Exhibit 10.2


August 6, 2007


Stone Tan China Acquisition Corp.

9191 Towne Center Drive, Suite 410

San Diego, California 92122


Morgan Joseph & Co.
Inc.

600 Fifth Avenue, 19th Floor

New York, New York 10020


Re:          Initial
Public Offering


Gentlemen:


The undersigned
stockholder and director of Stone Tan China Acquisition Corp. (“Company”), in
consideration of Morgan Joseph & Co., Inc. (“Morgan Joseph”) entering into
a letter of intent (“Letter of Intent”) to underwrite an initial public
offering of the securities of the Company (“IPO”) and embarking on the IPO
process, hereby agrees as follows (certain capitalized terms used herein are
defined in paragraph 11 hereof):


1.             If the Company
solicits approval of its stockholders of a Business Combination, the undersigned
will vote all Insider Shares owned by him in accordance with the majority of
the votes cast by the holders of the IPO Shares and will vote all shares of
Common Stock of the Company acquired by him in the IPO or aftermarket in favor
of any Business Combination negotiated by the officers of the Company.


2.             In the event that
the Company fails to consummate a Business Combination within 24 months from
the effective date (“Effective Date”) of the registration statement relating to
the IPO (such date being referred to herein as the “Termination Date”), the
undersigned shall take all such action reasonably within its power as is
necessary to dissolve the Company and liquidate the Trust Account to holders of
IPO Shares as soon as reasonably practicable. The undersigned hereby waives any
and all right, title, interest or claim of any kind in or to any distribution
of the Trust Account (as defined in the Letter of Intent) and any remaining net
assets of the Company as a result of such liquidation with respect to its Insider
Shares (“Claim”) and will not seek recourse against the Trust Account for any
reason whatsoever. In the event of the liquidation of the Trust Account, the
undersigned agrees to indemnify and hold harmless the Company jointly and
severally with Richard Tan, against any and all loss, liability, claims, damage
and expense whatsoever (including, but not limited to, any and all legal or
other expenses reasonably incurred in investigating, preparing or defending
against any litigation, whether pending or threatened, or any claim whatsoever)
which the Company may become subject as a result of any claim by any third
party if such third party did not execute a waiver of claims against the Trust
Account, but only to the extent necessary to ensure that such loss,
liability, claim, damage or expense does not reduce the amount in the Trust
Account. The foregoing section is not for the benefit of any third party beneficiaries
of the Company and does not create any contract right in favor of any person
other than the Company.



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3.             In order to minimize potential conflicts of
interest which may arise from multiple affiliations, the undersigned agrees (i) not
to become an officer, director or principal shareholder of a blank check
company engaged in business activities similar to those intended to be
conducted by the Company and (ii) to present to the Company for its
consideration, prior to presentation to any other person or entity, any
suitable opportunity to acquire an operating business, until the earlier of the
consummation by the Company of a Business Combination, or the liquidation of
the Company, subject to any pre-existing fiduciary and contractual obligations
the undersigned might have. For the purposes hereof, a suitable
opportunity shall mean any company or business having its primary operations in
the People’s Republic of China whose fair market value is at least equal to 80%
of the balance of the Trust Account (less deferred underwriting compensation of
$9,000,000, or $10,350,000 if the over-allotment is exercised in full and taxes
payable).


4.             The undersigned
acknowledges and agrees that the Company will not consummate any Business
Combination which involves a company which is currently a portfolio company of,
or affiliated with, any of the Insiders. The undersigned acknowledges and
agrees that the Company will not consummate any Business Combination which
involves a company which in the future becomes affiliate with any of the
Insiders, unless the Company obtains an opinion from an independent investment banking
firm that the Business Combination is fair to the Company’s stockholders from a
financial perspective.


5.             Prior to a Business
Combination, neither the undersigned, any member of the family of the
undersigned, nor any affiliate (“Affiliate”) of the undersigned will be
entitled to receive and will not accept any compensation for services rendered
to the Company. Notwithstanding the foregoing to the contrary, the undersigned
shall be entitled to reimbursement from the Company for his out-of-pocket expenses
incurred in connection with seeking and consummating a Business Combination and
commencing on the Effective Date, Pacific Millennium, an affiliate of the
Company’s Chief Executive Officer (“Related Party”), shall be allowed to charge
the Company $7,500 per month to compensate it for the Company’s use of the
Related Party’s office space and certain technology and administrative and
secretarial services.



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6.             Neither the
undersigned, any member of the family of the undersigned, nor any Affiliate of
the undersigned will be entitled to receive or accept a finder’s fee or any
other compensation in the event the undersigned, any member of the family of
the undersigned or any Affiliate of the undersigned originates a Business
Combination.


7.             The undersigned will
escrow its Insider Shares for the three year period commencing on the Effective
Date subject to the terms of a Securities Escrow Agreement which the Company
will enter into with the undersigned and an escrow agent acceptable to the
Company.


8.             The undersigned
agrees to be the non-executive Chairman of the board of director of the Company
and not resign from his position until the earlier of the consummation by the
Company of a Business Combination or the liquidation of the Company provided,
however that the undersigned is not obligated to contribute a minimum number of
hours per week to the Company’s business or operations. The undersigned’s
biographical information furnished to the Company and Morgan Joseph and
attached hereto as Exhibit A is true and accurate in all respects, does not
omit any material information with respect to the undersigned’s background and
contains all of the information required to be disclosed pursuant to Item 401
of Regulation S-K, promulgated under the Securities Act of 1933. The
undersigned’s Questionnaire furnished to the Company and Morgan Joseph is true
and accurate in all respects. The undersigned represents and warrants that:


(a)           he is not subject to or a respondent in any legal action
for, any injunction, cease-and-desist order or order or stipulation to desist
or refrain from any act or practice relating to the offering of securities in
any jurisdiction;


(b)           he has never been convicted of or pleaded guilty to any
crime (i) involving any fraud or (ii) relating to any financial transaction or
handling of funds of another person, or (iii) pertaining to any dealings in any
securities and he is not currently a defendant in any such criminal proceeding;
and


(c)           he has never been suspended or expelled from membership in
any securities or commodities exchange or association or had a securities or
commodities license or registration denied, suspended or revoked.


9.             The undersigned has
full right and power, without violating any agreement by which he is bound, to
enter into this letter agreement and to serve as the Chairman of the board of
director of the Company.


10.           This letter
agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflicts of law
principles that would result in the application of the substantive laws of
another jurisdiction. The undersigned hereby (i) agrees that any action,
proceeding or claim against him arising out of or relating in any way to this
letter agreement (a “Proceeding”) shall be brought and enforced in the courts
of the State of New York of the United States of America for the Southern
District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive, (ii) waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum and (iii)
irrevocably agrees to appoint Loeb & Loeb LLP as agent for the service of
process in the State of New York to receive, for the undersigned and on his
behalf, service of process in any Proceeding. If for any reason such agent is
unable to act as such, the undersigned will promptly notify the Company and Morgan
Joseph and appoint a substitute 



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agent acceptable to each
of the Company and Morgan Joseph within 30 days and nothing in this letter will
affect the right of either party to serve process in any other manner permitted
by law.


11.           As used herein, (i)
a “Business Combination” shall mean an acquisition by merger, capital stock
exchange, asset or stock acquisition, reorganization or control through
contractual arrangements or otherwise, of one or more operating businesses in People’s
Republic of China selected by the Company; (ii) “Insiders” shall mean all
officers, directors and stockholders of the Company immediately prior to the
IPO; (iii) “Insider Shares” shall mean all of the shares of Common Stock of the
Company owned by an Insider prior to the IPO; (iv) “IPO Shares” shall mean the
shares of Common Stock issued in the Company’s IPO; and (v) “Trust Account”
shall mean the trust account established by the Company at the consummation of
its IPO and into which a certain amount of the net proceeds of the IPO is
deposited.


	
   

  	
  STONE TAN CHINA ACQUISITION
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Richard Tan,
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INSIDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Roger W. Stone

  



 



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EXHIBIT A


[Insider
biographical information]


Roger W. Stone has
been our non-executive Chairman of the Board since our inception.
Mr. Stone has been the Chairman and Chief Executive Officer of KapStone
Paper and Packaging Corporation (formerly known as Stone Arcade Acquisition
Corp.) since April 2005. Stone Arcade was incorporated in April 2005
as a blank check company formed to acquire a business in the paper, packaging,
forest products and related industries. In January 2007, Stone Arcade
acquired a division of International Paper and changed its name to KapStone
Paper and Packaging Corporation. Mr. Stone has been Manager of
Stone-Kaplan Investments, LLC, a private investment company (which is no longer
operating) since July 2004. He was Chairman and Chief Executive Officer of
Box USA Holdings, Inc., a corrugated box manufacturer, from
July 2000 until the sale of that company in July 2004. Mr. Stone
was Chairman, President and Chief Executive Officer of Stone Container
Corporation, a multinational paper company primarily producing and selling
pulp, paper and packaging products, from March 1987 to November 1998
when Stone Container Corporation merged with Jefferson Smurfit Corporation, at
which time he became President and Chief Executive Officer of Smurfit-Stone
Container Corporation until March 1999. Mr. Stone has served on the
board of directors of McDonald’s Corporation since 1989. Mr. Stone received
a B.S. in Economics from the Wharton School at the University of Pennsylvania.



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