Document:

2004 Stock Incentive Plan

 EXHIBIT 10.3 2004 Stock Incentive Plan - Form of Restricted Stock Unit Award and Agreement 
 BOFI HOLDING, INC. 
 RESTRICTED STOCK UNIT GRANT NOTICE 
 (2004 STOCK INCENTIVE PLAN, AS AMENDED) 
 BofI Holding, Inc. (the
“Company”), pursuant to its 2004 Stock Incentive Plan, as amended (the “Plan”), hereby awards to Participant a Restricted Stock Unit award for the number of shares of the Company’s Stock set forth
below (the “Award”). The Award is subject to all of the terms and conditions as set forth herein and in the Plan and the Restricted Stock Unit Agreement, both of which are attached hereto and incorporated herein in their
entirety. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or the Restricted Stock Unit Agreement. In the event of any conflict between the terms in the Award and the Plan, the terms of the Plan shall
control. 
  

					
	Participant:	 	________________________________	  	
			
	Date of Grant:	 	________________________________	  	
	Vesting Commencement Date:	 	________________________________	  	
	Number of Shares Subject to Award:	 	________________________________	  	
	Consideration:	 		  	
	Fair Market Value per Share:	 	$_________________	  	

  

			
	Vesting Schedule:	  	The __________________________________________________________________. In addition, the vesting of the shares shall accelerate upon the occurrence of a Change of Control, as defined in the
Plan. Notwithstanding the foregoing, vesting shall terminate on upon the Participant’s termination of Continuous Service.
		
	Issuance Schedule:	  	The shares will be issued in accordance with the issuance schedule set forth in Section 6 of the Restricted Stock Unit Agreement.

 Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and understands and
agrees to, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Agreement and the
Plan set forth the entire understanding between Participant and the Company regarding the Award and supersedes all prior oral and written agreements on that subject. 
  

									
	BOFI HOLDING, INC.	 		 	PARTICIPANT:
				
	By:	 	 	 		 	 
		 	Signature	 		 	Signature
	Title:	 	 	 		 	Date:	 	 
					
	Date:	 	 	 		 		 	

 ATTACHMENTS: Restricted Stock Unit Agreement, 2004 Stock Incentive Plan, as Amended

 ATTACHMENT I 
 BOFI HOLDING, INC. 
 2004
STOCK INCENTIVE PLAN, AS AMENDED 
 RESTRICTED STOCK UNIT AGREEMENT – EXECUTIVE/BOARD MEMBER 
 Pursuant to the Restricted Stock Unit Grant Notice (“Grant Notice”) and this Restricted Stock Unit Agreement and in consideration
of your past services, BofI Holding, Inc. (the “Company”) has awarded you a deferred issuance restricted stock award (the “Award”) under its 2004 Stock Incentive Plan, as amended (the
“Plan”) for the number of shares of the Company’s Stock as indicated in the Grant Notice. Your Award is granted to you effective as of the Date of Grant set forth in the Grant Notice for this Award. Defined terms not
explicitly defined in this Restricted Stock Unit Agreement shall have the same meanings given to them in the Plan. In the event of any conflict between the terms in this Restricted Stock Unit Agreement and the Plan, the terms of the Plan shall
control. 
 RECITALS 
 WHEREAS,
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) provides that deferred compensation arrangements (including, in this case, the Award) that do not comply with, among other things, the
distribution requirements of Code Section 409A, are subject to an additional 20% tax, plus interest, on the distribution. 
 WHEREAS, Code
Section 409A provides that the payment of the deferred compensation must not occur prior to: (i) termination of Continuous Service (as defined below), but “key employees” of publicly traded companies must wait an additional six
months, (ii) Disability (as defined below), (iii) death, (iv) a fixed date (or dates) specified at the time of deferral, (v) a change in control, or (vi) the occurrence of an unforeseeable emergency. 
 WHEREAS, at the time the shares subject to your Award would otherwise be issued to you in connection with your termination of Continuous Service, you may be subject to
the distribution limitations contained in Code Section 409A applicable to a “key employee” as defined in Code Section 416(i). 
 NOW,
THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto do hereby agree that the details of your Award are as follows:

 1. VESTING. 
 (a) In General. Subject to the limitations contained herein, your Award will vest in accordance with the vesting schedule provided in the Grant Notice, provided that vesting will cease upon the termination of
your Continuous Service. For purposes of this Award, “Continuous Service” means that your service with the Company or an Affiliate, whether as an employee, director or consultant, is not interrupted or terminated. A change in
the capacity in which you render service to the Company or an Affiliate as an employee, consultant or director or a change in the entity for which you render such service, provided that there is no interruption 

 
or termination of your service with the Company or an Affiliate, shall not terminate your Continuous Service. For example, a change in status from an
employee of the Company to a consultant to an Affiliate or to a director shall not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or its compensation committee or any officer designated by the Board or
its compensation committee, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other
personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of
absence agreement or policy applicable to you, or as otherwise required by law. 
 (b) Vesting Acceleration.
Notwithstanding the foregoing, upon a Change of Control during your Continuous Service, or in the event that your Continuous Service is terminated due to your death or Disability, then your Award will immediately vest in full. 
 2. NUMBER OF SHARES. The number of shares subject to your Award may be adjusted from time to time for
capitalization adjustments, as provided in the Plan. 
 3. SECURITIES LAW COMPLIANCE. You
may not be issued any shares under your Award unless the shares are either: (i) then registered under the Securities Act; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the
Securities Act. Your Award also must comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with such laws and
regulations. 
 4. LIMITATIONS ON TRANSFER. Your Award is not transferable, except by
will or by the laws of descent and distribution. In addition to any other limitation on transfer created by applicable securities laws, you agree not to assign, hypothecate, donate, encumber or otherwise dispose of any interest in any of the shares
of Stock held by you under the Award until the shares are issued to you in accordance with Section 6 of this Agreement. After the shares have been issued to you, you are free to assign, hypothecate, donate, encumber or otherwise dispose of any
interest in such shares provided that any such actions are in compliance with the provisions herein and applicable securities laws. 
 5.
DIVIDENDS. You shall be entitled to receive payments equal to any cash dividends and other distributions paid with respect to a corresponding number of shares covered by your Award, provided that if any such dividends or
distributions are paid in shares, the Fair Market Value of such shares shall be converted into additional shares covered by the Award, and further provided that such additional shares shall be subject to the same forfeiture restrictions and
restrictions on transferability as apply to the shares subject to the Award with respect to which they relate. 
 6. DATE
OF ISSUANCE. 
 (a) The Company will deliver to you a number of shares of the
Company’s Stock equal to the number of vested shares subject to your Award, including any additional shares received pursuant to Section 5 above that relate to those vested shares on the vesting date or dates provided in your Grant Notice;
provided, however, that if the Company determines that 

 
you are subject to its policy regarding insider trading of the Company’s stock or you are otherwise prohibited from selling shares of the Company’s
stock in the public market and any shares of Common Stock subject to your Award are scheduled to be delivered on a day (the “Original Distribution Date”) that does not occur during an open “window period” applicable to you, as
determined by the Company in accordance with such policy, or a day when you are prohibited from selling shares of the Company’s stock in the public market and the Company elects not to satisfy its tax withholding obligations by
withholding shares from your distribution, then such shares shall not be delivered on such Original Distribution Date and shall instead be delivered as soon as practicable within the next open “window period” applicable to you pursuant to
such policy or the next day when you are not prohibited from selling shares of the Company’s stock in the public market; provided, however, that unless the delay until the next open window period or the next day when you are not
prohibited from selling shares of the Company’s stock in the public market would not result in the imposition of any additional taxes under the Code (including section 409A of the Code), the delivery of the shares shall not be delayed pursuant
to this provision beyond the later of: (a) December 31st of the same calendar year of the Original Distribution Date, or (b) the 15th day of the third calendar month following the Original Distribution Date. 
 (b) Notwithstanding the foregoing: 
 (i) If the first vesting date occurs no sooner than 13 months following the Date of Grant specified in your Grant Notice and if, within the 30-day period following the Date of Grant indicated on your Grant
Notice, you elect to defer delivery of such shares of Common Stock beyond the vesting date, then the Company will not deliver such shares on the vesting date or dates provided in your Grant Notice, but will instead deliver such shares to you on the
date or dates that you so elect (the “Settlement Date”); provided, however, that in the event of your “separation from service” (as such term is defined in Section 409A(a)(2)(A)(i) and applicable guidance
thereunder) prior to the Settlement Date, such vested shares of Common Stock shall instead be delivered to you on the date of your termination of Continuous Service. If such deferral election is made, the Committee shall, in its sole discretion,
establish the rules and procedures for such election which shall be evidenced by a Restricted Stock Unit Election Agreement. 
 (ii) If at the time the shares would otherwise be issued to you as a result of your termination of Continuous Service, you are subject to the distribution limitations contained in Code Section 409A applicable to “key
employees” as defined in Code Section 416(i), share issuances to you as a result of your termination of Continuous Service shall not be made before the date which is six (6) months following the date of your termination of Continuous
Service, or, if earlier, the date of your death that occurs within such six (6) month period. 
 7. RESTRICTIVE
LEGENDS. The shares issued under your Award shall be endorsed with appropriate legends determined by the Company. 
 8.
AWARD NOT A SERVICE CONTRACT. 
 (a)
Your Continuous Service with the Company or an Affiliate is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this
Restricted Stock 

 
Unit Agreement (including, but not limited to, the vesting of your Award pursuant to the schedule set forth in Section 2 herein), the Plan or any
covenant of good faith and fair dealing that may be found implicit in this Restricted Stock Unit Agreement or the Plan shall: (i) confer upon you any right to continue in the employ of, or affiliation with, the Company or an Affiliate;
(ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation;
(iii) confer any right or benefit under this Restricted Stock Unit Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company of the right to terminate
you at will and without regard to any future vesting opportunity that you may have. 
 (b) By accepting this Award, you
acknowledge and agree that the right to continue vesting in the Award pursuant to the schedule set forth in Section 2 is earned only by continuing as an employee, director or consultant at the will of the Company (not through the act of being
hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems
appropriate (a “reorganization”). You further acknowledge and agree that such a reorganization could result in the termination of your Continuous Service, or the termination of Affiliate status of your employer and the loss of
benefits available to you under this Restricted Stock Unit Agreement, including but not limited to, the termination of the right to continue vesting in the Award. You further acknowledge and agree that this Restricted Stock Unit Agreement, the Plan,
the transactions contemplated hereunder and the vesting schedule set forth herein or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of continued engagement as an
employee or consultant for the term of this Agreement, for any period, or at all, and shall not interfere in any way with your right or the Company’s right to terminate your Continuous Service at any time, with or without cause and with or
without notice. 
 9. WITHHOLDING OBLIGATIONS. 
 (a) On or before the time you receive a distribution of shares pursuant to your Award, or at any time thereafter as requested by
the Company, you hereby authorize withholding from payroll and/or any other amounts payable to you, provided that any such withholding will not be in excess of the minimum statutory withholding requirement, and otherwise agree to make adequate
provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with your Award. 
 (b) Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have no obligation
to issue the shares of Stock subject to your Award. 
 10. UNSECURED OBLIGATION. Your Award is unfunded,
and as a holder of a vested Award, you shall be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares pursuant to this Agreement. You shall not have voting or any other rights as a
stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you pursuant to Section 6 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a
stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

 11. NOTICES. Any notices provided for in your Award or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to
the Company. 
 12. MISCELLANEOUS. 
 (a) The rights and obligations of the Company under your Award shall be transferable to any one or more persons or entities, and
all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. Your rights and obligations under your Award may only be assigned with the prior written consent of the Company.

 (b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole
determination of the Company to carry out the purposes or intent of your Award. 
 (c) You acknowledge and agree that
you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award, and fully understand all provisions of your Award. 
 13. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions
of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the
provisions of your Award and those of the Plan, the provisions of the Plan shall control. 
 14. SEVERABILITY. If all
or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or
invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent
possible while remaining lawful and valid. 
 15. EFFECT ON OTHER EMPLOYEE
BENEFIT PLANS. The value of the Award subject to this Agreement shall not be included as compensation, earnings, salaries, or other similar terms used when calculating the Employee’s benefits under any employee
benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit
plans. 
 16. AMENDMENT. This Agreement may not be modified, amended or terminated except by an instrument in writing,
signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amended solely by the Board by a writing which specifically states that it is amending this Agreement, so long as a copy of

 
such amendment is delivered to you, and provided that no such amendment adversely affecting your rights hereunder may be made without your written consent.
Without limiting the foregoing, the Board reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in
applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided
herein.f8k082708ex4i_ea3chinavalve.htm

    

    Exhibit
4.1

    

    REGISTRATION
RIGHTS AGREEMENT

     

    This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of August 26, 2008, by and among China Valves Technology, Inc.
(f/k/a Intercontinental Resources, Inc.), a Nevada corporation, (collectively
with all predecessors thereof, the “Company”), and the investors
signatory hereto (each an “Investor” and collectively,
the “Investors”).

     

    This
Agreement is made in connection with the Securities Purchase Agreement, dated as
of the date hereof, among the Company, the Investors and the other parties
thereto(the “Purchase
Agreement”).

     

    The
Company and the Investors hereby agree as follows:

     

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

     

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

     

    “2009 Delivery Date” means the
date on which the 2009 Make Good Shares are required to be delivered to the
Investors by the Make Good Pledgors pursuant to the Make Good Escrow
Agreement.

     

    “2010 Delivery Date” means the
date on which the 2010 Make Good Shares are required to be delivered to the
Investors by the Make Good Pledgors pursuant to the Make Good Escrow
Agreement.

     

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

     

    “Commission Comments” means written comments pertaining solely to Rule
415 which are received by the Company from
the Commission to a filed Registration Statement, a copy of which shall have
been provided by the Company to the Holders, which either (i) requires the
Company to limit the number of Registrable Securities which may be included
therein to a number which is less than the number sought to be included thereon
as filed with the Commission or (ii) requires the Company to either exclude
Registrable Securities held by specified Holders or deem such Holders to be
underwriters with respect to Registrable Securities they seek to include in such
Registration Statement.

     

    “Cut Back Shares” has the
meaning set forth in Section 2(b).

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    “Effective Date” means, as to
a Registration Statement, the date on which such Registration Statement is first
declared effective by the Commission.

     

    “Effectiveness Date” means (a)
with respect to the initial Registration Statement required to be filed pursuant
to Section 2(a), the earlier of: (i) the 135th day
following the Closing Date and (ii) the fifth Trading Day following the date on
which the Company is notified by the Commission that the initial Registration
Statement will not be reviewed or is no longer subject to further review and
comments; (b) with respect to any additional Registration Statements required to
be filed pursuant to Section 2(a), the earlier of: (i) the 120th day
following the applicable Filing Date for such additional Registration
Statement(s) and (ii) the fifth Trading Day following the date on which the
Company is notified by the Commission that such additional Registration
Statement(s) will not be reviewed or is no longer subject to further review; (c)
with respect to any additional Registration Statements required to be filed
solely due to SEC Restrictions, the earlier of: (i) the 120th day
following the applicable Restriction Termination Date and (ii) the fifth Trading
Day following the date on which the Company is notified by the Commission that
such Registration Statement will not be reviewed or is no longer subject to
further review and comments; (d) with respect to a Registration Statement
required to be filed under Section 2(c), the earlier of: (i) the 90th day
following the date on which the Company becomes eligible to utilize Form S-3 to
register the resale of Common Stock; provided, that, if
the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (d)(i) shall
be the 120th day
following the date on which the Company becomes eligible to utilize Form S-3 to
register the resale of Common Stock, and (ii) the fifth Trading Day following
the date on which the Company is notified by the Commission that the
Registration Statement will not be reviewed or is no longer subject to further
review and comments; (e) with respect to a Registration Statement required to be
filed under Section 2(d), the earlier of: (i) the 90th day
following the 2008 Delivery Date; provided, that, if
the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (e)(i) shall
be the 135th day
following the 2008 Delivery Date, and (ii) the fifth Trading Day following the
date on which the Company is notified by the Commission that the Registration
Statement will not be reviewed or is no longer subject to further review and
comments, (f) with respect to a Registration Statement required to be filed
under Section 2(e), the earlier of: (i) the 90th day
following the 2009 Delivery Date; provided, that, if
the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (f)(i) shall
be the 135th day
following the 2009 Delivery Date, and (ii) the fifth Trading Day following the
date on which the Company is notified by the Commission that the Registration
Statement will not be reviewed or is no longer subject to further review and
comments and (g) with respect to a Registration Statement required to be filed
under Section 2(f), the earlier of: (i) the 90th day
following the 2010 Delivery Date; provided, that, if
the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (f)(i) shall
be the 135th day
following the 2010 Delivery Date, and (ii) the fifth Trading Day following the
date on which the Company is notified by the Commission that the Registration
Statement will not be reviewed or is no longer subject to further review and
comments.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    “Effectiveness Period” means,
as to any Registration Statement required to be filed pursuant to this
Agreement, the period commencing on the Effective Date of such Registration
Statement and ending on the earliest to occur of (a) the second anniversary of
such Effective Date, (b) such time as all of the Registrable Securities covered
by such Registration Statement have been publicly sold by the Holders of the
Registrable Securities included therein, or (c) such time as all of the
Registrable Securities covered by such Registration Statement may be sold by the
Holders without volume restrictions pursuant to Rule 144 as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company’s transfer agent and the affected
Holders.

     

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

     

    “Filing Date” means (a) with
respect to the initial Registration Statement required to be filed pursuant to
Section 2(a), the 45th day
following the Closing Date; (b) with respect to any additional Registration
Statements required to be filed pursuant to Section 2(a), the 15th day
following the Effective Date for the last Registration Statement filed pursuant
to this Agreement under Section 2(a); (c) with respect to any additional
Registration Statements required to be filed due to SEC Restrictions, the
15th
day following the applicable Restriction Termination Date; (d) with respect to a
Registration Statement required to be filed under Section 2(c), the 30th day
following the date on which the Company becomes eligible to utilize Form S-3 to
register the resale of Common Stock, (e) with respect to the Registration
Statement required to be filed under Section 2(d), the 45th day
following the 2008 Delivery Date (provided, that if the
Company is then eligible to utilize Form S-3 to register the resale of Common
Stock, the Filing Date under this clause (e) shall be 30 days following the 2008
Delivery Date), (f) with respect to the
Registration Statement required to be filed under Section 2(f), the 45th day
following the 2009 Delivery Date (provided, that if the
Company is then eligible to utilize Form S-3 to register the resale of Common
Stock, the Filing Date under this clause (f) shall be 30 days following the 2009
Delivery Date) and (g) with respect to the Registration Statement required to be
filed under Section 2(g), the 45th day
following the 2010 Delivery Date (provided, that if the
Company is then eligible to utilize Form S-3 to register the resale of Common
Stock, the Filing Date under this clause (g) shall be 30 days following the 2010
Delivery Date).

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    “Registrable Securities”
means: (i) the Shares, (ii) the 2008 Make Good Shares, as applicable, (iii) the
2009 Make Good Shares, as applicable, (iv) the 2010 Make Good Shares, as
applicable, (v) any shares of Common Stock issuable upon the exercise of
warrants issued to any placement agent (the “Placement Agent Warrant
Shares”) as compensation in connection with the financing that is the
subject of the Purchase Agreement and (vi) any securities issued or issuable
upon any stock split, dividend or other distribution, recapitalization or
similar event, or any price adjustment as a result of such stock splits, reverse
stock splits or similar events with respect to any of the securities referenced
in (i) – (v) above.  Notwithstanding the foregoing, a security shall
cease to be a Registrable Security for purposes of this Agreement from and after
such time as the Holder of such security may resell such security without volume
restrictions under Rule 144, as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the Company’s transfer agent and the affected holders.

     

    “Registration Statement” means
the initial registration statement required to be filed in accordance with
Section 2(a) and any additional registration statements required to be filed
under this Agreement, including in each case the Prospectus, amendments and
supplements to such registration statements or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference therein.

     

    “Restriction Termination Date”
has the meaning set forth in Section 2(b).

     

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

     

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

     

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

     

    “SEC Restrictions” has the
meaning set forth in Section 2(b).

     

    “Securities Act” means the
Securities Act of 1933, as amended.

     

    “Selling Holder Questionnaire”
means the selling security holder notice and questionnaire attached as Annex B
hereto.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    “Shares” means the shares of
Common Stock, par value $0.001 per share, issued or issuable to the Investors
pursuant to the Purchase Agreement.

     

    2. Registration.

     

    (a)    On or
prior to the applicable Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all Registrable
Securities (other than in the case of the initial Registration Statement to be
filed under this Section 2(a), the 2008 Make Good Shares, the 2009 Make Good
Shares and the 2010 Make Good Shares) not already covered by an existing and
effective Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415.  Each Registration Statement required to
be filed under this Agreement shall be filed on Form S-1 (or if the Company is
not then eligible to utilize such form of registration, it shall utilize such
other available form appropriate for such purpose) and contain (except if
otherwise required pursuant to written comments received from the Commission
upon a review of such Registration Statement, other than as to the
characterization of any Holder as an underwriter, which shall not occur unless
such characterization is consistent with written information provided by the
Holder in the Selling Holder Questionnaire) the “Plan of Distribution” attached
hereto as Annex
A.  The Company shall cause each Registration Statement
required to be filed under this Agreement to be declared effective under the
Securities Act as soon as possible but, in any event, no later than its
Effectiveness Date, and shall use its reasonable best efforts to keep each such
Registration Statement continuously effective during its entire Effectiveness
Period.  By 5:00 p.m. (New York City time) on the Business Day
immediately following the Effective Date of each Registration Statement, the
Company shall file with the Commission in accordance with Rule 424 under the
Securities Act the final prospectus to be used in connection with sales pursuant
to such Registration Statement (whether or not such filing is technically
required under such Rule).  If for any reason other than due solely to
SEC Restrictions, a Registration Statement is effective but not all outstanding
Registrable Securities are registered for resale pursuant thereto, then the
Company shall prepare and file by the applicable Filing Date an additional
Registration Statement to register the resale of all such unregistered
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415.

     

    (b)    Notwithstanding
anything to the contrary contained in this Section 2, if the Company receives
Commission Comments, and following discussions with and responses to the
Commission in which the Company uses its reasonable best efforts and time to
cause as many Registrable Securities (other than the 2008 Make Good Shares, 2009 Make Good Shares and 2010 Make Good Shares, unless the
2008 Delivery Date, 2009 Delivery Date, or 2010 Delivery Date, as the case may
be, shall have occurred) for as many Holders as possible to be included
in the Registration Statement filed pursuant to Section 2(a) without
characterizing any Holder as an underwriter unless such characterization is
consistent with written information provided by the Holder in the Selling Holder
Questionnaire (and in such regard uses its reasonable best efforts to cause the
Commission to permit the affected Holders or their respective counsel to
participate in Commission conversations on such issue together with Company
Counsel, and timely conveys relevant information concerning such issue with the
affected Holders or their respective counsel) (the day that such discussions and
responses are concluded shall be referred to as the “Tolling Date”), the Company is
unable to cause the inclusion of all Registrable Securities, then the Company
may, following not less than three (3) Trading Days prior written notice to the
Holders (i) remove from the Registration Statement such Registrable Securities
(the “Cut Back Shares”)
and/or (ii) agree to such restrictions and limitations on the registration and
resale of the Registrable Securities, in each case as the Commission may require
in order for the Commission to allow such Registration Statement to become
effective; provided, that in no
event may the Company characterize any Holder as an underwriter unless such
characterization is consistent with written information provided by the Holder
in the Selling Holder Questionnaire (collectively, the “SEC
Restrictions”).  Unless the SEC Restrictions otherwise require,
any cut-back imposed pursuant to this Section 2(b) shall be allocated first upon
the Placement Agent Warrant Shares, and then among the remaining Registrable
Securities of the Holders on a pro rata basis.  The required
Effectiveness Date for such Registration Statement will be tolled from the
Tolling Date until such time as the Company is able to effect the registration
of the Cut Back Shares in accordance with any SEC Restrictions if such
Registrable Securities cannot at such time be resold by the Holders thereof
without volume limitations pursuant to Rule 144 (such date, the “Restriction Termination
Date”).  From and after the Restriction Termination Date, all
provisions of this Section 2 shall again be applicable to the Cut Back Shares
(which, for avoidance of doubt, retain their character as “Registrable
Securities”) if such Registrable Securities cannot at such time be resold by the
Holders thereof without volume limitations pursuant to Rule 144 so that the
Company will be required to file with and cause to be declared effective by the
Commission such additional Registration Statements in the time frames set forth
herein as necessary to ultimately cause to be covered by effective Registration
Statements all Registrable Securities.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
       

      (c)    Promptly
following any date on which the Company becomes eligible to use a registration
statement on Form S-3 to register Registrable Securities for resale, the Company
shall file a Registration Statement on Form S-3 covering all Registrable
Securities (or a post-effective amendment on Form S-3 to the then effective
Registration Statement) and shall cause such Registration Statement to be filed
by the Filing Date for such Registration Statement and declared effective under
the Securities Act as soon as possible thereafter, but in any event prior to the
Effectiveness Date therefore.  Such Registration Statement shall
contain (except if otherwise required pursuant to written comments received from
the Commission upon a review of such Registration Statement, other than as to
the characterization of any Holder as an underwriter, which shall not occur
unless such characterization is consistent with written information provided by
the Holder in the Selling Holder Questionnaire) the “Plan of Distribution”
attached hereto as Annex
A.  The Company shall use its reasonable best efforts to keep
such Registration Statement continuously effective under the Securities Act
during the entire Effectiveness Period.  By 5:00 p.m. (New York City
time) on the Business Day immediately following the Effective Date of such
Registration Statement, the Company shall file with the Commission in accordance
with Rule 424 under the Securities Act the final prospectus to be used in
connection with sales pursuant to such Registration Statement (whether or not
such filing is technically required under such Rule).

       

      
        (d)    On or
prior to its Filing Date, the Company shall prepare and file with the Commission
a Registration Statement covering the resale of the 2008 Make Good Shares on
Form S-3 if the Company is then eligible to utilize such Form (or if the Company
is not then eligible to utilize such form of registration, it shall utilize such
other available form appropriate for such purpose) and shall cause such
Registration Statement to be filed by the Filing Date for such Registration
Statement and declared effective under the Securities Act as soon as possible
thereafter, but in any event prior to the Effectiveness Date
therefore.  Such Registration Statement shall contain (except if
otherwise required pursuant to written comments received from the Commission
upon a review of such Registration Statement, other than as to the
characterization of any Holder as an underwriter, which shall not occur without
such Holder’s consent) the “Plan of Distribution” attached hereto as Annex
A.  The Company shall use its reasonable best efforts to keep
such Registration Statement continuously effective under the Securities Act
during the entire Effectiveness Period which is applicable to it.  By
5:00 p.m. (New York City time) on the Business Day immediately following the
Effective Date of such Registration Statement, the Company shall file with the
Commission in accordance with Rule 424 under the Securities Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement (whether or not such filing is technically required under such
Rule).

         

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

         

        (e)    On or
prior to its Filing Date, the Company shall prepare and file with the Commission
a Registration Statement covering the resale of the 2009 Make Good Shares on
Form S-3 if the Company is then eligible to utilize such Form (or if the Company
is not then eligible to utilize such form of registration, it shall utilize such
other available form appropriate for such purpose) and shall cause such
Registration Statement to be filed by the Filing Date for such Registration
Statement and declared effective under the Securities Act as soon as possible
thereafter, but in any event prior to the Effectiveness Date
therefore.  Such Registration Statement shall contain (except if
otherwise required pursuant to written comments received from the Commission
upon a review of such Registration Statement, other than as to the
characterization of any Holder as an underwriter, unless such characterization
is consistent with written information provided by the Holder in the Selling
Holder Questionnaire) the “Plan of Distribution” attached hereto as Annex
A.  The Company shall use its reasonable best efforts to keep
such Registration Statement continuously effective under the Securities Act
during the entire Effectiveness Period which is applicable to it.  By
5:00 p.m. (New York City time) on the Business Day immediately following the
Effective Date of such Registration Statement, the Company shall file with the
Commission in accordance with Rule 424 under the Securities Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement (whether or not such filing is technically required under such
Rule).

         

        (f)    On or
prior to its Filing Date, the Company shall prepare and file with the Commission
a Registration Statement covering the resale of the 2010 Make Good Shares on
Form S-3 if the Company is then eligible to utilize such Form (or if the Company
is not then eligible to utilize such form of registration, it shall utilize such
other available form appropriate for such purpose) and shall cause such
Registration Statement to be filed by the Filing Date for such Registration
Statement and declared effective under the Securities Act as soon as possible
thereafter, but in any event prior to the Effectiveness Date
therefore.  Such Registration Statement shall contain (except if
otherwise required pursuant to written comments received from the Commission
upon a review of such Registration Statement, other than as to the
characterization of any Holder as an underwriter, unless such characterization
is consistent with written information provided by the Holder in the Selling
Holder Questionnaire) the “Plan of Distribution” attached hereto as Annex
A.  The Company shall use its reasonable best efforts to keep
such Registration Statement continuously effective under the Securities Act
during the entire Effectiveness Period which is applicable to it.  By
5:00 p.m. (New York City time) on the Business Day immediately following the
Effective Date of such Registration Statement, the Company shall file with the
Commission in accordance with Rule 424 under the Securities Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement (whether or not such filing is technically required under such
Rule).

         

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

         

         

        (g)    If: (i) a
Registration Statement is not filed on or prior to its Filing Date covering the
Registrable Securities required under this Agreement to be included therein (if
the Company files a Registration Statement without affording the Holders the
opportunity to review and comment on the same as required by Section 3(a)
hereof, the Company shall not be deemed to have satisfied this clause (i)), or
(ii) a Registration Statement is not declared effective by the Commission on or
prior to its required Effectiveness Date or if by the Business Day immediately
following the Effective Date, the Company shall not have filed a “final”
prospectus for the Registration Statement with the Commission under Rule 424(b)
in accordance with the terms hereof (whether or not such a prospectus is
technically required by such Rule), or (iii) after its Effective Date, without
regard for the reason thereunder or efforts therefore, such Registration
Statement ceases for any reason to be effective and available to the Holders as
to all Registrable Securities to which it is required to cover at any time prior
to the expiration of its Effectiveness Period for more than an aggregate of 30
Trading Days (which need not be consecutive) (any such failure or breach being
referred to as an “Event,” and for purposes of
clauses (i) or (ii) the date on which such Event occurs, or for purposes of
clause (iii) the date which such 30 Trading Day-period is exceeded, being
referred to as “Event
Date”), then in addition to any other rights the Holders may have
hereunder or under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay
to each Holder an amount in cash, as partial liquidated damages and not as a
penalty, equal to 1.0% of the aggregate Investment Amount paid by such Holder
for Shares pursuant to the Purchase Agreement.  The parties agree that (1) the
Company will not be liable for liquidated damages under this Agreement with
respect to any (i) Placement Agent Warrant Shares or (ii) warrants issued to any
placement agent as compensation in connection with the financing that is the
subject of the Purchase Agreement and (2) in no event will the Company be liable
for liquidated damages under this Agreement in excess of 1.0% of the aggregate
Investment Amount of the Holders in any 30-day period nor shall the Company be
liable for liquidated damages under this Agreement in excess of 10% of the
aggregate  Investment Amount of the Holders (which maximum amount
payable shall only be relevant to amounts paid pursuant to this Section 2(g) and
shall expressly not apply to any amounts payable under any other section of this
or any other Transaction Document).  The partial liquidated
damages pursuant to the terms hereof shall apply on a daily pro-rata basis for
any portion of a month prior to the cure of an Event (except in the case of the
first Event Date), and shall cease to accrue (unless earlier cured) upon the
expiration of the Effectiveness Period.

         

        (h)    Each
Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex B (a “Selling Holder
Questionnaire”).  The Company shall not be required to include
the Registrable Securities of a Holder in a Registration Statement and shall not
be required to pay any liquidated or other damages under Section 2(g) to any
Holder who fails to furnish to the Company a fully completed Selling Holder
Questionnaire at least two Trading Days prior to the Filing Date (subject to the
requirements set forth in Section 3(a)).

         

        3. Registration
Procedures.

         

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

         

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

         

         

        (a)    Not less
than four Trading Days prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto, the Company shall
furnish to each Holder copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such
document that addresses specifically this transaction or the Selling
Stockholders, as proposed to be filed, which documents will be subject to the
review of such Holder.  Such documents may be delivered to such Holder
via electronic mail (i.e., e-mail).  The Company shall not file a
Registration Statement, any Prospectus or any amendments or supplements thereto
in which the “Selling Stockholder” section thereof differs from the disclosure
received from a Holder in its Selling Holder Questionnaire (as amended or
supplemented).  The Company shall not file a Registration Statement,
any Prospectus or any amendments or supplements thereto in which it (i)
characterizes any Holder as an underwriter, unless such characterization is
consistent with written information provided by the Holder in the Selling Holder
Questionnaire, (ii) excludes a particular Holder due to such Holder refusing to
be named as an underwriter, or (iii) reduces the number of Registrable
Securities being registered on behalf of a Holder except pursuant to, in the
case of subsection (iii), the Commission Comments, without, in each case, such
Holder’s express written authorization, unless such reduction is made pursuant
to Section 2(b) hereof.

         

        (b)    (i)  Prepare
and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect to
each Registration Statement or any amendment thereto and, as promptly as
reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to such Registration
Statement that would not result in the disclosure to the Holders of material and
non-public information concerning the Company; and (iv) comply in all material
respects with the provisions of the Securities Act and the Exchange Act with
respect to the Registration Statement(s) and the disposition of all Registrable
Securities covered by each Registration Statement.

         

        (c)    Notify
the Holders as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than three Trading Days prior to such filing and, in the case of
(v) below, not less than three Trading Days prior to the financial statements in
any Registration Statement becoming ineligible for inclusion therein) and (if
requested by any such Person) confirm such notice in writing no later than one
Trading Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a “review” of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the Holders
that pertain to the Holders as a Selling Stockholder or to the Plan of
Distribution, but not information which the Company believes would constitute
material and non-public information); and (C) with respect to each Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental
authority for amendments or supplements to a Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.

         

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

         

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

         

        (e)    Furnish
to each Holder, without charge and at the option of the Company in electronic
format, at least one conformed copy of each Registration Statement and each
amendment thereto and all exhibits to the extent requested by such Person
(including those previously furnished) promptly after the filing of such
documents with the Commission.

         

        (f)    Promptly
deliver to each Holder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request.  The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.

         

        (g)    Prior to
any public offering of Registrable Securities, register or qualify such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of all jurisdictions within the United States as any Holder may request, to keep
each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statements; provided, however, in
connection with any such registration or qualification, the Company shall not be
required to (i) qualify to do business in any jurisdiction where the Company
would not otherwise be required to qualify, (ii) subject itself to general
taxation in any such jurisdiction, (iii) file a general consent to service of
process in any jurisdiction, or (iv) make any change to the Company’s Articles
of Incorporation or bylaws.

         

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

         

         

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

         

        (i)    Upon the
occurrence of any event contemplated by Section 3©(v), as promptly as reasonably
possible, prepare a supplement or amendment, including a post-effective
amendment, to the affected Registration Statements or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, no Registration Statement nor any Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.

         

        4. Registration
Expenses.  All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement.  The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement.  In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit and the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.  In no
event shall the Company be responsible for any broker or similar commissions
incurred by any Holder or, except to the extent provided for in the Transaction
Documents, any legal fees or other cost of the Holders in connection with this
Agreement.

         

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

         

        5. Indemnification.

         

        (a)    Indemnification by the
Company.  The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Holder, the officers,
directors, agents, investment advisors, partners, members and employees of each
of them, each Person who controls any such Holder (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable costs of
preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising
out of or relating to any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (2) in the case of an occurrence of
an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of an Advice or an amended or supplemented Prospectus,
but only if and to the extent that following the receipt of the Advice or the
amended or supplemented Prospectus the misstatement or omission giving rise to
such Loss would have been corrected.  The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the transactions contemplated by
this Agreement.

         

        (b)    Indemnification by
Holders. Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising solely out of
or based solely upon: (x) such Holder’s failure to comply with the prospectus
delivery requirements of the Securities Act or (y) any untrue statement of a
material fact contained in any Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or arising solely
out of or based solely upon any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading to the
extent, but only to the extent that, (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement
thereto or (2) in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or  defective and prior to the receipt by such
Holder of an Advice or an amended or supplemented Prospectus, but only if and to
the extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been corrected.  In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.

         

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

         

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

         

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

         

        All fees
and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification
hereunder).

         

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

         

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

         

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

         

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

         

        6. Miscellaneous.

         

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

         

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

         

         

        (b)    No Piggyback on
Registrations.  Except as and to the extent specified in Schedule 3.1(v) to
the Purchase Agreement, neither the Company nor any of its security holders
(other than the Holders in such capacity pursuant hereto) may include securities
of the Company in a Registration Statement other than the Registrable
Securities, and the Company shall not during the Effectiveness Period enter into
any agreement providing any such right to any of its security
holders.

         

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

         

        (d)    Discontinued
Disposition.  Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3©, such Holder will
forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the “Advice”) by the Company that
the use of the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus or Registration
Statement.  The Company may provide appropriate stop orders to enforce
the provisions of this paragraph.

         

        (e)    Piggy-Back
Registrations.  If at any time during the Effectiveness
Period  there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities to
be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen calendar days after receipt of such notice,
any such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be registered, subject to customary underwriter cutbacks
applicable to all holders of registration rights.

         

        (f)    Amendments and
Waivers.  The provisions of this Agreement, including the
provisions of this Section 6(f), may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of no less than a majority in interest of the then outstanding
Registrable Securities.  Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of certain Holders and that does not directly
or indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates; provided, further
that no amendment or waiver to any provision of this Agreement relating to
naming any Holder or requiring the naming of any Holder as an underwriter may be
effected in any manner inconsistent with the written information provided by the
Holder in the Selling Holder Questionnaire.  Section 2(a) may not be
amended or waived except by written consent of each Holder affected by such
amendment or waiver.

         

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

         

         

        (g)    Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section or (ii) electronic mail (i.e., Email) prior to
6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section or (ii) electronic
mail (i.e., Email)on a day that is not a Trading Day or later than 6:30 p.m.
(New York City time) on any Trading Day, (c) the Trading Day following the date
of mailing, if sent by U.S. nationally recognized overnight courier service, or
(d) upon actual receipt by the party to whom such notice is required to be
given.  The address for such notices and communications shall be as
follows:

         

        
          	
                   
      

                	
                  If
      to the Company:

                	
                  China
      Valves Technology, Inc.

                
	 	 	
                  No.93
      West Xinsong Road

                  Kaifeng
      City, Henan Province, Peoples Republic of China

                
	 	 	
                  Facsimile:  86-378-292-4630

                  
                    Attn.:  President

                  

                

        

        
        

        
        

        

        
          	
                   
      

                	
                  With
      a copy to:

                	
                  Thelen
      Reid Brown Raysman & Steiner
LLP

                

        

        
          	
                   
      

                	
                  701
      8th
      Street NW

                

        

        
          	
                   
      

                	
                  Washington,
      D.C. 20001

                

        

        
          	
                   
      

                	
                  Facsimile:  (202)
      654-1804

                

        

        
          	
                   
      

                	
                  Attn.:  Louis
      A. Bevilacqua, Esq.

                

        

        

        
          	
                   
      

                	
                  If
      to an Investor:

                	
                  To
      the address set forth under such Investor’s name on the signature
      pages hereof;

                	
                   

                

        

         

        
          	
                   
      

                	
                  With
      a copy to:

                	
                  Winston
      & Strawn LLP

                

        

        
          	
                   
      

                	
                  200
      Park Avenue

                

        

        
          	
                   
      

                	
                  New
      York, NY 10166

                

        

        
          	
                   
      

                	
                  Facsimile:  (212)
      294-4700

                

        

        
          	
                   
      

                	
                  Attn.:  Eric
      L. Cohen, Esq.

                

        

         

        
          	
                   
      

                	
                  If
      to any other Person who is then the registered
  Holder:

                

        

         

        
          	
                   
      

                	
                  To
      the address of such Holder as it appears in the stocktransfer books of the
      Company

                

        

         

        or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

         

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

         

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

         

         

        (i)    Execution and
Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same
Agreement.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.

         

        (j)    Arbitration. Any
dispute, controversy or claim arising out of or relating to this Agreement, or
the breach, termination or invalidity thereof, shall be settled definitively and
exclusively by arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association by a single arbitrator appointed in
accordance with said Rules.  The arbitration shall take place in New
York, New York, United States of America.  The language to be used in
the arbitral proceedings shall be English.  The arbitrator shall apply
the law of the State of New York, United States of America, without regard for
its principles of conflict of laws.  Judgment upon the award may be
entered in any court having jurisdiction thereof.  If either party
shall commence a Proceeding to enforce any provisions of a Transaction Document,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such
Proceeding.

         

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

         

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

         

        (n)    Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

         

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

         

         

        (o)    Independent Nature of
Investors’ Obligations and Rights.  The obligations of each
Investor under this Agreement are several and not joint with the obligations of
each other Investor, and no Investor shall be responsible in any way for the
performance of the obligations of any other Investor under this
Agreement.  Nothing contained herein or in any Transaction Document,
and no action taken by any Investor pursuant thereto, shall be deemed to
constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any other Transaction
Document.  Each Investor acknowledges that no other Investor will be
acting as agent of such Investor in enforcing its rights under this
Agreement.  Each Investor shall be entitled to independently protect
and enforce its rights, including without limitation the rights arising out of
this Agreement, and it shall not be necessary for any other Investor to be
joined as an additional party in any Proceeding for such purpose.  The
Company acknowledges that each of the Investors has been provided with the same
Registration Rights Agreement for the purpose of closing a transaction with
multiple Investors and not because it was required or requested to do so by any
Investor.

         

        [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

        SIGNATURE
PAGES TO FOLLOW]

         

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

         

         

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

         

        CHINA
VALVES TECHNOLOGY, INC.

        

        

        By:_________________________________

        Name:
Siping Fang

        Title:
Chief Executive Officer

         

        [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

        SIGNATURE
PAGES OF INVESTORS TO FOLLOW]

         

         

        

         

         

         

        [Signature
page to RRA for the Company]

         

        

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

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

         

        
          	 	NAME OF INVESTING
      ENTITY
	 	                                                         
      
	 	 
	 	By:                                                   
      
	 	    Name:
	 	    Title:
	 	 
	 	ADDRESS FOR
    NOTICE
	 	 
	 	c/o:                                                   
	 	 
	 	Street:                                              
      
	 	 
	 	City/State/Zip:                               
      
	 	 
	 	Attention:                                       
      
	 	 
	 	Tel:                                                  
      
	 	 
	 	Fax:                                                  
      
	 	 
	 	Email:                                               
      

        

         

        
 

         

        [Signature
page to RRA for the Investors]

         

         

         

        20

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