EXHIBIT 10.28
EXECUTION COPY

 

AMENDED AND RESTATED AGREEMENT

 

AUGUST 23, 2007
 

RMB186,000,000

CREDIT FACILITY
 

for
 

PHOTRONICS IMAGING TECHNOLOGIES (SHANGHAI) CO., LTD
 

with
 

JPMORGAN CHASE BANK (CHINA) COMPANY LIMITED, SHANGHAI BRANCH,
as Administrative Agent

 

 

 

 

 

ALLEN & OVERY

Allen & Overy LLP

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CONTENTS

Clause   Page 1.       Interpretation 3 2.   Facilities 12 3.   Purpose 13 4.  
Conditions Precedent 13 5.   Utilisation 14 6.   Repayment 15 7.   Prepayment
and Cancellation 15 8.   Interest 17 9.   Market Disruption 19 10.   Taxes 19
11.   Increased Costs 21 12.   Mitigation 21 13.   Payments 22 14.  
Representations and Warranties 24 15.   Information Covenants 28 16.   General
Covenants 29 17.   Default 32 18.   The Administrative Agent and the Collateral
Agent 36 19.   Evidence and Calculations 41 20.   Administrative Agent’s Fees 41
21.   Indemnities, Break Costs and Damage Waivers 41 22.   Expenses 43 23.  
Amendments and Waivers 43 24.   Changes to the Parties 45 25.   Disclosure of
Information 48 26.   Set-off 49 27.   Pro Rata Sharing 49 28.   Severability 50
29.   Counterparts 51 30.   Notices 51 31.   Language 53 32.   Governing Law 53
33.   Enforcement 53   Schedule      1.   Replacement Lenders, Loans and
Commitments 55 2.   Conditions Precedent Documents 59 3.   Form of Request 63 4.
  Form of Transfer Certificate 64   SIGNATORIES 66

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THIS AGREEMENT is dated August 23, 2007   BETWEEN:   (1)   PHOTRONICS IMAGING
TECHNOLOGIES (SHANGHAI) CO., LTD (the Company); and   (2)   THE FINANCIAL
INSTITUTIONS LISTED IN SCHEDULE 1 as lenders; and   (3)        JPMORGAN CHASE
BANK (CHINA) COMPANY LIMITED, SHANGHAI BRANCH as Administrative Agent (in this
capacity the Administrative Agent).   BACKGROUND:   (A)   A revolving credit and
term loan facility (the 2005 Facility) was established in favour of the Company
pursuant to the terms of the Agreement dated 10 October 2005 (as amended and
modified through the date of this Agreement, the 2005 Loan Agreement) between
the Company, as borrower, and JPMorgan Chase Bank, N.A., Shanghai Branch, as
lender.   (B)   On August 6, 2007, “JPMorgan Chase Bank (China) Company Limited,
Shanghai Branch” was incorporated pursuant to the People’s Republic of China
Regulations on Administration of Foreign Funded Banks (State Council Decree No.
478), and in connection therewith the interests of JPMorgan Chase Bank, N.A.,
Shanghai Branch, as lender under the 2005 Loan Agreement and related loan
documents, were transferred to JPMorgan Chase Bank (China) Company Limited,
Shanghai Branch (as such successor, the Original Lender).   (C)   The Original
Lender will retain a portion of, and will assign to the other lenders listed in
Schedule 1 (such lenders, together with the Original Lender, the Replacement
Lenders) the remaining portion of the loans and commitments under the 2005
Facility on the terms and conditions provided herein, and the Company and the
Replacement Lenders have agreed to amend and restate the 2005 Facility on the
terms and conditions provided herein.   (D)   This Agreement is given in an
amendment to, restatement of and substitution for the 2005 Loan Agreement.   IT
IS AGREED as follows:   1.   INTERPRETATION   1.1   Definitions     In this
Agreement:     Affiliate means a Subsidiary or a Holding Company of a person or
any other Subsidiary of that Holding Company.     Agents means the
Administrative Agent (and any successor administrative agent) and the Collateral
Agent.

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           Approved Lender means a bank or financial institution authorized by
CBRC and any other regulatory authority in the PRC with jurisdiction over such
banking or financial institution to engage in the making, purchasing or
investing in loans.   Availability Period means the period from and including
the date of the 2005 Loan Agreement to and including:   (a)   for a Term Loan,
10 July 2006; and   (b) for a Revolving Credit Loan, 11 October 2010.   Break
Costs means the amount (if any) which a Lender is entitled to receive under
Clause 21.3 (Break Costs).   Business Day means a day (other than a Saturday or
a Sunday) on which banks are open for general business in Shanghai.   CBRC means
China Banking Regulatory Commission, the banking regulatory authority in PRC.  
CBRC Rules means the Administration Rules on the Connected Transactions of
Commercial Banks with Insiders and Shareholders issued by CBRC, which took
effect on 1 May 2004.   Change in Control means:   (a)       the acquisition of
ownership, directly or indirectly, beneficially or of record, by any other
person or group (within the meaning of the U.S. Securities Exchange Act of 1934,
as amended, and the rules of the U.S. Securities and Exchange Commission as in
effect on the date of this Agreement) of shares representing more than 35 per
cent. of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Guarantor; or   (b) occupation of a majority of
the seats (other than vacant seats) on the board of directors of the Guarantor
by persons who were neither nominated by the board of directors of the Guarantor
nor appointed by directors so nominated.   Collateral Agent means JPMorgan Chase
Bank, National Association in its capacity as Collateral Agent for the Holders
of Secured Obligations and any successor Collateral Agent appointed pursuant to
the terms of the Intercreditor Agreement.   Commitment means the Revolving
Credit Commitment or Term Loan Commitment, as so designated, of a Lender under a
particular Facility.   Compliance Certificate means a certificate delivered by a
Financial Officer of the Company certifying as to whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto.   Default means:   (a) an
Event of Default; or

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             (b)        an event or circumstance which would be (with the expiry
of a grace period, the giving of notice or the making of any determination under
the Finance Documents or any combination of them) an Event of Default.     Event
of Default means an event specified as such in Clause 17 (Default).     Facility
means a credit facility made available under this Agreement.     Facility
Guarantee Secured Parties means the holders of the obligations of the Guarantor
under the Guarantee and the other Finance Documents from time to time and shall
include their respective successors, transferees and assigns.     Facility
Office means the office(s) notified by a Lender to the Administrative Agent:    
(a) on or before the date it becomes a Lender; or     (b) by not less than five
Business Days’ notice,     as the office(s) through which it will perform its
obligations under this Agreement.     Final Maturity Date means:     (a) for a
Term Loan, 11 October 2010; and     (b) for a Revolving Credit Loan, 11 October
2010.     Finance Document means:     (a) this Agreement;     (b) the Guarantee;
    (c) the Pledge Agreements (as defined in the Guarantee);     (d) the
Intercreditor Agreement (as defined in the Guarantee); or     (e) any other
document designated as such by the Administrative Agent and the Company.    
Finance Party means a Lender or the Administrative Agent.     Financial
Indebtedness means any indebtedness for or in respect of:     (a) any borrowed
money;     (b) any acceptance credit (including any dematerialised equivalent);
    (c) any bond, note, debenture, loan stock or other similar instrument;      
(d) any redeemable preference share;

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             (e)        any agreement treated as a finance or capital lease in
accordance with generally accepted accounting principles in the jurisdiction of
incorporation of the Company;   (f) receivables sold or discounted (other than
any receivables to the extent they are sold on a non-recourse basis);   (g) the
acquisition cost of any asset or service to the extent payable any time after
180 days following the acquisition or possession by the party liable where the
advance or deferred payment is arranged primarily as a method of raising finance
or financing the acquisition of that asset or the construction of that asset;  
(h) any derivative transaction protecting against or benefiting from
fluctuations in any rate or price (and, except for non-payment of an amount, the
then mark to market value of the derivative transaction will be used to
calculate its amount) other than those entered into in the ordinary course of
the Company’s business;   (i) any other transaction (including any forward sale
or purchase agreement) which has the commercial effect of a borrowing;   (j) any
counter-indemnity obligation in respect of any guarantee, indemnity, bond,
letter of credit or any other instrument issued by a bank or financial
institution; or   (k) any guarantee, indemnity or similar assurance against
financial loss of any person in respect of any item referred to in the above
paragraphs.   Financial Officer means the chief financial officer, any vice
president of finance, principal accounting officer, treasurer or controller of
the Company.   Guarantee means the amended and restated guarantee dated on or
about the date of this Agreement granted by the Guarantor in favour of the
Administrative Agent for the benefit of the Lenders, as amended, restated,
supplemented or otherwise modified from time to time.   Guarantor means
Photronics, Inc.   Holders of Secured Obligations means the Facility Guarantee
Secured Parties and the U.S. Facility Secured Parties (as defined in the U.S.
Facility Agreement).   Holding Company of any other person means a company in
respect of which that other person is a Subsidiary.   Increased Cost means:  
(a) an additional or increased cost;   (b) a reduction in the rate of return
from a Facility or on a Finance Party (or its Affiliate’s) overall capital; or  
(c) a reduction of an amount due and payable under any Finance Document,

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             which is incurred or suffered by a Finance Party or any of its
Affiliates but only to the extent attributable to a Finance Party having entered
into any Finance Document or funding or performing its obligations under any
Finance Document.   Lender means:   (a)   the Replacement Lenders; or   (b) any
person which becomes a Party in accordance with Clause 24.2 (Assignments and
transfers by Lenders).   Interest Payment Date means, as long as any part of the
Loan is outstanding, each 20 March, 20 June, 20 September and 20 December
provided that, if an Interest Payment Date does not fall on a Business Day, that
Interest Payment Date will instead occur on the next Business Day and provided
further that the last Interest Payment Date will be the Final Maturity Date.  
Loan means, unless otherwise stated in this Agreement, the principal amount of
each borrowing under this Agreement or the principal amount outstanding of that
borrowing.   Majority Lenders means, at any time, Lenders:   (a) whose share in
the outstanding Loans and whose undrawn Commitments then aggregate 662/3 per
cent. or more of the aggregate of all the outstanding Loans and the undrawn
Commitments of all the Lenders;   (b) if there is no Loan then outstanding,
whose undrawn Commitments then aggregate 662/3 per cent. or more of the Total
Commitments; or   (c)        if there is no Loan then outstanding and the Total
Commitments have been reduced to zero, whose Commitments aggregated 662/3 per
cent. or more of the Total Commitments immediately before the reduction.  
Material Adverse Effect means a material adverse effect on:   (a) the business,
assets, property or condition (financial or otherwise) of any Obligor;   (b) the
ability of any Obligor to perform its obligations under any Finance Document;  
(c) the validity or enforceability of any Finance Document; or   (d) any right
or remedy of a Finance Party in respect of a Finance Document.   Maturity Date
means, in respect of a Revolving Credit Loan, the date specified by the Company
in the Request of that Revolving Credit Loan, being a date falling no later than
12 months from the Utilisation Date of that Revolving Credit Loan and in any
event not later than the Final Maturity Date.   Obligor means the Company or the
Guarantor.   Original Financial Statements means the audited financial
statements of the Company for the year ended December 31, 2006.

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Party means a party to this Agreement.   PBOC means the People’s Bank of China.
  PBOC Base Rate means, subject to Clause 8.1(b) (Calculation of interest), in
relation to a Loan, the prevailing official lending rate per annum on the
Utilisation Date of that Loan as promulgated and announced by PBOC for loans
with a term comparable to that Loan.              PBOC Misappropriation Rate
means the highest permitted rate promulgated by PBOC from time to time which may
be applied on the interest rate on any Loan (or any part of if) which is not
used in accordance with Clause 3 (Purpose), being 165 per cent. at the date of
this Agreement.   PBOC Penalty Rate means the highest permitted rate promulgated
by PBOC from time to time which may be applied on the interest rate on any
overdue amount, being 135 per cent. at the date of this Agreement.   Permitted
Security Interest means:   (a)       any Security Interest comprising a netting
or set-off arrangement entered into by the Company in the ordinary course of its
banking arrangements for the purpose of netting debit and credit balances;   (b)
any Security Interest arising by operation of law or in the ordinary course of
business of the Company;   (c) any Security Interest entered into pursuant to a
Finance Document or pursuant to the U.S. Credit Agreement and related finance
documents;   (d) any Security Interest securing indebtedness the amount of which
(when aggregated with the amount of any other indebtedness of the Company which
has the benefit of a Security Interest) does not exceed RMB80,000,000 or its
equivalent at any time; and   (e) any other Security Interest with the prior
written consent of the Administrative Agent and the Majority Lenders.   PRC
means the People’s Republic of China.   Pro Rata Share means:   (a) for the
purpose of determining a Lender’s share in a utilisation of a Facility, the
proportion which its Commitment under that Facility bears to all the Commitments
under that Facility; and   (b) for any other purpose on a particular date:    
(i)   the proportion which a Lender’s share of the Loans (if any) bears to all
the Loans;     (ii) if there is no Loan outstanding on that date, the proportion
which its Commitment bears to the Total Commitments on that date;     (iii)
      if the Total Commitments have been cancelled, the proportion which its
Commitments bore to the Total Commitments immediately before being cancelled; or

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                    (iv)        when the term is used in relation to a Facility,
the above proportions but applied only to the Loans and Commitments for that
Facility.   For the purpose of sub-paragraph (iv) above, the Administrative
Agent will determine, in the case of a dispute whether the term in any case
relates to a particular Facility.   Project means the construction of a new
manufacturing facility located at No. 23 Lot, IC Industry Area, Zhangjiang
Hi-Tech Park, Shanghai, PRC and the installation of equipment by the Company.  
Repeating Representations means at any time the representations and warranties
which are then made or deemed to be repeated under Clause 14.20 (Times for
making representations and warranties).   Request means a request for a Loan,
substantially in the form of Schedule 3 (Form of Request).   Revolving Credit
Commitment means:   (a)   for the Replacement Lenders, the amount of revolving
credit commitment set opposite its name in Part 1 of Schedule 1 and the amount
of any other Revolving Credit Commitment it acquires; and   (b) for any other
Lender, the amount of any Revolving Credit Commitment it acquires,   to the
extent not cancelled, transferred or reduced under this Agreement.   Revolving
Credit Facility means the revolving credit facility made available under this
Agreement.   Revolving Credit Loan means a Loan under the Revolving Credit
Facility and identified as such in its Request.   RMB means the lawful currency
of the PRC.   Rollover Loan means one or more Revolving Credit Loans:   (a) to
be made on the same day that a maturing Revolving Credit Loan is due to be
repaid;   (b) the aggregate amount of which is equal to or less than the
maturing Revolving Credit Loan; and   (c) to be made for the purpose of
refinancing a maturing Revolving Credit Loan.   SAFE means the State
Administration of Foreign Exchange.   Security Interest means any mortgage,
pledge, lien, charge, assignment, hypothecation or security interest or any
other agreement or arrangement having a similar effect, whether created pursuant
to PRC law or any other applicable law.   Subsidiary means an entity of which a
person has direct or indirect control or owns directly or indirectly more than
50 per cent. of the voting capital or similar right of ownership.   Tax means
any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any related penalty or interest).

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  Tax Credit means a credit against any Tax or any relief or remission for Tax
(or its repayment).     Tax Deduction means a deduction or withholding for or on
account of Tax from a payment under a Finance Document.     Tax Payment means a
payment made by the Company to a Finance Party in any way related to a Tax
Deduction or under any indemnity given by the Company in respect of Tax under
any Finance Document.     Term Loan means a Loan under the Term Loan Facility
and identified as such in its Request.     Term Loan Commitment means
RMB56,000,000 to the extent not cancelled, transferred or reduced under this
Agreement.     Term Loan Facility means the term loan facility made available
under this Agreement.     Total Commitments means the aggregate of the
Commitments of all the Lenders.     Total Term Loan Commitments means the
aggregate of the Term Loan Commitments of all the Lenders, being the total
amount specified as such in Part 1 of Schedule 1 at the date of this Agreement.
    Total Revolving Credit Commitments means RMB130,000,000, being the aggregate
of the Revolving Credit Commitments of all the Lenders as described in Part 1 of
Schedule 1 at the date of this Agreement.     Transfer Certificate means a
certificate, substantially in the form of Schedule 5 (Form of Transfer
Certificate), with such amendments as the Administrative Agent may approve or
reasonably require or any other form agreed between the Administrative Agent and
the Company.     U.S. Credit Agreement means the Credit Agreement dated as of
June 6, 2007 by and among Photronics, Inc., the other borrowers and guarantors
party thereto, JPMorgan Chase Bank, National Association, as the administrative
agent and collateral agent, and the lenders party thereto.     Utilisation Date
means each date on which a Facility is utilised.   1.2   Construction        
(a) In this Agreement, unless the contrary intention appears, a reference to:  
  (i)   an amendment includes a supplement, novation, restatement or
re-enactment and amended will be construed accordingly;           (ii) assets
includes present and future properties, revenues and rights of every
description;     (iii) an authorisation includes an authorisation, consent,
approval, resolution, licence, exemption, filing, registration or notarisation;
    (iv) control means the power to direct the management and the policies of a
person whether through the ownership of voting capital, by contract or
otherwise;

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  (v) disposal means a sale, transfer, grant, lease or other disposal, whether
voluntary or involuntary, and dispose will be construed accordingly;     (vi)
including is without limitation;     (vii) indebtedness includes any obligation
(whether incurred as principal or as surety) for the payment or repayment of
money;     (viii) know your customer requirements are the identification checks
that a Finance Party requests in order to meet its obligations under any
applicable law or regulation to identify a person who is (or is to become) its
customer;     (ix) a person includes any individual, company, corporation,
unincorporated association or body (including a partnership, trust, joint
venture or consortium), government, state, agency, organisation or other entity
whether or not having separate legal personality;     (x) A reference to an
agreement (including this Agreement) is a reference to that agreement as
amended, supplemented, restated or novated;     (xi)       a regulation includes
any regulation, rule, official directive, request or guideline (whether or not
having the force of law but, if not having the force of law, being of a type
with which any person to which it applies is accustomed to comply) of any
governmental, inter-governmental or supranational body, agency, department or
regulatory, self-regulatory or other authority or organisation;     (xii) a
currency is a reference to the lawful currency for the time being of the
relevant country;     (xiii) a Default being outstanding means that it has not
been remedied or waived;     (xiv) a provision of law is a reference to that
provision as extended, applied, amended or re-enacted and includes any
subordinate legislation;     (xv) a Clause, a Subclause or a Schedule is a
reference to a clause or subclause of, or a schedule to, this Agreement;    
(xvi) a Party or any other person includes its successors in title, permitted
assigns and permitted transferees;     (xvii) a Finance Document or other
document includes (without prejudice to any prohibition on amendments) all
amendments however fundamental to that Finance Document or other document,
including any amendment providing for any increase in the amount of a facility
or any additional facility; and     (xviii) a time of day is a reference to
Shanghai time.   (b)       Unless the contrary intention appears, a reference to
a month or months is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next calendar month
or the calendar month in which it is to end, except that:     (i) if the
numerically corresponding day is not a Business Day, the period will end on the
next Business Day in that month (if there is one) or the preceding Business Day
(if there is not);

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    (ii)   if there is no numerically corresponding day in that month, that
period will end on the last Business Day in that month; and     (iii)
notwithstanding sub-paragraph (i) above, a period which commences on the last
Business Day of a month will end on the last Business Day in the next month or
the calendar month in which it is to end, as appropriate.   (c)   Unless the
contrary intention appears:     (i)  a reference to a Party will not include
that Party if it has ceased to be a Party under this Agreement;     (ii)  a word
or expression used in any other Finance Document or in any notice given in
connection with any Finance Document has the same meaning in that Finance
Document or notice as in this Agreement; and     (iii)        any obligation of
an Obligor under the Finance Documents which is not a payment obligation remains
in force for so long as any payment obligation of an Obligor is or may be
outstanding under the Finance Documents.   (d)   The headings in this Agreement
do not affect its interpretation.   2.   FACILITIES   2.1   Term Loan Facility  
(a)       Subject to the terms of the 2005 Loan Agreement, the predecessor to
the Original Lender made available to the Company a term loan facility in an
aggregate amount equal to RMB56,000,000.   (b)   The Company acknowledges that
(i) the term loan facility has been fully funded and the principal balance of
such term loan outstanding on the date hereof is RMB56,000,000, and (ii) all
such term loans outstanding on the date hereof under the 2005 Loan Agreement
shall be deemed to be the terms loans outstanding under this Agreement, subject
to the terms of this Agreement.   2.2   Revolving Credit Facility   (a)  
Subject to the terms of the 2005 Loan Agreement, the predecessor to the Original
Lender made available to the Company a revolving credit facility in an aggregate
amount equal to RMB130,000,000.   (b)   The Company acknowledges that (i) the
revolving loan facility has been fully funded and the principal balance of such
revolving loans outstanding on the date hereof is RMB130,000,000, and (ii) all
such revolving loans outstanding on the date hereof under the 2005 Loan
Agreement shall be deemed to be the revolving loans outstanding under this
Agreement, subject to the terms of this Agreement.   2.3   Nature of a Finance
Party’s rights and obligations     Unless all the Finance Parties agree
otherwise:     (a)  the obligations of a Finance Party under the Finance
Documents are several;

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  (b)       failure by a Finance Party to perform its obligations does not
affect the obligations of any other person under the Finance Documents;     (c)
no Finance Party is responsible for the obligations of any other Finance Party
under the Finance Documents;       (d) the rights of a Finance Party under the
Finance Documents are separate and independent rights;     (e) a Finance Party
may, except as otherwise stated in the Finance Documents, separately enforce
those rights; and     (f)   a debt arising under the Finance Documents to a
Finance Party is a separate and independent debt.   2.4   Assignment to
Replacement Lenders   (a)   The Original Lender hereby transfers by novation to
the other Replacement Lenders such portion of the Original Lender’s rights and
obligations relating to the commitments and loans set forth in Part 1 of
Schedule 1, plus all interest thereon accrued through the proposed transfer
date, in accordance with the terms of this Agreement.   (b)   The proposed
transfer date is August 31, 2007.   (c)   The administrative details of each
Replacement Lender for the purposes of this Agreement are set out in Part 2 of
Schedule 1.   (d)   Each such Replacement Lender expressly acknowledges the
limitations on the Original Lenders’ obligations in respect of the transfer in
Clause 24.5 of this Agreement.   (e)   Each such Replacement Lender represents
and warrants to the Original Lender that it is an Approved Lender.   3.  
PURPOSE   3.1   Loans     A portion of the Loans were used to repay a then
existing RMB4,000,000 loan from the predecessor to the Original Lender.
Thereafter, each Loan may only be used for working capital purposes and for
costs of the Project.   3.2   No obligation to monitor     No Finance Party is
bound to monitor or verify the utilisation of a Facility.   4.   CONDITIONS
PRECEDENT   4.1   Conditions precedent documents   (a)       A Request may not
be given until the Administrative Agent has notified the Company and the Lenders
that it has received all of the documents and evidence set out in Schedule 2
(Conditions precedent documents) in form and substance satisfactory to the
Administrative Agent.

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(b)       

The Administrative Agent must give this notification to the Company and the
Lenders promptly upon being so satisfied.

  4.2 Further conditions precedent  

The obligations of each Lender to participate in any Loan are subject to the
further conditions precedent that on both the date of the Request and the
Utilisation Date for that Loan:

            (a)      

the Repeating Representations are correct in all material respects;

  (b)

no Default or, in the case of a Rollover Loan, no Event of Default is
outstanding or would result from the Loan; and

  (c)

there has been no disruption of, or material adverse change in, the financial,
banking or capital market conditions which would have an impact on the Lender’s
ability to make that Loan.

 

5.        UTILISATION   5.1  Giving of Requests    

(a)       

The Company may borrow a Loan by giving to the Administrative Agent a duly
completed Request.

  (b)

Unless the Administrative Agent otherwise agrees, the latest time for receipt by
the Administrative Agent of a duly completed Request is 11.00 a.m. three
Business Days before the proposed Utilisation Date.

  (c)

Each Request is irrevocable.

    5.2  Completion of Requests   

A Request for a Loan will not be regarded as having been duly completed unless:

 

             (a)      

it identifies the Facility the Loan applies to;

  (b)

the Utilisation Date is a Business Day falling within the Availability Period;

  (c)

the amount of the Loan requested is:

    (i)      

a minimum of RMB1,000,000 and an integral multiple of RMB100,000;

    (ii)

no more than the maximum undrawn amount available under the relevant Facility on
the proposed Utilisation Date; or

    (iii)

such other amount as the Administrative Agent may agree; and

  (d)

in respect of a Revolving Credit Loan, the proposed Maturity Date complies with
this Agreement.

  Only one Loan may be requested in a Request.

 

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5.3 Advance of Loan   (a)      

The Administrative Agent must promptly notify each Lender of the details of the
requested Loan and the amount of its share in that Loan.

  (b)

The amount of each Lender’s share of the requested Loan will be its Pro Rata
Share on the proposed Utilisation Date.

  (c)

No Lender is obliged to make a Loan if as a result:

    (i)      

its share in the Loans under a Facility would exceed its Commitment for that
Facility; or

    (ii)

the Loans would exceed the Total Commitments.

  (d)

If the conditions set out in this Agreement have been met, each Lender must make
its share in the requested Loan available to the Administrative Agent for the
Company through its Facility Office on the Utilisation Date.

 

6.       REPAYMENT   6.1 Repayment of Term Loans    

The Company must repay the Term Loans in full on the Final Maturity Date.   6.2
Repayment of Revolving Credit Loans  

(a)      

The Company must repay each Revolving Credit Loan in full on its Maturity Date.

  (b)

Subject to the other terms of this Agreement, any amounts repaid under paragraph
(a) above may be re-borrowed.

  (c)

Subject to paragraph (a) above, the Company must repay the Revolving Credit
Loans in full on the Final Maturity Date.

 

7.       PREPAYMENT AND CANCELLATION   7.1 Mandatory prepayment  

(a)      

A Lender must notify the Administrative Agent and the Company promptly if:

    (i)      

it becomes aware that it is unlawful in any applicable jurisdiction for that
Lender to perform any of its obligations under a Finance Document or to fund or
maintain any Loan; or

    (ii)

it determines that its ability to perform any of its obligations under a Finance
Document or to fund or maintain any Loan is restricted or seriously affected as
a result of:

      (A)      

the introduction of, or any change in, or any change in the interpretation,
administration or application of, any law or regular any change in law; or

      (B)

compliance with any law or regulation made after the date of this Agreement.

 

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(b)        

After notification under paragraph (a) above the Administrative Agent must
notify the Company promptly that:

    (i)      

the Company must repay or prepay the share of that Lender in each Loan on the
date specified by that Lender in the notification under paragraph (a) above; and

    (ii)

the Commitments of that Lender will be immediately cancelled.

7.2  Voluntary prepayment   (a)      

The Company may, having obtained the prior written consent of the Administrative
Agent and the Majority Lenders (such consent not to be unreasonably withheld)
and any necessary authorisations from any relevant governmental authority under
any applicable regulation, by giving not less than 10 Business Days’ prior
notice to the Administrative Agent, prepay any Loan at any time in whole or in
part.

  (b)

A prepayment of part of a Loan must be in a minimum amount of RMB1,000,000 and
be no less than 50 per cent. of the Loan outstanding under the Term Loan
Facility or the Revolving Credit Facility (as the case may be).

  7.3 Automatic cancellation  

The Commitments of each Lender will be automatically cancelled at the close of
business on the last day of the relevant Availability Period.

  7.4 Voluntary cancellation

(a)        

The Company may, by giving not less than 15 Business Days’ prior notice to the
Administrative Agent, cancel the unutilised amount of the Total Commitments in
whole or in part.

  (b)

Partial cancellation of the Total Commitments must be in a minimum amount of
RMB500,000 and an integral multiple of RMB100,000.

  (c)

Any cancellation in part will be applied against the relevant Commitment of each
Lender pro rata.

   7.5 Right of repayment and cancellation of a single Lender

(a)         

If the Company is, or will be, required to pay to a Lender:

    (i)       a Tax Payment; or     (ii) an Increased Cost,    

the Company may, while the requirement continues, give notice to the
Administrative Agent requesting prepayment and cancellation in respect of that
Lender.

  (b)

After notification under paragraph (a) above:

    (i)

the Company must repay or prepay that Lender’s share in each Loan on the date
specified in paragraph (c) below; and

 

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(c)         

the Commitments of that Lender will be immediately cancelled.

  (d)

The date for repayment or prepayment of a Loan will be:

    (i)      

the next Interest Payment Date for that Loan; or

    (ii)

if earlier, the date specified by the Company in its notification.

 

7.6         Re-borrowing of Revolving Credit Loans    

Any voluntary prepayment of a Revolving Credit Loan under Clause 7.2 (Voluntary
prepayment) may be re-borrowed on the terms of this Agreement. Any other
prepayment of a Revolving Credit Loan may not be re-borrowed.

  7.7 Miscellaneous provisions  

(a)        

Any notice of prepayment and/or cancellation under this Agreement is irrevocable
and must specify the relevant date(s) and the affected Loans and Commitments.
The Administrative Agent must notify the Lenders promptly of receipt of any such
notice.

  (b)

All prepayments under this Agreement must be made with accrued interest on the
amount prepaid. The Company must pay to the Lenders Break Costs and any premium
or penalty (as solely determined by the Lenders) in respect of any prepayment.

  (c)

The Majority Lenders may agree a shorter notice period for a voluntary
prepayment or a voluntary cancellation.

  (d)

No prepayment or cancellation is allowed except in accordance with the express
terms of this Agreement.

  (e)

No amount of a Term Loan prepaid under this Agreement may subsequently be
re-borrowed.

  (f)

No amount of the Total Commitments cancelled under this Agreement may
subsequently be reinstated.

 

8.        INTEREST   8.1  Calculation of interest  

(a)        

The rate of interest on each Loan is the PBOC Base Rate.

  (b)

If at any time before the Final Maturity Date there occurs an adjustment to the
PBOC Base Rate or a change in the official method of calculation of the PBOC
Base Rate, the new PBOC Base Rate will take effect on the next Interest Payment
Date or as otherwise required under the relevant PRC regulations.

 

8.2        Payment of interest    

Except where it is provided to the contrary in this Agreement, the Company must
pay interest on each Loan on each Interest Payment Date, which is accrued:

 

            (a)        

in the case of the first Interest Payment Date, from the period from the first
Utilisation Date to that Interest Payment Date; and

 

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            (b)      

in any other case, from the period from the day after the preceding Interest
Payment Date to that Interest Payment Date.

 

8.3 Interest on overdue or misappropriated amounts   (a)      

Subject to the other provisions on this Clause 8.3, if the Company fails to pay
any amount payable by it under the Finance Documents, it must immediately on
demand by the Administrative Agent pay interest on the overdue amount from its
due date up to the date of actual payment, both before, on and after judgment,
at the PBOC Base Rate multiplied by the PBOC Penalty Rate.

  (b)

Subject to the other provisions on this Clause 8.3, if the Company does not use
any Loan (or any part of it) in accordance with Clause 3 (Purpose), it must
immediately on demand by the Administrative Agent pay interest on the
misappropriated amount from the date of its misappropriation up to the date on
which such misappropriation ceases, before, on and after judgment, at the PBOC
Base Rate multiplied by the PBOC Misappropriation Rate.

  (c)

If paragraphs (a) and (b) above both apply, interest is payable under this
Clause by multiplying the PBOC Base Rate by the higher of the PBOC Penalty Rate
and the PBOC Misappropriation Rate.

  (d)

Interest on the unpaid interest will be compounded with the unpaid interest in
accordance with the relevant PRC regulations. If, at the relevant time, the
Lenders are entitled under law to determine their own basis on which such
interest may be compounded, such interest will be compounded on each Interest
Payment Date.

  (e)

The Lenders’ right to receive interest from the Company applying the PBOC
Penalty Rate or the PBOC Misappropriate Rate will not affect the other rights of
the Lenders under any other Finance Document or applicable law.

  (f)

Notwithstanding any other provision of this Clause 8.3, if, at the relevant
time, no PBOC Misappropriation Rate or the PBOC Penalty Rate is promulgated by
PBOC or the Lenders become entitled under law to set their own default rate in
these respects, the interest payable under paragraph (a) or (b) above (as the
case may be) on the relevant amount will be determined by the Lenders to be:

    (i)      

in the case of the Company’s failure to pay any amount payable by it under the
Finance Documents on the due date, one per cent. per annum above the rate which
would have been payable if the overdue amount had, during the period of
non-payment, constituted a Loan; and

    (ii)

in the case of the Company’s failure to use any amount in accordance with Clause
3 (Purpose), three per cent. per annum above the rate which would have been
payable if the misappropriated amount had, during the period in which it was
misappropriated, constituted a Loan,

   

and for this purpose, the Lenders may (acting reasonably with best effort and to
the extent permitted by law) select the duration of the Loan.

  8.4 Notification of rates of interest  

The Administrative Agent must promptly notify each relevant party of the
determination of a rate of interest under this Agreement.

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8.5  No overrunning the Final Maturity Date   

If an Interest Payment Date would otherwise overrun a Maturity Date or the Final
Maturity Date, that Interest Payment Date will be shortened so that it falls on
that Maturity Date or the Final Maturity Date.

  9.        MARKET DISRUPTION    9.1  Market disruption   

(a)        

If the Administrative Agent determines that:

    (i)      

no PBOC Base Rate is available;

    (ii)

funding in RMB in the required amount for that Loan is not available to any
Lender; or

    (iii)

funding in RMB in the required amount is not available to any Lender on terms
that are adequately covered by the PBOC Base Rate,

   

the Administrative Agent must promptly notify the Company and the Lenders in
writing.

  (b)

After notification under paragraph (a) above, the Company and the Administrative
Agent must enter into negotiations for a period of not more than 30 days with a
view to agreeing an alternative basis for determining the rate of interest
and/or funding for the affected Loan.

  (c)

Any alternative basis agreed will be, with the prior consent of all the Lenders,
binding on all the Parties.

  (d)

If the Parties fail to reach an agreement on an alternative basis for
determining the rate of interest, the Company must prepay the relevant loan with
all accrued interest and other amounts within 15 Business Days of receipt of the
Administrative Agent’s notice of prepayment.

 

10.       TAXES   10.1 Tax gross-up  

(a)        

The Company must make all payments to be made by it under the Finance Documents
without any Tax Deduction, unless a Tax Deduction is required by law.

  (b)

If the Company or a Lender is aware that the Company must make a Tax Deduction
(or that there is a change in the rate or the basis of a Tax Deduction), it must
promptly notify the Administrative Agent. The Administrative Agent must then
promptly notify the affected Parties.

  (c)

If a Tax Deduction is required by law to be made by the Company, the amount of
the payment due from the Company will be increased to the extent necessary to
ensure that after making the Tax Deduction, each Lender receives and retains a
net amount equal to the payment which it would have received and retained if no
Tax Deduction had been required.

  (d)

If the Company is required to make a Tax Deduction, the Company must make the
minimum Tax Deduction allowed by law and must make any payment required in
connection with that Tax Deduction to the relevant tax authority within the time
allowed by law.

 

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(e)      

Within 30 days of making either a Tax Deduction or a payment required by law in
connection with a Tax Deduction, the Company must deliver to the Administrative
Agent for the relevant Finance Party evidence satisfactory to that Finance Party
(acting reasonably) that the Tax Deduction has been made or (as applicable) the
appropriate payment has been paid to the relevant taxing authority.

  10.2 Tax indemnity

(a)      

Except as provided below, the Company must indemnify a Finance Party against any
loss or liability which the Finance Party (in its absolute discretion)
determines will be or has been suffered (directly or indirectly) by that Finance
Party for or on account of Tax in relation to a payment received or receivable
(or any payment deemed to be received or receivable) under a Finance Document.

  (b)

Paragraph (a) above does not apply to any Tax assessed on a Finance Party under
the laws of the jurisdiction in which:

    (i)      

That Finance Party is incorporated or, if different, the jurisdiction (or
jurisdictions) in which that Finance Party has a Facility Office and treated as
resident for tax purposes; or

    (ii)

that Finance Party’s Facility Office is located in respect of amounts received
or receivable in that jurisdiction,

   

if that Tax is imposed on or calculated by reference to the net income received
or receivable by that Finance Party. However, any payment deemed to be received
or receivable, including any amount treated as income but not actually received
by the Finance Party, such as a Tax Deduction, will not be treated as net income
received or receivable for this purpose.

  (c)

A Finance Party making, or intending to make, a claim under paragraph (a) above,
must promptly notify the Company of the event which will give, or has given,
rise to the claim.

  10.3 Tax Credit  

If the Company makes a Tax Payment and the relevant Finance Party (in its
absolute discretion) determines that:

             (a)      

a Tax Credit is attributable to that Tax Payment; and

  (b)

it has used and retained that Tax Credit,

 

the Finance Party must pay an amount to the Company which that Finance Party
determines (in its absolute discretion) will leave it (after that payment) in
the same after-tax position as it would have been if the Tax Payment had not
been required to be made by the Company.

10.4       Stamp taxes     

The Company must pay and indemnify each Finance Party against any stamp duty,
registration or other similar Tax payable in connection with the entry into,
performance or enforcement of any Finance Document.

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10.5  Value added taxes      (a)      

Any amount payable under a Finance Document by the Company is exclusive of any
value added tax or any other Tax of a similar nature which might be chargeable
in connection with that amount. If any such Tax is chargeable, the Company must
pay to the Finance Party (in addition to and at the same time as paying that
amount) an amount equal to the amount of that Tax.

  (b)

Where a Finance Document requires any Party to reimburse a Finance Party for any
costs or expenses, that Party must also at the same time pay and indemnify the
Finance Party against all value added tax or any other Tax of a similar nature
incurred by the Finance Party in respect of those costs or expenses but only to
the extent that the Finance Party (acting reasonably) determines that it is not
entitled to credit or repayment from the relevant tax authority in respect of
the Tax.

    11.  INCREASED COSTS       11.1  Increased Costs    

Except as provided below in this Clause, the Company must pay to a Finance Party
the amount of any Increased Cost incurred by that Finance Party or any of its
Affiliates as a result of:

(a)      

the introduction of, or any change in, or any change in the interpretation,
administration or application of, any law or regulation; or

  (b)

compliance with any law or regulation made after the date of this Agreement.

      11.2        Exceptions   

The Company need not make any payment for an Increased Cost to the extent that
the Increased Cost is:

 

              (a)      

compensated for under another Clause or would have been but for an exception to
that Clause; or

  (b)

attributable to a Finance Party or its Affiliate wilfully failing to comply with
any law or regulation.

11.3 Claims   (a)      

A Finance Party intending to make a claim for an Increased Cost must notify the
Administrative Agent of the circumstances giving rise to and the amount of the
claim, following which the Administrative Agent will promptly notify the
Company.

  (b)

Each Finance Party must, as soon as practicable after a demand by the
Administrative Agent, provide a certificate confirming the amount of its
Increased Cost.

  12.   MITIGATION   12.1  Mitigation 

(a)         

Each Finance Party must, in consultation with the Company, take all reasonable
steps to mitigate any circumstances which arise and which result or would result
in:

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             (i)      

any Tax Payment or Increased Cost being payable to that Finance Party; or

  (ii)

that Finance Party being able to exercise any right of prepayment and/or
cancellation under this Agreement by reason of any illegality,

including transferring its rights and obligations under the Finance Documents to
an Affiliate or changing its Facility Office.

  (b)      

Paragraph (a) above does not in any way limit the obligations of any Obligor
under the Finance Documents.

  (c)

The Company must indemnify each Finance Party for all costs and expenses
reasonably incurred by that Finance Party as a result of any step taken by it
under this Subclause.

  (d)

A Finance Party is not obliged to take any step under this Subclause if, in the
opinion of that Finance Party (acting reasonably), to do so might be prejudicial
to it.

    12.2 

Conduct of business by a Finance Party 

 

No term of any Finance Document will:

              (a)      

interfere with the right of any Finance Party to arrange its affairs (Tax or
otherwise) in whatever manner it thinks fit;

  (b)

oblige any Finance Party to investigate or claim any credit, relief, remission
or repayment available to it in respect of Tax or the extent, order and manner
of any claim other than those that would be claimed by a prudent business person
in the ordinary course of business; or

  (c)

oblige any Finance Party to disclose any information relating to its affairs
(Tax or otherwise) or any computation in respect of Tax.

13.  PAYMENTS      13.1        Place   

Unless a Finance Document specifies that payments under it are to be made in
another manner, all payments by a Party (other than the Administrative Agent)
under the Finance Documents must be made to the Administrative Agent to its
account at such office or bank as it may notify to that Party for this purpose
by not less than five Business Days’ prior notice.

  13.2  Funds       

Payments under the Finance Documents to the Administrative Agent must be made
for value on the due date before 11:00 a.m. Shanghai time and in such funds as
the Administrative Agent may specify to the Party concerned as being customary
at the time for the settlement of transactions in that currency in the place for
payment.

  13.3  Distribution   

(a)         

Each payment received by the Administrative Agent under the Finance Documents
for another Party must, except as provided below, be made available by the
Administrative Agent to that Party by

 

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payment (as soon as practicable after receipt) to its account at such office or
bank as it may notify to the Administrative Agent for this purpose by not less
than five Business Days’ prior notice.

  (b)      

The Administrative Agent may apply any amount received by it from or on behalf
of an Obligor in or towards payment (as soon as practicable after receipt) of
any amount due from that Obligor under the Finance Documents or in or towards
the purchase of any amount of any currency to be so applied.

  (c)

Where a sum is paid to the Administrative Agent under this Agreement for another
Party, the Administrative Agent is not obliged to pay that sum to that Party
until it has established that it has actually received it. However, the
Administrative Agent may assume that the sum has been paid to it, and, in
reliance on that assumption, make available to that Party a corresponding
amount. If it transpires that the sum has not been received by the
Administrative Agent, that Party must immediately on demand by the
Administrative Agent refund any corresponding amount made available to it
together with interest on that amount from the date of payment to the date of
receipt by the Administrative Agent at a rate calculated by the Administrative
Agent to reflect its cost of funds.

  13.4    Currency 

(a)      

Unless a Finance Document specifies that payments under it are to be made in a
different manner, the currency of each amount payable under the Finance
Documents is determined under this Clause.

  (b)

Amounts payable in respect of Taxes, fees, costs and expenses are payable in the
currency in which they are incurred.

  (c)

Each other amount payable under the Finance Documents is payable in RMB.

    13.5  No set-off or counterclaim   

All payments made by the Company under the Finance Documents must be calculated
and made without (and free and clear of any deduction for) set-off or
counterclaim.

    13.6  Business Days 

(a)      

If a payment under the Finance Documents is due on a day which is not a Business
Day, the due date for that payment will instead be the next Business Day in the
same calendar month (if there is one) or the preceding Business Day (if there is
not) or whatever day the Administrative Agent determines is market practice.

  (b)

During any extension of the due date for payment of any principal under this
Agreement interest is payable on that principal at the rate payable on the
original due date.

  13.7  Partial payments 

(a)         

If the Administrative Agent receives a payment insufficient to discharge all the
amounts then due and payable by the Obligors under the Finance Documents, the
Administrative Agent must apply that payment towards the obligations of the
Obligors under the Finance Documents in the following order:

    (i)      

first, in or towards payment pro rata of any unpaid fees, costs and expenses of
the Administrative Agent under the Finance Documents;

 

23

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           (ii)      

secondly, in or towards payment pro rata of any accrued interest (including,
without limitation, any accrued default, penalty or compounded interest) or fee
due but unpaid under this Agreement;

    (iii)

thirdly, in or towards payment pro rata of any principal amount due but unpaid
under this Agreement; and

    (iv)

fourthly, in or towards payment pro rata of any other sum due but unpaid under
the Finance Documents.

  (b)      

The Administrative Agent must, if so directed by all the Lenders, vary the order
set out in sub-paragraphs (a)(ii) to (iv) above.

  (c)

This Subclause will override any appropriation made by an Obligor.

 

13.8        Timing of payments      

If a Finance Document does not provide for when a particular payment is due,
that payment will be due within three Business Days of written demand by the
relevant Finance Party.

  14.   REPRESENTATIONS AND WARRANTIES   14.1  Representations and warranties  
 

The representations and warranties set out in this Clause are made by the
Company to the Lenders.

  14.2    Status  

(a)         

The Company is a limited liability company, duly incorporated and validly
existing under the laws of its jurisdiction of incorporation.

  (b)

The Guarantor is a corporation, duly incorporated, validly existing and in good
standing under the laws of the State of Connecticut.

  (c)

Each Obligor has the power to own its assets and carry on its business as it is
being conducted.

 

14.3        Powers and authority      

Each Obligor has the power to enter into and perform, and has taken all
necessary action to authorise the entry into and performance of, the Finance
Documents to which it is or will be a party and the transactions contemplated by
those Finance Documents.

  14.4  Legal validity  

(a)         

Subject to any general principles of law limiting its obligations and referred
to in any legal opinion required under this Agreement, each Finance Document to
which an Obligor is a party is its legally binding, valid and enforceable
obligation.

  (b)

Each Finance Document to which an Obligor is a party is in the proper form for
its enforcement in the jurisdiction of its incorporation.

 

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14.5        Non-conflict     

The entry into and performance by each Obligor of, and the transactions
contemplated by, the Finance Documents do not conflict with:

    (a)      

any law or regulation applicable to that Obligor;

    (b)

the constitutional documents of that Obligor; or

    (c)

to the knowledge of the Company, any material document which is binding upon
that Obligor or any of its assets.

  14.6 No default

(a)         

No Default is outstanding or will result from the entry into of, or the
performance of any transaction contemplated by, any Finance Document; and

  (b)

no other event is outstanding which constitutes a default under any document
which is binding on an Obligor or any of its assets to an extent or in a manner
which has or is reasonably likely to have a Material Adverse Effect.

  14.7       Authorisations    

Except for the foreign debt registration with SAFE as a result of the
performance of the Guarantee by the Guarantor, all authorisations required by an
Obligor in connection with the entry into, performance, validity and
enforceability of, and the transactions contemplated by, the Finance Documents
have been obtained or effected (as appropriate) and are in full force and
effect.

  14.8    Financial statements    

The audited financial statements of the Company most recently delivered to the
Administrative Agent (which, in the case of the Company at the date of this
Agreement, are the Original Financial Statements):

 

              (a)      

have been prepared in accordance with accounting principles and practices
generally accepted in the jurisdiction of incorporation of that Obligor,
consistently applied; and

  (b)

fairly represent financial condition (consolidated, if applicable) of that
Obligor as at the date to which they were drawn up,

 

except, in each case, as disclosed to the contrary in those financial
statements.

14.9        Security Interests    

The Company’s assets are not subject to any Security Interests other than
Permitted Security Interests.

  14.10  No material adverse change    

There has been no material adverse change in the financial condition of the
Company since the date to which the most recent audited financial statements
delivered to the Lenders were drawn up.

 

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14.11        Litigation    

To the best of the Company’s knowledge and belief, no litigation, arbitration or
administrative proceedings are current, pending, or threatened in writing, which
have or, if adversely determined, are reasonably likely to have a Material
Adverse Effect.

  14.12  Information  

(a)      

All information supplied by the Company to the Lenders in connection with the
Finance Documents is true and accurate in all material respects as at its date
or (if appropriate) as at the date (if any) at which it is stated to be given;
and

  (b)

the Company has not omitted to supply any information which, if disclosed, might
make the information supplied untrue or misleading in any material respect.

  14.13  No other business 

(a)           

Except in connection with the Project and the business in the scope as provided
in its business licence, it has not traded or carried on any business since the
date of its incorporation; and

  (b)

it does not have any Subsidiaries.

  14.14        Taxes on payments    

All amounts payable by an Obligor under the Finance Documents may be made
without any Tax Deduction, except as otherwise required by any applicable law.

  14.15  Stamp duties    

Except for registration fees payable (if any) in respect of foreign debt under
PRC law and stamp duty payable in respect of the execution of this Agreement, no
stamp or registration duty or similar Tax or charge is payable in the PRC in
respect of any Finance Document.

  14.16  Immunity  

(a)      

The entry into by an Obligor of each Finance Document constitutes, and the
exercise by such Obligor of its rights and performance of its obligations under
each Finance Document will constitute, private and commercial acts performed for
private and commercial purposes; and

  (b)

no Obligor will be entitled to claim immunity from suit, execution, attachment
or other legal process in any proceedings taken in its jurisdiction of
incorporation in relation to any Finance Document.

    14.17  No adverse consequences 

(a)           

It is not necessary under the laws of its jurisdiction of incorporation:

    (i)      

in order to enable any Finance Party to enforce its rights under any Finance
Document; or

    (ii)

by reason of the entry into of any Finance Document or the performance by it of
its obligations under any Finance Document,

 

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        that any Finance Party should be licensed, qualified or otherwise
entitled to carry on business in its jurisdiction of incorporation; and   (b) no
Finance Party is or will be deemed to be resident, domiciled or carrying on
business in its jurisdiction of incorporation by reason only of the entry into,
performance and/or enforcement of any Finance Document.   14.18
Jurisdiction/governing law   (a) Its:             (i) agreement that this
Agreement is governed by PRC law; and     (ii) agreement not to claim any
immunity to which it or its assets may be entitled, are legal, valid and binding
under the laws of its jurisdiction of incorporation.   14.19 Difference of Total
Investment and Registered Capital     For the purpose of the foreign debt
registration with SAFE arising from the performance of the Guarantee by the
Guarantor, the total amount of (a) the aggregated long or medium-term loans
borrowed by the Company as foreign debt, (b) the balance of its short-term
foreign borrowings and (c) any foreign debt incurred by the Company as a result
of the performance of guarantees provided by any offshore entity or individual,
shall not be in excess of the difference of its total investment and registered
capital.   14.20 CBRC rules      The Company is not related to any shareholder,
director or employee of any Lender or Agent or to any other “connected party” as
defined in the CBRC Rules.1   14.21 Times for making representations and
warranties   (a) The representations and warranties set out in this Clause are
made by the Company on the date of this Agreement.   (b) Unless a representation
and warranty is expressed to be given at a specific date, each representation
and warranty is deemed to be repeated by the Company on the date of each
Request, each Utilisation Date and each Interest Payment Date.   (c) When the
representation and warranty in Clause 14.6(a) (No default) is repeated on a
Request for a Rollover Loan or an Interest Payment Date for a Term Loan, the
reference to a Default will be construed as a reference to an Event of Default.
  (d) When a representation and warranty is repeated, it is applied to the
circumstances existing at the time of repetition.

____________________

1 Subject to local counsel review. 

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15.      INFORMATION COVENANTS   15.1 Financial statements   (a) The Company
must supply to the Administrative Agent in sufficient copies for all the
Lenders:     (i)      its audited financial statements for each of its financial
years; and     (ii) its interim financial statements for the first half-year of
each of its financial years.   (b) All financial statements must be supplied as
soon as they are available and:     (i) in the case of the Company’s audited
financial statements, within 90 days;      (ii) in the case of the Company’s
interim financial statements, within 45 days, of the end of the relevant
financial period.   15.2 Form of financial statements   (a) The Company must
ensure that each set of financial statements supplied under this Agreement gives
(if audited) a true and fair view of, or (if unaudited) fairly represents, the
financial condition (consolidated or otherwise) of the relevant person as at the
date to which those financial statements were drawn up.   (b) The Company must
notify the Administrative Agent of any change to the manner in which its audited
financial statements are prepared.   (c) If requested by the Administrative
Agent, the Company must supply to the Administrative Agent:     (i) a full
description of any change notified under paragraph (b) above; and     (ii)
sufficient information to enable the Finance Parties to make a proper comparison
between the financial position shown by the set of financial statements prepared
on the changed basis and its most recent audited financial statements delivered
to the Administrative Agent under this Agreement.     (d) If requested by the
Administrative Agent, the Company must enter into discussions for a period of
not more than 30 days with a view to agreeing any amendments required to be made
to this Agreement to place the Company and the Lenders in the same position as
they would have been in if the change notified under paragraph (b) above had not
happened. Any agreement between the Company and the Administrative Agent will
be, with the prior consent of the Majority Lenders, binding on all the Parties.
  (e) If no agreement is reached under paragraph (d) above on the required
amendments to this Agreement, the Company must ensure that its auditors certify
those amendments; the certificate of the auditors will be, in the absence of
manifest error, binding on all the Parties.

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15.3   Information – miscellaneous     The Company must supply to the
Administrative Agent:     (a)       a Compliance Certificate with each set of
its financial statements sent to the Administrative Agent under this Agreement.
    (b) copies of all documents despatched by the Company to its creditors
generally or any class of them at the same time as they are despatched;     (c)
promptly upon becoming aware of them, details of any litigation, arbitration or
administrative proceedings which are current, threatened in writing or pending
and which have or might, if adversely determined, have a Material Adverse
Effect;     (d) promptly on request, such further information regarding the
financial condition and operations of the Company as any Finance Party through
the Administrative Agent may reasonably request; and     (e) promptly upon
becoming aware of it, a notice that it is related to a shareholder, director or
employee of a Lender or Agent or to any other “connected party” as defined in
the CBRC Rule.2   15.4 Notification of Default   (a) Unless the Administrative
Agent has already been so notified by the Company, each Obligor must notify the
Administrative Agent of any Default (and the steps, if any, being taken to
remedy it) promptly upon becoming aware of its occurrence.   (b) Promptly on
request by the Administrative Agent, the Company must supply to the
Administrative Agent a certificate, signed by two of its authorised signatories
on its behalf, certifying that no Default is outstanding or, if a Default is
outstanding, specifying the Default and the steps, if any, being taken to remedy
it.   15.5 Know your customer requirements   (a) The Company must promptly on
the request of any Finance Party supply to that Finance Party any documentation
or other evidence which is reasonably requested by that Finance Party (whether
for itself, on behalf of any Finance Party or any prospective new Lender) to
enable a Finance Party or prospective new Lender to carry out and be satisfied
with the results of all applicable know your customer requirements.   (b) Each
Lender must promptly on the request of the Administrative Agent supply to the
Administrative Agent any documentation or other evidence which is reasonably
required by the Administrative Agent to carry out and be satisfied with the
results of all know your customer requirements.   16. GENERAL COVENANTS   16.1
General           The Company agrees to be bound by the covenants set out in
this Clause.

____________________

2 Subject to local counsel review. 

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16.2       Authorisations     The Company must promptly:     (a)       obtain,
maintain and comply with the terms; and     (b) supply certified copies to the
Administrative Agent,     of any authorisation required under any law or
regulation to enable it to perform its obligations under, or for the validity or
enforceability of, any Finance Document.   16.3 Compliance with laws     The
Company must comply in all respects with all laws to which it is subject where
failure to do so has or is reasonably likely to have a Material Adverse Effect.
  16.4 Pari passu ranking     The Company must ensure that its payment
obligations under the Finance Documents at all times rank at least pari passu
with all its other present and future unsecured payment obligations, except for
obligations mandatorily preferred by law applying to companies generally.   16.5
Negative pledge   (a) Other than Permitted Security Interests, the Company may
not create or allow to exist any Security Interest on any of its assets.   (b)
Other than Permitted Security Interests, the Company may not:     (i) sell,
transfer or otherwise dispose of any of its assets on terms where it is or may
be leased to or re-acquired or acquired by it or any of its related entities;  
    (ii) sell, transfer or otherwise dispose of any of its receivables on
recourse terms;     (iii) enter into any arrangement under which money or the
benefit of a bank or other account may be applied, set-off or made subject to a
combination of accounts; or       (iv) enter into any other preferential
arrangement having a similar effect,      in circumstances where the transaction
is entered into primarily as a method of raising Financial Indebtedness or of
financing the acquisition of an asset.   16.6 Disposals   (a) Except as provided
below, the Company may not, either in a single transaction or in a series of
transactions and whether related or not, dispose of all or any part of its
assets.   (b) Paragraph (a) does not apply to any disposal:     (i) made in the
ordinary course of trading of the disposing entity; or

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        (ii)       of assets in exchange for other assets comparable or superior
as to type, value and quality.   16.7 Financial Indebtedness   (a) Except as
provided below, the Company may not incur any Financial Indebtedness.   (b)
Paragraph (a) does not apply to:     (i) any Financial Indebtedness incurred in
the ordinary course of business not exceeding an aggregate of US$1,000,000 or
its equivalent;       (ii) any Financial Indebtedness incurred under the Finance
Documents;     (iii)  any Financial Indebtedness incurred or permitted under the
U.S. Credit Agreement and the related finance documents;     (iv)  any Financial
Indebtedness of any person acquired by the Company which is incurred under
arrangements in existence at the date of acquisition, but only for a period of
six months from the date of acquisition; or       (v) any derivative transaction
protecting against or benefiting from fluctuations in any rate or price entered
into in the ordinary course of business.     16.8 Year end     The Company must
not change its financial year end without the consent of the Majority Lenders.  
16.9 Change of business     The Company must not carry on any business other
than the Project and ensure that no substantial change is made to the general
nature of its business from that carried on, or anticipated, at the date of this
Agreement.   16.10 Mergers     The Company must not enter into any amalgamation,
demerger, merger or reconstruction other than pursuant to a transaction agreed
by the Majority Lenders.   16.11 Acquisitions   (a) Except as provided below,
the Company must not make any acquisition or investment.   (b)  Paragraph (a)
does not apply to acquisitions or investments made in the ordinary course of
trade or with the consent of the Majority Lenders.

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16.12      Environmental matters   (a) In this Subclause:     Environmental
Approval means any authorisation and the filing of any notification, report or
assessment required under any Environmental Law for the operation of the
business of any the Company conducted on or from properties owned or used by the
Company;     Environmental Claim means any claim, proceeding, formal notice or
investigation by any person in respect of any Environmental Law; and    
Environmental Law means any applicable law or regulation which relates to:    
      (i)       the pollution or protection of the environment;     (ii) the
harm to or the protection of human health;     (iii) the conditions of the
workplace; or     (iv) any emission or substance capable of causing harm to any
living organism or the environment.   (b) The Company must ensure that it is,
and has been, in compliance with all Environmental Law and Environmental
Approvals applicable to it, where failure to do so has or is reasonably likely
to have a Material Adverse Effect or result in any liability for a Finance
Party.   (c) The Company must, promptly upon becoming aware, notify the a
Finance Party of:     (i) any Environmental Claim current, or to its knowledge,
pending, or threatened in writing; or     (ii) any circumstances reasonably
likely to result in an Environmental Claim,     which has or, if substantiated,
is reasonably likely to either have a Material Adverse Effect or result in any
liability for a Finance Party.   16.13 Insurance     The Company must insure its
business and assets with insurance companies to such an extent and against such
risks as companies engaged in a similar business normally insure.   17. DEFAULT
  17.1 Events of Default     Each of the events or circumstances set out in this
Clause is an Event of Default.   17.2 Non-payment     An Obligor does not pay on
the due date any amount payable by it under the Finance Documents in the manner
required under the Finance Documents, unless the non-payment:     (a)  is caused
by technical or administrative error; and

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        (b)       is remedied within five Business Days of the due date.   17.3
Breach of other obligations   (a) An Obligor does not comply with any term of
Clause 16 (General covenants) or clause 7 (General covenants) of the Guarantee;
or   (b) an Obligor does not comply with any other term of the Finance Documents
not already referred to in this Clause, unless the non-compliance:     (i) is
capable of remedy; and     (ii) is remedied within 14 days of the earlier of the
Administrative Agent giving notice of the breach to the Company and any Obligor
becoming aware of the non-compliance.     17.4 Misrepresentation     A
representation or warranty made or repeated by an Obligor in any Finance
Document or in any document delivered by or on behalf of any Obligor under any
Finance Document is incorrect or misleading in any material respect when made or
deemed to be repeated.   17.5 Cross-default     Any of the following occurs in
respect of an Obligor:     (a) any of its Financial Indebtedness (including,
without limitation, the Financial Indebtedness arising under the U.S. Credit
Agreement) is not paid when due (after the expiry of any originally applicable
grace period);       (b) any of its Financial Indebtedness (including, without
limitation, the Financial Indebtedness arising under the U.S. Credit Agreement):
        (i)       becomes prematurely due and payable;         (ii) is placed on
demand; or       (iii) is capable of being declared by or on behalf of a
creditor to be prematurely due and payable or of being placed on demand,      
in each case, as a result of an event of default or any provision having a
similar effect (howsoever described) and, in the case of sub-paragraph (iii)
above, such event is not remedied within five Business Days of the relevant
Obligor becoming aware of such event; or       (c) any commitment for its
Financial Indebtedness (including, without limitation, the Financial
Indebtedness arising under the U.S. Credit Agreement) is cancelled or suspended
as a result of an event of default or any provision having a similar effect
(howsoever described) and such event is not remedied within five Business Days
of the relevant Obligor becoming aware of such event,         unless the
aggregate amount of Financial Indebtedness falling within all or any of
paragraphs (a) to (c) above in respect of that Obligor is:

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                (i)       in the case of the Borrower, less than RMB1,000,000 or
its equivalent; and       (ii) in the case of the Guarantor, less than
RMB5,000,000 or its equivalent.   17.6 Insolvency     Any of the following
occurs in respect of an Obligor:     (a) it is, or is deemed for the purposes of
any applicable law to be, unable to pay its debts as they fall due or insolvent;
      (b) it admits its inability to pay its debts as they fall due;     (c) it
suspends making payments on any of its debts or announces an intention to do so;
    (d) by reason of actual or anticipated financial difficulties, it begins
negotiations with any creditor for the rescheduling or restructuring of any of
its indebtedness; or       (e) a moratorium is declared in respect of any of its
indebtedness.     If a moratorium occurs in respect of any Obligor, the ending
of the moratorium will not remedy any Event of Default caused by the moratorium.
  17.7 Insolvency proceedings   (a) Except as provided below, any of the
following occurs in respect of an Obligor:     (i) any step is taken with a view
to a moratorium or a composition, assignment or similar arrangement with any of
its creditors;     (ii)  a meeting of its shareholders, directors or other
officers is convened for the purpose of considering any resolution for, to
petition for or to file documents with a court or any registrar for, its
winding-up, administration or dissolution or any such resolution is passed;    
(iii)  any person presents a petition, or files documents with a court or any
registrar, for its winding-up, administration or dissolution;     (iv) any
Security Interest is enforced over any of its assets;       (v) an order for its
winding-up, administration, dissolution or reorganisation (by way of voluntary
arrangement, scheme of arrangement or otherwise) is made;       (vi) any
liquidator, trustee in bankruptcy, judicial custodian, compulsory manager,
receiver, administrative receiver, administrator or similar officer is appointed
in respect of it or any of its assets;     (vii) its shareholders, directors or
other officers request the appointment of, or give notice of their intention to
appoint, a liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or similar officer; or
      (viii) any other analogous step or procedure is taken in any
jurisdiction. 

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(b)       Paragraph (a) above does not apply to a petition for winding-up
presented by a creditor which is being contested in good faith and with due
diligence and is discharged or struck out within 14 days.   17.8 United States
Bankruptcy Laws   (a) In this Subclause, U.S. Bankruptcy Law means the United
States Bankruptcy Code 1978 or any other United States Federal or State
bankruptcy, insolvency or similar law.   (b) Any of the following occurs in
respect of the Guarantor:     (i)       it makes a general assignment for the
benefit of creditors;     (ii) it commences a voluntary case or proceeding under
any U.S. Bankruptcy Law;     (iii) an involuntary case under any U.S. Bankruptcy
Law is commenced against it and is not controverted within 30 days or is not
dismissed or stayed within 60 days after commencement of the case; or       (iv)
an order for relief or other order approving any case or proceeding is entered
under any U.S. Bankruptcy Law.     17.9 Creditors’ process     Any attachment,
sequestration, distress, execution or analogous event affects any asset(s) of an
Obligor, having an aggregate value of at least RMB1,000,000, and is not
discharged within 14 days.   17.10 Cessation of business     An Obligor ceases,
or threatens to cease, to carry on business.   17.11 Effectiveness of Finance
Documents   (a) It is or becomes unlawful for any Obligor to perform any of its
obligations under the Finance Documents.   (b) Any Finance Document is not
effective in accordance with its terms or is alleged by an Obligor to be
ineffective in accordance with its terms for any reason.   (c) An Obligor
repudiates a Finance Document or evidences an intention to repudiate a Finance
Document.   17.12 Ownership and Change in Control   (a) The Company is not or
ceases to be a Subsidiary of the Guarantor.   (b) A Change in Control occurs.  
17.13 Material adverse change     Any event or series of events occurs which, in
the opinion of the Majority Lenders, has or is reasonably likely to have a
Material Adverse Effect.

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17.14       Acceleration   (a) If an Event of Default described in Clause 17.8
(United States Bankruptcy Laws) occurs, the Total Commitments will, if not
already cancelled under this Agreement, be immediately and automatically
cancelled and all amounts outstanding under the Finance Documents will be
immediately and automatically due and payable.   (b)  Subject to paragraph (a)
above, if an Event of Default is outstanding, the Administrative Agent may, and
must if so instructed by the Majority Lenders, by notice to the Company:     (i)
      cancel all or any part of the Total Commitments; and/or     (ii) declare
that all or part of any amounts outstanding under the Finance Documents are:    
  (A)       immediately due and payable; and/or       (B) payable on demand by
the Administrative Agent acting on the instructions of the Majority Lenders.    
    Any notice given under this Subclause will take effect in accordance with
its terms.   18. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT   18.1 
Appointment and duties of the Administrative Agent and the Collateral Agent    
(a) Each Finance Party (other than the Agents) irrevocably appoints JPMorgan
Chase Bank (China) Company Limited, Shanghai Branch as Administrative Agent, and
JPMorgan Chase Bank, National Association as Collateral Agent, under and in
connection with the Finance Documents. Without limiting the foregoing, each
Lender authorizes each of the Agents to enter into the Intercreditor Agreement
on behalf of such Lender and agrees to be bound by the terms of the
Intercreditor Agreement as if it were a party thereto.     (b) Each Finance
Party irrevocably authorises each Agent to:     (i) perform the duties and to
exercise the rights, powers and discretions that are specifically given to it
under the Finance Documents, together with any other incidental rights, powers
and discretions; and         (ii) enter into and deliver each Finance Document
expressed to be entered into by each Agent.   (c) Each Agent has only those
duties which are expressly specified in the Finance Documents. Those duties are
solely of a mechanical and administrative nature.   18.2 No fiduciary duties  
(a) Nothing in the Finance Documents makes an Agent a trustee or fiduciary for
any other Party or any other person; and   (b) No Agent needs hold in trust any
moneys paid to it or recovered by it for a Party in connection with the Finance
Documents or be liable to account for interest on those moneys.

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18.3       Individual position of each Agent   (a) If it is also a Lender, an
Agent has the same rights and powers under the Finance Documents as any other
Lender and may exercise those rights and powers as though it were not an Agent.
  (b) Each Agent may:     (i)       carry on any business with an Obligor or its
related entities (including acting as an agent or a trustee for any other
financing); and       (ii) retain any profits or remuneration it receives under
the Finance Documents or in relation to any other business it carries on with an
Obligor or its related entities.     18.4 Reliance     Each Agent may:     (a)
rely on any notice or document believed by it to be genuine and correct and to
have been signed by, or with the authority of, the proper person;       (b) rely
on any statement made by any person regarding any matters which may reasonably
be assumed to be within his knowledge or within his power to verify;       (c)
assume, unless the context otherwise requires, that any communication made by an
Obligor is made on behalf of and with the consent and knowledge of each Obligor;
      (d) engage, pay for and rely on professional advisers selected by it
(including those representing a Party other than such Agent); and       (e) act
under the Finance Documents through its personnel and agents.   18.5 Majority
Lenders’ instructions   (a) Each Agent is fully protected if it acts on the
instructions of the Majority Lenders in the exercise of any right, power or
discretion or any matter not expressly provided for in the Finance Documents.
Any such instructions given by the Majority Lenders will be binding on all the
Lenders. In the absence of instructions, each Agent may act as it considers to
be in the best interests of all the Lenders.   (b) Each Agent may assume that
unless it has received notice to the contrary, any right, power, authority or
discretion vested in any Party or the Majority Lenders has not been exercised.  
(c) Each Agent may refrain from acting in accordance with the instructions of
the Majority Lenders (or, if appropriate, the Lenders) until it has received
security satisfactory to it, whether by way of payment in advance or otherwise,
against any liability or loss which it may incur in complying with the
instructions.   (d) No Agent is authorised to act on behalf of a Lender (without
first obtaining that Lender’s consent) in any legal or arbitration proceedings
in connection with any Finance Document.

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18.6       Responsibility   (a) No Agent is responsible for the adequacy,
accuracy or completeness of any statement or information (whether written or
oral) made in or supplied in connection with any Finance Document.   (b) No
Agent is responsible for the legality, validity, effectiveness, adequacy,
completeness or enforceability of any Finance Document or any other document.  
(c) Without affecting the responsibility of any Obligor for information supplied
by it or on its behalf in connection with any Finance Document, each Lender
confirms that it:     (i)       has made, and will continue to make, its own
independent appraisal of all risks arising under or in connection with the
Finance Documents (including the financial condition and affairs of each Obligor
and its related entities and the nature and extent of any recourse against any
Party or its assets); and     (ii) has not relied exclusively on any information
provided to it by either Agent in connection with any Finance Document or
agreement entered into in anticipation of or in connection with any Finance
Document.   18.7 Exclusion of liability   (a) No Agent is liable or responsible
to any other Finance Party for any action taken or not taken by it in connection
with any Finance Document, unless directly caused by its gross negligence or
wilful misconduct.   (b) No Party (other than an Agent) may take any proceedings
against any officers, employees or agents of such Agent in respect of any claim
it might have against such Agent or in respect of any act or omission of any
kind by that officer, employee or agent in connection with any Finance Document.
Any officer, employee or agent of either Agent may rely on this Subclause.   (c)
No Agent is liable for any delay (or any related consequences) in crediting an
account with an amount required under the Finance Documents to be paid by each
Agent if each Agent has taken all necessary steps as soon as reasonably
practicable to comply with the regulations or operating procedures of any
recognised clearing or settlement system used by each Agent for that purpose.  
(d) (i) Nothing in this Agreement will oblige either Agent to satisfy any know
your customer requirement in relation to the identity of any person on behalf of
any Finance Party.     (ii) Each Finance Party confirms to each Agent that it is
solely responsible for any know your customer requirements it is required to
carry out and that it may not rely on any statement in relation to those
requirements made by any other person.   18.8 Default     No Agent is obliged to
monitor or enquire whether a Default has occurred. No Agent is deemed to have
knowledge of the occurrence of a Default.

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18.9   Information   (a) Except where a Finance Document specifically provides
otherwise, no Agent is obliged to review or check the adequacy, accuracy or
completeness of any document it forwards to another Party.   (b) No Agent has
any duty:     (i) either initially or on a continuing basis to provide any
Lender with any credit or other information concerning the risks arising under
or in connection with the Finance Documents (including any information relating
to the financial condition or affairs of any Obligor or its related entities or
the nature or extent of recourse against any Party or its assets) whether coming
into its possession before, on or after the date of this Agreement; or     (ii)
unless specifically requested to do so by a Lender in accordance with a Finance
Document, to request any certificate or other document from any Obligor.   (c)
In acting as an Agent, each Agent will be regarded as acting through its agency
division which will be treated as a separate entity from its other divisions and
departments. Any information acquired by an Agent which, in its opinion, is
acquired by another division or department or otherwise than in its capacity as
an Agent may be treated as confidential by such Agent and will not be treated as
information possessed by the Agent in its capacity as such.   (d) No Agent is
obliged to disclose to any person any confidential information supplied to it by
or on behalf of a member of the Group for the purpose of evaluating whether any
waiver or amendment is required in respect of any term of the Finance Documents.
  (e) Each Obligor irrevocably authorises each Agent to disclose to the other
Finance Parties any information which, in its opinion, is received by it in its
capacity as an Agent.   18.10       Indemnities   (a) Without limiting the
liability of any Obligor under the Finance Documents, each Lender must indemnify
each Agent for that Lender’s Pro Rata Share of any loss or liability incurred by
each Agent in acting as an Agent (unless such Agent has been reimbursed by an
Obligor under a Finance Document), except to the extent that the loss or
liability is caused by such Agent’s gross negligence or wilful misconduct.   (b)
If a Party owes an amount to an Agent under the Finance Documents, such Agent
may, after giving notice to that Party:     (i)       deduct from any amount
received by it for that Party any amount due to that Agent from that Party under
a Finance Document but unpaid; and       (ii) apply that amount in or towards
satisfaction of the owed amount.     That Party will be regarded as having
received the amount so deducted.   18.11 Compliance     Each Agent may refrain
from doing anything (including disclosing any information) which might, in its
opinion, constitute a breach of any law or regulation or be otherwise actionable
at the suit of any person,

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and may do anything which, in its opinion, is necessary or desirable to comply
with any law or regulation.

        18.12 Resignation of the Agents   (a) The Administrative Agent may
resign and appoint any of its Affiliates as successor Administrative Agent by
giving notice to the other Finance Parties and the Company.   (b) Alternatively,
the Administrative Agent may resign by giving notice to the Finance Parties and
the Company, in which case the Majority Lenders may appoint a successor
Administrative Agent.   (c) If no successor Administrative Agent has been
appointed under paragraph (b) above within 30 days after notice of resignation
was given, the Administrative Agent may appoint a successor Administrative
Agent.   (d) The person(s) appointing a successor Administrative Agent must, if
practicable, consult with the Company prior to the appointment.   (e) The
resignation of the Administrative Agent and the appointment of any successor
Administrative Agent will both become effective only when the successor
Administrative Agent notifies all the Parties that it accepts its appointment.  
  On giving the notification the successor Administrative Agent will succeed to
the position of the Administrative Agent and the term Administrative Agent will
mean the successor Administrative Agent.   (f) The retiring Administrative Agent
must, at its own cost:     (i)       make available to the successor
Administrative Agent those documents and records and provide any assistance as
the successor Administrative Agent may reasonably request for the purposes of
performing its functions as the Administrative Agent under the Finance
Documents; and     (ii) enter into and deliver to the successor Administrative
Agent those documents and effect any registrations as may be required for the
transfer or assignment of all of its rights and benefits under the Finance
Documents to the successor Administrative Agent.   (g) Upon its resignation
becoming effective, this Clause will continue to benefit the retiring
Administrative Agent in respect of any action taken or not taken by it in
connection with the Finance Documents while it was the Administrative Agent,
and, subject to paragraph (f) above, it will have no further obligations under
any Finance Document.   (h) The Collateral Agent may resign and a successor
collateral agent may be appointed in accordance with the terms of the
Intercreditor Agreement.   18.13 Relationship with Lenders   (a) The
Administrative Agent may treat each Lender as a Lender, entitled to payments
under this Agreement and as acting through its Facility Office(s) until it has
received not less than five Business Days’ prior notice from that Lender to the
contrary.

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(b) The Administrative Agent may at any time, and must if requested to do so by
the Majority Lenders, convene a meeting of the Lenders.   (c)       The
Administrative Agent must keep a record of all the Parties and supply any other
Party with a copy of the record on request. The record will include each
Lender’s Facility Office(s) and contact details for the purposes of this
Agreement.   18.14 The Agents’ management time     If an Agent requires, any
amount payable to such Agent by any Party under any indemnity or in respect of
any costs or expenses incurred by such Agent under the Finance Documents after
the date of this Agreement may include the cost of using its management time or
other resources and will be calculated on the basis of such reasonable daily or
hourly rates as such Agent may notify to the relevant Party. This is in addition
to any amount in respect of fees or expenses paid or payable to such Agent under
any other term of the Finance Documents.   18.15 Notice period     Where this
Agreement specifies a minimum period of notice to be given to each Agent, each
Agent may, at its discretion, accept a shorter notice period.   19. EVIDENCE AND
CALCULATIONS   19.1 Accounts     Accounts maintained by a Finance Party in
connection with this Agreement are prima facie evidence of the matters to which
they relate for the purpose of any litigation or arbitration proceedings.   19.2
Certificates and determinations     Any certification or determination by a
Finance Party of a rate or amount under the Finance Documents will be, in the
absence of manifest error, conclusive evidence of the matters to which it
relates.   19.3 Calculations     Any interest or fee accruing under this
Agreement accrues from day to day and is calculated on the basis of the actual
number of days elapsed and a year of 360 days.   20. ADMINISTRATIVE AGENT’S FEES
  20.1 Administrative Agent’s fee     The Company must pay to the Administrative
Agent for its own account an agency fee in the amount and manner agreed in the
Fee Letter between the Administrative Agent and the Company.   21. INDEMNITIES,
BREAK COSTS AND DAMAGE WAIVERS   21.1 Currency indemnity   (a) The Company must,
as an independent obligation, indemnify each Finance Party against any loss or
liability which that Finance Party incurs as a consequence of:

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(i)       That Finance Party receiving an amount in respect of an Obligor’s
liability under the Finance Documents; or   (ii)   that liability being
converted into a claim, proof, judgment or order,  

in a currency other than the currency in which the amount is expressed to be
payable under the relevant Finance Document.

  (b) Unless otherwise required by law, the Company waives any right it may have
in any jurisdiction to pay any amount under the Finance Documents in a currency
other than that in which it is expressed to be payable.         21.2 Other
indemnities   (a) The Company must indemnify each Finance Party against any loss
or liability which that Finance Party incurs as a consequence of:   (i)   the
occurrence of any Event of Default;   (ii) any failure by an Obligor to pay any
amount due under a Finance Document on its due date; including any resulting
from any distribution or redistribution of any amount among the Lenders under
this Agreement;   (iii) (other than by reason of negligence or default by that
Finance Party) a Loan not being made after a Request has been delivered for that
Loan;   (iv) a Loan (or part of a Loan) not being prepaid in accordance with
this Agreement;   (v) investigating any event which the Lenders reasonably
believe to be a Default; or   (vi) acting or relying on any notice which the
Lenders reasonably believe to be genuine, correct and appropriately authorised.
  The Company’s liability in each case includes any loss or expense on account
of funds borrowed, contracted for or utilised to fund any amount payable under
any Finance Document or any Loan.   (b) The Company must indemnify the
Administrative Agent against any loss or liability incurred by the
Administrative Agent as a result of:   (i) investigating any event which the
Administrative Agent reasonably believes to be a Default; or   (ii) acting or
relying on any notice which the Administrative Agent reasonably believes to be
genuine, correct and appropriately authorised.   21.3 Break Costs   (a) The
Company must pay to each Lender its Break Costs if a Loan or an overdue amount
is repaid or prepaid otherwise than on an Interest Payment Date.   (b) Break
Costs are the amount (if any) determined by the relevant Lender which would
indemnify that Lender against any loss or liability that it incurs as a
consequence of any part of a Loan or overdue

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amount being so repaid or prepaid on a date other than an Interest Payment Date,
and includes any costs incurred as a result of that Lender terminating all or
any part of its fixed rate, swap or other hedging arrangements.

  (c) Each Lender must supply to the Administrative Agent for the Company
details of the amount of any Break Costs claimed by it under this Subclause.  
21.4       Damage Waivers     To the extent permitted by applicable law, the
Borrower shall not assert, and the Borrower hereby waives, any claim against any
Finance Party, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Finance Document,
or any other agreement, instrument or transactions contemplated hereby or
thereby, any Loan or the use of the proceeds thereof.   22. EXPENSES   22.1
Initial costs     The Company or the Guarantor, as the case may be, must pay to
the Administrative Agent and the Collateral Agent the amount of all costs and
expenses (including legal fees and translation costs) reasonably incurred by it
in connection with the negotiation, preparation, printing, and syndication and
execution of the Finance Documents.   22.2 Subsequent costs     The Company or
the Guarantor, as the case may be, must pay to the Administrative Agent the
amount of all costs and expenses (including legal fees and translation costs)
reasonably incurred by it in connection with:     (a)       the negotiation,
preparation, printing and execution of any Finance Document executed after the
date of this Agreement; and     (b) any amendment, waiver or consent requested
by or on behalf of an Obligor or specifically allowed by a Finance Document.  
22.3 Enforcement costs     The Company or the Guarantor, as the case may be,
must pay to each Finance Party the amount of all costs and expenses (including
legal fees and translation costs) incurred by it in connection with the
enforcement of, or the preservation of any rights under, any Finance Document.  
23. AMENDMENTS AND WAIVERS   23.1 Procedure   (a) Except as provided in this
Clause, any term of the Finance Documents may be amended or waived with the
agreement of the Company and the Majority Lenders. The Administrative Agent or
the Collateral Agent, as applicable, may effect, on behalf of any Finance Party,
an amendment or waiver allowed under this Clause.

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(b) The Administrative Agent or the Collateral Agent, as applicable, must
promptly notify the other Parties of any amendment or waiver effected by it
under paragraph (a) above. Any such amendment or waiver is binding on all the
Parties.   (c)       The Guarantor agrees to any amendment or waiver allowed by
this Clause which is agreed to by the Company. This includes any amendment or
waiver which would, but for this paragraph, require the consent of the Guarantor
if the guarantee under the Finance Documents is to remain in full force and
effect.   23.2 Exceptions   (a) An amendment or waiver which relates to:     (i)
      the definition of Majority Lenders in Clause 1.1 (Definitions);     (ii)
an extension of the date of payment of any amount to a Lender under the Finance
Documents;     (iii) a reduction in the Margin or a reduction in the amount of
any payment of principal, interest, fee or other amount payable to a Lender
under the Finance Documents;     (iv) an increase in, or an extension of, a
Commitment or the Total Commitments;     (v) a release of an Obligor other than
in accordance with the terms of this Agreement; a term of a Finance Document
which expressly requires the consent of each Lender;     (vi) the right of a
Lender to assign or transfer its rights or obligations under the Finance
Documents; or     (vii) this Clause,     may only be made with the consent of
each Lender directly affected thereby.   (b) An amendment or waiver which
relates to the rights or obligations of the Administrative Agent may only be
made with the consent of the Administrative Agent.   23.3 Change of currency  
If a change in any currency of a country occurs (including where there is more
than one currency or currency unit recognised at the same time as the lawful
currency of a country), the Finance Documents will be amended to the extent the
Administrative Agent (acting reasonably and after consultation with the Company)
determines is necessary to reflect the change.   23.4 Waivers and remedies
cumulative   The rights of each Finance Party under the Finance Documents:   (a)
  may be exercised as often as necessary;   (b) are cumulative and not exclusive
of its rights under the general law; and   (c) may be waived only in writing and
specifically.

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Delay in exercising or non-exercise of any right is not a waiver of that right.

  24.       CHANGES TO THE PARTIES   24.1 Assignments and transfers by the
Company   The Company may not assign or transfer any of its rights and
obligations under the Finance Documents without the prior consent of the
Administrative Agent and the Majority Lenders.   24.2 Assignments and transfers
by a Lender   (a) Subject to the following provisions of this Clause, a Lender
(the Existing Lender) may at any time:     (i)       assign any of its rights;
or     (ii) transfer by way of novation any of its rights or obligations under
this Agreement, to any other bank or financial institution which is an Approved
Lender (the New Lender).  

(b)

(i) Any Lender may, without the consent of the Company or the Administrative
Agent, sell sub-participations to one or more banks or other entities (a
Sub-Participant) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Company, the Administrative Agent, and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a sub-participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Sub-Participant, agree to any amendment, modification or waiver
described in Clause 23.2 (Exceptions) that affects such Sub-Participant. Subject
to paragraph (b)(ii) of this Clause, the Company agrees that each
Sub-Participant shall be entitled to the benefits of Clause 10 (Taxes) and 11
(Increased Costs) to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Clause 24.2 (Assignments and transfers by a
Lender). To the extent permitted by law, each Sub-Participant also shall be
entitled to the benefits of Clause 26 (Set-off) as though it were a Lender,
provided such Sub-Participant agrees to be subject to Clause 13 (Payments) as
though it were a Lender.   (ii) A Sub-Participant shall not be entitled to
receive any greater payment under Clause 10 (Taxes) or Clause 11 (Increased
Costs) than the applicable Lender would have been entitled to receive with
respect to the sub-participation sold to such Sub-Participant, unless the sale
of the sub-participation to such Sub-Participant is made with the Company’s
prior written consent.   24.3 Conditions to assignment or transfer - consents  
The consent of the Company is required for any assignment or transfer unless the
New Lender is another Lender or an Affiliate of a Lender or any group members of
a Lender that are more than 50% owned or controlled by that Lender’s group and
any sub-braches of a Lender or an Event of Default is outstanding.

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The consent of the Company (if required) must not be unreasonably withheld or
delayed. The Company will be deemed to have given its consent five Business Days
after the Company is given notice of the request unless it is expressly refused
by the Company within that time. The acknowledgement of the Administrative Agent
is required for each assignment or transfer.

  24.4       Reconstitution, absorption or conversion of a Finance Party    
Notwithstanding any other terms in this Agreement, if any Finance Party (the
Converting Party) undergoes reconstitution, absorption or conversion of any form
pursuant to the People’s Republic of China Regulations on Administration of
Foreign Funded Banks (State Council Decree No. 478), the other Finance Parties
and the Company agree that the Converting Party may assign or transfer any of
its rights and/or obligations under this Agreement to the reconstituted,
surviving or new entity by giving a notice of the assignment or transfer to the
other Finance Parties and/or the Company. The parties hereto agree that such
notice of assignment or transfer may be in the form of a public announcement in
the national newspapers and/or the provincial newspapers where the Converting
Party is located, or any other forms to the extent permitted by law and at the
sole discretion of the Converting Party and no consent or approval from the
other Finance Parties or the Company is required for such assignment or
transfer. In the case of the Administrative Agent as the Converting Party, the
reconstituted, surviving or new entity shall be deemed as successor
Administrative Agent pursuant to Clause 18.12 (a) hereof. This Agreement will
continue to be effective against the other Finance Parties and the Company, and
the other Finance Parties and the Company agree to be bound and continue to be
bound by this Agreement notwithstanding such assignment or transfer.   24.5
Other conditions to assignment or transfer   (a) Unless the Company and the
Administrative Agent otherwise agree, a transfer of part of a Commitment or part
of its rights and obligations under this Agreement by the Existing Lender must
be in a minimum amount of RMB10 million.   (b) The Administrative Agent is not
obliged to enter into a Transfer Certificate or otherwise give effect to an
assignment or transfer until it has completed all know your customer
requirements to its satisfaction. The Administrative Agent must promptly notify
the Existing Lender and the New Lender if there are any such requirements.   (c)
If the consent of the Company is required for any assignment or transfer
(irrespective of whether it may be unreasonably withheld or not), the
Administrative Agent is not obliged to enter into a Transfer Certificate if the
Company withholds its consent.   (d) Unless the Administrative Agent otherwise
agrees, the New Lender must pay to the Administrative Agent for its own account,
on or before the date any assignment or transfer occurs, a fee of RMB15,000.  
(e) Any reference in this Agreement to a Lender includes a New Lender but
excludes a Lender if no amount is or may be owed to or by it under this
Agreement.   24.6 Procedure for assignment of rights   An assignment of rights
will only be effective on receipt by the Administrative Agent of written
confirmation from the New Lender (in form and substance satisfactory to the
Administrative Agent) that the New Lender will, in relation to the assigned
rights, assume obligations to the other Finance Parties equivalent to those it
would have been under if it had been the Existing Lender.

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        (a)       In this Subclause:         Transfer Date means, in relation to
a transfer, the later of:             (i)       the proposed Transfer Date
specified in that Transfer Certificate; and         (ii) the date on which the
Administrative Agent executes that Transfer Certificate.           (b) A
transfer of rights or obligations using a Transfer Certificate will be effective
if:       (i) the Existing Lender and the New Lender deliver to the
Administrative Agent a duly completed Transfer Certificate; and                
(ii) the Administrative Agent enters into it.     (c) On the Transfer Date:    
  (i) the New Lender will assume the rights and obligations of the Existing
Lender expressed to be the subject of the novation in the Transfer Certificate
in substitution for the Existing Lender;             (ii) the Existing Lender
will be released from those obligations and cease to have those rights; and    
        (iii) the New Lender will become a Lender under this Agreement and be
bound by the terms of this Agreement as Lender.           (d) The Administrative
Agent must enter into a Transfer Certificate delivered to it and which appears
on its face to be in order as soon as reasonably practicable and, as soon as
reasonably practicable after it has entered into a Transfer Certificate, send a
copy of that Transfer Certificate to the Company.         (e) Each Party (other
than the Existing Lender and the New Lender) irrevocably authorises the
Administrative Agent to enter into and deliver any duly completed Transfer
Certificate on its behalf.       24.7 Limitation of responsibility of Existing
Lender   (a) Unless expressly agreed to the contrary, an Existing Lender makes
no representation or warranty and assumes no responsibility to a New Lender for:
      (i) the financial condition of an Obligor; or     (ii) the legality,
validity, effectiveness, enforceability, adequacy, accuracy, completeness or
performance of:           (A) any Finance Document or any other document;      
(B) any statement or information (whether written or oral) made in or supplied
in connection with any Finance Document, or

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(C)       any observance by any Obligor of its obligations under any Finance
Document or any other document,   and any representations or warranties implied
by law are excluded.   (b)       Each New Lender confirms to the Existing Lender
and the other Finance Parties that it:     (i)       has made, and will continue
to make, its own independent appraisal of all risks arising under or in
connection with the Finance Documents (including the financial condition and
affairs of each Obligor and its related entities and the nature and extent of
any recourse against any Party or its assets) in connection with its
participation in this Agreement; and     (ii) has not relied exclusively on any
information supplied to it by the Existing Lender in connection with any Finance
Document.     (c) Nothing in any Finance Document requires an Existing Lender
to:     (i) accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this Clause; or     (ii) support any
losses incurred by the New Lender by reason of the non-performance by either
Obligor of its obligations under any Finance Document or otherwise.   24.8 Costs
resulting from change of Lender or Facility Office   If:   (a) a Lender assigns
or transfers any of its rights and obligations under the Finance Documents or
changes its Facility Office; and   (b) as a result of circumstances existing at
the date the assignment, transfer or change occurs, the Company would be obliged
to pay a Tax Payment or an Increased Cost,   then the Company need only pay that
Tax Payment or Increased Cost to the same extent that it would have been obliged
to if no assignment, transfer or change had occurred.   25. DISCLOSURE OF
INFORMATION   (a) Each Finance Party must keep confidential any information
supplied to it by or on behalf of any Obligor in connection with the Finance
Documents. However, a Finance Party is entitled to disclose information:   (i)  
which is publicly available, other than as a result of a breach by that Finance
Party of this Clause;   (ii) in connection with any legal or arbitration
proceedings;   (iii) if required to do so under any law or regulation;   (iv) to
a governmental, banking, taxation or other regulatory authority;

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(v) to its professional advisers;   (vi) to any rating agency;   (vii) to the
extent allowed under paragraph (b) below;   (viii)       to the other Obligor;
or   (ix) with the agreement of the Obligor.   (b)       A Finance Party may
disclose to an Affiliate or any person (a third party) with (or through) whom
that Finance Party enters into or may enter, or has entered into, any kind of
transfer, participation or other agreement in relation to this Agreement (a
participant):     (i)       a copy of any Finance Document; and     (ii) any
information which that Finance Party has acquired under or in connection with
any Finance Document.     However, before a third party may receive any
confidential information, it must agree with the relevant Finance Party to keep
that information confidential on the terms of paragraph (a) above.   (c) This
Clause 25 supersedes any previous confidentiality undertaking given by a Finance
Party in connection with this Agreement prior to it becoming a Party.   26.
SET-OFF   A Finance Party may set off any matured obligation owed to it by the
Company under the Finance Documents (to the extent beneficially owned by that
Finance Party) against any obligation (whether or not matured) owed by that
Finance Party to the Company, regardless of the place of payment, booking branch
or currency of either obligation. If the obligations are in different
currencies, the Finance Party may convert either obligation at a market rate of
exchange in its usual course of business for the purpose of the set-off, subject
to applicable PRC laws and any SAFE requirement.   27. PRO RATA SHARING   27.1
Redistribution   If a Finance Party (the recovering Finance Party) receives or
recovers any amount from an Obligor other than in accordance with this Agreement
(a recovery) and applies that amount to a payment due under a Finance Document,
then:   (a)   the recovering Finance Party must, within three Business Days,
supply details of the recovery to the Administrative Agent;   (b) the
Administrative Agent must calculate whether the recovery is in excess of the
amount which the recovering Finance Party would have received if the recovery
had been received and distributed by the Administrative Agent in accordance with
this Agreement without taking account of any Tax which would be imposed on the
Administrative Agent in relation to a recovery or distribution; and

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(c) the recovering Finance Party must pay to the Administrative Agent an amount
equal to the excess (the redistribution).         27.2 Effect of redistribution
  (a) The Administrative Agent must treat a redistribution as if it were a
payment by the relevant Obligor under this Agreement and distribute it among the
Finance Parties, other than the recovering Finance Party, accordingly.   (b)
When the Administrative Agent makes a distribution under paragraph (a) above,
the recovering Finance Party will be subrogated to the rights of the Finance
Parties which have shared in that redistribution.   (c) If and to the extent
that the recovering Finance Party is not able to rely on any rights of
subrogation under paragraph (b) above, the relevant Obligor will owe the
recovering Finance Party a debt which is equal to the redistribution,
immediately payable and of the type originally discharged.   (d) If:     (i)
      a recovering Finance Party must subsequently return a recovery, or an
amount measured by reference to a recovery, to an Obligor; and     (ii) the
recovering Finance Party has paid a redistribution in relation to that recovery,
          each Finance Party, on the request of the Administrative Agent, must
reimburse the recovering Finance Party all or the appropriate portion of the
redistribution paid to that Finance Party, together with interest for the period
while it held the redistribution. In this event, the subrogation in paragraph
(b) above will operate in reverse to the extent of the reimbursement.
  27.3 Exceptions   Notwithstanding any other term of this Clause, a recovering
Finance Party need not pay a redistribution to the extent that:   (a) it would
not, after the payment, have a valid claim against the relevant Obligor in the
amount of the redistribution; or         (b) it would be sharing with another
Finance Party any amount which the recovering Finance Party has received or
recovered as a result of legal or arbitration proceedings, where:   (i) the
recovering Finance Party notified the Administrative Agent of those proceedings;
and   (ii)       the other Finance Party had an opportunity to participate in
those proceedings but did not do so or did not take separate legal or
arbitration proceedings as soon as reasonably practicable after receiving notice
of them.   28. SEVERABILITY   If a term of a Finance Document is or becomes
illegal, invalid or unenforceable in any respect under any jurisdiction, that
will not affect:

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        (a)      the legality, validity or enforceability in that jurisdiction
of any other term of the Finance Documents; or           (b)      the legality,
validity or enforceability in other jurisdictions of that or any other term of
the Finance Documents.   29. COUNTERPARTS     Each Finance Document may be
executed in any number of counterparts. This has the same effect as if the
signatures on the counterparts were on a single copy of the Finance Document.  
30.   NOTICES   30.1   In writing   (a)   Any communication in connection with a
Finance Document must be in writing and, unless otherwise stated, may be given
in person, by post or fax.   (b)   Unless it is agreed to the contrary, any
consent or agreement required under a Finance Document must be given in writing.
  30.2   Contact details   (a)   Except as provided below, the contact details
of each Party for all communications in connection with the Finance Documents
are those notified by that Party for this purpose to the Administrative Agent on
or before the date it becomes a Party.   (b)   The contact details of the
Company for this purpose are:     Address: No. 158 Jin Qiu Road       Shanghai
201203       P.R.China   Fax number: +8621 50792710   Attention: K J Kim,
General Manager     with a copy to:         Address: PKL       Daewoo
Engineering, 5 FL       9-3 Sunae, Bundang, Seongnam       Kyunggi, 463-825,
Korea   Fax number: +8231 738 0999   Attention: Jacob Kim

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(c)       The contact details of the Administrative Agent for this purpose are:
    Address: 31F, HSBC Building       1000 Lujiazui Ring Road       Shanghai
200120       People’s Republic of China   Fax number: +8621 61602707  
Attention: Christine Lin/Carol CZ Cai/Betty Wang     with a copy to:         
Address: 27/F, Chater House       8 Connaught Road       Central, Hong Kong  
Fax number: +852 2836 9672   Attention: Sara Wong     (d) The contact details of
each Replacement Lender for this purpose are set out in Part 2 of Schedule 1.  
(e) Any Party may change its contact details by giving five Business Days’
notice to the Administrative Agent or (in the case of the Administrative Agent)
to the other Parties.   (f) Where a Party nominates a particular department or
officer to receive a communication, a communication will not be effective if it
fails to specify that department or officer.   30.3 Effectiveness   (a) Except
as provided below, any communication in connection with a Finance Document will
be deemed to be given as follows:     (i)       if delivered in person, at the
time of delivery;     (ii) if posted, five days after being deposited in the
post, postage prepaid, in a correctly addressed envelope; and     (iii) if by
fax, when received in legible form.   (b) A communication given under paragraph
(a) above but received on a non-working day or after business hours in the place
of receipt will only be deemed to be given on the next working day in that
place.   (c) A communication to the Administrative Agent will only be effective
on actual receipt by it.   30.4 Obligors   (a) All communications under the
Finance Documents (other than the Guarantee) to or from the Guarantor must be
sent through the Company.   (b) Any communication given to the Company in
connection with a Finance Document will be deemed to have been given also to the
Guarantor.

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(c)       Each Finance Party may assume that any communication made by the
Company is made with the consent of the Guarantor.   31.   LANGUAGE

(a)       Any notice given in connection with a Finance Document must be in
English.   (b) Any other document provided in connection with a Finance Document
must be:     (i)       in English; or     (ii) (unless the Administrative Agent
otherwise agrees) accompanied by a certified English translation. In this case,
the English translation prevails unless the document is a statutory or other
official document.   32. GOVERNING LAW  

This Agreement is governed by PRC law.

  33. ENFORCEMENT   33.1 Arbitration

(a)          Any dispute arising from or in connection with this Agreement,
including any question regarding its existence, validity or termination, must be
submitted to China International Economic and Trade Arbitration Commission (the
Commission) for arbitration which must be conducted in accordance with the
Commission’s Financial Disputes Arbitration Rules in effect at the time of
applying for arbitration (for the purposes of this Subclause, the Rules). The
arbitral award is final and binding upon all parties.   (b) The Rules are
incorporated by reference into this Subclause and capitalised terms used in this
Subclause which are not otherwise defined in this Agreement, have the meaning
given to them in the Rules.   (c) The arbitral tribunal (the Tribunal) is to
consist of three arbitrators. The Company and the Administrative Agent on behalf
of the Lenders will each appoint one arbitrator within seven Business Days from
the date of receipt of the Notice of Arbitration, failing which the Commission
will make such appointment. The Commission will appoint the third arbitrator who
will act as presiding arbitrator. The nationality of the presiding arbitrator
must not be the same as the other two arbitrators appointed by the parties.  
(d) The seat, or legal place of arbitration, will be Shanghai. The language used
in the arbitral proceedings will be English.   (e) All arbitration costs
(including legal fees and other related costs and taxes) will be borne by the
unsuccessful party, unless otherwise determined by the Tribunal.   (f) By
agreeing to arbitration, the parties undertake to carry out any award
immediately. The parties also waive irrevocably their right to any form of
appeal, review or recourse to any state court or other judicial authority,
insofar as such waiver may be validly made.   (g) Unless the parties expressly
agree in writing to the contrary, the parties undertake as a general principle
to keep confidential all awards in their arbitration, together with all
materials in the proceedings created

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for the purpose of the arbitration and all other documents produced by another
party in the proceedings not otherwise in the public domain save as to the
extent that disclosure may be required of a party by legal duty, to protect or
to pursue a legal right or to enforce or challenge on award in bona fide legal
proceedings before a state court or other judicial authority.

  (h)          Where two or more disputes have been referred to arbitration, the
Tribunal may, with the agreement of all parties to the dispute or upon the
application of one of the parties, order that the whole or part of the matter or
issue be consolidated or heard together upon such terms or conditions as the
Tribunal thinks fit.  

33.2       Waiver of immunity     The Company irrevocably and unconditionally:  
  (a)       agrees not to claim any immunity from proceedings brought by a
Finance Party against it in relation to a Finance Document and to ensure that no
such claim is made on its behalf;     (b) consents generally to the giving of
any relief or the issue of any process in connection with those proceedings; and
    (c) waives all rights of immunity in respect of it or its assets.

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SCHEDULE 1

PART 1

REPLACEMENT LENDERS, LOANS AND COMMITMENTS

Facility  Aggregate Amount  Replacement  Amount of  Amount of Loans    of
Commitment and  Lender  Commitment  Retained/Assigned    Loans   
Retained/Assigned    Term Loan        RMB56,000,000                             
  JPMorgan Chase  RMB 16,800,000 – fully  RMB 16,800,000        Bank (China) 
funded        Company            Limited,            Shanghai Branch           
HSBC Bank  RMB 16,800,000 – fully  RMB 16,800,000      (China)  funded         
Company          Limited,          Shanghai Branch            Citibank (China) 
RMB 11,200,000 – fully  RMB 11,200,000      Co., Ltd.  funded        Shanghai
Branch            Bank of America  RMB 11,200,000 – fully  RMB 11,200,000     
N.A. Shanghai  funded        Branch        Revolving  RMB130,000,000       
Credit                JPMorgan Chase  RMB 39,000,000 – fully  RMB 39,000,000   
  Bank (China)  funded, subject to        Company  Clauses 6.2 (Repayment       
Limited,  of Revolving Credit        Shanghai Branch  Loans) & 7.6 (Re-         
borrowing of Revolving          Credit Loans)          HSBC Bank  RMB39,000,000
– fully  RMB 39,000,000      (China)  funded, subject to        Company  Clauses
6.2 (Repayment        Limited,  of Revolving Credit        Shanghai Branch 
Loans) & 7.6 (Re-          borrowing of Revolving Credit Loans)   

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Facility  Aggregate Amount  Replacement  Amount of  Amount of Loans    of
Commitment and  Lender  Commitment  Retained/Assigned          Loans         
      Retained/Assigned              Citibank (China)  RMB 26,000,000 --  RMB
26,000,000        Co., Ltd.  fully funded, subject to            Shanghai
Branch  Clauses 6.2 (Repayment          of Revolving Credit          Loans) &
7.6 (Re-          borrowing of Revolving          Credit Loans)          Bank of
America  RMB 26,000,000 --  RMB 26,000,000      N.A. Shanghai  fully funded,
subject to        Branch  Clauses 6.2 (Repayment            of Revolving Credit 
        Loans) & 7.6 (Re-          borrowing of Revolving          Credit
Loans)   

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SCHEDULE 1

PART 2

ADMINISTRATIVE DETAILS OF REPLACEMENT LENDERS

Name  Facility Office  Notice Address  JPMorgan Chase Bank        Shanghai 
      31F, HSBC Building  (China) Company    1000 Lujiazui Ring Road  Limited,
Shanghai    Shanghai 200120, P.R. China  Branch      Attn: Christine Lin/Carol
Cz Cai/Betty Wang        Fax: 86-21-6160-2707        27/F, Chater House      8
Connaught Road      Central, Hong Kong      Attn: Sara Wong      Fax:
852-2836-9672    Citibank (China) Co.,  Shanghai  34F Citigroup Tower, 33 Hua
Yuan Shi Qiao Road  Ltd. Shanghai Branch    Shanghai, 200120 P.R. China     
Attn:   Zheng Jie      Tele. # 86-21-2896-6535     
Fax:    86-21-5879-5936/8621-5879-5937        34F Citigroup Tower, 33 Hua Yuan
Shi Qiao Road      Shanghai, 200120 P.R. China      Attn:   Zhang Ling     
Tele. # 86-21-2896-6130      Fax:    86-21-5879-1132        34F Citigroup Tower,
33 Hua Yuan Shi Qiao Road      Shanghai, 200120 P.R. China      Attn:   Grace
Zhou      Tele. # 86-21-2896-6504      Fax:    86-21-5879-5936/8621-5879-5937   
    34F Citigroup Tower, 33 Hua Yuan Shi Qiao Road,      Shanghai, 200120 P.R.
China      Attn:   Zhang Xun      Tele. # 86-21-2896-6193     
Fax:    86-21-5879-1132    Bank of America N.A.  Shanghai  42/F IFC II Central
Hong Kong  Shanghai Branch    Attn:   Sandra Y.K. Wong      Tele. #
852-2847-5852      Fax:    852-2847-5886 

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Name        Facility Office        Notice Address      17/F AZIA Centre      No
1233 Lujiazui Ring Road      Shanghai 200120, P.R. China      Attn:   Clara
Wang        Tele. # 86-21-6160-8818      Fax:     86-21-6160-8955        17/F
AZIA Centre      No 1233 Lujiazui Ring Road      Shanghai 200120, P.R. China   
  Attn:   Jenny Xue        Tele. # 86-21-6160-8888      Fax:     86-21-616-8735 
      17/F AZIA Centre      No 1233 Lujiazui Ring Road      Shanghai 200120,
P.R. China      Attn:   Louis Meng      Tele. # 86-21-6160-8710     
Fax:     86-21-6160-8735    HSBC Bank (China)  Shanghai  35th Floor, HSBC Tower 
Company Limited,    1000 Lujiazui Ring Road, Pudong,  Shanghai Branch   
Shanghai 200120, P.R. China      Attn:   Chester Zhu      Tele. #
86-21-3888-1995      Fax:     86-21-6841-1435        35th Floor, HSBC Tower     
1000 Lujiazui Ring Road, Pudong,      Shanghai 200120, P.R. China      Attn:  
Caprie Xue      Tele. # 86-21-3888-2373      Fax:     86-21-6841-0199 

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SCHEDULE 2

CONDITIONS PRECEDENT DOCUMENTS

PART 1

Obligors

1.       A copy of each of the following constitutional documents:     (a)      
in relation to the Company:       (i) a copy of the current business licence of
the Company issued by the State Administration of Industry and Commerce of the
PRC or its relevant local branch;       (ii) a copy of the approval certificate
issued by the Ministry of Commerce of the PRC or its relevant local branch in
respect of the Company;       (iii) the current foreign exchange registration
certificate issued to the Company by SAFE or its relevant local branch;      
(iv) the Articles of Association together with its amendments (if any);      
(v) a copy of the approval issued by Ministry of Commerce of the PRC or its
relevant local branch approving the establishment of the Company and its
articles of association;       (vi) the capital contribution verification report
issued by a qualified accounting firm or other person acceptable to the
Administrative Agent certifying the paid-up registered capital of the Company;  
    (vii) a list of the directors of the Company; and       (viii)       the
current loan card issued to the Company by the PBOC or its relevant local
branch; and     (b) in relation to the Guarantor, a copy of its:       (i)
certificate of incorporation; and       (ii) its bylaws.   2. A copy of a
resolution of the board of directors of each Obligor approving the terms of, and
the transactions contemplated by, the Finance Documents.   3. A
Director’s/Secretary’s Certificate for each Obligor substantially in the form of
Part 2 of this Schedule, including a specimen of the signature of each person
authorised on behalf of that Obligor to sign the Finance Documents or any other
document in connection with the Finance Documents.

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Finance Documents

4.       An original of this Agreement and the Guarantee each duly executed by
the parties to it.

Legal opinions

5. A legal opinion of Fangda Partners, PRC law legal advisers to the
Administrative Agent, addressed to the Finance Parties.   6.       Legal
opinions from the Guarantor’s counsel in respect of United States federal law
and the laws of the State of Connecticut, addressed to the Finance Parties; and
legal opinions from the Administrative Agent’s counsel in respect of the laws of
the State of New York, addressed to the Finance Parties.

Other documents and evidence

7.       A copy of the receipt for payment of all stamp duty in respect of this
Agreement under PRC laws and regulations.   8. Evidence that all fees and
expenses then due and payable from the Company under the Finance Documents have
been or will be paid by the first Utilisation Date.   9. A copy of any other
authorisation or other document, opinion or assurance, together with any
necessary translations, which the Administrative Agent has notified the Company
is necessary or desirable in connection with the entry into and performance of,
and the transactions contemplated by, any Finance Document or for the validity
and enforceability of any Finance Document.

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PART 2

FORM OF DIRECTOR’S/SECRETARY’S CERTIFICATE

To:      JPMorgan Chase Bank (China) Company Limited, Shanghai Branch as
Administrative Agent

PHOTRONICS IMAGING TECHNOLOGIES (SHANGHAI) CO., LTD
RMB186,000,000 Amended and Restated Credit Agreement dated August 23, 2007 (the
Agreement)

I refer to the Agreement. Terms defined in the Agreement have, unless defined in
this certificate, the same meaning when used in this certificate.

I am [a director of Photronics Imaging Technologies (Shanghai) Co., Ltd. (the
Company)][[Secretary] of Photronics, Inc. (the Guarantor)]. I am authorised to
give this certificate and certify as follows:

1.      

Each document delivered by the Company to the Administrative Agent in respect of
the Company/Guarantor under Schedule 2 (Conditions precedent documents) to the
Agreement (including the documents listed below and attached to this
certificate) is true and complete in all material respects and is in full force
and effect on the date of this certificate:

    [include following for Company’s director certificate]     (a)      

the current business licence of the Company issued by the State Administration
of Industry and Commerce of the PRC or its relevant local branch;

    (b)

the approval certificate issued by the Ministry of Commerce of the PRC or its
relevant local branch in respect of the Company;

    (c)

the current foreign exchange registration certificate issued to the Company by
SAFE or its relevant local branch;

    (d)

the Articles of Association of the Company, together with its amendments (if
any);

    (e)

the approval issued by Ministry of Commerce of the PRC or its relevant local
branch approving the establishment of the Company and its articles of
association;

    (f)

the capital contribution verification report issued by a qualified accounting
firm or other person acceptable to the Administrative Agent certifying the
paid-up registered capital of the Company;

    (g)

a list of the directors of the Company;

    (h)

the current loan card issued to the Company by the PBOC or its relevant local
branch; and

    (i)

the minutes of a meeting of the Board of Directors of the Company held on [ ].

    [include following for Guarantor’s Secretary’s certificate]     (a)

the certificate of registration of the Guarantor;

    (b)

the By-laws of the Guarantor; and

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(c)       the minutes of resolutions passed at a meeting of the Board of
Directors of the Guarantor held on [        ].   Neither the entry into of the
Finance Documents by the [Company/Guarantor], nor the exercise by it of its
rights or performance of its obligations under the Finance Documents will breach
any borrowing or other power or restriction binding on the [Company/Guarantor]
under its articles of association.   2.       Each resolution adopted at the
meeting referred to above is in full force and effect without modification.   3.
The resolutions constitute all corporate action necessary on the part of the
[Company/Guarantor] to:     (a)       approve the terms of and transactions
contemplated by the Finance Documents; and     (b) authorise the signing of, any
communications and/or other action under or in connection with, the Finance
Documents.   4. The following is a complete list of all persons who are
directors of the [Company/Guarantor] as at the date of this Certificate and who
were Directors on the date of the meeting referred to above.     [      ]   5.
Each person listed below:     (a) occupies the position stated against his name
(and occupied that position on the date each Finance Document was signed by
him);     (b) is the person duly authorised in the minutes to sign the Finance
Documents (and any other document in connection with the Finance Documents) on
behalf of the [Company/Guarantor]; and     (c) has his true signature appearing
opposite his name.  

                   Name  Position  Specimen Signature   

6.       Unless disclosed to the Administrative Agent in writing, the
[Company/Guarantor] has not created any Security Interests (other than Permitted
Security Interests) which are subsisting at the date of this Certificate.   7.
Unless we notify you to the contrary in writing, you may assume that this
Certificate remains true and correct.   8. At the date of this certificate, the
[Company/Guarantor] is solvent.

For

[      ]

[Director][Secretary] 

62 
 

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SCHEDULE 3

FORM OF REQUEST

To:      JPMorgan Chase Bank (China) Company Limited, Shanghai Branch

From: [      ]

Date: [      ]

PHOTRONICS IMAGING TECHNOLOGIES (SHANGHAI) CO., LTD
RMB186,000,000 Amended and Restated Credit Agreement dated August 23, 2007 (the
Agreement)

1.       We refer to the Agreement. This is a Request.   2. We wish to borrow a
[Term Loan/Revolving Credit Loan] on the following terms:     (a)      
Utilisation Date: [      ]     (b) Amount: RMB[      ]     (c) [Maturity Date:
[      ].] [Include for a Revolving Credit Loan.]   3.    Our payment
instructions are: [      ].   4. We confirm that each condition precedent under
the Agreement which must be satisfied on the date of this Request is so
satisfied. In particular, we confirm that, as at the date of this Request:    
(a) the Repeating Representations are correct in all material respects; and    
(b) no Default is outstanding or would result from the Loan.   5. This Request
is irrevocable.

By:

PHOTRONICS IMAGING TECHNOLOGIES (SHANGHAI) CO., LTD

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SCHEDULE 4

FORM OF TRANSFER CERTIFICATE

To:      JPMorgan Chase Bank (China) Company Limited, Shanghai Branch, as
Administrative Agent

From: [EXISTING LENDER] (the Existing Lender) and [NEW LENDER] (the New Lender)

Date:  [      ]

Photronics Imaging Technologies (Shanghai) Co., Ltd. – RMB186,000,000 Amended
and Restated Credit
Agreement
dated August 23, 2007 (the Agreement)

We refer to the Agreement. This is a Transfer Certificate.

1.       The Existing Lender transfers by novation to the New Lender the
Existing Lender’s rights and obligations referred to in the Schedule below in
accordance with the terms of the Agreement.   2. The proposed Transfer Date is
[      ].   3. The administrative details of the New Lender for the purposes of
the Agreement are set out in the Schedule.   4. The New Lender expressly
acknowledges the limitations on the Existing Lender’s obligations in respect of
this Transfer Certificate contained in the Agreement.   5. This Transfer
Certificate may be executed in any number of counterparts and this has the same
effect as if the signatures on the counterparts were on a single copy of the
Transfer Certificate.   6. This Transfer Certificate is governed by PRC law.

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SCHEDULE

to

TRANSFER CERTIFICATE

Rights and obligations to be transferred by novation
[insert relevant details, including applicable Commitment (or part)]

Administrative details of the New Lender
[insert details of Facility Office, address for notices and payment details
etc.]

 

[EXISTING LENDER]  [NEW LENDER]    By:  By: 

The Transfer Date is confirmed by the Administrative Agent as [      ].

JPMORGAN CHASE BANK (CHINA) COMPANY LIMITED, SHANGHAI BRANCH

By:

Note: It is the responsibility of each New Lender to ascertain whether any other
document or formality is required to perfect the transfer contemplated by this
Transfer Certificate or to take the benefit of any interest in any security.

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This Agreement has been entered into on the date stated at the beginning of this
Agreement.

SIGNATORIES

Company

PHOTRONICS IMAGING TECHNOLOGIES (SHANGHAI) CO., LTD.

By:

 

Administrative Agent

JPMORGAN CHASE BANK (CHINA) COMPANY LIMITED, SHANGHAI BRANCH

By:

 

Replacement Lenders

JPMORGAN CHASE BANK (CHINA) COMPANY LIMITED, SHANGHAI BRANCH

By:

 

CITIBANK (CHINA) CO., LTD. SHANGHAI BRANCH

By:

 

BANK OF AMERICA N.A. SHANGHAI BRANCH

By:

 

HSBC BANK (CHINA) COMPANY LIMITED, SHANGHAI BRANCH

By:

 

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