Unassociated Document


    REGISTRATION
      RIGHTS AGREEMENT

    


    This
      Registration Rights Agreement (this "Agreement")
      is
      made and entered into as of October 14, 2008, by and between China Bio Energy
      Holding Group Co., Ltd. (the “Company”),
      and
      the Purchasers listed on Schedule
      I
      hereto
      (the "Purchasers").

    


    This
      Agreement is being entered into pursuant to (i) the Warrant Exercise Agreement,
      dated as of the date hereof(the "Warrant
      Exercise Agreements"),
      by
      and between (x) the Company and Vision Opportunity Master Fund,
      Ltd.(“VOMF”),
      and
      (y) the Company and Vision Capital Advantage Fund, L.P. (“VCAF”),
      and
      (ii) the Securities Purchase Agreement, dated as of the date hereof, between
      the
      Company and Vision Opportunity China LP (“VOC”),
      (the
“Purchase
      Agreement,
      and
      together with the Warrant Exercise Agreements, the “Master
      Agreements”).

    


    The
      Company and the Purchasers hereby agree as follows:

    


    1. Definitions.

    


    Capitalized
      terms used and not otherwise defined herein shall have the meanings given such
      terms in the Master Agreements, as applicable. As used in this Agreement, the
      following terms shall have the following meanings:

    


    “2008
      Delivery Date” means
      the
      date on which the Make Good Shares are required to be delivered to VOC pursuant
      to the Escrow Agreement.

    


    "Advice"
      shall
      have meaning set forth in Section 3(m).

    


    "Affiliate"
      means,
      with respect to any Person, any other Person that directly or indirectly
      controls or is controlled by or under common control with such Person. For
      the
      purposes of this definition, "control,"
      when
      used with respect to any Person, means the possession, direct or indirect,
      of
      the power to direct or cause the direction of the management and policies of
      such Person, whether through the ownership of voting securities, by contract
      or
      otherwise; and the terms of "affiliated,"
      "controlling"
      and
      "controlled"
      have
      meanings correlative to the foregoing.

    


    "Board"
      shall
      have meaning set forth in Section 3(n).

    


    "Business
      Day"
      means
      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 generally are
      authorized or required by law or other government actions to close.

    


    "Commission"
      means
      the Securities and Exchange Commission.

    


    "Common
      Stock"
      means
      the Company's common stock, par value $0.0001 per share.

     

    “Conversion
      Shares”
means
      the shares of Common Stock issuable upon conversion of the Company’s Series B
      Preferred Stock, par value $0.001.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    "Effectiveness
      Date"
      means,
(a)
      with
      respect to the initial Registration Statement to be filed under Section 2(a),
      the earlier of (A) the one hundred and fifth (105th)
      day
      following the Filing Date (or in the event the Registration Statement receives
      a
“full review” by the Commission, the one hundred thirty fifth (135th)
      day
      following the Filing Date) and (B) the date which is within three (3) Business
      Days after the date on which the Commission informs the Company (i) that the
      Commission will not review the Registration Statement or (ii) that
      the
      Company may request the acceleration of the effectiveness of the Registration
      Statement (the “Acceleration
      Dates”);
      (b)
      with respect to the Registration Statement to be filed pursuant to Section
      2(b),
      the earlier of (A) the ninetieth (90th)
      day
      following the Restricted Period (or in the event the Registration Statement
      receives a “full review” by the Commission, the one hundred twentieth
      (120th)
      day
      following the Filing Date) and (B) the Acceleration Dates; and (c) with respect
      to the Registration Statement to be filed pursuant to Section 2(c), the earlier
      of (A) the one hundred and fifth (105th)
      following the 2008 Delivery Date (or in the event the Registration Statement
      receives a “full review” by the Commission, the one hundred thirty fifth
      (135th)
      day
      following the Filing Date), and (B) the Acceleration Dates; provided that,
      if the
      Effectiveness Date falls on a Saturday, Sunday or any other day which shall
      be a
      legal holiday or a day on which the Commission is authorized or required by
      law
      or other government actions to close, the Effectiveness Date shall be the
      following Business Day.

     

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

    


    “Escrow
      Agreement”
means
      that certain securities escrow agreement, dated as of the date hereof, by and
      between the Company and Vision Opportunity China LP.

    


    "Event"
      shall
      have the meaning set forth in Section 7(e).

    


    "Event
      Date"
      shall
      have the meaning set forth in Section 7(e).

    


    "Exchange
      Act"
      means
      the Securities Exchange Act of 1934, as amended.

    


    "Filing
      Date"
      means
      (a) with respect to the initial Registration Statement required to be filed
      pursuant to Section 2(a), the date that is the 30th
      day
      following receipt of a Demand Notice; and (b) if the Make Good Shares are not
      included on the initial Registration Statement, with respect to the Registration
      Statement required to be filed under Section 2(c), the 45th
      day
      following the 2008 Delivery Date; provided that,
      if the
      Filing Date falls on a Saturday, Sunday or any other day which shall be a legal
      holiday or a day on which the Commission is authorized or required by law or
      other government actions to close, the Filing Date shall be the following
      Business Day. 

    


    "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).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    


    “Make
      Good Shares”
means
      the 2,465,753 shares of Common Stock of the Company deposited in an escrow
      account pursuant to the terms of the Escrow Agreement. 

    


    "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.

    


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

    


    "Prospectus"
      means
      the prospectus included in the 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 under 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 the Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference in such
      Prospectus.

    


    “Purchase
      Price”
means
      the amount paid by (i) VOMF and/or VCAF upon exercise of their respective Series
      A-1 Warrant, and/or (ii) VOCF to purchase the Debenture, as the case may
      be.

    


    "Registrable
      Securities”
      means
      (i) up to 1,704,546 shares of Common Stock issued in the aggregate to VOMF
      and
      VCAF upon the partial exercise of their respective Series A-1 Warrants; (ii)
      the
      Conversion Shares; (iii) the Make Good Shares; provided,
      however
      that the
      Make Good Shares shall be part of the Registrable Securities only if at the
      time
      of inclusion on the Registration Statement they have been released to the Holder
      or Holders pursuant to the terms of the Escrow Agreement; (iv) any additional
      shares issuable in connection with any anti-dilution provisions associated
      with
      the Preferred Shares (in each case, without giving effect to any limitations
      on
      conversion set forth in the Certificate of Designation); and (v) any securities
      issued or issuable upon any stock split, dividend or other distribution,
      recapitalization or similar event with respect to the foregoing.

    


    "Registration
      Statement"
      means
      the registration statements and any additional registration statements
      contemplated by Section 2, including (in each case) the Prospectus, amendments
      and supplements to such registration statement or Prospectus, including pre-
      and
      post-effective amendments, all exhibits thereto, and all material incorporated
      by reference in such registration statement.

    


    "Rule
      144"
      means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "Rule
      158"
      means
      Rule 158 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

    


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

    


    “Rule
      416”
means
      Rule 416 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

    


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

    


    "Securities
      Act"
      means
      the Securities Act of 1933, as amended.

    


    “Series
      A-1 Warrant”
means
      the Series A-1 Warrants issued to the Holders as of October 23, 2007.


    


    2. Resale
      Registration.

     

    (a) At
      any
      time a Purchaser or the Purchasers, or a Holder or Holders owning more than
      25%
      of Registrable Securities (the “Initiating
      Holders”)
      may
      demand that the Company file a Registration Statement providing for the resale
      of all Registrable Securities (other than the Make Good Shares, if at such
      time
      the Make Good Shares have not been delivered to the Holder or Holders) then
      held
      by the Initiating Holders by giving written notice (a “Demand
      Notice”)
      to the
      Company, in which case all Holders of Registrable Securities may have all of
      their Registrable Securities included on such Registration Statement, by
      providing written notice of acceptance to the Company. The Demand Notice shall
      describe the number of Registrable Securities intended to be disposed of and
      the
      intended method of disposition. The Company shall then prepare and file with
      the
      Commission on or prior to the Filing Date, a “resale” Registration Statement
      providing for the resale of all Registrable Securities included in the Demand
      Notice for an offering to be made on a continuous basis pursuant to Rule 415.
      Any such Registration Statements shall be on Form S-1 (except if the Company
      is
      not then eligible to register for resale such Registrable Securities on Form
      S-1, in which case such registrations shall be on another appropriate form
      in
      accordance herewith and the Securities Act and the rules promulgated
      thereunder). The Company shall (i) not permit any securities other than the
      Registrable Securities to be included in any such Registration Statement 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 Registrable 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 (the “Effectiveness
      Period”).
      The
      Company shall request that the effective time of any such Registration Statement
      is 5:00 p.m. Eastern Time on the applicable Effectiveness Date. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (b) In
      the
      event that the Company is unable to register for resale under Rule 415 all
      of
      the Registrable Securities on the initial Registration Statement that it has
      agreed to file pursuant to the first sentence of Section 2(a) due to limits
      imposed by the Commission’s interpretation of Rule 415 of Regulation C, the
      Company will file an additional Registration Statement under the Securities
      Act
      with the Commission covering the resale by the Purchasers of such lesser amount
      of the Registrable Securities as the Company is able to register pursuant to
      the
      Commission’s interpretation of Rule 415 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 Registrable Securities that were omitted from its prior Registration
      Statements filed with the Commission pursuant to this Section 2(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 Holder
      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 latest
      Registration Statement filed pursuant to Section 2(a) or 2(b) hereof, as
      applicable, or (y) the date on which all Registrable Securities registered
      on
      all of the prior Registration Statements filed pursuant to Section 2(a) and
      2(b)
      hereof are sold (the “Restricted
      Period”),
      that
      the Company shall file, within 30 days following the date of receipt of such
      written notice, an additional Registration Statement registering any Registrable
      Securities that were the subject of the applicable Demand Notice, but were
      omitted from such prior Registration Statements. 

     

    (c) On
      or
      prior to the Filing Date, the Company shall prepare and file with the Commission
      a Registration Statement covering the resale of the Make Good Shares on Form
      S-1
      (except if the Company is not then eligible to register for resale such
      Registrable Securities on Form S-1, in which case such registrations shall
      be on
      another appropriate form in accordance herewith and the Securities Act and
      the
      rules promulgated thereunder). The Company shall (i) not permit any securities
      other than the Make Good Shares to be included in any such Registration
      Statement 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 on or 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 Registrable
      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. The Company shall
      request that the effective time of any such Registration Statement is 5:00
      p.m.
      Eastern Time on the Effectiveness Date. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    3. Registration
      Procedures.

    


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

     

    (a)
       Prepare
      and file with the Commission, on or prior to the Filing Date, a Registration
      Statement on Form S-1 (or if the Company is not then eligible to register for
      resale the Registrable Securities on Form S-1 such registration shall be on
      another appropriate form in accordance herewith and the Securities Act and
      the
      rules promulgated thereunder) in accordance with the plan of distribution as
      set
      forth on Exhibit
      A
      hereto
      and in accordance with applicable law, and cause the Registration Statement
      to
      become effective and remain effective as provided herein; provided,
      however,
      that
      not less than five (5) Business Days prior to the filing of the Registration
      Statement or any related Prospectus or any amendment or supplement thereto,
      the
      Company shall (i) furnish to the Holders, copies of all such documents proposed
      to be filed, which documents will be subject to the review of such Holders,
      and
      (ii) cause its officers and directors, counsel and independent certified public
      accountants to respond to such inquiries as shall be necessary, in the
      reasonable opinion of counsel, to conduct a reasonable review of such documents.
      The Company shall not file the Registration Statement or any such Prospectus
      or
      any amendments or supplements thereto to which the Purchasers shall reasonably
      object in writing within three (3) Business Days of their receipt
      thereof.

    


    (b) (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to the Registration Statement as may be necessary to keep the
      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 as necessary 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, and as so supplemented or amended to be filed pursuant to Rule
      424
      (or any similar provisions then in force) promulgated under the Securities
      Act;
      (iii) respond as promptly as possible, but in no event later than ten (10)
      Business Days, to any comments received from the Commission with respect to
      the
      Registration Statement or any amendment thereto and as promptly as possible
      provide the Holders true and complete copies of all correspondence from and
      to
      the Commission relating to the Registration Statement; (iv) file the final
      prospectus pursuant to Rule 424 of the Securities Act no later than two (2)
      Business Days following the date the Registration Statement is declared
      effective by the Commission; and (v) 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 the Registration Statement
      during the Effectiveness Period in accordance with the intended methods of
      disposition by the Holders thereof set forth in the Registration Statement
      as so
      amended or in such Prospectus as so supplemented.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (c) Notify
      the Holders of Registrable Securities as promptly as possible (and, in the
      case
      of (i)(A) below, not less than three (3) Business Days prior to such filing,
      and
      in the case of (iii) below, on the same day of receipt by the Company of such
      notice from the Commission) and (if requested by any such Person) confirm such
      notice in writing no later than one (1) Business Day following the day: (i)(A)
      when a Prospectus or any Prospectus supplement or post-effective amendment
      to
      the Registration Statement is 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 the 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
      the Registration Statement or Prospectus or for additional information; (iii)
      of
      the issuance by the Commission of any stop order suspending the effectiveness
      of
      the Registration Statement covering any or all of the Registrable Securities
      or
      the initiation or threatening 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) if at any time any representation or warranty
      of the Company contained in any agreement contemplated hereby ceases to be
      true
      and correct in all material respects; and (vi) of the occurrence of any event
      that makes any statement made in the 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 the Registration
      Statement, Prospectus or other documents so that, in the case of the
      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 the light of the circumstances under which they were made, not
      misleading.

    


    (d) Use
      its
      best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
      of,
      as promptly as possible, (i) any order suspending the effectiveness of the
      Registration Statement or (ii) any suspension of the qualification (or exemption
      from qualification) of any of the Registrable Securities
      for sale in any jurisdiction.

    


    (e) If
      requested by the Holders of a majority in interest of the Registrable
      Securities, (i) promptly incorporate in a Prospectus supplement or
      post-effective amendment to the Registration Statement such information as
      the
      Company reasonably agrees should be included therein and (ii) make all required
      filings of such Prospectus supplement or such post-effective amendment as soon
      as practicable after the Company has received notification of the matters to
      be
      incorporated in such Prospectus supplement or post-effective
      amendment.

    


    (f) If
      requested by any Holder, furnish to such Holder , without charge, at least
      one
      conformed copy of each Registration Statement and each amendment thereto,
      including financial statements and schedules, all documents incorporated or
      deemed to be incorporated therein by reference, 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.

    


    (g) Promptly
      deliver to each Holder, without charge, as many copies of the Prospectus or
      Prospectuses (including each form of prospectus) and each amendment or
      supplement thereto as such Persons may reasonably request; and subject to the
      provisions of Sections 3(m) and 3(n), 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.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

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

    


    (i) Cooperate
      with the Holders to facilitate the timely preparation and delivery of
      certificates representing Registrable Securities to be sold pursuant to a
      Registration Statement, which certificates, to the extent permitted by the
      Purchase Agreement, if applicable, and applicable federal and state securities
      laws, 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
      Holder may request in connection with any sale of Registrable
      Securities.

    


    (j) Upon
      the
      occurrence of any event contemplated by Section 3(c)(vi), as promptly as
      possible, prepare a supplement or amendment, including a post-effective
      amendment, to the 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 the 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 the light
      of the circumstances under which they were made, not misleading.

    


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

    


    (l) Comply
      in
      all material respects with all applicable rules and regulations of the
      Commission and make generally available to its security holders all documents
      filed or required to be filed with the Commission, including, but not limited,
      to, earning statements satisfying the provisions of Section 11(a) of the
      Securities Act and Rule 158 not later than 45 days after the end of any 12-month
      period (or 90 days after the end of any 12-month period if such period is a
      fiscal year) commencing on the first day of the first fiscal quarter of the
      Company after the effective date of the Registration Statement, which statement
      shall conform to the requirements of Rule 158. 

    


    (m) The
      Company may require each selling Holder to furnish to the Company information
      regarding such Holder and the distribution of such Registrable Securities as
      is
      required by law to be disclosed in the Registration Statement, Prospectus,
      or
      any amendment or supplement thereto, and the Company may exclude from such
      registration the Registrable Securities of any such Holder who unreasonably
      fails to furnish such information within a reasonable time after receiving
      such
      request.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    If
      the
      Registration Statement refers to any Holder by name or otherwise as the holder
      of any securities of the Company, then such Holder shall have the right to
      require (if such reference to such Holder by name or otherwise is not required
      by the Securities Act or any similar federal statute then in force) the deletion
      of the reference to such Holder in any amendment or supplement to the
      Registration Statement filed or prepared subsequent to the time that such
      reference ceases to be required.

    


    Each
      Holder covenants and agrees that it will not sell any Registrable Securities
      under the Registration Statement until the Company has electronically filed
      the
      Prospectus as then amended or supplemented as contemplated in Section 3(g)
      and
      notice from the Company that the Registration Statement and any post-effective
      amendments thereto have become effective as contemplated by Section
      3(c).

    


    Each
      Holder agrees by its acquisition of such Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of any event of the
      kind
      described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), 3(c)(vi) or 3(n),
      such Holder will forthwith discontinue disposition of such Registrable
      Securities under the Registration Statement until such Holder's receipt of
      the
      copies of the supplemented Prospectus and/or amended Registration Statement
      contemplated by Section 3(j), or until it is advised in writing (the
      "Advice")
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement.

    


    (n) If
      (i)
      there is material non-public information regarding the Company which the
      Company's Board of Directors (the "Board")
      determines not to be in the Company's best interest to disclose and which the
      Company is not otherwise required to disclose, (ii) there is a significant
      business opportunity (including, but not limited to, the acquisition or
      disposition of assets (other than in the ordinary course of business) or any
      merger, consolidation, tender offer or other similar transaction) available
      to
      the Company which the Board determines not to be in the Company's best interest
      to disclose, or (iii) the Company is required to file a post-effective amendment
      to the Registration Statement to incorporate the Company’s quarterly and annual
      reports and audited financial statements on Forms 10-Q and 10-K, then the
      Company may (x) postpone or suspend filing of a registration statement for
      a
      period not to exceed thirty (30) consecutive days or (y) postpone or suspend
      effectiveness of a registration statement for a period not to exceed twenty
      (20)
      consecutive days; provided that the Company may not postpone or suspend
      effectiveness of a registration statement under this Section 3(n) for more
      than
      forty-five (45) days in the aggregate during any three hundred sixty (360)
      day
      period; provided,
      however,
      that no
      such postponement or suspension shall be permitted for consecutive twenty (20)
      day periods arising out of the same set of facts, circumstances or
      transactions.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. Registration
      Expenses.

    


    All
      fees
      and expenses incident to the performance of or compliance with this Agreement
      by
      the Company, except as and to the extent specified in this Section 4, shall
      be
      borne by the Company whether or not the Registration Statement is filed or
      becomes effective and whether or not any Registrable Securities are sold
      pursuant to the 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 (A) with respect
      to filings required to be made with the NASDAQ and
      each
      other securities exchange or market on which Registrable Securities are required
      hereunder to be listed, if any (B) with respect to filing fees required to
      be
      paid to the National Association of Securities Dealers, Inc. and the NASD
      Regulation, Inc. (including, without limitation, pursuant to NASD Rule 2710)
      and
      (C) in compliance with state securities or Blue Sky laws (including, without
      limitation, fees and disbursements of counsel for the Holders in connection
      with
      Blue Sky qualifications of the Registrable Securities and determination of
      the
      eligibility of the Registrable Securities for investment under the laws of
      such
      jurisdictions as the Holders of a majority of Registrable Securities may
      designate)), (ii) printing expenses (including, without limitation, expenses
      of
      printing certificates for Registrable Securities and of printing prospectuses
      if
      the printing of prospectuses is requested by the holders of a majority of the
      Registrable Securities included in the Registration Statement), (iii) messenger,
      telephone and delivery expenses, (iv) reasonable and itemized 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, including, without
      limitation, the Company's independent public accountants (including the expenses
      of any comfort letters or costs associated with the delivery by independent
      public accountants of a comfort letter or comfort letters). 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, the fees and expenses incurred in connection with the listing
      of the Registrable Securities on any securities exchange if required hereunder.
      The Company shall not be responsible for any discounts, commissions, transfer
      taxes or other similar fees incurred by the Holders in connection with the
      sale
      of the Registrable Securities.

    


    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, managers, partners, members,
      shareholders, agents, brokers, investment advisors and employees 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, agents and employees 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, costs of preparation
      and attorneys' fees) and expenses (collectively, "Losses"),
      as
      incurred, arising out of or relating to any violation of securities laws or
      untrue or alleged untrue statement of a material fact contained in the
      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 form of prospectus or supplement thereto, in the light of
      the
      circumstances under which they were made) not misleading; provided,
      however,
      that
      (i)  the Company will not be liable in any case to the extent that any such
      Losses arise out of, or are based upon, any such untrue statement or alleged
      untrue statement or omission or alleged omission made therein in reliance upon
      and in conformity with information furnished to the Company in writing by or
      on
      behalf of any such Holder for inclusion therein and (ii) the Company will
      not be liable to any indemnified party under this Section 5(a) with respect
      to
      any Registration Statement or Prospectus to the extent that any Losses of such
      indemnified party result solely from the indemnified party’s failure, at or
      prior to the written confirmation of a sale, to send or give an amended or
      supplemented Registration Statement or Prospectus (if delivery of a prospectus
      is required by the Securities Act and was not so made), which was delivered
      to
      such indemnified party before the sale in question to correct an untrue
      statement of a material fact contained in, or the omission of a material fact
      from, the Registration Statement or Prospectus. The Company shall notify the
      Holders promptly of the institution, threat or assertion of any Proceeding
      of
      which the Company is aware in connection with the transactions contemplated
      by
      this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    (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 and employees
      of
      such controlling Persons, to the fullest extent permitted by applicable law,
      from and against all Losses, as incurred, arising solely out of or based solely
      upon any untrue statement of a material fact contained in the Registration
      Statement, any Prospectus, or any form of prospectus, or in any amendment or
      supplement thereto, or arising solely out of or based solely upon any omission
      of a material fact required to be stated therein or necessary to make the
      statements therein (in the case of any Prospectus or form of prospectus or
      supplement thereto, in the light of the circumstances under which they were
      made) not misleading, 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 or other Indemnifying Party to the Company specifically for
      inclusion in the Registration Statement or such Prospectus. Notwithstanding
      anything to the contrary contained herein, each Holder shall be liable under
      this Section 5(b) only for the lesser of (a) the actual damages incurred or
      (b)
      that amount as does not exceed the gross proceeds to such Holder as a result
      of
      the sale of his/her/its Registrable Securities pursuant to such Registration
      Statement.

    


    (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 promptly shall promptly notify the Person from whom indemnity
      is sought (the "Indemnifying
      Party”)
      in
      writing, and the Indemnifying Party shall be entitled 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 proximately and materially adversely 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; or (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 such parties shall have been advised by counsel
      that a 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
      such 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 or
      threatened Proceeding in respect of which any Indemnified Party is a party
      and
      indemnity has been sought hereunder, unless such settlement includes an
      unconditional release of such Indemnified Party from all liability on claims
      that are the subject matter of such Proceeding.

    


    All
      indemnifiable fees and expenses of the Indemnified Party (including reasonable
      fees and expenses 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 (10) Business Days of
      written notice thereof to the Indemnifying Party (regardless of whether it
      is
      ultimately determined that an Indemnified Party is not entitled to
      indemnification hereunder; provided,
      that the Indemnified Party shall reimburse all such fees and expenses to the
      extent it is finally judicially determined that such Indemnified Party is not
      entitled to indemnification hereunder).

    


    (d) Contribution.
      If a
      claim for indemnification under Section 5(a) or 5(b) is due but unavailable
      to
      an Indemnified Party because of a failure or refusal of a governmental authority
      to enforce such indemnification in accordance with its terms (by reason of
      public policy or otherwise), then each 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 Losses, in such proportion
      as is appropriate to reflect the relative benefits received by the Indemnifying
      Party on the one hand and the Indemnified Party on the other from the exercise
      of the Series A-1 Warrants, or the offering of the Debenture, as applicable.
      If,
      but only if, the allocation provided by the foregoing sentence is not permitted
      by applicable law, the allocation of contribution shall be made in such
      proportion as is appropriate to reflect not only the relative benefits referred
      to in the foregoing sentence but also the relative fault, as applicable, 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 Section 5(c), any reasonable attorneys' or other
      reasonable 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. In no event shall any selling Holder
      be
      required to contribute an amount under this Section 5(d) in excess of the gross
      proceeds received by such Holder upon sale of such Holder’s Registrable
      Securities pursuant to the Registration Statement giving rise to such
      contribution obligation.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    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. 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.

    


    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 pursuant to the law.

    


    6. Rule
      144.

     

    As
      long
      as any Holder owns Registrable Securities, the Company covenants to timely
      file
      (or obtain extensions in respect thereof and file within the applicable grace
      period) all reports required to be filed by the Company after the date hereof
      pursuant to Section 13(a) or 15(d) of the Exchange Act. As long as any Holder
      owns Registrable Securities, if the Company is not required to file reports
      pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and
      furnish to the Holders and make publicly available in accordance with Rule
      144(c) promulgated under the Securities Act annual and quarterly financial
      statements, together with a discussion and analysis of such financial statements
      in form and substance substantially similar to those that would otherwise be
      required to be included in reports required by Section 13(a) or 15(d) of the
      Exchange Act, as well as any other information required thereby, in the time
      period that such filings would have been required to have been made under the
      Exchange Act. The Company further covenants that it will take such further
      action as any Holder may reasonably request, all to the extent reasonably
      required from time to time to enable such Person to sell Registrable Securities
      without registration under the Securities Act within the limitation of the
      exemptions provided by Rule 144 promulgated under the Securities Act, including
      providing any legal opinions relating to such sale pursuant to Rule 144. Upon
      the request of any Holder, the Company shall deliver to such Holder a written
      certification of a duly authorized officer as to whether it has complied with
      such requirements.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7. Miscellaneous.

    


    (a) Remedies.
      In the
      event of a breach by the Company or by a Holder, of any of their obligations
      under this Agreement, such 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, will 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 waive the
      defense that a remedy at law would be adequate.

    


    (b) No
      Inconsistent Agreements.
      The
      Company has not, as of the date hereof entered into and currently in effect,
      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 is
      inconsistent with the rights granted to the Holders in this Agreement or
      otherwise conflicts with the provisions hereof. Except as disclosed in
Schedule
      II
      hereto,
      the Company has not previously entered into any agreement currently in effect
      granting any registration rights with respect to any of its securities to any
      Person. Without limiting the generality of the foregoing, without the written
      consent of the Holders of a majority of the then outstanding Registrable
      Securities, the Company shall not grant to any Person the right to request
      the
      Company to register any securities of the Company under the Securities Act
      unless the rights so granted are subject in all respects to the prior rights
      in
      full of the Holders set forth herein, and are not otherwise in conflict with
      the
      provisions of this Agreement.

    


    (c) No
      Piggyback on Registrations.
      Neither
      the Company nor any of its security holders (other than the Holders in such
      capacity pursuant hereto or as disclosed in Schedule
      II
      hereto)
      may include securities of the Company in the Registration Statement, and the
      Company shall not after the date hereof enter into any agreement providing
      such
      right to any of its security holders, unless the right so granted is subject
      in
      all respects to the prior rights in full of the Holders set forth herein, and
      is
      not otherwise in conflict with the provisions of this Agreement.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) Piggy-Back
      Registrations.
      If at
      any time when there is not an effective Registration Statement covering
      Registrable Securities, 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 stock option or other employee
      benefit plans, the Company shall send to each holder of Registrable Securities
      written notice of such determination and, if within thirty (30) days after
      receipt of such notice, or within such shorter period of time as may be
      specified by the Company in such written notice as may be necessary for the
      Company to comply with its obligations with respect to the timing of the filing
      of such registration statement, any such holder shall so request in writing
      (which request shall specify the Registrable Securities intended to be disposed
      of by the Purchasers), the Company will cause the registration under the
      Securities Act of all Registrable Securities which the Company has been so
      requested to register by the holder, to the extent requisite to permit the
      disposition of the Registrable Securities so to be registered, provided that
      if
      at any time after giving written notice of its intention to register any
      securities and prior to the effective date of the registration statement filed
      in connection with such registration, the Company shall determine for any reason
      not to register or to delay registration of such securities, the Company may,
      at
      its election, give written notice of such determination to such holder and,
      thereupon, (i) in the case of a determination not to register, shall be relieved
      of its obligation to register any Registrable Securities in connection with
      such
      registration (but not from its obligation to pay expenses in accordance with
      Section 4 hereof), and (ii) in the case of a determination to delay registering,
      shall be permitted to delay registering any Registrable Securities being
      registered pursuant to this Section 7(d) for the same period as the delay in
      registering such other securities. 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 7(d) that are eligible for sale pursuant to Rule 144
      of
      the Securities Act. In the case of an underwritten public offering, if the
      managing underwriter(s) or underwriter(s) should reasonably object to the
      inclusion of the Registrable Securities in such registration statement, then
      if
      the Company after consultation with the managing underwriter should reasonably
      determine that the inclusion of such Registrable Securities would materially
      adversely affect the offering contemplated in such registration statement,
      and
      based on such determination recommends inclusion in such registration statement
      of fewer or none of the Registrable Securities of the Holders, then (x) the
      number of Registrable Securities of the Holders included in such registration
      statement shall be reduced pro-rata among such Holders (based
      upon the number of Registrable Securities requested to be included in the
      registration), if the Company after consultation with the underwriter(s)
      recommends the inclusion of fewer Registrable Securities, or (y) none of the
      Registrable Securities of the Holders shall be included in such registration
      statement, if the Company after consultation with the underwriter(s) recommends
      the inclusion of none of such Registrable Securities; provided,
      however,
      that if
      securities are being offered for the account of other persons or entities as
      well as the Company, such reduction shall not represent a greater fraction
      of
      the number of Registrable Securities intended to be offered by the Holders
      than
      the fraction of similar reductions imposed on such other persons or entities
      (other than the Company). 

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e) Failure
      to File Registration Statement and Other Events.
      The
      Company and the Purchasers agree that the Holders will suffer damages if the
      Registration Statement is not filed on or prior to the Filing Date and not
      declared effective by the Commission on or prior to the Effectiveness Date
      and
      maintained in the manner contemplated herein during the Effectiveness Period
      or
      if certain other events occur. The Company and the Holders further agree that
      it
      would not be feasible to ascertain the extent of such damages with precision.
      Accordingly, if (A) the Registration Statement is not filed on or prior to
      the
      Filing Date, or (B) the Registration Statement is not declared effective by
      the
      Commission on or prior to the Effectiveness Date, or (C) the Company fails
      to
      file with the Commission a request for acceleration in accordance with Rule
      461
      promulgated under the Securities Act within three (3) Business Days of the
      date
      that the Company is notified (orally or in writing, whichever is earlier) by
      the
      Commission that a Registration Statement will not be "reviewed," or not subject
      to further review, or (D) the Registration Statement is filed with and declared
      effective by the Commission but thereafter ceases to be effective as to all
      Registrable Securities at any time prior to the expiration of the Effectiveness
      Period, without being succeeded immediately by a subsequent Registration
      Statement filed with and declared effective by the Commission in accordance
      with
      Section 2(a) hereof, or (E) the Company has breached Section 3(n) of this
      Agreement, or (F) trading in the Common Stock shall be suspended or if the
      Common Stock is no longer quoted on the OTCBB, or is delisted from the NASDAQ
      (or other principal exchange on which the Common Stock is traded), as
      applicable, for any reason for more than three (3) Business Days in the
      aggregate (any such failure or breach being referred to as an "Event,"
      and
      for purposes of clauses (A) and (B) the date on which such Event occurs, or
      for
      purposes of clauses (C) and (F) the date on which such three (3) Business Day
      period is exceeded, or for purposes of clause (D) after more than fifteen (15)
      Business Days, being referred to as "Event
      Date"),
      the
      Company shall pay an amount in cash as liquidated damages to each Holder equal
      to one percent (1%) of the Purchase Price: (1) on the Event Date; and (2) for
      each calendar month or portion thereof thereafter from the Event Date until
      the
      applicable Event is cured; provided,
      however,
      that in
      no event shall the amount of liquidated damages payable at any time and from
      time to time to any Holder pursuant to this Section 7(e) exceed an aggregate
      of
      ten percent (10%) of the Purchase Price; and
      provided,
      further,
      that in
      the event the Commission does not permit all of the Registrable Securities
      to be
      included in the Registration Statement because of its application of Rule 415,
      liquidated damages payable pursuant to this Section shall be payable by the
      Company based on one percent (1%) of the portion of the Purchase Price that
      corresponds to the number of such Holder’s Registrable Securities permitted to
      be registered by the Commission in such Registration Statement pursuant to
      Rule
      415, but are not so registered due to one or more of the events specified above
      in (A) though (F). For further clarification, the parties understand that no
      liquidated damages shall be payable pursuant to this Section with respect to
      any
      Registrable Securities that the Company is not permitted to include on such
      Registration Statement due to the Commission’s application of Rule 415.
      Notwithstanding anything to the contrary in this paragraph (e), if (a) any
      of
      the Events described in clauses (A), (B), (C), (D) or (F) shall have occurred,
      (b) on or prior to the applicable Event Date, the Company shall have exercised
      its rights under Section 3(n) hereof and (c) the postponement or suspension
      permitted pursuant to such Section 3(n) shall remain effective as of such
      applicable Event Date, then the applicable Event Date shall be deemed instead
      to
      occur on the second Business Day following the termination of such postponement
      or suspension. Liquidated damages payable by the Company pursuant to this
      Section 7(d) shall be payable on the Event Date and the first (1st)
      Business Day of each thirty (30) day period following the Event Date.
      Notwithstanding anything to the contrary contained herein, in no event shall
      any
      liquidated damages be payable with respect to any issued Additional Share
      Issuances.

    


    (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 (i) the Company, (ii) the Purchasers, provided that the Purchasers
      hold Registrable Securities at such time, and (iii) the Holders of 25% the
      Registrable Securities, of which the Purchasers’ ownership of Registrable
      Securities shall be part. 

    


    (g) Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery, telecopy or facsimile at the address or number designated below (if
      delivered on a business day during normal business hours where such notice
      is to
      be received), or the first business day following such delivery (if delivered
      other than on a business day during normal business hours where such notice
      is
      to be received) or (b) on the second business day following the date of mailing
      by express courier service, fully prepaid, addressed to such address, or upon
      actual receipt of such mailing, whichever shall first occur. The addresses
      for
      such communications shall be:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to the Company:

            	
              China
                Bio Energy Holding Group Co., Ltd.

              c/o
                Xi'an Baorun Industrial Development Co. Ltd.

              Dongxin
                Century Square,  7th Floor

              Xi'an
                East City High-Tech Industrial Development Park

              Shaanxi
                Province,  P.R. China

              Attn:
                Mr. Gao Xincheng

              Tel: 
                86 29 82682019

              Fax:
                86 29 82683629

            
	 	 
	
              with
                copies to (which shall not constitute notice):

            	
              Loeb
                & Loeb

              345
                Park Avenue

              New
                York, NY10154

              Attn:
                Mitchell S. Nussbaum

              Tel:
                212.407.4159

              Fax:
                212.407-4990

            
	 	 
	
              If
                to any Purchaser:

            	
              At
                the address of such Purchaser set forth on Schedule
                I
                to this Agreement

            


    

     

    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) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns and shall inure to the benefit of each
      Holder and its successors and assigns. The Company may not assign this Agreement
      or any of its rights or obligations hereunder without the prior written consent
      of each Holder. 

    


    (i) 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 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. 

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (j) Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other parties
      hereto, it being understood that all parties need not sign the same counterpart.
      In the event that any signature is delivered by facsimile transmission, such
      signature shall create a valid binding obligation of the party executing (or
      on
      whose behalf such signature is executed) the same with the same force and effect
      as if such facsimile signature were the original thereof.

     

    (k) Governing
      Law; Jurisdiction.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York, without giving effect to any of the conflicts
      of
      law principles which would result in the application of the substantive law
      of
      another jurisdiction. This Agreement shall not be interpreted or construed
      with
      any presumption against the party causing this Agreement to be drafted. The
      Company and the Holders agree that venue for any dispute arising under this
      Agreement will lie exclusively in the state or federal courts located in New
      York County, New York, and the parties irrevocably waive any right to raise
      forum
      non conveniens
      or any
      other argument that New York is not the proper venue. The Company and the
      Holders irrevocably consent to personal jurisdiction in the state and federal
      courts of the state of New York. The Company and the Holders consent to process
      being served in any such suit, action or proceeding by mailing a copy thereof
      to
      such party at the address in effect for notices to it under this Agreement
      and
      agrees that such service shall constitute good and sufficient service of process
      and notice thereof. Nothing in this Section 7(k) shall affect or limit any
      right
      to serve process in any other manner permitted by law. The Company and the
      Holders hereby agree that the prevailing party in any suit, action or proceeding
      arising out of or relating to this Agreement or the Warrant Exercise Agreement,
      shall be entitled to reimbursement for reasonable legal fees from the
      non-prevailing party. The parties hereby waive all rights to a trial by
      jury.

    


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

    


    (m) Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held to be
      invalid, illegal, void or unenforceable in any respect, 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 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.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

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

    


    (o) Shares
      Held by the Company and its Affiliates.
      Whenever the consent or approval of Holders of a specified percentage of
      Registrable Securities is required hereunder, Registrable Securities held by
      the
      Company or its Affiliates (other than any Holder or transferees or successors
      or
      assigns thereof if such Holder is deemed to be an Affiliate solely by reason
      of
      its holdings of such Registrable Securities) shall not be counted in determining
      whether such consent or approval was given by the Holders of such required
      percentage.

    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Registration Rights
      Agreement to be duly executed by their respective authorized persons as of
      the
      date first indicated above.

    


    
      	 	
              CHINA
                BIO ENERGY HOLDING GROUP CO., LTD.

            
	 	 
	 	
              By:

            	 
              /s/ Gao Xincheng
	 	 	
              Name:
                Mr. Gao Xincheng

            
	 	 	
              Title:
                CEO

            
	 	 
	 	
              PURCHASERS:

            
	 	 
	 	
              VISION
                OPPORTUNITY MASTER FUND, LTD.

            
	 	
               

            
	 	
              By:

            	 
              /s/ Adam Benowitz
	 	 	
              Name:
                Adam Benowitz

            
	 	 	
              Title:
                Director

            
	 	 
	 	
              VISION
                CAPITAL ADVANTAGE FUND, L.P.

            
	 	
               

            
	 	
              By:

            	 
              /s/ Adam Benowitz
	 	 	
              Name:
                Adam Benowitz

            
	 	 	
              Title:
                Managing Member, VCAF GP, LLC

            
	 	 	 
	 	
              VISION
                OPPORTUNITY CHINA LP

            
	 	 
	 	
              By:

            	 
              /s/ Adam Benowitz
	 	 	
              Name:
                Adam Benowitz

            
	 	 	
              Title:
                Authorized Signatory

            


    

    


    [Signature
      Page to Registration Rights Agreement]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Schedule
      I

    Purchasers

    


    Name
      and Address of Purchasers

    


    Vision
      Opportunity Master Fund, Ltd.

    20
      West
      55th Street

    5th
      Floor

    New
      York,
      NY 10019

    Attn:
      Kim
      Gabriel

    


    Vision
      Capital Advantage Fund, L.P.

    20
      West
      55th Street

    5th
      Floor

    New
      York,
      NY 10019

    Attn:
      Kim
      Gabriel

    


    Vision
      Opportunity China LP

    20
      West
      55th Street

    5th
      Floor

    New
      York,
      NY 10019

    Attn:
      Kim
      Gabriel

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
      II

    Other
      Securities to be Included on the Registration Statement

    


    None

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A

    Plan
      of Distribution

     

    The
      selling security holders and any of their pledgees, donees, assignees and
      successors-in-interest may, from time to time, sell any or all of their shares
      of common stock being offered under this prospectus on any stock exchange,
      market or trading facility on which shares of our common stock are traded or
      in
      private transactions. These sales may be at fixed or negotiated prices. The
      selling security holders may use any one or more of the following methods when
      disposing of shares:

     

    
      	 	
              ·

            	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits a Purchaser;

            


    

     

    
      	 	
              ·

            	
              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 resales by the broker-dealer
                for its
                account;

            


    

     

    
      	 	
              ·

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

            


    

     

    
      	 	
              ·

            	
              privately
                negotiated transactions;

            


    

     

    
      	 	
              ·

            	
              to
                cover short sales made after the date that the registration statement
                of
                which this prospectus is a part is declared effective by the
                Commission;

            


    

     

    
      	 	
              ·

            	
              broker-dealers
                may agree with the selling security holders to sell a specified number
                of
                such shares at a stipulated price per
                share;

            


    

     

    
      	 	
              ·

            	
              a
                combination of any of these methods of sale;
                and

            


    

     

    
      	 	
              ·

            	
              any
                other method permitted pursuant to applicable
                law.

            


    

     

    The
      shares may also be sold under Rule 144 under the Securities Act of 1933, as
      amended (“Securities Act”), if available, rather than under this prospectus. The
      selling security holders have the sole and absolute discretion not to accept
      any
      purchase offer or make any sale of shares if they deem the purchase price to
      be
      unsatisfactory at any particular time.

     

    The
      selling security holders may pledge their shares to their brokers under the
      margin provisions of customer agreements. If a selling security holder defaults
      on a margin loan, the broker may, from time to time, offer and sell the pledged
      shares.

     

    Broker-dealers
      engaged by the selling security holders may arrange for other broker-dealers
      to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the selling security holders (or, if any broker-dealer acts as agent for a
      purchaser of shares, from a purchaser) in amounts to be negotiated, which
      commissions as to a particular broker or dealer may be in excess of customary
      commissions to the extent permitted by applicable law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    If
      sales
      of shares offered under this prospectus are made to broker-dealers as
      principals, we would be required to file a post-effective amendment to the
      registration statement of which this prospectus is a part. In the post-effective
      amendment, we would be required to disclose the names of any participating
      broker-dealers and the compensation arrangements relating to such
      sales.

     

    The
      selling security holders and any broker-dealers or agents that are involved
      in
      selling the shares offered under this prospectus may be deemed to be
“underwriters” within the meaning of the Securities Act in connection with these
      sales. Commissions received by these 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. Any broker-dealers or agents
      that are deemed to be underwriters may not sell shares offered under this
      prospectus unless and until we set forth the names of the underwriters and
      the
      material details of their underwriting arrangements in a supplement to this
      prospectus or, if required, in a replacement prospectus included in a
      post-effective amendment to the registration statement of which this prospectus
      is a part.

     

    The
      selling security holders and any other persons participating in the sale or
      distribution of the shares offered under this prospectus will be subject to
      applicable provisions of the Exchange Act, and the rules and regulations under
      that act, including Regulation M. These provisions may restrict activities
      of,
      and limit the timing of purchases and sales of any of the shares by, the selling
      security holders or any other person. Furthermore, under Regulation M, persons
      engaged in a distribution of securities are prohibited from simultaneously
      engaging in market making and other activities with respect to those securities
      for a specified period of time prior to the commencement of such distributions,
      subject to specified exceptions or exemptions. All of these limitations may
      affect the marketability of the shares.

     

    If
      any of
      the shares of common stock offered for sale pursuant to this prospectus are
      transferred other than pursuant to a sale under this prospectus, then subsequent
      holders could not use this prospectus until a post-effective amendment or
      prospectus supplement is filed, naming such holders. We offer no assurance
      as to
      whether any of the selling security holders will sell all or any portion of
      the
      shares offered under this prospectus.

     

    We
      have
      agreed to pay all fees and expenses we incur incident to the registration of
      the
      shares being offered under this prospectus. However, each selling security
      holder and purchaser is responsible for paying any discounts, commissions and
      similar selling expenses they incur. 

     

    We
      and
      the selling security holders have agreed to indemnify one another against
      certain losses, damages and liabilities arising in connection with this
      prospectus, including liabilities under the Securities Act.