Document:

Exhibit 10.5

SECURITIES ESCROW AGREEMENT

SECURITIES ESCROW AGREEMENT, dated as of                             ,
2007 (“Agreement”) by and among Stone Tan China Acquisition Corp., a Delaware
corporation (“Company”), the undersigned parties listed as Initial Stockholders
on the signature page hereto (collectively, the “Initial Stockholders”) and
Continental Stock Transfer & Trust Company, a New York corporation (“Escrow
Agent”).

WHEREAS, the Company has entered into an Underwriting Agreement, dated                 ,
2007 (“Underwriting Agreement”) with Morgan Joseph & Co., Inc. (“Morgan
Joseph”), as representative of the underwriters named therein (collectively, “Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to
purchase 37,500,000 units (“Units”) of the Company. Each Unit consists of one
share of the Company’s common stock, par value $.0001 per share (“Common Stock”),
and one warrant, each warrant to purchase one share of Common Stock, all as
more fully described in the Company’s definitive Prospectus, dated                     ,
2007 (“Prospectus”) comprising part of the Company’s Registration Statement on
Form S-1 (File No. 333-                  )
under the Securities Act of 1933, as amended (“Registration Statement”),
declared effective on                             ,
2007 (“Effective Date”); and

WHEREAS, the Initial Stockholders have agreed, as a condition of the
Underwriters’ obligation to purchase the Units pursuant to the Underwriting
Agreement and to offer them to the public, to deposit all of their shares of
Common Stock as set forth opposite their respective names in Schedule A
attached hereto (collectively “Escrow Securities”), in escrow as
hereinafter provided; and

WHEREAS, certain of the Initial Stockholders have agreed to purchase
warrants (the “Founders’ Warrants”) in a private placement prior to the
consummation of the offering, and to deposit all of their Founders’ Warrants in
escrow in the amounts set forth opposite their respective names in Schedule B
attached hereto the (the “Escrow Warrants” and together with the Escrow Securities,
the “Escrow Securities”)

WHEREAS, the Company and the Initial Stockholders desire that the
Escrow Agent accept the Escrow Securities, in escrow, to be held and disbursed
as hereinafter provided.

NOW, THEREFORE, IT IS AGREED:

1.             Appointment of
Escrow Agent. The
Company and the Initial Stockholders hereby appoint the Escrow Agent to act in
accordance with and subject to the terms of this Agreement and the Escrow Agent
hereby accepts such appointment and agrees to act in accordance with and
subject to such terms.

2.             Deposit of
Escrow Securities. With respect to the Escrow Securities, each of the
Initial Stockholders shall deliver on or prior to the Effective Date to the
Escrow Agent certificates representing his or her respective Escrow Securities
that have been issued as of such date, to be held and disbursed subject to the
terms and conditions of this Agreement. Each Initial Stockholder acknowledges
and agrees that the certificates representing his or her Escrow Securities is
legended to reflect the deposit of such Escrow Securities under this Agreement.

3.             Disbursement of
the Escrow Securities. The Escrow Agent shall hold the Escrow Securities
until one year from the closing date of a Business Combination (“Escrow Period”),
on which date it shall, upon written instructions from each Initial
Stockholder, disburse each of the Initial Stockholder’s Escrow Securities to
such Initial Stockholder; provided, however, that if the
Underwriters do not exercise their over-allotment option in full, up to 1,406,250
of Escrow Securities shall be released to the Company upon written instruction
from the Company; provided, further, that if the Escrow Agent is
notified by the Company pursuant to Section 6.6 hereof that the Company is
being liquidated at any time during the Escrow Period, then the Escrow Agent
shall promptly destroy the certificates representing the Escrow Securities; provided further,
that if, after the Company consummates a Business Combination, it (or the
surviving entity) subsequently consummates a liquidation, merger, stock
exchange or other similar transaction which results in all of its stockholders
of such entity having the right to exchange their shares of Common Stock for
cash, securities or other property, then the Escrow Agent will, upon receipt of
a certificate, executed by the Chairman, Chief Executive Officer or Chief
Financial Officer of the Company, in form reasonably acceptable to the Escrow
Agent, that such transaction is then being consummated, release the Escrow Securities
to the Initial Stockholders upon consummation of such transaction so that they can
similarly participate. Upon written instructions from the Company advising that
a Business Combination has been consummated and that public stockholders
holding in excess of 20% of the shares of Common Stock issued pursuant to the
Registration Statement exercise the right to redeem their shares for cash as
described in the Registration Statement, the Escrow Agent will release and
deliver to the Company for cancellation on a pro rata basis certificates
representing that number of Escrow Securities (up to a maximum of 1,171,875)
which results in the Initial Stockholders collectively owning no more then
23.81% of the Company’s outstanding Common Stock immediately prior to the
consummation of the Business Combination after giving effect to the redemption.
Such instructions shall be set forth both the number of shares the Company is
redeeming and the number of Escrow Securities to be delivered to the Company
for cancellation. The Escrow Agent shall have no further duties hereunder after
the disbursement or destruction of the Escrow Securities in accordance with
this Section 3.

4.             Rights of Initial
Stockholders in Escrow Securities.

4.1           Voting Rights as a Stockholder. Subject to the
terms of the Insider Letter described in Section 4.4 hereof and except as
herein provided, the Initial Stockholders shall retain all of their rights as
stockholders of the Company during the Escrow Period, including, without
limitation, the right to vote such shares.

4.2           Dividends and Other Distributions in Respect of the
Escrow Securities. During the Escrow Period, all dividends payable in cash
with respect to the Escrow Securities shall be paid to the Initial
Stockholders, but all dividends payable in stock or other non-cash property (“Non-Cash
Dividends”) shall be delivered to the Escrow Agent to hold in accordance with
the terms hereof. As used herein, the term “Escrow Securities” shall be deemed
to include the Non-Cash Dividends distributed thereon, if any.

4.3           Restrictions on Transfer. During the Escrow Period,
no sale, transfer or other disposition may be made of any or all of the Escrow Securities
except (i) by gift to a member of Initial Stockholder’s immediate family or to
a trust or other entity, the beneficiary of which is an Initial Stockholder or
a member of an Initial Stockholder’s immediate family, or (ii) by virtue of the
laws of descent and distribution upon death of any Initial Stockholder, (iii)
pursuant to a qualified domestic relations order; provided, however,
that such permissive transfers may be implemented only upon the respective
transferee’s written agreement to be bound by the terms and conditions of this
Agreement and of the Insider Letter signed by the Initial Stockholder
transferring the Escrow Securities. During the Escrow Period, the Initial
Stockholders shall not pledge or grant a security interest in the Escrow Securities
or grant a security interest in their rights under this Agreement.

4.4           Insider Letters. Each of the Initial Stockholders
has executed a letter agreement with Morgan Joseph and the Company, dated as
indicated on Schedule A hereto, and which is filed as an exhibit to the
Registration Statement (“Insider Letter”), respecting the rights and
obligations of such Initial Stockholder in certain events, including but not
limited to the liquidation of the Company.

5.             Concerning the
Escrow Agent.

5.1           Good Faith Reliance. The Escrow Agent shall not be
liable for any action taken or omitted by it in good faith and in the exercise
of its own best judgment, and may rely conclusively and shall be protected in
acting upon any order, notice, demand, certificate, opinion or advice of
counsel (including counsel chosen by the Escrow Agent), statement, instrument,
report or other paper or document (not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the truth and
acceptability of any information therein contained) which is believed by the
Escrow Agent to be genuine and to be signed or presented by the proper person
or persons. The Escrow Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Agreement unless
evidenced by a writing delivered to the Escrow Agent signed by the proper party
or parties and, if the duties or rights of the Escrow Agent are affected,
unless it shall have given its prior written consent thereto.

5.2           Indemnification. The Escrow Agent shall be
indemnified and held harmless by the Company from and against any expenses, including
counsel fees and disbursements, or loss suffered by the Escrow Agent in
connection with any action, suit or other proceeding involving any claim which
in any way, directly or indirectly, arises out of or relates to this Agreement,
the services of the Escrow Agent hereunder, or the Escrow Securities held by it
hereunder, other than expenses or losses arising from the gross negligence or
willful misconduct of the Escrow Agent. Promptly after the receipt by the
Escrow Agent of notice of any demand or claim or the commencement of any
action, suit or proceeding, the Escrow Agent shall notify the other parties
hereto in writing. In the event of the receipt of such notice, the Escrow
Agent, in its sole discretion, may commence an action in the nature of
interpleader in an appropriate court to determine ownership or disposition of
the Escrow Securities or it may deposit the Escrow Securities with

the clerk of any appropriate court or it may
retain the Escrow Securities pending receipt of a final, non appealable order
of a court having jurisdiction over all of the parties hereto directing to whom
and under what circumstances the Escrow Securities are to be disbursed and
delivered. The provisions of this Section 5.2 shall survive in the event the
Escrow Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

5.3           Compensation. The Escrow Agent shall be entitled to
reasonable compensation from the Company for all services rendered by it
hereunder, as set forth on Exhibit A hereto. The Escrow Agent shall also be
entitled to reimbursement from the Company for all expenses paid or incurred by
it in the administration of its duties hereunder including, but not limited to,
all counsel, advisors’ and agents’ fees and disbursements and all taxes or
other governmental charges. The Escrow Agent shall bill the Company on a
monthly basis for services rendered.

5.4           Further Assurances. From time to time on and after
the date hereof, the Company and the Initial Stockholders shall deliver or
cause to be delivered to the Escrow Agent such further documents and
instruments and shall do or cause to be done such further acts as the Escrow
Agent shall reasonably request to carry out more effectively the provisions and
purposes of this Agreement, to evidence compliance herewith or to assure itself
that it is protected in acting hereunder.

5.5           Resignation. The Escrow Agent may resign at any
time and be discharged from its duties as escrow agent hereunder by its giving
the other parties hereto written notice and such resignation shall become
effective as hereinafter provided. Such resignation shall become effective at
such time that the Escrow Agent shall turn over to a successor escrow agent
appointed by the Company and approved by Morgan Joseph, the Escrow Securities
held hereunder. If no new escrow agent is so appointed within the 60 day period
following the giving of such notice of resignation, the Escrow Agent may
deposit the Escrow Securities with any court it deems appropriate.

5.6           Discharge of Escrow Agent. The Escrow Agent shall
resign and be discharged from its duties as escrow agent hereunder if so
requested in writing at any time by the Company and a majority of the Initial
Stockholders, jointly, provided, however, that such resignation
shall become effective only upon acceptance of appointment by a successor
escrow agent as provided in Section 5.5.

5.7           Liability. Notwithstanding anything herein to the
contrary, the Escrow Agent shall not be relieved from liability hereunder for
its own gross negligence or its own willful misconduct.

6.             Miscellaneous.

6.1           Governing Law. This Agreement shall for all
purposes be deemed to be made under and shall be construed in accordance with
the laws of the State of New York. Each of the parties hereby agrees that any
action, proceeding or claim against it arising out of or relating in any way to
this Agreement shall be brought and enforced in the courts of the State of New
York or the United States District Court for the Southern

District of New York (each, a “New York court”),
and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. Each of the parties hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum.

6.2           Third-Party Beneficiaries. Each of the Initial
Shareholders hereby acknowledges that Morgan Joseph is a third-party
beneficiary of this Agreement and this Agreement may not be modified or changed
without the prior written consent of Morgan Joseph.

6.3           Entire Agreement. This Agreement contains the
entire agreement of the parties hereto with respect to the subject matter
hereof and, except as expressly provided herein, may not be changed or modified
except by an instrument in writing signed by the party to the charged.

6.4           Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation thereof.

6.5           Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the respective parties hereto and their legal
representatives, successors and assigns.

6.6           Notices. Any notice or other communication required
or which may be given hereunder shall be in writing and either be delivered
personally or by private national courier service, or be mailed, certified or
registered mail, return receipt requested, postage prepaid, and shall be deemed
given when so delivered personally or, if sent by private national courier
service, on the next business day after delivery to the courier, or, if mailed,
two business days after the date of mailing, as follows:

If to the Company, to:

Stone Tan China Acquisition Corp.

9191 Towne Center Drive,

Suite 410

San Diego, California 92122

Attn: Richard Tan, President and Chief Executive Officer

If to a Stockholder, to his address set forth in Exhibit A.

and if to the Escrow Agent, to:

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Felix Orihuela, Vice President and Senior Account Executive

A copy of any notice sent hereunder shall be sent to:

Loeb & Loeb LLP

345 Park Avenue

New York, New York 10154

Attn: Fran Stoller, Esq.

and:

Morgan Joseph & Co., Inc.

600 Fifth Avenue

19th Floor

New York, New York 10020

Attn: Tina Pappas

and:

DLA Piper US LLP

1251 Avenue of the Americas

New York, New York 10020

Attn: Jonathan Klein, Esq.

The parties may change the persons and addresses to which the notices
or other communications are to be sent by giving written notice to any such
change in the manner provided herein for giving notice.

6.7           Liquidation of Company. The Company shall give the
Escrow Agent written notification of the liquidation and dissolution of the
Company in the event that the Company fails to consummate a Business
Combination within the time period(s) specified in the Prospectus.

6.8           Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original and all such counterparts shall together constitute
one and the same instrument.

WITNESS the execution of this Agreement as of the date first above
written.

 

	
  

  	
  STONE TAN CHINA ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Richard Tan, President and Chief Executive Officer

  

 

 

- Signature page of Initial Stockholders immediately
follows -

WITNESS the execution of this Agreement as of the date first above
written.

	
  

  	
  INITIAL
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

WITNESS the execution of this Agreement as of the date first above
written.

	
   

  	
  CONTINENTAL STOCK TRANSFER

  
	
   

  	
     &
  TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

SCHEDULE A

	
  Name and Address of Initial Stockholder

  	
   

  	
  Number of

  Common Shares

  	
   

  	
  Number of

  Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

EXHIBIT A

Escrow Agent Fees

SCHEDULE B

Escrow WarrantsExhibit 10.7

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into
as of the      day of                     ,
2007, by and among Stone Tan China Acquisition Corp., a Delaware corporation
(the “Company”), and the undersigned parties listed under Investors 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 the Initial Investor Shares (as defined below), the Private
Placement Warrants (as defined below) and the Private Placement Warrant Shares
(as defined below) 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;
INTERPRETATION.  As used herein, the
word “shares” may, as context requires, be used in reference to units,
warrants, rights, options or any other security, in addition to Common Stock.  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.

“Announcement Date” means the date the Company files a Form 8-K
with the Commission announcing the entering into of a definitive agreement for
the Business Combination.

“Business Combination” means the acquisition of direct or
indirect ownership through a merger, capital stock exchange, asset or stock
acquisition or other similar type of transaction, of an operating business or businesses
having collectively, a fair market value of at least 80% of the Company’s net
assets at the time of such acquisition; provided, however, that, any
acquisition of multiple operating businesses shall occur contemporaneously with
one other target business.

“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.

“First Release Date” means the date the Private Placement
Warrants may be distributed from escrow pursuant to Section 3 of that certain
Securities Escrow Agreement dated as of the date hereof, by and among the
parties thereto and Continental Stock Transfer & Trust Company.

“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.

“Initial Investor Shares” means all of the Common Stock held by
the Investors before the IPO and the Private Placement and any Common Stock
issued as a dividend or other distribution with respect to or in exchange for
or in replacement of such shares of Common Stock.

“Investor” is defined in the preamble to this Agreement.

“Investor Indemnified Party” is defined in Section 4.1.

“IPO” means the Company’s initial public offering of securities.

“Majority-in-interest” of Demanding Holders, or of any other
group of holders of Registrable Securities, means (i) after the First Release
Date but prior to the Second Release Date, a majority-in-interest of the holders
of Private Placement Warrants and Private Placement Warrant Shares and (ii)
after the Second Release Date, a majority-in-interest of the holders of
Registrable Securities.

“Maximum Number of Shares” is defined in Section 2.1.3.

“Morgan Joseph” means Morgan Joseph & Co. Inc.

“Notices” is defined in Section 6.3.

“Piggy-Back Registration” is defined in Section 2.2.1.

“Private Placement” means the sale by the Company of the Private
Placement Warrants.

“Private Placement Warrant Shares” means the shares of Common
Stock underlying the Private Placement Warrants.

“Private Placement Warrants” means Warrants issued and delivered
to initial stockholders of the Company.

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“Pro Rata” is defined in Section 2.1.3.

“Purchase Option” means the option to purchase 3,750,000 units,
each unit consisting of one share of Common Stock and one Common Stock purchase
warrant, issued to Morgan Joseph or its designees in connection with the IPO
(as may be transferred from time to time in accordance with its terms).

“Purchase Option Shares” means the securities underlying the
Purchase Option that have been granted registration rights by the Company
pursuant to the Purchase Option.

“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” means the Private Placement Warrants,
the Private Placement Warrant Shares and the Initial Investor Shares.  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 saleable 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).

“Second Release Date” means the date the Initial Investor Shares
may be distributed from escrow pursuant to Section 3 of that certain Securities
Escrow Agreement dated as of the date hereof, by and among the parties thereto
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.

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2.             REGISTRATION
RIGHTS.

2.1           Demand
Registration.

2.1.1.       Request for
Registration.  At any time and from
time to time on or after the Announcement Date, the holders of a Majority-in-interest
held by the Investors or their transferees, may make a written demand for
registration under the Securities Act of all or part of the Private Placement
Warrants and Private Placement Warrant Shares (the “First Demand
Registration”); provided, however, such Demand Registration
shall not be declared effective by the Commission until after the First Release
Date.  At any time and from time to time
on or after the Second Release Date, the holders of a Majority-in-interest held
by the Investors or their transferees, may make a written demand for
registration under the Securities Act of all or part of the Registrable
Securities (the “Second Demand Registration” and together with the First
Demand Registration, a “Demand Registration”).  Any demand for a Demand Registration shall
specify the number of shares of Registrable Securities, as applicable, proposed
to be sold and the intended method(s) of distribution thereof.  The Company will notify all holders of
Registrable Securities of the Demand Registration, 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 (i) one (1) Demand Registration prior to the First Release Date and
(ii) not more than two (2) Demand Registrations prior to the Second Release
Date 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.

2.1.4.       Reduction
of Offering.  Subject to the
registration rights set forth in the Purchase Option, which rights in no way
shall be limited by the Maximum Number of Shares to be included in the
Registration Statement pursuant to this Section 2.1.3, 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

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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 stockholders 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 pro rata in accordance with the number of shares that each
such person has requested be included in such registration, regardless of the
number of shares held by each such person (such proportion is referred to
herein as “Pro Rata”)) 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; and (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 or other securities 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.

2.1.4.       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 Second 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 stockholders
of the Company for their account (or by the Company and by stockholders 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 stockholders, (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

 5
 

of Registrable Securities as such holders may request in writing within
fifteen (15) 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.

2.2.2.       Reduction
of Offering.  Subject to the
registration rights set forth in the Purchase Option, which rights in no way
shall be limited by the Maximum Number of Shares to be included in the
Registration Statement pursuant to this Section 2.2.2, 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
or other securities which the Company desires to sell, taken together with
shares of Common Stock or other securities, 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 or other securities, if any, as to which
registration has been requested pursuant to the written contractual piggy-back
registration rights of other stockholders 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 or other securities, if any, comprised of Registrable Securities
and Purchase Option Securities, as to which registration has been requested
pursuant to the applicable written contractual piggy-back registration rights
of such security holders, Pro Rata, 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
shares of Common Stock or other securities for the account of other persons
that the Company is obligated to register pursuant to written contractual
piggy-back registration rights with such persons and 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 or pursuant to written contractual arrangements with such persons, (A)
first, the shares of Common Stock or other securities 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; (C) third, to the extent that the Maximum Number
of Shares has not been reached under

 6
 

the
foregoing clauses (A) and (B), the shares of Common Stock or other securities
comprised of Registrable Securities, Pro Rata, as to which registration has
been requested pursuant to the terms hereof that can be sold without exceeding
the Maximum Number of Shares; 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 or other securities for the account of other
persons that the Company is obligated to register pursuant to written
contractual arrangements with such persons, that can be sold without exceeding
the Maximum Number of Shares.

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 (whether on its own determination
or as the result of a withdrawal by persons making a demand pursuant to written
contractual obligations) 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 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 or other securities of the
Company, if any, 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

 7
 

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 deferment 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 stockholders
for such Registration Statement to be effected at such time; provided,  further,
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.

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

 8
 

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.

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 and, 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.  Holders of Registrable
Securities shall agree to such covenants and indemnification and contribution
obligations for selling stockholders as are customarily contained in agreements
of that type.  Further, such holders
shall cooperate fully in the preparation of the Registration Statement and
other documents relating to any offering in which they include securities
pursuant to Section 2 hereof.  Each
holder shall also furnish to the Company such information regarding itself, the
Registrable Securities held by such holder, as

 9
 

applicable, and the intended method of disposition of such securities
as shall be reasonably required to effect the registration of the Registrable
Securities.

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.

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 by any
Underwriter participating in such distribution, 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 stockholders, 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

 10
 

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.

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 stockholders 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

 11
 

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, employees, 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.

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 selling holder and each other person, if any, who
controls another selling holder or such Underwriter or the Company within the
meaning of the Securities Act or the Exchange 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 other selling
holder or 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

 12
 

joint and shall be limited to the amount of any net proceeds actually
received by such selling holder from the sale of Registrable Securities which
gave rise to such indemnification obligation.

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.

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

 13
 

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.

5.             COVENANT.

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 with respect to those securities issued or
issuable upon exercise of that certain Purchase Option to be issued to Morgan
Joseph or its designees in connection with the IPO on             
2007, 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 share 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, to Morgan Joseph and its successors and the

 14
 

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.

	
  

  	
  To the Company:

  
	
   

  	
  Stone Tan China
  Acquisition Corp.

  
	
   

  	
  9191 Towne
  Center Drive, Suite 410

  
	
   

  	
  San Diego, CA
  92122

  
	
   

  	
  Attn: Richard
  Tan, President and Chief

  
	
   

  	
  Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Loeb & Loeb
  LLP

  
	
   

  	
  345 Park Avenue

  
	
   

  	
  New York, New
  York 10154

  
	
   

  	
  Attn:     Fran Stoller,
  Esq.

  
	
   

  	
   

  
	
   

  	
  To an Investor,
  to:

  
	
   

  	
   

  
	
   

  	
  Their address of
  record on the books of the Company

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Loeb & Loeb
  LLP

  
	
   

  	
  345 Park Avenue

  
	
   

  	
  New York, New
  York 10154

  
	
   

  	
  Attn:      Fran
  Stoller, 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

 15
 

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) constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.

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. Each of the parties hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this
Agreement shall be brought and enforced in

 16
 

the courts of the State of New York or the United States District Court
for the Southern District of New York (each, a “New York Court”), and
irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. Each of the parties hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum.  SPAC Trust (“non-U.S. Investor”) has appointed                            
as its authorized agent (the “Authorized Agent”) upon whom process may be
served in any such action arising out of or based on this Agreement or the
transactions contemplated hereby which may be instituted in any New York Court.
Such appointment shall be irrevocable. The Company and the Non-U.S. Investor
represent and warrant that the Authorized Agent has agreed to act as such agent
for services of process and agrees to take any and all action, including the
filing of any and all documents and instruments that may be necessary to
continue such appointment in full force and effect as aforesaid. Service of
process upon the Authorized Agent and written notice of such service to the
Company shall be deemed, in every respect, effective service of process upon the
respective Non-U.S. Investor.

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]

 17
 

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.

 

	
  

  	
  STONE TAN CHINA ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard Tan

  
	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
					

 

- Signature
page of the Investors immediately follows -

 18
 

 

	
  

  	
  INVESTORS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [                              ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [                                ]

  

 

 19

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