l)  Comply with all applicable rules and regulations of the Commission.
 
(m)  The Company may require each selling Holder to furnish to the Company a
certified statement as to the number of shares of Common Stock beneficially
owned by such Holder and, if required by the Commission, the natural persons
thereof that have voting and dispositive control over the shares. In the event
of the failure by such Holder to comply with the Company’s request within
fifteen (15) days from the date of such request, the Company shall be permitted
to exclude such Holder from a Registration Statement, without being subject to
the payment of liquidated damages to such Holder. At such time that such Holder
complies with the Company’s request the Company shall use its best efforts to
include such Holder on the Registration Statement.

(n)  Use its best efforts to cause all Registrable Securities relating to the
Registration Statement to continue to be listed or quoted on a National Exchange
or to be listed or quoted on any other national securities exchange, quotation
system or market, if any, on which similar securities issued by the Company are
then listed or traded.

(o)  Within two (2) Trading Days after a Registration Statement which covers the
Registrable Securities is ordered effective by the Commission, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Holders whose
Registrable Securities are included in such Registration Statement) confirmation
that such Registration Statement has been declared effective by the Commission
in the form attached hereto as Exhibit B.

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4.  Registration Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses of the Company’s counsel and independent
registered public accountants) (A) with respect to filings made with the
Commission, (B) with respect to filings required to be made with any National
Stock Exchange on which the Common Stock is then listed for trading, (C) in
compliance with applicable state securities or Blue Sky laws reasonably agreed
to by the Company in writing (including, without limitation, fees and
disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities) and (D) with respect
to any filing that may be required to be made by any broker through which a
Holder intends to make sales of Registrable Securities with the FINRA pursuant
to NASD Rule 2710, so long as the broker is receiving no more than a customary
brokerage commission in connection with such sale, (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder. In no
event shall the Company be responsible for any broker or similar commissions of
any Holder or, except to the extent provided for in the Transaction Documents,
any legal fees or other costs of the Holders.
 
5.  Indemnification.

(a)  Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, members, partners, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees (and any other Persons with a functionally equivalent role of a
Person holding such titles, notwithstanding a lack of such title or any other
title) of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, members, stockholders, partners, agents and
employees (and any other Persons with a functionally equivalent role of a Person
holding such titles, notwithstanding a lack of such title or any other title) of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred, arising out of or relating to (1) any
untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading or (2) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any state securities law, or
any rule or regulation thereunder, in connection with the performance of its
obligations under this Agreement, except to the extent, but only to the extent,
that (i) such untrue statements or omissions are based solely upon information
regarding a Holder furnished in writing to the Company by such Holder expressly
for use therein, or to the extent that such information relates to a Holder or
such Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved Annex A hereto for
this purpose) or (ii) the Holder used an outdated or defective Prospectus which
the Company had previously notified such Holder was outdated or defective
pursuant to Sections 3(d)(iii)-(vi) and for which the Company had not yet
provided the Advice contemplated in Section 6(d). The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by this
Agreement of which the Company is aware.

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(b)  Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, to the
extent arising out of or based solely upon: (x) such Holder’s failure to comply
with the prospectus delivery requirements of the Securities Act or (y) any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading (i) to the extent, but
only to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder to the Company specifically
for inclusion in such Registration Statement or such Prospectus or (ii) to the
extent that such information relates to such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in a Registration Statement (it
being understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or in any amendment or supplement thereto or (iii) in the case
of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi),
the use by such Holder of an outdated or defective Prospectus after the Company
has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of the Advice contemplated in Section
6(d). In no event shall the liability of any selling Holder hereunder be greater
in amount than the dollar amount of the net proceeds received by such Holder
upon the sale of the Registrable Securities giving rise to such indemnification
obligation.
 
(c)  Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall have the right to assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that, the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have prejudiced the
Indemnifying Party.
 
An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses, (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding, or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and counsel to the Indemnified Party shall
reasonably believe that a material conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
 
Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that, the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is judicially
determined not to be entitled to indemnification hereunder.

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(d)  Contribution. If the indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall contribute to the
amount paid or payable by such Indemnified Party, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other fees or expenses incurred by such party in connection with any Proceeding
to the extent such party would have been indemnified for such fees or expenses
if the indemnification provided for in this Section was available to such party
in accordance with its terms.
 
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
net proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
 
The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

6.  Miscellaneous.

(a)  Remedies. In the event of a breach by the Company or by a Holder of any of
their respective obligations under this Agreement, each Holder or the Company,
as the case may be, in addition to being entitled to exercise all rights granted
by law and under this Agreement, including recovery of damages, shall be
entitled to specific performance of its rights under this Agreement. The Company
and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall not assert
or shall waive the defense that a remedy at law would be adequate.

(b)  No Piggyback on Registrations; Prohibition on Filing Other Registration
Statements. With the exception of a bona fide public offering of the Company’s
Common Stock for aggregate gross proceeds of no less than $5,000,000, neither
the Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the Company in any
Registration Statements other than the Registrable Securities. The Company shall
not file any other registration statements until all Registrable Securities are
registered pursuant to a Registration Statement that is declared effective by
the Commission.
 
(c)  Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration
Statement.
 
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(d)  Discontinued Disposition. By its acquisition of Registrable Securities,
each Holder agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(d)(iii) through (vi),
such Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until it is advised in writing (the
“Advice”) by the Company that the use of the applicable Prospectus (as it may
have been supplemented or amended) may be resumed. The Company will use its best
efforts to ensure that the use of the Prospectus may be resumed as promptly as
is practicable. The Company agrees and acknowledges that any periods during
which the Holder is required to discontinue the disposition of the Registrable
Securities hereunder shall be subject to the provisions of Section 2(b).

(e)  Piggy-Back Registrations. If, at any time during the Effectiveness Period,
there is not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the Company’s stock option or
other employee benefit plans, then the Company shall deliver to each Holder a
written notice of such determination and, if within fifteen days after the date
of the delivery of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered; provided, however,
that the Company shall not be required to register any Registrable Securities
pursuant to this Section 6(e) that are eligible for resale without volume or
manner-of-sale restrictions pursuant to Rule 144 promulgated by the Commission
pursuant to the Securities Act or that are the subject of a then effective
Registration Statement.

(f)  Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders of
50% or more of the then outstanding Registrable Securities (including, for this
purpose, any Registrable Securities issuable upon exercise of the Warrants),
provided, that such Holders shall include Vision Opportunity China LP, so long
as Vision Opportunity China (or any of its affiliates) holds more than 5% of its
original investment, and CMHJ Technology Fund II, L.P., (or any of its
affiliate), so long as CMHJ Technology Fund II, L.P., (or any of its affiliates)
holds more than 5% of its original investment. If a Registration Statement does
not register all of the Registrable Securities pursuant to a waiver or amendment
done in compliance with the previous sentence, then the number of Registrable
Securities to be registered for each Holder shall be reduced pro rata among all
Holders and each Holder shall have the right to designate which of its
Registrable Securities shall be omitted from such Registration Statement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of a
Holder or some Holders and that does not directly or indirectly affect the
rights of other Holders may be given by such Holder or Holders of all of the
Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the first sentence of
this Section 6(f).
 
(g)  Notices. All notices, demands, consents, requests, instructions and other
communications to be given or delivered or permitted under or by reason of the
provisions of this Agreement or in connection with the transactions contemplated
hereby shall be in writing and shall be deemed to be delivered and received by
the intended recipient as follows: (i) if personally delivered, on the business
day of such delivery (as evidenced by the receipt of the personal delivery
service), (ii) if mailed certified or registered mail return receipt requested,
two (2) business days after being mailed, (iii) if delivered by overnight
courier (with all charges having been prepaid), on the business day of such
delivery (as evidenced by the receipt of the overnight courier service of
recognized standing), or (iv) if delivered by facsimile transmission, on the
business day of such delivery if sent by 6:00 p.m. in the time zone of the
recipient, or if sent after that time, on the next succeeding business day (as
evidenced by the printed confirmation of delivery generated by the sending
party’s telecopier machine). If any notice, demand, consent, request,
instruction or other communication cannot be delivered because of a changed
address of which no notice was given (in accordance with this Section 6), or the
refusal to accept same, the notice, demand, consent, request, instruction or
other communication shall be deemed received on the second business day the
notice is sent (as evidenced by a sworn affidavit of the sender). All such
notices, demands, consents, requests, instructions and other communications will
be sent to the following addresses or facsimile numbers as applicable.:

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If to the Company:
 
Lihua International, Inc.
c/o Lihua Holdings Limited
Houxiang Five-Star Industry District
Danyang City, Jiangsu Province, PRC
Attention: Mr. Zhu Jianhua
Tel. No.: +86 511 8631 7399
Fax No.: +86 511 8631 2040
 
 
 
with copies (which
shall not constitute
notice) to:
 
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attention: Mitchell S. Nussbaum, Esq.
Tel. No.: (212) 407-4000
Fax No.: (212) 407-4990
 
 
 
If to any Purchaser:
 
At the address of such Purchaser set forth on Exhibit A and Exhibit B to the
Purchase Agreement or as specified in writing by such Purchaser.
 
 
 
With copies (which copies shall not constitute notice) to:
 
Anslow & Jaclin LLP
195 Route 9 South, Suite 204
Manalapan, New Jersey 07726
Attn: Joseph M. Lucosky, Esq.
Tel. No.: (732) 409-1212
Fax No.: (732) 577-1188

 
Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

(h) Assignment of Registration Rights. The rights of each Holder hereunder,
including the right to have the Company register for resale Registrable
Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any Person who acquires all or a
portion of the Registrable Securities if: (i) the Holder agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement,
along with an investor questionnaire completed by the transferee or assignee is
furnished to the Company within a reasonable time after such assignment, (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned, (iii) following such transfer or assignment
the further disposition of such securities by the transferee or assignees is
restricted under the Securities Act and applicable state securities laws unless
such securities are registered in a Registration Statement under this Agreement
(in which case the Company shall be obligated to amend such Registration
Statement to reflect such transfer or assignment) or are otherwise exempt from
registration, and (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this Section, the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions of this
Agreement. The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.

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(i)  Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The Company may not assign (except by
merger) its rights or obligations hereunder without the prior written consent of
all of the Holders of the then outstanding Registrable Securities. Each Holder
may assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.

(j)  No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries
has entered, as of the date hereof, nor shall the Company or any of its
Subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities, that would have the effect of impairing the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof.

(k)  Execution and Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

(l)  Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.

(m)  Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any other remedies provided by law.

(n)  Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

(o)  Headings. The headings in this Agreement are for convenience only, do not
constitute a part of the Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

(p)  Independent Nature of Holders’ Obligations and Rights. The Company
acknowledges that the obligations of each Holder under this Agreement are
several and not joint with the obligations of any other Holder, and no Holder
shall be responsible in any way for the performance of the obligations of any
other Holder under this Agreement. The Company acknowledges that nothing
contained herein, and no action taken by any Holder pursuant hereto (including,
but not limited to, the (i) inclusion of a Holder in the Registration Statement
and (ii) review by, and consent to, such Registration Statement by a Holder)
shall be deemed to constitute the Holders as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Holders are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. The Company
acknowledges that each Holder shall be entitled to independently protect and
enforce its rights, including without limitation, the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose. The Company acknowledges
that it has elected to provide all Holders with the same terms for the
convenience of the Company and not because it was required or requested to do so
by the Holders. The Company acknowledges that such procedure with respect to
this Agreement in no way creates a presumption that the Holders are in any way
acting in concert or as a group with respect to this Agreement or the
transactions contemplated hereby.

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

(Signature Pages Follow)

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
 
 
LIHUA INTERNATIONAL, INC.
 
 
 
 
By:  
/s/ Zhu Jianhua
 
Name: Zhu Jianhua
 
Title: Chief Executive Officer and President

 
[SIGNATURE PAGE OF HOLDERS FOLLOWS]

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[SIGNATURE PAGE OF HOLDERS TO LIHUA RRA]

 
Name of Holder: __________________________

Signature of Authorized Signatory of Holder: __________________________

Name of Authorized Signatory: _________________________

Title of Authorized Signatory: __________________________
 

[SIGNATURE PAGES CONTINUE]

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Annex A

Plan of Distribution

Each Selling Stockholder (the “Selling Stockholders”) of the common stock and
any of their pledgees, assignees and successors-in-interest may, from time to
time, sell any or all of their shares of common stock on the National Stock
Exchange or any other stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. A Selling Stockholder may use any one or more of the
following methods when selling shares:
 
·
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 
·
block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;

 
·
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 
·
an exchange distribution in accordance with the rules of the applicable
exchange;

 
·
privately negotiated transactions;

 
·
settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;

 
·
broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;

 
·
through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

 
·
a combination of any such methods of sale; or

 
·
any other method permitted pursuant to applicable law.

 
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.
 
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with FINRA NASD Rule 2440; and in the case of a principal
transaction a markup or markdown in compliance with NASD IM-2440.
 
In connection with the sale of the common stock or interests therein, the
Selling Stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

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The Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. In no
event shall any broker-dealer receive fees, commissions and markups which, in
the aggregate, would exceed eight percent (8%).
 
The Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
 
Because Selling Stockholders may be deemed to be “underwriters” within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act including Rule 172 thereunder. In addition,
any securities covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than under
this prospectus. There is no underwriter or coordinating broker acting in
connection with the proposed sale of the resale shares by the Selling
Stockholders.
 
We agreed to keep this prospectus effective until the earlier of (i) the date on
which the shares may be resold by the Selling Stockholders without registration
and without regard to any volume or manner-of-sale limitations by reason of Rule
144, without the requirement for the Company to be in compliance with the
current public information under Rule 144 under the Securities Act or any other
rule of similar effect or (ii) all of the shares have been sold pursuant to this
prospectus or Rule 144 under the Securities Act or any other rule of similar
effect. The resale shares will be sold only through registered or licensed
brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is complied
with.
 
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not simultaneously engage
in market making activities with respect to the common stock for the applicable
restricted period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of the common stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act).

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EXHIBIT A

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
 
[TRANSFER AGENT]
_____________________________
_____________________________
Attn: _________________

Re:           , INC.
 
Ladies and Gentlemen:
 
We are counsel to Lihua International, Inc., a Delaware corporation (the
“Company”). The Company entered into a Registration Rights Agreement, dated
October 31, 2008 (the “Registration Rights Agreement”), with _________,
____________ and ________________ (collectively, the “Stockholders”), pursuant
to which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), under the
Securities Act of 1933, as amended (the “1933 Act”). In connection with the
Company’s obligations under the Registration Rights Agreement, on
________________, 2008, the Company filed a Registration Statement on Form S-1
(File No. 333-________) (the “Registration Statement”) with the Securities and
Exchange Commission (the “SEC”) relating to the resale of the Registrable
Securities which names each of the Stockholders as a selling stockholder
thereunder.

In connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the Commission has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC’s staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the Commission and accordingly,
the Registrable Securities are available for resale under the 1933 Act pursuant
to the Registration Statement.
 
 
Very truly yours,
 
[COUNSEL]
 
 
 
 
By:  
 
 
 
cc: [STOCKHOLDERS]
 

 
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