f8k030708ex4ii_chinayida.htm


    REGISTRATION
RIGHTS AGREEMENT

    


    

      This
Registration Rights Agreement (this “Agreement”) is made
and entered into as of March 7, 2008, between China Yida Holding, Co., a
Delaware corporation (the “Company”) and each of
the several purchasers signatory hereto (each such purchaser, a “Purchaser” and,
collectively, the “Purchasers”).



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

    


                   The
Company and each Purchaser hereby agrees as follows:

    


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

    


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

    


    “Effectiveness Date”
means, with respect to the Initial Registration Statement required to be filed
hereunder, the 150th calendar day following the date hereof (or, in the event of
a “full review” by the Commission, the 180th calendar day following the date
hereof) and with respect to any additional Registration Statements which may be
required pursuant to Section 3(c), the 90th calendar day following the date on
which an additional Registration Statement is required to be filed hereunder;
provided, however, that in the
event the Company is notified by the Commission that one or more of the above
Registration Statements will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Date as to such Registration Statement
shall be the fifth Trading Day following the date on which the Company is so
notified if such date precedes the dates otherwise required above.

    


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

    


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

    


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

    


    “Filing Date” means,
with respect to the Initial Registration Statement required hereunder, the 60th
calendar day following the date hereof and, with respect to any additional
Registration Statements which may be required pursuant to Section 3(c), the 60th
calendar day following the date on which the Company is permitted by SEC
Guidance to file such additional Registration Statement related to the
Registrable Securities (but in no event sooner than the 180th calendar day
following the date the initial Registration Statement is first declared
effective by the Commission unless the filing of such additional Registration
Statement sooner than such 180th calendar is permitted pursuant to Rule
415).

     

     

    
      
        
        

      

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

    


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

    


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

    


    “Initial Registration
Statement” means the initial Registration Statement filed pursuant to
this Agreement.

    


    “Initial Shares” means
a number of Registrable Securities equal to the lesser of (i) the total number
of Registrable Securities, and (ii) one-third of the number of shares of Common
Stock issued and outstanding and held by non-affiliates of the Company
immediately prior to the filing date of the Initial Registration
Statement.

    


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

    


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

    


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

    


    “Registrable
Securities” means, as of the date in question, (i) all of the Shares of
Common Stock, (ii) all Warrant Shares (assuming on the date of determination the
Warrants are exercised in full without regard to any exercise limitations
therein), (iii) any additional shares of Common Stock issuable in connection
with any anti-dilution provisions in the Purchase Agreement (as to the Shares)
and Warrants (in each case, without giving effect to any limitations on exercise
set forth in the Warrants), (v) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing, or (vi) any “Escrow Shares” released to the Purchasers
in connection with the Make Good Agreement, dated as of the date hereof, between
the Company, Chen Minhua, an officer, director and principal stockholder of the
Company, and an agent of the purchasers (the “Make Good
Agreement”).

    


    “Registration
Statement” means the registration statement required to be filed
hereunder and any additional registration statements contemplated by Section
3(c), 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 or
deemed to be incorporated by reference in such registration
statement.

     

     

    
      
        
        

      

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

    


    “Rule 424” means Rule
424 promulgated by the Commission pursuant to the 1933 Act, as such Rule may be
amended or interpreted from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.

    


    “Selling Shareholder
Questionnaire” shall have the meaning set forth in Section
3(a).

    


    “SEC Guidance” means
(i) any publicly-available written or oral guidance, comments, requirements or
requests of the Commission staff, and (ii) the 1933 Act and the rules and
regulations promulgated thereunder.

    


    2.           Registration

    


    (a)           On
or prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all or such portion
of the Registrable Securities as permitted by SEC Guidance (provided that the
Company shall use diligent efforts to advocate with the Commission for the
registration of all of the Registrable Securities in accordance with the SEC
Guidance, including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29) that are not then registered on an effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415;
provided, however, that if 100%
of the Registrable Securities hereunder shall equal or exceed 30% of the issued
and outstanding Common Stock of the Company (less any shares of Common Stock
held by Affiliates of the Company) on the actual filing date of the Initial
Registration Statement, the Initial Registration Statement shall register a
number of shares of Common Stock which is equal to 30% of the issued and
outstanding shares of Common Stock of the Company (less any shares of Common
Stock held by Affiliates of the Company) on such actual filing date minus 10,000
shares of Common Stock.  The remaining Registrable Securities shall be
subject to Section 3(c). In such event, the number of Registrable Securities to
be registered for each Holder shall be reduced pro-rata among all Holders, and
unless otherwise directed in writing by a Holder
as to its Registrable Securities, the number of Registrable Securities to be
registered on such Registration Statement will first be reduced by Registrable
Securities represented by Warrant Shares (applied, in the case that some Warrant
Shares may be registered, to the Holders on a pro rata basis based on the total
number of unregistered Warrant Shares held by such Holders), and second by
Registrable Securities represented by Shares (applied, in
the case that some Shares may be registered, to the Holders on a pro rata basis
based on the total number of unregistered Shares held by such Holders).
The Initial Registration Statement shall be on Form S-1 and, to the extent
available, any additional Registration Statements that are required shall be on
Form S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith) and shall contain (unless
otherwise directed by at least an 85% majority in interest of the Holders)
substantially the “Plan of Distribution”
attached hereto as Annex
A.  

     

     

     

    
      
        
        

      

      
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    Subject
to the terms of this Agreement, the Company shall use its best efforts to cause
a Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event prior to the
applicable Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act until all
Registrable Securities covered by such Registration Statement have been sold, or
may be sold without volume restrictions pursuant to Rule 144(k), as determined
by the counsel to the Company pursuant to a written opinion letter to such
effect, addressed and acceptable to the Company’s transfer agent and the
affected Holders (the “Effectiveness
Period”).  The Company shall telephonically request
acceleration of a Registration Statement as of 5:00 p.m. New York City time on a
Trading Day that is no later than five (5) days following receipt of
notification by the SEC that they have no further comments.   The
Company shall immediately notify the Holders via facsimile or by e-mail delivery
of a “.pdf” format data file of the effectiveness of a Registration Statement on
the same Trading Day that the Company telephonically confirms effectiveness with
the Commission, which shall be the date requested for effectiveness of a
Registration Statement.  The Company shall, by 9:30 a.m. New York City
time on the fourth (4th)
Trading Day after the Effective Date, file a final Prospectus with the
Commission as required by Rule 424.  Failure to so notify the Holder
within one (1) Trading Day of such notification of effectiveness or failure to
file a final Prospectus as foresaid shall be deemed an Event under Section
2(b).

    


    (b)           If:
(i) the Initial Registration Statement is not filed on or prior to its Filing
Date (if the Company files the Initial Registration Statement without affording
the Holders the opportunity to review and comment on the same as required by
Section 3(a) herein, the Company shall be deemed to have not satisfied this
clause (i)), or (ii) the Company fails to file with the Commission a request for
acceleration of a Registration Statement in accordance with Rule 461 promulgated
by the Commission pursuant to the Securities Act, within five Trading Days of
the date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that such Registration Statement will not be
“reviewed” or will not be subject to further review, or (iii) prior to the
Effectiveness Date, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the Commission in respect of
such Registration Statement as soon as practicable after the receipt of comments
by or notice from the Commission that such amendment is required in order for
such Registration Statement to be declared effective, or (iv) the Initial
Registration Statement filed or required to be filed hereunder is not declared
effective by the Commission by its Effectiveness Date, or (v) after the
Effectiveness Date Registration Statement ceases for any reason to remain
continuously effective as to all Registrable Securities for which it is required
to be effective, or the Holders are otherwise not permitted to utilize the
Prospectus therein to resell such Registrable Securities, for more than an
aggregate of 30 calendar days (which need not be consecutive calendar days)
during any 12-month period (any such failure or breach being referred to as an
“Event”, and
for purposes of clauses (i), (iv) and (v) the date on which such Event occurs,
and for purpose of clause (ii) the date on which such five Trading Day period is
exceeded, and for purpose of clause (iii) the date which such 10 calendar day
period is exceeded, and for purpose of clause (vi) the date on which such 10 or
15 calendar day period, as applicable, is exceeded being referred to as “Event Date”), then,
in addition to any other rights the Holders may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of each
such Event Date (if the applicable Event shall not have been cured by such date)
until the applicable Event is cured, the Company shall pay to each Holder an
amount in cash or shares of Common Stock, or combination thereof, as partial
liquidated damages and not as a penalty, equal to one (1%) percent of the
aggregate Unit Purchase Price paid by such Holder pursuant to the Purchase
Agreement for any unregistered Registrable Securities then held by such
Holder.  

     

     

    
      
        
        

      

      
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    The
parties agree that (1) the Company shall not be liable for liquidated damages
under this Agreement with respect to any Warrants or Warrant Shares, and (2) in
no event will the Company be liable for liquidated damages under this Agreement
in excess of one (1%) percent of the aggregate Purchase Price of the Holders in
any 30-day period, and (3) the maximum aggregate liquidated damages payable to a
Holder under this Agreement shall be 24% of the aggregate Unit Purchase Price
paid by such Holder pursuant to the Purchase Agreement.  If the
Company fails to pay any partial liquidated damages pursuant to this Section in
full within seven days after the date payable, the Company will pay interest
thereon at a rate of 15% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the
date such partial liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The partial liquidated damages pursuant to
the terms hereof shall apply on a daily pro rata basis for any portion of a
month prior to the cure of an Event.

    


    3.           Registration
Procedures.  In connection with the Company’s registration
obligations hereunder, the Company shall:

    


    (a)           Not
less than five (5) Trading Days prior to the filing of each Registration
Statement and not less than one (1) Trading Day prior to the filing of any
related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall (i) furnish to each Holder copies of all such
documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of such
Holders, and (ii) cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of respective counsel to each Holder, to conduct a
reasonable investigation within the meaning of the 1933 Act. The Company shall
not file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith, provided that the Company is
notified of such objection in writing no later than five (5) Trading Days after
the Holders have been so furnished copies of a Registration Statement or one (1)
Trading Day after the Holders have been so furnished copies of any related
Prospectus or amendments or supplements thereto. Each Holder agrees to furnish
to the Company a completed questionnaire in the form attached to this Agreement
as Annex B (a
“Selling Shareholder
Questionnaire”) not less than two Trading Days prior to the Filing Date
or by the end of the fourth Trading Day following the date on which such Holder
receives draft materials in accordance with this Section.

    


    (b)              (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the
Registrable Securities, unless such Registrable Securities can be sold freely
pursuant to Rule 144; 

     

     

    
      
        
        

      

      
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    (ii)
cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement (subject to the terms of this Agreement), and, as so
supplemented or amended, to be filed pursuant to Rule 424; (iii) respond as
promptly as reasonably possible to any comments received from the Commission
with respect to a Registration Statement or any amendment thereto and provide as
promptly as reasonably possible to the Holders true and complete copies of all
correspondence from and to the Commission relating to a Registration Statement
(provided that the Company may excise any information contained therein which
would constitute material non-public information as to any Holder which has not
executed a confidentiality agreement with the Company); and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by a
Registration Statement during the applicable period in accordance (subject to
the terms of this Agreement) with the intended methods of disposition by the
Holders thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.

    


    (c)           If
during the Effectiveness Period, the number of Registrable Securities at any
time exceeds 100% of the number of shares of Common Stock then registered in a
Registration Statement, or otherwise can be resold under Rule 144, then the
Company shall file as soon as reasonably practicable and in accordance with SEC
Guidlines, but in any case prior to the applicable Filing Date, an additional
Registration Statement covering the resale by the Holders of not less than the
number of such Registrable Securities.

    


    (d)           Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant
to clauses (iii) through (vi) hereof, be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made) as
promptly as reasonably possible (and, in the case of (i)(A) below, not less than
one Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one Trading Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement; and (C) with respect to a Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; (v) of the occurrence of any event or passage of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; 

     

     

    
      
        
        

      

      
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    and (vi)
of the occurrence or existence of any pending corporate development with respect
to the Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interest of the Company
to allow continued availability of a Registration Statement or Prospectus,
provided that any and all of such information shall remain confidential to each
Holder until such information otherwise becomes public, unless disclosure by a
Holder is required by law; provided, further, that
notwithstanding each Holder’s agreement to keep such information confidential,
each such Holder makes no acknowledgement that any such information is material,
non-public information.

    


    (e)           Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of (i) any order stopping or suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.

    


    (f)           Unless
otherwise publicly available, furnish to each Holder, without charge, at least
one conformed copy of each such Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such
Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission; provided, that
any such item which is available on the EDGAR system need not be furnished in
physical form.

    


    (g)           Subject
to the terms of this Agreement, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving of any notice pursuant to Section 3(d).

    


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

     

     

    
      
        
        

      

      
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    (i)           If
requested by a Holder, cooperate with such Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement,
of all restrictive legends, and to enable such Registrable Securities to be in
such denominations and registered in such names as any such Holder may
request.

    


    (j)           Upon
the occurrence of any event contemplated by Section 3(d), as promptly as
reasonably possible under the circumstances taking into account the Company’s
good faith assessment of any adverse consequences to the Company and its
stockholders of the premature disclosure of such event, prepare a supplement or
amendment, including a post-effective amendment, to a Registration Statement or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the
Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to
suspend the use of any Prospectus until the requisite changes to such Prospectus
have been made, then the Holders shall suspend use of such
Prospectus.  The Company will use its best efforts to ensure that the
use of the Prospectus may be resumed as promptly as is
practicable.  The Company shall be entitled to exercise its right
under this Section 3(k) to suspend the availability of a Registration Statement
and Prospectus, subject to the payment of partial liquidated damages otherwise
required pursuant to Section 2(b), for a period not to exceed 60 calendar days
(which need not be consecutive days) in any 12 month period.

    


    (k)           Comply
with all applicable rules and regulations of the Commission.

    


    (l)           The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such
Holder and, if required by the Commission, the natural persons thereof that have
voting and dispositive control over the shares. During any periods that the
Company is unable to meet its obligations hereunder with respect to the
registration of the Registrable Securities solely because any Holder fails to
furnish such information within three Trading Days of the Company’s request, any
liquidated damages that are accruing at such time as to such Holder only shall
be tolled and any Event that may otherwise occur solely because of such delay
shall be suspended as to such Holder only, until such information is delivered
to the Company.

    


    4.           Registration
Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses of the Company’s counsel and auditors) (A)
with respect to filings made with the Commission, (B) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, (C) in compliance with applicable state securities or Blue
Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions of the Registrable Securities),


     

     

    
      
        
        

      

      
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    and (D)
if not previously paid by the Company in connection with an Issuer Filing, with
respect to any filing that may be required to be made by any broker through
which a Holder intends to make sales of Registrable Securities with the NASD
pursuant to NASD Rule 2710, so long as the broker is receiving no more than a
customary brokerage commission in connection with such sale, (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement.  In addition, the
Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.  In no event shall the Company be responsible for any
broker or similar commissions of any Holder or, except to the extent provided
for in the Transaction Documents, any legal fees or other costs of the
Holders.

    


    5.           Indemnification.

    


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

     

     

     

    
      
        
        

      

      
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    or (ii)
in the case of an occurrence of an event of the type specified in Section
3(d)(iii)-(vi), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice
contemplated in Section 6(d).  The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding arising from
or in connection with the transactions contemplated by this Agreement of which
the Company is aware.

    


    (b)           Indemnification by
Holders. Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, to the extent arising
out of or based solely upon: (x) such Holder’s failure to comply with the
prospectus delivery requirements of the Securities Act, or (y) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or 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 not misleading (i) to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the
Company specifically for inclusion in such Registration Statement or such
Prospectus or such form of prospectus, (ii) to the extent that such information
relates to such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement (it being understood that the
Holder has approved Annex A hereto for this purpose), such Prospectus or in any
amendment or supplement thereto, or (ii) in the case of an occurrence of an
event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of the Advice contemplated in Section 6(d). In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification
obligation.

    


    (c)           Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an “Indemnified Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying Party”)
in writing, and the Indemnifying Party shall have the right to assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have prejudiced the Indemnifying Party.

     

     

    
      
        
        

      

      
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    An Indemnified Party shall have the
right to employ separate counsel in any such Proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and counsel to the Indemnified Party shall reasonably believe that a
material conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if
such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of no more than one separate counsel shall be
at the expense of the Indemnifying Party).  The Indemnifying Party
shall not be liable for any settlement of any such Proceeding effected without
its written consent, which consent shall not be unreasonably withheld or
delayed.  No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.

     

    Subject to the terms of this Agreement,
all reasonable fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Trading
Days of written notice thereof to the Indemnifying Party; provided, that the
Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is judicially determined to be not entitled to indemnification
hereunder.

    


    (d)           Contribution. If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
Party or insufficient to hold an Indemnified Party harmless for any Losses, then
each Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission.  The amount paid or payable by a party
as a result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys’ or other fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.

     

     

     

    
      
        
        

      

      
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    The parties hereto agree that it would
not be just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
immediately preceding paragraph.  Notwithstanding the provisions of
this Section 5(d), no Holder shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the net proceeds actually received
by such Holder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.

    


    The indemnity and contribution
agreements contained in this Section are in addition to any liability that the
Indemnifying Parties may have to the Indemnified Parties.

    


    6.           Miscellaneous.

    


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

    


                                  
(b)           No Piggyback on Registrations; Prohibition on
Filing Other Registration Statements. Except as set forth on Annex C
attached hereto, neither the Company nor any of its security holders (other than
the Holders in such capacity pursuant hereto) may include securities of the
Company in the initial Registration Statement other than the Registrable
Securities.  If available, and the Company so desires, the Company may
include securities other than the Registrable Securities in any additional
Registration Statement filed pursuant hereto; provided, however, that the
Registrable Securities shall be given priority. For the sake of clarification,
no other securities may be included in any additional Registration Statements
filed pursuant hereto, unless: (i) there are no additional Registrable
Securities to be registered; and (ii) additional shares are permitted to be
included by the SEC.  The Company shall not file any other
registration statements until the initial Registration Statement required
hereunder is declared effective by the Commission, provided that this Section
6(b) shall not prohibit the Company from filing amendments to registration
statements already filed.


    (c)           Compliance. Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it in connection with sales of
Registrable Securities pursuant to a Registration Statement.

     

     

    
      
        
        

      

      
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    (d)           Discontinued
Disposition.  By its acquisition of Registrable Securities,
each Holder agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(d)(iii) through (vi),
such Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until it is advised in writing (the
“Advice”) by
the Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed.  The Company will use its
best efforts to ensure that the use of the Prospectus may be resumed as promptly
as is practicable.  The Company agrees and acknowledges that any
periods during which the Holder is required to discontinue the disposition of
the Registrable Securities hereunder shall be subject to the provisions of
Section 2(b).

    


    (e)           Piggy-Back
Registrations. If, at any time during the Effectiveness Period, there is
not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the Company’s stock option or
other employee benefit plans, then the Company shall deliver to each Holder a
written notice of such determination and, if within fifteen days after the date
of the delivery of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered; provided, however, that the
Company shall not be required to register any Registrable Securities pursuant to
this Section 6(e) that are eligible for resale pursuant to Rule 144(k)
promulgated by the Commission pursuant to the Securities Act or that are the
subject of a then effective Registration Statement.

    


    (f)           Amendments and
Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and the Holders of a majority
of the then outstanding Registrable Securities (including, for this purpose any
Registrable Securities issuable upon exercise or conversion of any
Security).  If a Registration Statement does not register all of the
Registrable Securities pursuant to a waiver or amendment done in compliance with
the previous sentence, then the number of Registrable Securities to be
registered for each Holder shall be reduced pro rata among all Holders and each
Holder shall have the right to designate which of its Registrable Securities
shall be omitted from such Registration Statement. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of a Holder or some Holders
and that does not directly or indirectly affect the rights of other Holders may
be given by such Holder or Holders of all of the Registrable Securities to which
such waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the first  sentence of this
Section 6(f).

    


              (g)           Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be delivered as set forth in the Purchase
Agreement.

     

     

    
      
        
        

      

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

    


    (i)           No Inconsistent
Agreements. Neither the Company nor any of its Subsidiaries has entered,
as of the date hereof, nor shall the Company or any of its Subsidiaries, on or
after the date of this Agreement, enter into any agreement with respect to its
securities, that would have the effect of impairing the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof.  Except as set forth on Annex C, neither the
Company nor any of its Subsidiaries has previously entered into any agreement
granting any registration rights with respect to any of its securities to any
Person that have not been satisfied in full.

    


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

    


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

    


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

     

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

    


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

     

     

    
      
        
        

      

      
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    (o)           Independent Nature of
Holders’ Obligations and Rights. The obligations of each Holder hereunder
are several and not joint with the obligations of any other Holder hereunder,
and no Holder shall be responsible in any way for the performance of the
obligations of any other Holder hereunder. Nothing contained herein or in any
other agreement or document delivered at any closing, and no action taken by any
Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Holders are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Holder shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.

    


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

     

     

     

    
      
        
        

      

      
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                   IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.

     

    


    
      	
              CHINA
      YIDA HOLDING, CO.

               

               

            
	
              By:
      /s/ Chen
      Minhua

                   Name: 
      Chen
      Minhua

                   Title:   
      Chairman
      and Chief Executive Officer

            


    

     

     

     

     

     

     

     

     

     

    
 

    


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