Document:

PROMISSORY NOTE

$__________                                                 As of April 11, 2005
                                                           San Diego, California

      Chardan China Acquisition Corp. III ("Maker") promises to pay to the order
of _________  ("Payee") the principal sum of _________ and No Cents  ($________)
in lawful  money of the United  States of America,  on the terms and  conditions
described below.

      1. Principal. The principal balance of this Note shall be repayable on the
earlier of (i) April 11,  2006 or (ii) the date on which  Maker  consummates  an
initial public offering of its securities.

      2. Interest.  No interest shall accrue on the unpaid principal  balance of
this Note.

      3. Application of Payments. All payments shall be applied first to payment
in full of any costs  incurred in the collection of any sum due under this Note,
including (without limitation)  reasonable  attorneys' fees, then to the payment
in full of any late charges and finally to the reduction of the unpaid principal
balance of this Note.

      4. Events of Default. The following shall constitute Events of Default:

            (a) Failure to Make Required  Payments.  Failure by Maker to pay the
principal of this Note within five (5)  business  days  following  the date when
due.

            (b)  Voluntary  Bankruptcy,  Etc.  The  commencement  by  Maker of a
voluntary  case  under  the  Federal  Bankruptcy  Code,  as now  constituted  or
hereafter  amended,  or  any  other  applicable  federal  or  state  bankruptcy,
insolvency, reorganization,  rehabilitation or other similar law, or the consent
by it to the  appointment  of or taking  possession  by a receiver,  liquidator,
assignee, trustee, custodian,  sequestrator (or other similar official) of Maker
or for  any  substantial  part  of its  property,  or  the  making  by it of any
assignment  for the benefit of creditors,  or the failure of Maker  generally to
pay its debts as such debts  become  due, or the taking of  corporate  action by
Maker in furtherance of any of the foregoing.

            (c) Involuntary Bankruptcy,  Etc. The entry of a decree or order for
relief by a court having  jurisdiction in the premises in respect of maker in an
involuntary  case  under  the  Federal  Bankruptcy  Code,  as now  or  hereafter
constituted, or any other applicable federal or state bankruptcy,  insolvency or
other similar law, or appointing a receiver,  liquidator,  assignee,  custodian,
trustee, sequestrator (or similar official) of Maker or for any substantial part
of its property,  or ordering the winding-up or liquidation of its affairs,  and
the  continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days.

      5. Remedies.

<PAGE>

            (a) Upon the occurrence of an Event of Default  specified in Section
4(a),  Payee may, by written  notice to Maker,  declare  this Note to be due and
payable,  whereupon  the  principal  amount of this Note,  and all other amounts
payable   thereunder,   shall  become   immediately   due  and  payable  without
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby  expressly  waived,   anything  contained  herein  or  in  the  documents
evidencing the same to the contrary notwithstanding.

            (b) Upon the occurrence of an Event of Default specified in Sections
4(b) and 4(c), the unpaid principal  balance of, and all other sums payable with
regard to, this Note shall automatically and immediately become due and payable,
in all cases without any action on the part of Payee.

      6. Waivers.  Maker and all endorsers and  guarantors of, and sureties for,
this Note waive presentment for payment,  demand,  notice of dishonor,  protest,
and  notice of  protest  with  regard  to the  Note,  all  errors,  defects  and
imperfections  in any  proceedings  instituted  by Payee under the terms of this
Note,  and all  benefits  that might accrue to Maker by virtue of any present or
future  laws  exempting  any  property,  real or  personal,  or any  part of the
proceeds arising from any sale of any such property,  from  attachment,  levy or
sale under  execution,  or providing for any stay of execution,  exemption  from
civil process, or extension of time for payment;  and Maker agrees that any real
estate that may be levied upon pursuant to a judgment obtained by virtue hereof,
on any writ of execution issued hereon,  may be sold upon any such writ in whole
or in part in any order desired by Payee.

      7. Unconditional Liability.  Maker hereby waives all notices in connection
with the delivery,  acceptance,  performance,  default,  or  enforcement  of the
payment of this Note,  and agrees  that its  liability  shall be  unconditional,
without regard to the liability of any other party, and shall not be affected in
any manner by any indulgence, extension of time, renewal, waiver or modification
granted or consented  to by Payee,  and  consents to any and all  extensions  of
time,  renewals,  waivers,  or  modifications  that may be granted by Payee with
respect  to the  payment  or other  provisions  of this  Note,  and  agree  that
additional makers, endorsers,  guarantors, or sureties may become parties hereto
without notice to them or affecting their liability hereunder.

      8. Notices. Any notice called for hereunder shall be deemed properly given
if (i)  sent by  certified  mail,  return  receipt  requested,  (ii)  personally
delivered,  (iii) dispatched by any form of private or governmental express mail
or delivery service providing receipted delivery,  (iv) sent by telefacsimile or
(v) sent by e-mail,  to the  following  addresses  or to such  other  address as
either party may designate by notice in accordance with this Section:

      If to Maker:

            Chardan China Acquisition Corp. III
            625 Broadway, Suite 1111
            San Diego, California 92101
            Attn.:  Jiangnan Huang, Chairman

      If to Payee:

                                       2
<PAGE>

Notice  shall be  deemed  given on the  earlier  of (i)  actual  receipt  by the
receiving   party,   (ii)  the  date  shown  on  a  telefacsimile   transmission
confirmation, (iii) the date on which an e-mail transmission was received by the
receiving  party's  on-line access  provider (iv) the date reflected on a signed
delivery receipt,  or (vi) two (2) Business Days following tender of delivery or
dispatch by express mail or delivery service.

      9.  Construction.  This Note shall be construed and enforced in accordance
with the  domestic,  internal  law, but not the law of conflict of laws,  of the
State of California.

      10. Severability. Any provision contained in this Note which is prohibited
or  unenforceable  in  any  jurisdiction  shall,  as to  such  jurisdiction,  be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

         IN WITNESS WHEREOF,  Maker,  intending to be legally bound hereby,  has
caused this Note to be duly  executed by its  __________  the day and year first
above written.

                                             CHARDAN CHINA ACQUISITION CORP. III

                                             By:
                                                 -------------------------------
                                                  Name:
                                                  Title:

                                       3REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION  RIGHTS AGREEMENT (this  "Agreement") is entered into
as of the ____ day of ______,  2005,  by and among:  Chardan  China  Acquisition
Corp. III, a Delaware  corporation (the "Company");  and the undersigned parties
listed under  Investor on the  signature  page hereto (each,  an "Investor"  and
collectively, the "Investors").

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

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

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

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

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

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

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

               "Company" is defined in the preamble to this Agreement.

               "Demand Registration" is defined in Section 2.1.1.

               "Demanding Holder" is defined in Section 2.1.1.

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

               "Form S-3" is defined in Section 2.3.

               "Indemnified Party" is defined in Section 4.3.

               "Indemnifying Party" is defined in Section 4.3.

               "Investor" is defined in the preamble to this Agreement.

               "Investor Indemnified Party" is defined in Section 4.1.

<PAGE>

               "Maximum Number of Shares" is defined in Section 2.1.4.

               "Notices" is defined in Section 6.3.

               "Piggy-Back Registration" is defined in Section 2.2.1.

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

               "Registrable  Securities"  mean all of the shares of Common Stock
owned or held by Investors.  Registrable Securities include any warrants, shares
of capital  stock or other  securities  of the  Company  issued as a dividend or
other  distribution with respect to or in exchange for or in replacement of such
shares  of Common  Stock.  As to any  particular  Registrable  Securities,  such
securities  shall cease to be  Registrable  Securities  when: (a) a Registration
Statement  with  respect  to the  sale  of such  securities  shall  have  become
effective  under the  Securities Act and such  securities  shall have been sold,
transferred,  disposed of or  exchanged  in  accordance  with such  Registration
Statement;  (b) such  securities  shall  have been  otherwise  transferred,  new
certificates  for them not bearing a legend  restricting  further transfer shall
have been delivered by the Company and subsequent  public  distribution  of them
shall not require  registration  under the Securities  Act; (c) such  securities
shall  have  ceased  to be  outstanding,  or (d)  the  Securities  and  Exchange
Commission makes a definitive  determination to the Company that the Registrable
Securities are salable under Rule 144(k).

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

               "Release Date" means the date on which shares of Common Stock are
disbursed  from  escrow  pursuant  to  Section 3 of that  certain  Stock  Escrow
Agreement  dated as of  _____________,  2005 by and among the parties hereto and
Continental Stock Transfer & Trust Company.

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

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

         2.    REGISTRATION RIGHTS.

               2.1 Demand Registration.

                                       2
<PAGE>

                   2.1.1. Request for Registration. At any time and from time to
time on or after the date that is three  months prior to the Release  Date,  the
holders of a  majority-in-interest  of the  Registrable  Securities  held by the
Investors or the  transferees  of the  Investors,  may make a written demand for
registration  under  the  Securities  Act of all or  part of  their  Registrable
Securities (a "Demand Registration"). Any demand for a Demand Registration shall
specify the number of shares of Registrable  Securities  proposed to be sold and
the intended  method(s)  of  distribution  thereof.  The Company will notify all
holders of Registrable  Securities of the demand, and each holder of Registrable
Securities  who wishes to include all or a portion of such holder's  Registrable
Securities  in the Demand  Registration  (each such holder  including  shares of
Registrable  Securities in such  registration,  a "Demanding  Holder")  shall so
notify the Company  within  fifteen (15) days after the receipt by the holder of
the notice from the Company.  Upon any such request, the Demanding Holders shall
be  entitled  to  have  their  Registrable  Securities  included  in the  Demand
Registration,  subject to Section  2.1.4 and the  provisos  set forth in Section
3.1.1.  The Company  shall not be  obligated to effect more than an aggregate of
two (2) Demand  Registrations under this Section 2.1.1 in respect of Registrable
Securities.

                   2.1.2. Effective Registration. A  registration will not count
as a  Demand  Registration  until  the  Registration  Statement  filed  with the
Commission with respect to such Demand  Registration has been declared effective
and the Company has complied with all of its  obligations  under this  Agreement
with  respect  thereto;  provided,  however,  that if,  after such  Registration
Statement has been declared  effective,  the offering of Registrable  Securities
pursuant  to a Demand  Registration  is  interfered  with by any  stop  order or
injunction of the  Commission  or any other  governmental  agency or court,  the
Registration  Statement with respect to such Demand  Registration will be deemed
not to have been declared  effective,  unless and until,  (i) such stop order or
injunction  is  removed,   rescinded  or  otherwise   terminated,   and  (ii)  a
majority-in-interest  of the Demanding Holders  thereafter elect to continue the
offering;  provided,  further, that the Company shall not be obligated to file a
second Registration Statement until a Registration Statement that has been filed
is counted as a Demand Registration or is terminated.

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

                                       3
<PAGE>

                   2.1.4. Reduction of Offering.  Subject to  the rights  of the
holders of  securities  issued or issuable  upon  exercise of those certain Unit
Purchase  Options to be issued to  EarlyBirdCapital,  Inc. or its  designees  in
connection with the Company's  initial public offering in _________ 2005, if the
managing  Underwriter or Underwriters for a Demand Registration that is to be an
underwritten  offering advises the Company and the Demanding  Holders in writing
that the dollar amount or number of shares of Registrable  Securities  which the
Demanding Holders desire to sell, taken together with all other shares of Common
Stock or other  securities  which the Company  desires to sell and the shares of
Common Stock, if any, as to which  registration  has been requested  pursuant to
written contractual piggy-back registration rights held by other shareholders of
the Company who desire to sell,  exceeds  the maximum  dollar  amount or maximum
number of shares that can be sold in such offering without  adversely  affecting
the  proposed  offering  price,  the timing,  the  distribution  method,  or the
probability  of success of such offering  (such maximum dollar amount or maximum
number of shares,  as  applicable,  the "Maximum  Number of  Shares"),  then the
Company  shall  include  in  such  registration:   (i)  first,  the  Registrable
Securities as to which Demand  Registration  has been requested by the Demanding
Holders  (pro rata in  accordance  with the  number  of  shares  of  Registrable
Securities  which  such  Demanding  Holder has  requested  be  included  in such
registration,  regardless of the number of shares of Registrable Securities held
by each Demanding  Holder) that can be sold without exceeding the Maximum Number
of Shares;  (ii) second, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clause (i), the shares of Common Stock or other
securities that the Company  desires to sell that can be sold without  exceeding
the Maximum Number of Shares; (iii) third, to the extent that the Maximum Number
of Shares has not been reached  under the  foregoing  clauses (i) and (ii),  the
shares of Common  Stock for the  account of other  persons  that the  Company is
obligated to register  pursuant to written  contractual  arrangements  with such
persons and that can be sold without exceeding the Maximum Number of Shares; and
(v)  fourth,  to the  extent  that the  Maximum  Number of Shares  have not been
reached under the foregoing  clauses (i), (ii), and (iii),  the shares of Common
Stock that other shareholders  desire to sell that can be sold without exceeding
the Maximum Number of Shares.

                   2.1.5. Withdrawal. If a majority-in-interest of the Demanding
Holders  disapprove  of the terms of any  underwriting  or are not  entitled  to
include   all  of  their   Registrable   Securities   in  any   offering,   such
majority-in-interest  of the  Demanding  Holders may elect to withdraw from such
offering  by  giving  written  notice  to the  Company  and the  Underwriter  or
Underwriters  of their  request to withdraw  prior to the  effectiveness  of the
Registration  Statement  filed with the  Commission  with respect to such Demand
Registration.  If the  majority-in-interest  of the Demanding  Holders withdraws
from  a  proposed  offering  relating  to  a  Demand  Registration,   then  such
registration  shall not count as a Demand  Registration  provided for in Section
2.1.1.

               2.2 Piggy-Back Registration.

                   2.2.1.  Piggy-Back  Rights.  If at any time on or  after  the
Release Date the Company  proposes to file a  Registration  Statement  under the
Securities Act with respect to an offering of equity  securities,  or securities
or other  obligations  exercisable or  exchangeable  for, or  convertible  into,
equity securities, by the Company for its own account or for shareholders of the
Company for their account (or by the Company and by  shareholders of the Company
including,   without  limitation,   pursuant  to  Section  2.1),  other  than  a
Registration Statement (i) filed in connection with any employee stock option or
other benefit plan, (ii) for an exchange offer or offering of securities  solely
to the Company's  existing  shareholders,  (iii) for an offering of debt that is
convertible  into  equity  securities  of the  Company  or (iv)  for a  dividend
reinvestment  plan,  then the  Company  shall  (x) give  written  notice of such
proposed filing to the holders of Registrable  Securities as soon as practicable
but in no event less than ten (10) days  before  the  anticipated  filing  date,
which notice shall  describe the amount and type of securities to be included in
such  offering,  the  intended  method(s) of  distribution,  and the name of the
proposed managing Underwriter or Underwriters,  if any, of the offering, and (y)
offer to the holders of Registrable Securities in such notice the opportunity to
register  the sale of such number of shares of  Registrable  Securities  as such
holders may request in writing  within five (5) days  following  receipt of such
notice (a "Piggy-Back  Registration").  The Company shall cause such Registrable
Securities to be included in such registration and shall use its best efforts to
cause the  managing  Underwriter  or  Underwriters  of a  proposed  underwritten
offering  to permit the  Registrable  Securities  requested  to be included in a
Piggy-Back  Registration  to be included on the same terms and conditions as any
similar securities of the Company and to permit the sale or other disposition of
such  Registrable  Securities  in  accordance  with the  intended  method(s)  of
distribution  thereof.  All  holders  of  Registrable  Securities  proposing  to
distribute their securities  through a Piggy-Back  Registration that involves an
Underwriter  or  Underwriters  shall  enter into an  underwriting  agreement  in
customary form with the Underwriter or Underwriters selected for such Piggy-Back
Registration.

                                       4
<PAGE>

                   2.2.2. Reduction of Offering.  Subject to the  rights of  the
holders of  securities  issued or issuable  upon  exercise of those certain Unit
Purchase  Options to be issued to  EarlyBirdCapital,  Inc. or its  designees  in
connection with the Company's  initial public offering in _________ 2005, if the
managing Underwriter or Underwriters for a Piggy-Back Registration that is to be
an  underwritten  offering  advises the  Company and the holders of  Registrable
Securities in writing that the dollar amount or number of shares of Common Stock
which the Company  desires to sell,  taken together with shares of Common Stock,
if  any,  as to  which  registration  has  been  demanded  pursuant  to  written
contractual  arrangements  with  persons  other than the holders of  Registrable
Securities  hereunder,  the Registrable  Securities as to which registration has
been requested  under this Section 2.2, and the shares of Common Stock,  if any,
as to which registration has been requested pursuant to the written  contractual
piggy-back registration rights of other shareholders of the Company, exceeds the
Maximum  Number  of  Shares,   then  the  Company  shall  include  in  any  such
registration:

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

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

                                       5
<PAGE>

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

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

         3.    REGISTRATION PROCEDURES.

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

                   3.1.1.  Filing  Registration  Statement.  The  Company shall,
as  expeditiously  as  possible  and in any event  within  sixty (60) days after
receipt of a request for a Demand Registration  pursuant to Section 2.1, prepare
and file with the Commission a Registration  Statement on any form for which the
Company then  qualifies or which counsel for the Company shall deem  appropriate
and which form shall be available for the sale of all Registrable  Securities to
be  registered   thereunder  in  accordance  with  the  intended   method(s)  of
distribution  thereof, and shall use its best efforts to cause such Registration
Statement  to become and remain  effective  for the period  required  by Section
3.1.3;  provided,  however,  that the Company  shall have the right to defer any
Demand Registration for up to thirty (30) days, and any Piggy-Back  Registration
for such period as may be applicable to deferral of any demand  registration  to
which such Piggy-Back  Registration  relates,  in each case if the Company shall
furnish to the holders a certificate  signed by the Chief  Executive  Officer of
the Company  stating that, in the good faith  judgment of the Board of Directors
of the  Company,  it would be  materially  detrimental  to the  Company  and its
shareholders  for such  Registration  Statement  to be  effected  at such  time;
provided further, however, that the Company shall not have the right to exercise
the right set forth in the immediately  preceding  proviso more than once in any
365-day period in respect of a Demand Registration hereunder.

                                       6
<PAGE>

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

                   3.1.3.  Amendments and Supplements. The Company shall prepare
and  file  with  the  Commission  such  amendments,   including   post-effective
amendments,  and supplements to such  Registration  Statement and the prospectus
used in  connection  therewith  as may be  necessary  to keep such  Registration
Statement  effective and in compliance with the provisions of the Securities Act
until  all  Registrable   Securities  and  other  securities   covered  by  such
Registration  Statement  have been disposed of in  accordance  with the intended
method(s) of distribution set forth in such Registration Statement (which period
shall not exceed the sum of one hundred eighty (180) days plus any period during
which any such disposition is interfered with by any stop order or injunction of
the Commission or any governmental agency or court) or such securities have been
withdrawn.

                   3.1.4.  Notification.  After  the  filing  of  a Registration
Statement,  the  Company  shall  promptly,  and in no  event  more  than two (2)
business days after such filing,  notify the holders of  Registrable  Securities
included in such Registration Statement of such filing, and shall further notify
such holders  promptly  and confirm such advice in writing in all events  within
two (2) business days of the occurrence of any of the  following:  (i) when such
Registration Statement becomes effective; (ii) when any post-effective amendment
to  such  Registration  Statement  becomes  effective;  (iii)  the  issuance  or
threatened  issuance by the  Commission of any stop order (and the Company shall
take all  actions  required to prevent the entry of such stop order or to remove
it if  entered);  and (iv) any request by the  Commission  for any  amendment or
supplement to such Registration  Statement or any prospectus relating thereto or
for  additional  information  or of the  occurrence  of an event  requiring  the
preparation  of a  supplement  or  amendment  to such  prospectus  so  that,  as
thereafter  delivered  to the  purchasers  of the  securities  covered  by  such
Registration Statement,  such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements  therein not  misleading,  and promptly make
available to the holders of Registrable Securities included in such Registration
Statement any such  supplement or amendment;  except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement
thereto,  including  documents  incorporated  by  reference,  the Company  shall
furnish to the holders of Registrable  Securities  included in such Registration
Statement  and to the legal  counsel  for any such  holders,  copies of all such
documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents
and comment thereon,  and the Company shall not file any Registration  Statement
or  prospectus  or  amendment  or  supplement   thereto,   including   documents
incorporated  by  reference,  to which such holders or their legal counsel shall
object.

                                       7
<PAGE>

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

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

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

                                       8
<PAGE>

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

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

                   3.1.10.  Earnings Statement.  The Company  shall  comply with
all applicable  rules and  regulations of the Commission and the Securities Act,
and make  available to its  shareholders,  as soon as  practicable,  an earnings
statement  covering a period of twelve (12) months,  beginning  within three (3)
months after the effective date of the  registration  statement,  which earnings
statement  shall satisfy the  provisions of Section 11(a) of the  Securities Act
and Rule 158 thereunder.

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

               3.2  Obligation  to  Suspend  Distribution.  Upon  receipt of any
notice from the Company of the  happening of any event of the kind  described in
Section 3.1.4(iv), or, in the case of a resale registration on Form S-3 pursuant
to Section 2.3 hereof, upon any suspension by the Company, pursuant to a written
insider trading  compliance program adopted by the Company's Board of Directors,
of the  ability of all  "insiders"  covered by such  program to  transact in the
Company's   securities   because  of  the   existence  of  material   non-public
information,  each holder of Registrable Securities included in any registration
shall  immediately   discontinue  disposition  of  such  Registrable  Securities
pursuant to the  Registration  Statement  covering such  Registrable  Securities
until such holder receives the supplemented or amended  prospectus  contemplated
by Section 3.1.4(iv) or the restriction on the ability of "insiders" to transact
in the Company's  securities is removed,  as applicable,  and, if so directed by
the Company, each such holder will deliver to the Company all copies, other than
permanent  file  copies  then in such  holder's  possession,  of the most recent
prospectus  covering such Registrable  Securities at the time of receipt of such
notice.

                                       9
<PAGE>

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

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

         4.    INDEMNIFICATION AND CONTRIBUTION.

               4.1  Indemnification  by  the  Company.  The  Company  agrees  to
indemnify and hold  harmless each Investor and each other holder of  Registrable
Securities,  and  each of  their  respective  officers,  employees,  affiliates,
directors, partners, members, attorneys and agents, and each person, if any, who
controls an Investor and each other holder of Registrable Securities (within the
meaning of Section 15 of the  Securities  Act or Section 20 of the Exchange Act)
(each, an "Investor Indemnified Party"), from and against any expenses,  losses,
judgments, claims, damages or liabilities, whether joint or several, arising out
of or based upon any untrue  statement  (or  allegedly  untrue  statement)  of a
material fact contained in any  Registration  Statement  under which the sale of
such  Registrable  Securities  was  registered  under the  Securities  Act,  any
preliminary prospectus,  final prospectus or summary prospectus contained in the
Registration  Statement,  or any amendment or  supplement  to such  Registration
Statement, or arising out of or based upon any omission (or alleged omission) to
state a material  fact  required to be stated  therein or  necessary to make the
statements  therein  not  misleading,  or any  violation  by the  Company of the
Securities Act or any rule or regulation  promulgated  thereunder  applicable to
the  Company  and  relating  to action or  inaction  required  of the Company in
connection with any such registration;  and the Company shall promptly reimburse
the Investor  Indemnified Party for any legal and any other expenses  reasonably
incurred by such Investor Indemnified Party in connection with investigating and
defending any such expense, loss, judgment,  claim, damage, liability or action;
provided,  however,  that the Company will not be liable in any such case to the
extent that any such expense,  loss, claim, damage or liability arises out of or
is based upon any untrue  statement or allegedly untrue statement or omission or
alleged omission made in such Registration  Statement,  preliminary  prospectus,
final prospectus, or summary prospectus, or any such amendment or supplement, in
reliance upon and in conformity with  information  furnished to the Company,  in
writing,  by such selling  holder  expressly  for use therein.  The Company also
shall indemnify any Underwriter of the Registrable  Securities,  their officers,
affiliates, directors, partners, members and agents and each person who controls
such Underwriter on substantially the same basis as that of the  indemnification
provided above in this Section 4.1.

                                       10
<PAGE>

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

               4.3  Conduct  of   Indemnification  Proceedings.  Promptly  after
receipt by any person of any notice of any loss,  claim,  damage or liability or
any action in respect of which  indemnity may be sought  pursuant to Section 4.1
or 4.2,  such  person (the  "Indemnified  Party")  shall,  if a claim in respect
thereof is to be made  against any other person for  indemnification  hereunder,
notify  such other  person  (the  "Indemnifying  Party") in writing of the loss,
claim,  judgment,  damage,  liability  or action;  provided,  however,  that the
failure by the  Indemnified  Party to notify the  Indemnifying  Party  shall not
relieve the Indemnifying  Party from any liability which the Indemnifying  Party
may have to such Indemnified  Party  hereunder,  except and solely to the extent
the  Indemnifying  Party  is  actually   prejudiced  by  such  failure.  If  the
Indemnified Party is seeking indemnification with respect to any claim or action
brought  against the Indemnified  Party,  then the  Indemnifying  Party shall be
entitled  to  participate  in such claim or action,  and,  to the extent that it
wishes,  jointly with all other Indemnifying  Parties,  to assume control of the
defense thereof with counsel satisfactory to the Indemnified Party. After notice
from the Indemnifying  Party to the Indemnified  Party of its election to assume
control of the defense of such claim or action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal or other expenses  subsequently
incurred by the  Indemnified  Party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that in any action in
which  both the  Indemnified  Party  and the  Indemnifying  Party  are  named as
defendants,  the  Indemnified  Party  shall  have the right to  employ  separate
counsel  (but  no  more  than  one  such  separate  counsel)  to  represent  the
Indemnified  Party and its  controlling  persons who may be subject to liability
arising  out of any claim in  respect  of which  indemnity  may be sought by the
Indemnified Party against the Indemnifying  Party, with the fees and expenses of
such  counsel to be paid by such  Indemnifying  Party if, based upon the written
opinion of counsel of such Indemnified Party,  representation of both parties by
the same counsel  would be  inappropriate  due to actual or potential  differing
interests between them. No Indemnifying  Party shall,  without the prior written
consent of the  Indemnified  Party,  consent to entry of  judgment or effect any
settlement of any claim or pending or threatened  proceeding in respect of which
the  Indemnified  Party is or could have been a party and  indemnity  could have
been  sought  hereunder  by such  Indemnified  Party,  unless  such  judgment or
settlement includes an unconditional  release of such Indemnified Party from all
liability arising out of such claim or proceeding.

                                       11
<PAGE>

               4.4  Contribution.

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

                   4.4.2.  The  parties  hereto  agree that it would not be just
and equitable if  contribution  pursuant to this Section 4.4 were  determined by
pro rata  allocation  or by any other method of  allocation  which does not take
account of the equitable considerations referred to in the immediately preceding
Section 4.4.1. The amount paid or payable by an Indemnified Party as a result of
any loss,  claim,  damage,  liability or action  referred to in the  immediately
preceding  paragraph shall be deemed to include,  subject to the limitations set
forth above, any legal or other expenses  incurred by such Indemnified  Party in
connection   with   investigating   or  defending  any  such  action  or  claim.
Notwithstanding  the  provisions  of this Section 4.4, no holder of  Registrable
Securities  shall be required to  contribute  any amount in excess of the dollar
amount of the net proceeds (after payment of any underwriting  fees,  discounts,
commissions  or  taxes)  actually  received  by such  holder  from  the  sale of
Registrable  Securities  which  gave rise to such  contribution  obligation.  No
person  guilty of  fraudulent  misrepresentation  (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any person
who was not guilty of such fraudulent misrepresentation.

                                       12
<PAGE>

         5.    UNDERWRITING AND DISTRIBUTION.

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

         6.    MISCELLANEOUS.

               6.1  Other  Registration  Rights.  Except  for  the  registration
rights granted to EarlyBirdCapital,  Inc. pursuant to that certain unit purchase
option  issued,  or to be issued,  by the Company,  the Company  represents  and
warrants that no person, other than a holder of the Registrable Securities,  has
any right to require the Company to register any shares of the Company's capital
stock  for sale or to  include  shares  of the  Company's  capital  stock in any
registration  filed by the Company  for the sale of shares of capital  stock for
its own account or for the account of any other person.

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

               6.3  Notices.   All   notices,   demands,   requests,   consents,
approvals  or  other  communications   (collectively,   "Notices")  required  or
permitted  to be given  hereunder  or  which  are  given  with  respect  to this
Agreement  shall be in writing  and shall be  personally  served,  delivered  by
reputable  air courier  service with charges  prepaid,  or  transmitted  by hand
delivery, telegram, telex or facsimile, addressed as set forth below, or to such
other  address  as such party  shall have  specified  most  recently  by written
notice.  Notice shall be deemed given on the date of service or  transmission if
personally served or transmitted by telegram, telex or facsimile; provided, that
if such  service or  transmission  is not on a business  day or is after  normal
business hours, then such notice shall be deemed given on the next business day.
Notice  otherwise  sent as  provided  herein  shall be deemed  given on the next
business day following timely delivery of such notice to a reputable air courier
service with an order for next-day delivery.

                                       13
<PAGE>

                           To the Company:

                           Chardan China Acquisition Corp. III
                           625 Broadway
                           Suite 1111
                           San Diego, California 92101
                           Attention: Chairman

                           with a copy to:

                           Blank Rome LLP
                           The Chrysler Building
                           405 Lexington Avenue
                           New York, New York 10174
                           Attention: Robert J. Mittman, Esq.

                                                                       ; and

                           Graubard Miller
                           The Chrysler Building
                           405 Lexington Avenue
                           New York, NY 10174
                           Attention: David Alan Miller, Esq.

                           To an Investor, to:

                           Li Zhang                                    ; or
                           Chardan China Acquisition Corp. III
                           625 Broadway
                           Suite 1111
                           San Diego, California 92101

                           Kerry Propper                               ; or
                           Chardan China Acquisition Corp. III
                           625 Broadway
                           Suite 1111
                           San Diego, California 92101

                                       14
<PAGE>

                           Jiangnan Huang                              ; or
                           Chardan China Acquisition Corp. III
                           625 Broadway
                           Suite 1111
                           San Diego, California 92101

                           Chardan Capital Partners                    ; or
                           c/o Dr. Richard D. Propper
                           Chardan China Acquisition Corp. III
                           625 Broadway
                           Suite 1111
                           San Diego, California 92101

                           SUJG, Inc.
                           c/o Kerry Propper
                           Chardan China Acquisition Corp. III
                           625 Broadway
                           Suite 1111
                           San Diego, California 92101

                           with a copy to:

                           Graubard Miller
                           The Chrysler Building
                           405 Lexington Avenue
                           New York, NY 10174
                           Attention: David Alan Miller, Esq.

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

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

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

                                       15
<PAGE>

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

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

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

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

               6.11  Governing  Law.   This  Agreement  shall   be  governed by,
interpreted  under,  and construed in  accordance  with the internal laws of the
State of New York applicable to agreements  made and to be performed  within the
State of New York, without giving effect to any choice-of-law provisions thereof
that  would  compel  the  application  of the  substantive  laws  of  any  other
jurisdiction.

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       16
<PAGE>

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

                                     CHARDAN CHINA ACQUISITION CORP. III
                                     A Delaware corporation

                               By:
                                     ---------------------------
                                     Jiangnan Huang, Chairman

                                     INITIAL STOCKHOLDERS:

                                     ---------------------------
                                     Li Zhang

                                     ---------------------------
                                     Kerry Propper

                                     ---------------------------
                                     Jiangnan Huang

                                     CHARDAN CAPITAL PARTNERS

                               By:
                                     ---------------------------
                                     Name:
                                     Title:

                                     SUJG, INC.

                               By:
                                     ---------------------------
                                     Name:
                                     Title:

                                       17

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