CNCN form 8k 03-15-2007 EX 10.1


    


    


    


    


    


    


    


    


    


    


    


    CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT

    


    


    by
      and
      between

    


    


    


    


    Cintel
      Corp.

    


    


    and

    


    


    Woori
      Private Equity Fund

    


    


    


    


    


    


    


    


    


    


    


    


    March
      15,
      2007

    


    


    


    


    


    


    
      
        
          
          

        

        
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    CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT

    


     

    This
      CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT (the "Agreement")
      is
      made and entered into as of March 15, 2007 by and between the parties stated
      hereunder:

     

    
      	(1)  	
              CINTEL
                CORP., a
                corporation incorporated under the laws of the State of Nevada having
                its
                principal office at 9900 Corporate Campus Drive Suite 3000 Louisville,
                KY
                40223, U.S.A. (the “Company”);
                and

            


    

     

    
      	(2)  	
              WOORI
                PRIVATE EQUITY FUND,
                a
                company incorporated under the laws of the Republic of Korea
                (“Korea”)
                having its principal office at 20Fl,
                Youngpoong Bldg., 33 Seorin-dong, Chongno-gu, Seoul, Korea
                (the “Subscriber”).
                

            


    

     

    RECITALS

     

    WHEREAS, the
      Company has authorized the sale of convertible bonds in an aggregate principal
      amount of Korean Won (“KRW”
or
      “Won”)
      60,000,000,000 (Sixty Billion Won) (the “Bonds”
or
      “Convertible
      Bonds”),
      convertible into shares of the Company’s common stock, having the par value of
      0.001 United States Dollars (“USD”)
      (the
“Common
      Stock”);

     

    WHEREAS,
      the
      Subscriber desires to subscribe for the Bonds on the terms and conditions set
      forth herein; and

     

    WHEREAS,
      the
      Company and the Subscriber are executing and delivering this Agreement in
      reliance upon the exemption from securities registration afforded by Section
      4(2) and/or Regulation S of the United States Securities Act of 1933, as amended
      (the “U.S.
      Securities Act”)
      and
      its applicable state securities laws. 

     

    NOW
      THEREFORE,
      in
      consideration of the foregoing recitals and the mutual promises,
      representations, warranties and covenants hereinafter set forth and for other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows:

     

    1.     ISSUANCE
      OF THE CONVERTIBLE BONDS. 

     

    Pursuant
      to the terms and conditions set forth in this Agreement on the Closing Date
      (as
      defined below), the Company shall issue to the Subscriber, and the Subscriber
      shall subscribe for, KRW 60,000,000,000 (Sixty Billion Won) Convertible Bonds
      due on April 12, 2012, in accordance with the terms and conditions set forth
      in
      Exhibit A. The Bonds will be issued at an issue price (the “Subscription
      Price”)
      equal
      to 100 per cent. of the principal amount of the Bonds.

     

    


    2.     PAYMENT
      OF SUBSCRIPTION PRICE FOR THE CONVERTIBLE BONDS. 

     

    The
      Subscription Price for the Convertible Bonds shall be paid or caused to be
      paid
      by the Subscriber to the Company at 10 a.m., Seoul, Korea, on the Closing Date
      in same day funds.

     

    


    
      
        
        

      

      
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    3.     CLOSING
      

     

    3.1           
      Closing
      Date and Place.
      The
      closing of the issuance and subscription of the Convertible Bonds (the
“Closing”)
      will
      be held at the offices of the Subscriber or such other place as agreed between
      the parties hereto, at 10 a.m., Seoul, Korea time, on April 12, 2007, or such
      other date as agreed between the parties hereto (the “Closing
      Date”).
      

     

    3.2      Conditions
      to Closing.
      The
      Closing is conditional upon fulfillment or waiver by the Company of the
      followings:

     

    
      	(i)  	
              The
                issue and subscription of the Convertible Bonds on the terms and
                conditions herein provided shall not violate any requirements of
                law
                applicable to the Company or the Subscriber;


            


    

     

    
      	(ii)  	
              The
                Subscriber and the Company shall have completed or obtained all requisite
                governmental or internal approvals, consents and filing of reports;
                and

            


    

    


    
      	(iii)  	
              Affiliates
                of Bokwang Group, such as Phoenix Development & Investment Co., Ltd.,
                Phoenix Digital Tech Co., Ltd., etc. shall have subscribed to the
                convertible bonds issued by the Company in the amount of at least
                KRW 10
                billion under the terms and conditions that are not more favorable
                for the
                foregoing parties than those for the Subscriber, on or prior to the
                Closing Date. “Bokwang
                Group” means the corporate conglomerate as designated as Bokwang Group
                pursuant to the Monopoly Regulation and Fair Trade Act of Korea
                (“MRFTA”)
                and the “Affiliate” has the meaning as defined in the
                MRFTA.

            


    

    


    3.3     
Closing
      Deliveries

    


     

    3.3.1    Closing
      Deliveries
      of the Company.
      On the
      Closing Date, the Company shall deliver or cause to be delivered to the
      Subscriber all the following documents at the same time, in form and substance
      reasonably satisfactory to the Subscriber:

     

    


    
      	(i)  	
              a
                receipt signed by a duly authorized officer of the Company, acknowledging
                receipt of the Subscription Price;

            


    

     

    
      	(ii)  	
              bond
                certificates representing the Convertible Bonds;
                

            


    

     

    
      	(iii)  	
              a
                certificate of a duly authorized officer of the Company attaching
                copies,
                certified by such officer as true and complete, of the resolutions
                of its
                board of directors in connection with the authorization and approval
                of
                the execution, delivery and performance of this Agreement and the
                consummation of the transaction contemplated hereunder and of all
                other
                documents evidencing all necessary corporate action taken in connection
                therewith; 

            


    

     

    
      	(iv)  	
              a
                certified copy of the Commercial Registry extract of the Company
                or
                equivalent documents in the jurisdiction of the Company, dated as
                of a
                date no later than the date hereof;

            


    

     

    
      	(v)  	
              the
                Articles of Incorporation of the Company or equivalent documents
                in the
                jurisdiction of the Company; and

            


    

     

    
      	(vi)  	
              such
                other documents as the Subscriber may reasonably
                request.

            


    

     

    3.3.2     Closing
      Deliveries of the Subscriber. On or prior to the Closing Date, the Subscriber
      shall deliver or cause to be delivered to the Company the following, in form
      and
      substance reasonably satisfactory to the Company:

     

    
      
        
        

      

      
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      	(i)  	
              a
                certificate from a duly authorized officer of the Subscriber attaching
                copies, certified by such officer as true and complete, of the resolutions
                of its board of directors or committee in connection with the
                authorization and approval of the execution, delivery and performance
                of
                this Agreement and the consummation of the transaction contemplated
                hereunder and of all other documents evidencing all necessary corporate
                action taken in connection therewith;


            


    

     

    
      	(ii)  	
              a
                certified copy of the Commercial Registry extract for the Subscriber,
                dated as of a date no later than the date hereof;
                and

            


    

     

    
      	(iii)  	
              such
                other documents as the Company may reasonably request.
                

            


    

     

    


    4.    TERMINATION

    


    4.1  
Termination
      of Agreement. This Agreement may be terminated by notice in writing at any
      time
      prior to the Closing by:

     

    
      	(i)  	
              the
                Company or the Subscriber, if any governmental authority of competent
                jurisdiction shall have issued any judgment, injunction, order, ruling
                or
                decree or taken any other action restraining, enjoining or otherwise
                prohibiting the consummation of the transactions contemplated by
                this
                Agreement and such judgment, injunction, order, ruling, decree or
                other
                action becomes final and non-appealable; provided, that the party
                seeking
                to terminate this Agreement pursuant to this clause (i) shall have
                used its best and reasonable efforts to have such judgment, injunction,
                order, ruling or decree lifted, vacated or
                denied;

            


    

     

    
      	(ii)  	
              the
                Company and the Subscriber, if the Company and the Subscriber so
                mutually
                agree in writing; 

            


    

     

    
      	(iii)  	
              the
                Company or the Subscriber, if there has been a material breach on
                the part
                of the other party of its representations, warranties and undertakings,
                and the failure to perform its obligations, set forth in this Agreement
                and the other party fails to cure such breach in fourteen (14) calendar
                days after the other party receives a notice of such breach;
                and

            


    

     

    
      	(iv)  	
              the
                Company or the Subscriber, if any of the conditions specified Section
                3.2
                hereof has not been satisfied or
                waived.

            


    

     

    4.2   Effect
      of
      Termination. If this Agreement is terminated in accordance with Section 4.1
      hereof and the transactions contemplated hereby are not consummated, this
      Agreement shall become null and void and shall be of no further force and
      effect. No party shall be under any liability to the other party in respect
      of
      this Agreement, only if this Agreement is terminated pursuant to Article 4.1(i)
      and (ii) hereof. 

     

    4.3   Indemnification.
      In case of termination hereof under Article 4.1(iii) or (iv) above, the party
      with the fault causing such termination shall indemnify and hold the other
      party, its directors, officers, employees, sub-contractors or agents harmless
      from any and all reasonable losses and damages incurred by the non-breaching
      party.

     

    


    5.     
      Representations,
      Warranties and Undertakings of the Subscriber.

     

        5.1    Representations
      and Warranties: The Subscriber represents to the Company as of the date of
      this
      Agreement and as of the Closing Date that:

    


    
      
        
        

      

      
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      	a.  	
              Organization
                and Qualification. The Subscriber is duly organized and validly existing
                under the law of the jurisdiction in which it is incorporated, and
                has the
                requisite corporate power to own its properties and to carry on their
                business as now being conducted. The Subscriber is duly qualified
                to do
                business in every jurisdiction in which the nature of the business
                conducted by it makes such qualification necessary and where the
                failure
                so to qualify would have a Material Adverse Effect. “Material
                Adverse Effect”
                means any material adverse effect on the business, properties, operations,
                assets, financial condition or results of operations of the Subscriber
                or
                the Company, as the case may be, taken as a whole, or on the transactions
                contemplated hereby or by the agreements or instruments to be entered
                into
                in connection herewith.

            


    

    


    
      	b.  	
              Authorization;
                Enforcement. (i) The Subscriber has the requisite corporate power
                and
                authority to execute and deliver this Agreement and to perform its
                obligations under this Agreement in accordance with the terms hereof
                and
                thereof, (ii) the execution and delivery of this Agreement by the
                Subscriber and the consummation by it of the transactions contemplated
                hereby and thereby have been duly authorized by its board of directors
                or
                committee and no further consent or authorization of the Subscriber,
                or
                its board of directors, committee or stock holder is required, (iii)
                this
                Agreement has been duly executed and delivered, and (iv) this Agreement
                constitutes a valid and binding obligation of the Subscriber enforceable
                against the Subscriber in accordance with its
                terms.

            


    

    


    
      	c.  	
              Evaluation.
                The Subscriber has experiences in evaluating and investing in private
                placement transactions of securities in companies similar to the
                Company
                so that it is capable of evaluating the merits and risks of its investment
                in the Company and has the capacity to protect its own interests.
                The
                Subscriber must bear the economic risk of this investment until the
                Bonds
                are sold pursuant to (i) an effective registration statement under
                the
                U.S. Securities Act, or (ii) an exemption from
                registration.

            


    

     

    
      	d.  	
              Acquisition
                for Own Account. The Subscriber is acquiring the Bonds and the shares
                of
                Common Stock issuable upon conversion of the Bonds (the “Bond
                Shares”)
                for the Subscriber’s own account for investment only, and not with a view
                towards their distribution.

            


    

     

    
      	e.  	
              Non-Reliance.
                The Subscriber represents that by reason of its business and financial
                experience, the Subscriber has the capacity to protect its own interests
                in connection with the execution and delivery of this Agreement and
                the
                transactions contemplated in this
                Agreement.

            


    

     

    
      	f.  	
              No
                General Solicitation. Subscriber acknowledges that the Bonds were
                not
                offered to the Subscriber by means of any form of general or public
                solicitation or general advertising, or publicly disseminated
                advertisements or sales literature, including (i) any advertisement,
                article, notice or other communication published in any newspaper,
                magazine, or similar media, or broadcast over television on radio,
                or (ii)
                any seminar or meeting to which the Subscriber was invited by any
                of the
                foregoing means of communications. The Subscriber, in making the
                decision
                to purchase the securities, has relied upon independent investigation
                made
                by it and the representations, warranties and agreements set forth
                herein
                and has not relied on any information or representations made by
                third
                parties.

            


    

     

    
      	g.  	
              Legends.

            


    

     

    
      
        
        

      

      
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              (i)    The
        Bonds
        shall bear substantially the following legend until the Bonds and Bond Shares
        are covered by an effective registration statement filed with the Securities
        and  Exchange Commission (“SEC”):
        

    

     

    “THIS
      BOND AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS BOND HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
      OR, IF APPLICABLE, STATE SECURITIES LAWS. THIS BOND AND THE COMMON STOCK
      ISSUABLE UPON CONVERSION OF THIS BOND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
      OR HYPOTHECATED UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
      THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”

    


    
      	(ii)  	
              The
                Bond Shares shall bear a legend which shall be in substantially the
                following form until such shares are covered by an effective registration
                statement filed with the SEC:

            


    

     

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR IF APPLICABLE,
      STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
      OR HYPOTHECATED UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
      THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”

    


    6.    Representations,
      Warranties and undertakings of the Company. 

     

       
      6.1          Representations
      and Warranties: The Company represents to the Subscriber as of the date of
      this
      Agreement and the Closing Date that:

     

    
      	a.  	
              Organization
                and Qualification. The Company is duly organized and existing in
                good
                standing under the law of the jurisdiction in which it is incorporated,
                and has the requisite corporate power to own its properties and to
                carry
                on its business as now being conducted. The Company is duly qualified
                as a
                corporation to do business and is in good standing in every jurisdiction
                in which the nature of the business conducted by it makes such
                qualification necessary and where the failure so to qualify would
                have a
                Material Adverse Effect. 

            


    

    


    
      	b.  	
              Authorization;
                Enforcement. (i) The Company has the requisite corporate power and
                authority to execute and deliver this Agreement and to perform its
                obligations under this Agreement, and to issue the Bonds and Common
                Stock
                issuable upon conversion, in accordance with the terms hereof and
                thereof,
                (ii) the execution and delivery of this Agreement by the Company
                and the
                consummation by it of the transactions contemplated hereby and thereby
                have been duly authorized by its board of directors and no further
                consent
                or authorization of the Company, or its board of directors or stock
                holder
                is required, (iii) this Agreement has been duly executed and delivered,
                and (iv) this Agreement constitutes a valid and binding obligation
                of the
                Company enforceable against the Company in accordance with its
                terms.

            


    

    


    
      	c.  	
              Issuance
                of Bonds. The Bonds are duly authorized and are validly issued, fully
                paid
                and non-assessable, free of any encumbrances, and are not subject
                to
                preemptive rights of the Company’s Certificate of Incorporation, Bylaws
                and other constitutional documents.

            


    

    


    
      	d.  	
              No
                Conflicts. The execution, delivery and performance of this Agreement
                and
                the Bonds issued by the Company and the consummation by the Company
                of the
                transactions contemplated hereby will not (i) result in a violation
                of the
                Certificate of Incorporation, By-laws or other constitutional documents
                of
                the Company or (ii) conflict with, or constitute a default (or an
                event
                which with notice or lapse of time or both could become a default)
                in
                material respects under, or give to others any rights of termination,
                amendment or cancellation of, any agreement, indenture or instrument
                to
                which the Company is a party, or (iii) result in a violation of any
                law,
                rule, regulation, order, judgment or decree (including federal and
                state
                securities laws and regulations) in material respects applicable
                to the
                Company or by which any material property or asset of the Company
                is bound
                or affected.

            


    

    


    
      
        
        

      

      
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      	e.  	
              Third
                Party Consents. Except as specifically contemplated by this Agreement
                and
                as required under the U.S. Securities Act and the Korea Securities
                and
                Exchange Act and the regulations thereunder, the Company is not required
                to obtain any consent, authorization or order of, or make any filing
                or
                registration with, any court or governmental agency or any regulatory
                or
                self regulatory agency in order for it to execute, deliver or perform
                any
                of its obligations under this Agreement in accordance with the terms
                hereof or thereof.

            


    

    


    
      	f.  	
              Absence
                of Litigation. There is no action, suit, proceeding, inquiry or
                investigation before or by any court, public board, government agency,
                self-regulatory organization or body pending or, to the knowledge
                of the
                Company, threatened against or affecting the Company that is reasonably
                likely to have a Material Adverse
                Effect.

            


    

    


    
      	g.  	
              Patents,
                Copyrights, etc. The Company (i) owns or has the right to use, free
                and
                clear of all liens, claims, encumbrances, pledges, security interests,
                and
                other adverse interests of any kind whatsoever, all patents, inventions,
                know-how, trade secrets, trademarks, service marks, trade names,
                copyrights, technology, and all licenses and rights with respect
                to the
                foregoing, used in the conduct of its business as now conducted or
                proposed to be conducted without, to the best knowledge of the Company,
                infringing upon or otherwise acting adversely to the right or claimed
                right of any person, Company or other entity, (ii) is not obligated
                or
                under any liability whatsoever to make any payments by way of royalties,
                fees or otherwise to any owner or licensee of, or other claimant
                to, any
                patent, trademark, service mark, trade name, copyright, know-how,
                technology or other intangible asset, with respect to the use thereof
                or
                in connection with the conduct of its business or otherwise and (iii)
                has
                not received any notice of infringement of or conflict with asserted
                rights of others with respect to any of the foregoing which, singly
                or in
                the aggregate, if the subject of an unfavorable decision, ruling
                or
                finding, might have a Material Adverse
                Effect.

            


    

    


    
      	h.  	
              Taxes.
                The Company has filed or caused to be filed all income tax returns
                which
                is required to be filed and has paid or caused to be paid all taxes
                and
                all assessments received by them to the extent that such taxes and
                assessments have become due, except taxes and assessments the validity
                or
                amount of which is being contested in good faith by appropriate
                proceedings and with respect to which adequate reserves have been
                set
                aside, and except for such returns for which the failure to file
                would not
                have a Material Adverse Effect upon the Company. The Company has
                paid or
                caused to be paid, or has established reserves that the Company reasonably
                believes to be adequate in all material respects, for all federal
                income
                tax liabilities and state income tax liabilities applicable to the
                Company
                for all fiscal years which have not been examined and reported on
                by the
                taxing authorities (or closed by applicable
                statutes).

            


    

    


    
      	i.  	
              Security.
                The security conferred by the Company under this Agreement constitutes
                a
                first priority security interest over the Secured Assets (as defined
                in
                Article 6.2(c) hereof) and those Secured Assets are not subject to
                any
                prior or pari passu security
                interests.

            


    

    


    
      	j.  	
              No
                Material Adverse Change. There has been no material adverse change
                in the
                business and financial conditions of the Company since the date of
                its
                last audited financial statements.

            


    

    


    
      	k.  	
              No
                Violation of Law. The
                Company is not in violation of and is not under investigation with
                respect
                to and, to the best knowledge of the Company, has not been threatened
                to
                be charged with or given notice of any violation of, any law or government
                order, which would have a Material Adverse
                Effect.

            


    

    


    
      
        
        

      

      
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    6.2     Undertaking.
      The Company undertakes with the Subscriber that:

    


    
      	a.  	
              Listing.
                The Company shall apply for the listing of the Common Shares on any
                of
                NASDAQ, London Stock Exchange, Hong Kong Stock Exchange and Singapore
                Exchange Securities Trading Limited (collectively, “Stock
                Exchanges”)
                and use its best efforts to obtain such listing by October 31,
                2009.

            


    

    


    
      	b.  	
              Inspection
                and Information Provision. The
                Company shall prepare and deliver, to the extent permissible under
                the
                applicable law, to the Subscriber: (i) audited annual financial
                statements
                and management report within 90 days after the end of each fiscal
                year;
                (ii) unaudited quarterly financial and management information within
                45 days after the end of each quarter; (iii) material information
                concerning the management and operation of the Company at least on
                a
                monthly basis; (iv) copies of all documents or other information
                sent to
                any shareholder
                or
                bondholder that are material to the rights and/or obligations of
                the
                Subscriber; (v) annual budget within 30 days prior to the end of
                each
                fiscal year, if such annual budget has been prepared; and (vi) copies
                of
                any material reports filed by the Company with any relevant securities
                exchange, regulatory authority or government agency.
                The Company shall make available to the Subscriber the directors
                or other
                responsible officers of the Subscriber as to the matters relating
                to this
                Agreement and copies of all notices, statements and documents in
                connection therewith that the Subscriber may reasonably request.
                More
                specifically, while the Subscriber is a shareholder or bondholder
                of the
                Company,
                the Company shall (i) give the Subscriber and its representatives
                reasonable access to the offices and properties during normal business
                hours of the Company and to books and records of the Company; (ii)
                furnish
                to the Subscriber and its advisors such financial and operating data
                and
                other information relating to the Company, to the extent permissible
                under
                the applicable law, as such persons shall reasonably request; and
                (iii)
                instruct employees and advisors of the Company to cooperate with
                the
                Subscriber in respect of the
                foregoing.

            


    

    


    
      	c.  	
              Security.
                The Company shall pledge and provide security in respect of the investment
                made by the Subscriber hereunder, by providing the following as security:
                All convertible bonds to be issued by any entity (the “Acquired
                Company”)
                and subscribed by the Company using the proceeds arising out of the
                issuance of the Bonds, in favor of the Company (and any shares converted
                from such convertible bonds) and all the shares of the Acquired Company
                to
                be owned by the Company (collectively, the “Secured
                Assets”).
                Unless specifically permitted under this Agreement or consented to
                by the
                Subscriber in writing, the Company may not encumber, pledge or dispose
                of
                the Secured Assets in any event. The Company shall cooperate with
                the
                Subscriber, in order to implement the pledge of the Secured Assets
                in the
                manner intended by the Subscriber, and the pledge hereunder shall
                be valid
                and effective until the earlier of (i) redemption of the last
                share/security of the Company owned by the Subscriber, or (ii) conversion
                of all of the Bonds owned by the Subscriber into equity shares of
                the
                Company. The Company and the Subscriber hereby agree that the security
                created as described above shall remain valid and effective with
                respect
                to the convertible bonds to be transferred to any special purpose
                entity
                managed or sponsored by Woori Private Equity Co., Ltd. in accordance
                with
                the Asset-Backed Securitization Act (as amended) or the Indirect
                Investment Asset Management Business Act (as amended) (the “SPE”),
                but that such security shall
                be released if the Subscriber transfers the convertible bonds to
                any
                entity other than the SPE. 

            


    

    


    
      
        
        

      

      
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      	d.  	
              Put/Redemption
                Option: The Subscriber shall have put/redemption option as follows:
                In
                case the Company does not go through the initial public offering
                process
                by October 31, 2009 for any reason not solely attributable to the
                Subscriber, the Subscriber shall be entitled to exercise its put
                option to
                redeem the Bonds at the face value thereof and shall also be entitled
                to
                receive from the Company the payment of interest on the outstanding
                principal balance of the Bonds calculated at the compounded rate
                of ten
                per cent. (10%) per annum. In case the Company goes through the initial
                public offering process prior to the end of October of 2009, the
                Subscriber shall be entitled, on or after the fourth anniversary
                of the
                issuance of the Bonds hereunder, to exercise its put option to redeem
                the
                Bonds at the face value thereof, in which case the Subscriber shall
                also
                be entitled to receive from the Company the payment of interest on
                the
                outstanding principal amount of the Bonds calculated at the compounded
                rate of eight per cent. (8%) per annum. In case of the occurrence
                of any
                Event of Default (as defined in the Terms and Conditions of the Bonds)
                by
                the Company hereunder, the Subscriber shall be entitled to exercise
                its
                put option to redeem the Bonds at the face value thereof if the said
                Event
                of Default is not cured within sixty (60) days of notice thereof,
                in which
                case the Subscriber shall also be entitled to receive from the Company
                the
                payment of default interest on the outstanding principal balance
                of the
                Bonds calculated at the compounded rate of nineteen per cent. (19%)
                per
                annum.

            


    

    


    
      	e.  	
              Notice
                Obligation: In case there is any material change at the Company,
                the
                Company shall promptly inform the Subscriber in
                writing.

            


    

    


    6.3     Negative
      Covenant. Unless specifically permitted in writing by the Subscriber, so long
      as
      any of the Bonds remain outstanding, the Company undertakes with the Subscriber
      that:

    


    
      	a.  	
              it
                will not provide or distribute any dividend or the like to its
                shareholders;

            


    

    


    
      	b.  	
              it
                will not acquire its own stock / treasury
                stock;

            


    

    


    
      	c.  	
              it
                will not issue any securities or stock option, except for securities
                issuable upon the exercise of presently outstanding options, warrants
                and
                other convertible bonds which have been in writing disclosed to the
                Subscriber as of the date of this Agreement
                ;

            


    

    


    
      	d.  	
              it
                will not issue any convertible bonds, bonds with warrants and/or
                other
                securities convertible into shares of the Company, with the exception
                for
                the convertible bonds agreed to be issued to KTB Networks in the
                amount of
                up to KRW 10 billion; provided, that the terms and conditions of
                issuance
                of such convertible bonds to KTB Networks shall not be more favorable
                than
                those for the Subscriber;

            


    

    


    
      	e.  	
              it
                will not take any steps for capital
                reduction;

            


    

    


    
      	f.  	
              it
                will not go through the delisting process nor take any steps that
                may
                cause the delisting of shares of the
                Company;

            


    

    


    
      	g.  	
              it
                will not enter into dissolution, liquidation, bankruptcy or other
                similar
                proceeding;

            


    

    


    
      	h.  	
              it
                will not merge, consolidate, spin-off, reorganize or take other similar
                steps;

            


    

    


    
      	i.  	
              it
                will not borrow, loan, incur debt/liability, provide guarantee for
                third
                party debts or take any other similar action, involving an amount
                equal to
                US$10 million or above in
                aggregate;

            


    

    


    
      	j.  	
              it
                will not acquire or subscribe any shares or interests of any other
                company/entity, other than the Acquired Company (which is approved
                by the
                Subscriber in writing), involving an amount equal to US$10 million
                or
                above in aggregate; and

            


    

    


    
      	k.  	
              it
                will not cause any change in
                control.

            


    

    


    
      
        
        

      

      
        -
          9
          -

        
          

        

      

      
        
        

      

    

    7.    Conversion
      of Convertible Bonds.

     

    7.1  
Mechanics
      of Conversion.

     

    
      	(i)  	
              In
                the event that the Subscriber has notified the Company of the Subscriber’s
                intention to sell the Bond Shares and the Bond Shares are included
                in an
                effective registration statement or are otherwise exempt from registration
                when sold: (1) Upon the conversion of the Bonds or part thereof,
                the
                Company shall, at its own cost and expense, take all necessary action
                (including the issuance of an opinion of counsel) to assure that
                the
                Company's transfer agent shall issue stock certificates in the name
                of the
                Subscriber (or its nominee) or such other persons as designated by
                the
                Subscriber and in such denominations to be specified representing
                the
                number of Bond Shares issuable upon such conversion; and (2) The
                Company
                warrants that no instructions other than these instructions have
                been or
                will be given to the transfer agent of the Common Stock and that
                the Bond
                Shares issued will be unlegended, free-trading, and freely transferable,
                and will not contain any legend restricting the resale or transferability
                of the Bond Shares other than the legends set out under Section
                5.1(i).

            


    

     

    
      	(ii)  	
              The
                Subscriber will give notice of his decision to exercise his right
                to
                convert some or all of the Bonds, which is within its sole discretion
                and
                at its option, by faxing or otherwise delivering an executed and
                completed
                notice of the number of shares to be converted to the Company (the
                “Notice
                of Conversion”).
                The Subscriber will not be required to surrender the Bonds until
                the
                Subscriber receives a certificate or certificates, as the case may
                be,
                representing the Bond Shares or until the Bonds has been fully satisfied.
                Each date on which a Notice of Conversion is faxed or delivered to
                the
                Company in accordance with the provisions hereof shall be deemed
                a
                “Conversion
                Date.”
                The Company will or will cause the transfer agent to transmit the
                Common
                Stock certificates representing the shares issuable upon conversion
                of the
                Bonds (and a certificate representing the balance of the Bonds not
                so
                converted, if requested by a Subscriber) to the Subscriber via express
                courier for receipt by the Subscriber within five (5) business days
                after
                receipt by the Company of the Notice of
                Conversion.

            


    

     

    


    8.     MISCELLANEOUS.

     

    8.1    Entire
      Agreement. This Agreement, the exhibits and schedules hereto, and the other
      documents delivered pursuant hereto constitute the full and entire understanding
      and agreement between the parties with regard to the subjects hereof and no
      party shall be liable or bound to any other in any manner by any
      representations, warranties, covenants and agreements except as specifically
      set
      forth herein and therein. 

     

    8.2    Notices.
      All notices required or permitted hereunder shall be in writing and shall be
      deemed effectively given: (a) upon personal delivery to the party to be
      notified, (b) when sent by confirmed telex or facsimile if sent during
      normal business hours of the recipient, if not, then on the next business day,
      (c) five days after having been sent by registered or certified mail,
      return receipt requested, postage prepaid, or (d) one day after deposit
      with a nationally recognized overnight courier, specifying next day delivery,
      with written verification of receipt. All communications shall be as follows
      at
      such other address as the Company or the Subscriber may designate by ten days
      advance written notice to the other parties hereto:

     

    
      
        
        

      

      
        -
          10
          -

        
          

        

      

      
        
        

      

    

    to
      the
      Company:

    


    Cintel
      Corp.

    9900
      Corporate Campus Drive Suite 3000

    Louisville,
      KY 40223

    U.S.A.

    


    Attention: Sang
      Don
      Kim

    Telephone
      No.: 822-512-2111

    Facsimile
      No.: 822-512-5111

    


    with
      a
      copy to 

    


    Pheonix
      Asset Management Inc.

    26th
      Fl.,
      Hanwha Securities Bldg.

    23-5,
      Yoido-dong, Youngdeungpo-gu

    Seoul
      150-717, Korea

    


    Attention: Stanley
      S.Y. Oh

    Telephone
      No.: 822-799-2202

    Facsimile
      No.: 822-799-2286

    


    to
      the
      Subscriber:

     

    Woori
      Private Equity Fund

    20Fl,
      Youngpoong Bldg., 33 Seorin-dong, Chongno-gu, Seoul, Korea 

    


    Attention Jung-Ho
      Kim

    Telephone
      No.: 822-399-7107

    Facsimile
      No.: 822-399-7118

    


    8.3    Titles
      and Subtitles. The titles of the sections and subsections of this Agreement
      are
      for convenience of reference only and are not to be considered in construing
      this Agreement.

     

    8.4    Facsimile
      Signatures; Counterparts. This Agreement may be executed by facsimile signatures
      and in any number of counterparts, each of which shall be an original, but
      all
      of which together shall constitute one instrument.

     

    8.5    Broker's
      Fees. Each party hereto represents and warrants that no agent, broker,
      investment banker, person or firm acting on behalf of or under the authority
      of
      such party hereto is or will be entitled to any broker's or finder's fee or
      any
      other commission directly or indirectly in connection with the transactions
      contemplated herein, except as specified herein with respect to the Company.
      

     

    8.6    Waiver
      of
      Immunity. Each of the parties hereto irrevocably waives any immunity to which
      it
      or its property may at any time be or become entitled, whether characterized
      as
      sovereign immunity or otherwise, from any set-off or legal action in Korea
      or
      elsewhere, including immunity from service of process, immunity from
      jurisdiction of any court or tribunal, and immunity of any of its property
      from
      attachment prior to judgment or from execution of a judgment.

    


    
      
        
        

      

      
        -
          11
          -

        
          

        

      

      
        
        

      

    

    8.7    Governing
      Law; Jurisdiction. This Agreement shall be governed by and construed in
      accordance with the laws of Korea, except for the laws of the United States
      of
      America or relevant state laws mandatorily applicable to the Company or the
      Bonds. The Seoul Central District Court of Korea shall have jurisdiction to
      settle any disputes which may arise out of or in connection with this Agreement
      and accordingly any legal action or proceedings arising out of or in connection
      with this Agreement shall be brought in such court.

    


    8.8    Successors
      in Interest. This Agreement may not be assigned or transferred by the Company
      without the prior written consent of the Subscriber. Except as otherwise
      provided herein, all provisions of this Agreement shall be binding upon, inure
      to the benefit of, and be enforceable by and against the respective heirs,
      executors, administrators, personal representatives and successors and permitted
      assigns of any of the parties to this Agreement. 

    


    8.9    Severability.
      If any term or other provision of this Agreement is invalid, illegal or
      incapable of being enforced by any rule of law or public policy, all other
      conditions and provisions of this Agreement shall nevertheless remain in full
      force and effect. Upon such determination that any term or other provision
      is
      invalid, illegal or incapable of being enforced, the parties hereto shall
      negotiate in good faith to modify this Agreement so as to effectuate the
      original intent of the parties as closely as possible. 

    


    8.10         
      Construction.
      Each party acknowledges that its legal counsel participated in the preparation
      of this Agreement and, therefore, stipulates that the rule of construction
      that
      ambiguities are to be resolved against the drafting party shall not be applied
      in the interpretation of this Agreement to favor any party against the
      other.

     

    8.11   Costs,
      Expenses and
      Taxes. Each of the Company and the Subscriber shall be responsible for any
      and
      all costs, expenses and taxes (including, without limitation, attorney fees)
      respectively incurred by it in connection with the execution and delivery of
      this Agreement and the performance of its obligations under this
      Agreement.

    


    8.12   Confidentiality.
      Each
      of
      the Company and the Subscriber agrees
      not to disclose to any person any information relating to the
      business, finances or other matters of the other party that it may have obtained
      as a result of the execution of this Agreement or of which it may otherwise
      become possessed as a result of being party to this Agreement or the performance
      of its obligations hereunder. Each
      of
      the Company and the Subscriber
      shall
      use all reasonable endeavors to prevent any such disclosure; provided, however,
      that the provisions of this Section 8.12 shall not apply:

    


    
      	(a)  	
              to
                the disclosure
                of
                any information: (i) to any person who is required to know the same
                to
                perform its obligations under this Agreement; (ii) already known
                to the
                recipient otherwise than as a result of entering into this Agreement;
                (iii) subsequently received by the recipient which it would otherwise
                be
                free to disclose; (iv) which is or becomes public knowledge otherwise
                than
                as a result of the breach of this Section 8.12 of the recipient;
                (v) to
                professional advisers or auditors who receive the same under a duty
                of
                confidentiality on a need to know basis; and (vi) with the consent
                of all
                the parties to whom such confidential information relates;
                and

            


    

    


    
      	(b)  	
              to
                any extent that the recipient is required to disclose any information
                pursuant to any law or order
                of
                any court or pursuant to any direction, request or requirement (whether
                or
                not having the force of law) of any governmental or other regulatory
                or
                taxation authority or stock exchange on which the Convertible Bonds
                are
                listed from time to time (including, without limitation, any official
                bank
                examiners or regulators).

            


    

    


    
      
        
        

      

      
        -
          12
          -

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof, the parties hereto have executed this CONVERTIBLE BONDS
      SUBSCRIPTION AGREEMENT as of the date set forth in the first paragraph
      hereof.

     

    
      	
              For
                and on behalf of

              Cintel
                Corp.

               

               

              /s/
                Sang Don Kim

               

              Name:
                Sang Don Kim

              Title:
                President and CEO

            	
              For
                and on behalf of

              Woori
                Private Equity Fund

               

               

              /s/
                Jung
                Ho Kim

               

              Name:
                Jung
                Ho Kim

              Title:
                Director

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    


    
      
        
          
          

        

        
          -
            13
            -

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      A

    THIS
      BOND
      AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS BOND HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
      OR, IF APPLICABLE, STATE SECURITIES LAWS. THIS BOND AND THE COMMON STOCK
      ISSUABLE UPON CONVERSION OF THIS BOND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
      OR HYPOTHECATED UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
      THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

    


    Convertible
      Bond - Cintel Corp. / Bond Certificate No.: [ ]

    


    
      	
              Korean
                Won 60,000,000,000 (Sixty Billion Korean Won)

            	
              April
                12, 2007 (the “Issue
                Date”)

            


    

    


    (representing
      one (1) Bond with the face value of Korean Won 60,000,000,000 (Sixty Billion
      Korean Won), provided that additional certificate(s) of different
      denomination(s) may be created by Cintel Corp. (the “Company”)
      in
      case of partial redemption or conversion of the Bonds by the Subscriber and/or
      the Holder) 

     

    This
      certificate is issued in respect of one (1) bond which is duly authorized issue
      of Korean Won 60,000,000,000 Convertible Bond due on April 12, 2012 (the
“Bond”)
      of the
      Company. References herein to the Conditions shall be to the terms and
      conditions of the Bond attached hereto (the “Conditions”).

    


    For
      value
      received, the Company, subject to and in accordance with the Conditions,
      promises to pay to Woori Private Equity Fund (the “Subscriber”)
      or its
      registered assigns (collectively the “Holder”)
      upon
      presentation and surrender of this Certificate the principal sum of Korean
      Won
      60,000,000,000 (Sixty Billion Korean Won) (or such other amount as is shown
      on
      the register of the bondholder with respect to the Bond as being represented
      by
      this Certificate) on April 12, 2012 (the “Maturity
      Date”)
      or on
      such earlier date as such sum becomes due and repayable under the Conditions,
      together with any other sums payable under the Conditions, all subject to and
      in
      accordance with the Conditions. 

    


    The
      coupon rate of the Bond shall be at the compounded interest rate of 2.3% per
      annum until the date of conversion thereof; however, if conversion right is
      not
      exercised during the conversion period (i.e., the period from the day after
      the
      Issue Date until one month prior to the Maturity Date), then regardless of
      the
      coupon rate, the Company shall guarantee a compounded interest rate of 8% per
      annum (which includes the coupon rate of 2.3%) in total on the Bond, provided,
      however, that the foregoing rate shall be changed from 8% per annum to 10%
      per
      annum, if the Company does not go through the initial public offering process
      by
      October 31, 2009 for any reason not solely attributable to the Holder. The
      Company shall pay interest in cash on the Interest Payment Date (as defined
      below), provided that if the Interest Payment Date is not a Business Day (as
      defined in the Conditions) then such payment shall be made on the first Business
      Day thereafter without bearing additional interest. “Interest
      Payment Date”
means
      a
      day falling every six month after the Issue Date up to the Maturity Date. At
      any
      time between the day after the Issue Date and one month prior to the Maturity
      Date, the Bond may, at the option of the Holder, be converted into common shares
      in the Company by the number of shares which will be calculated by dividing
      the
      principal amount of the Bond by 0.7 United States Dollars, and a remaining
      fractional amount, if any, which is less than the Conversion Price (as defined
      in the Terms and Conditions of the Bonds), shall be returned to the Subscriber
      without any interest on the Maturity Date. 

    


    
      
        
        

      

      
        -
          14
          -

        
          

        

      

      
        
        

      

    

    This
      Certificate is governed by, and shall be construed in accordance with, the
      laws
      of the Republic of Korea. The Company has submitted to the exclusive
      jurisdiction of the Seoul Central District Court of Korea for all purposes
      in
      connection with this Certificate.

    


    


    IN
      WITNESS WHEREOF the Company has caused this Certificate to be duly executed
      on
      its behalf and under its corporate seal.

    


    
      	
              CINTEL
                CORP.

            
	 
	 
	
              By:.                                        
                

            
	
              Name:
                Sang Don Kim

            
	
              Title:
                CEO/President

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
          
          

        

        
          -
            15
            -

          
            

          

        

        
          
          

        

      

    

    


     

    TERMS
      AND CONDITIONS OF THE BONDS

    


    


    The
      statements in these terms and conditions (the “Conditions”)
      constitute Korean Won 60,000,000,000 Convertible Bonds of Cintel Corp. (the
      “Company”)
      due on
      April 12, 2012 (the “Bonds”)
      and
      the holder of the Bonds (the “Holder”)
      is
      entitled to the benefit of and is bound by all the provisions of the Conditions.
      The term “Agreement” as used herein shall refer to the Convertible Bonds
      Subscription Agreement executed by and between the Company and the Subscriber
      dated as of March 15, 2007.

    


    1.          Status,
      Type, Denomination, Repayment of Principal and Interest

     

    The
      Bonds
      constitute direct, secured and unsubordinated obligations of the Company and
      rank at least with all other present and future debt and obligations of the
      Company. The Bonds are in registered form (Ki-Myoung-Shik).
      The
      Bonds are due and payable as follows:

    


    (A)  The
      principal amount of the Bonds, together with all accrued and unpaid interest
      then outstanding, shall be due and payable on April 12, 2012 (the “Maturity
      Date”).
      

     

    (B)  Certificate(s)
      of different denomination(s) may be created by the Company in case of partial
      redemption or conversion of the Bonds by the Subscriber and/or the
      Holder.
      

    


    (C)  The
      coupon rate of the Bonds shall be at the compounded interest rate of 2.3% per
      annum until the date of conversion thereof; however, if conversion right is
      not
      exercised during the conversion period (i.e., the period from the day after
      the
      Issue Date until one month prior to the Maturity Date), then regardless of
      the
      coupon rate, the Company shall guarantee a compounded interest rate of 8% per
      annum (which includes the coupon rate of 2.3%) in total on the Bonds, provided,
      however, that the foregoing rate shall be changed from 8% per annum to 10%
      per
      annum, if the Company does not go through the initial public offering process
      by
      October 31, 2009 for any reason not solely attributable to the Holder. The
      Company shall pay interest on the Interest Payment Date (as defined below),
      provided that if the Interest Payment Date is not a Business Day (as defined
      below) then such payment shall be made on the first Business Day thereafter
      without bearing additional interest. “Business
      Day”
means
      any day on which banks are open for business in Seoul. “Interest
      Payment Date”
means
      a
      day falling every six month after the Issue Date up to the Maturity
      Date.

    

      	2.  	
              Conversion

            


       

    

    (A)  Conversion
      Period and Conversion Price

     

    At
      any
      time between a day after the issuance date of the Bonds and one month prior
      to
      the Maturity Date, the Holder has a right to convert any Bond, whether wholly
      or
      in part, into shares of common stock of the Company (the “Common
      Shares”)
      at the
      option of the Holder (the “Conversion
      Right)”.
      The
      number of the Common Shares to be issued will be determined by dividing the
      principal amount of the Bonds deposited for conversion (translated into United
      States Dollars at the fixed rate of United States Dollars 1.00 = Korean Won
      900)
      by the Conversion Price, as adjusted herein, at the Conversion Date (both as
      hereinafter defined), and a remaining fractional amount, if any, which is less
      than the Conversion Price shall be returned to the Holder without any interest
      on the Maturity Date. 

     

    The
      price
      at which the Common Shares of the Company will be issued upon conversion will
      be
      United States Dollars 0.7 per Common Share (the “Initial
      Conversion Price”)
      but
      will be subject to adjustment in the manner provided in Conditions 2(C) and
      2(D)
      (the “Conversion
      Price”).

     

    
      
        
        

      

      
        -
          16
          -

        
          

        

      

      
        
        

      

    

    (B)  Procedure
      for Conversion

     

     

    To
      exercise the Conversion Right attaching to any Bond, the Holder must complete,
      execute and deposit at his own expense during normal business hours at the
      specified office of the Company a notice of conversion (a “Conversion
      Notice”)
      in
      duplicate in the form obtainable from the Company together with the relevant
      Bond. 

    


    The
      date
      on which any Bond and the Conversion Notice (in duplicate) relating thereto
      are
      deposited with the Company or, if later, the date on which all conditions
      precedent to the conversion thereof are fulfilled is hereinafter referred to
      as
      the “Deposit
      Date”
      applicable to such Bond and must fall at a time when the Conversion Right
      attaching to such Bond is expressed in these Terms and Conditions to be
      exercisable. The request for conversion shall be deemed to have been made at
      23:59 hours (New York time) on the Deposit Date applicable to the relevant
      Bond
      (herein referred to as the Conversion
      Date
      applicable to such Bond). A Conversion Notice once deposited may not be
      withdrawn without the consent in writing of the Company.

     

    With
      effect from the Conversion Date, the Company will deem the converting Holder
      to
      have become the holder of record of the number of Common Shares to be issued
      to
      such Holder upon such conversion (disregarding any retroactive adjustment of
      the
      Conversion Price referred to below prior to the time such retroactive adjustment
      shall have become effective). Thereafter the Company will, subject to any
      applicable limitations then imposed by United States laws and regulations,
      according to the request made in the relevant Conversion Notices, cause its
      share transfer agent as soon as practicable, and in any event within 10 Business
      Days after the Conversion Date, (i) to deliver or cause to be delivered to
      the
      order of the person named for that purpose in the relevant Conversion Notice
      for
      the time being of the share transfer agent a certificate or certificates for
      the
      relevant Shares registered in the name of the converting Holder or, in cases
      permitted under United States law, any other person named for that purpose
      in
      the relevant Conversion Notices, or (ii) to credit the relevant Shares to the
      electronic book-entry account of the converting Holder, together with any other
      securities, property or cash (including, without limitation, cash payable
      pursuant to Condition 2) required to be delivered upon conversion and such
      assignments and other documents (if any) as may be required by law to effect
      the
      delivery thereof. 

     

    Any
      dividend on the Common Shares issued upon conversion of a Bond or Bonds with
      respect to the Fiscal Period (as defined below) during which the relevant
      Conversion Date falls will be paid with respect to the full Fiscal Period on
      the
      basis that the conversion took effect immediately before the beginning of such
      Fiscal Period. The Common Shares issued upon conversion of the Bonds will in
      all
      other respect rank pari passu with the Common Shares in issue on the relevant
      Conversion Date (except for any right the record date for which precedes such
      Conversion Date and any other right excluded by mandatory provisions of
      applicable law). “Fiscal
      Period”
      means an
      annual period commencing on January 1 and ending on December 31 in any year
      unless changed in accordance with the provisions of the Article of Incorporation
      of the Company.

     

    (C)  Adjustment
      of Conversion Price

    


    
      
        
        

      

      
        -
          17
          -

        
          

        

      

      
        
        

      

    

    The
      Conversion Price shall be subject to adjustment as follows:

    
      	(i)(x)  	
              If
                the Company shall (a) make a free distribution of Common Shares,
                (b)
                sub-divide its outstanding Common Shares, (c) consolidate its outstanding
                Common Shares into a smaller number of Common Shares, or (d) re-classify
                any of its Common Shares into other securities of the Company, then
                the
                Conversion Price shall be appropriately adjusted so that the Holder,
                the
                Conversion Date in respect of which occurs after the coming into effect of
                the adjustment described in this paragraph (i)(x), shall be entitled
                to
                receive the number of Common Shares or other securities of the Company
                which he would have held or have been entitled to receive after the
                happening of any of the events described above had such Bond been
                converted immediately prior to the happening of such event (or, if
                the
                Company has fixed a prior record date for the determination of
                shareholders entitled to receive any such free distribution of Common
                Shares or other securities issued upon any such sub-division,
                consolidation or re-classification, immediately prior to such record
                date), but without prejudice to the effect of any other adjustment
                to the
                Conversion Price made with effect from the date of the happening
                of such
                event (or such record date) or at any time thereafter. An adjustment
                made
                pursuant to this paragraph (i)(x) shall become effective immediately
                on
                the relevant event referred to above becoming effective or, if a
                record
                date is fixed therefor, immediately after such record date; provided,
                that in the case of a free distribution of Common Shares which must,
                under
                the applicable law, be submitted for approval to a general meeting
                of
                shareholders or be approved by a meeting of the Board of Directors
                of the
                Company before being legally paid or made, and which is so approved
                after
                the record date fixed for the determination of shareholders entitled
                to
                receive such distribution, such adjustment shall, immediately upon
                such
                approval being given by such meeting, become effective retroactively
                to
                immediately after such record date.

            


    

    


    If
      the
      Company shall authorize a free distribution of Common Shares which distribution
      is to be paid or made to shareholders as of a record date which is
      also:

    


    
      	(a)  	
              the
                record date for the issue of any rights or warrants which requires
                an
                adjustment of the Conversion Price pursuant to paragraph (ii) or
                (iii)
                below;

            


    

    


    
      	(b)  	
              the
                day immediately before the date of issue of any securities convertible
                into or exchangeable for Common Shares which requires an adjustment
                of the
                Conversion Price pursuant to paragraph (v)
                below;

            


    

    


    
      	(c)  	
              the
                day immediately before the date of issue of any Common Shares which
                requires an adjustment of the Conversion Price pursuant to paragraph
                (vi)
                below; or 

            


    

    


    
      	(d)  	
              the
                day immediately before the date of issue of any rights or warrants
                which
                requires an adjustment of the Conversion Price pursuant to paragraph
                (vii)
                below,

            


    

    


    then
      (except where such free distribution gives rise to a retroactive adjustment
      of
      the Conversion Price under this paragraph (i)(x)) no adjustment of the
      Conversion Price in respect of such free distribution shall be made under this
      paragraph (i)(x), but in lieu thereof an adjustment shall be made under
      paragraph (ii), (iii), (v), (vi) or (vii) below (as the case may be) by
      including in the denominator of the fraction described therein the aggregate
      number of Common Shares to be issued pursuant to such free
      distribution.

    


    
      	(i)(y)  	
              If
                the Company shall declare a dividend in Common Shares then the Conversion
                Price in effect on the date when such dividend is declared (or, if
                the
                Company has fixed a prior record date for the determination of
                shareholders entitled to receive such dividend, on such record date)
                shall
                be adjusted in accordance with the following formula:

            


    

    


    
      
        
        

      

      
        -
          18
          -

        
          

        

      

      
        
        

      

    

    NCP
      = OCP
 ́
      [(N + y)
 ̧
      (N +
      n)]

    


    where:

    


    NCP =
       the
      Conversion Price after such adjustment

    


    OCP
       =
       the
      Conversion Price before such adjustment

    


    N
       = the
      number of Common Shares outstanding (having regard to paragraph (x) below)
      at
      the time of declaration of such dividend (or at the close of business in the
      United States on such record date as the case may be) 

    


    n
       = the
      number of Common Shares to be distributed to the shareholders as a
      dividend

    


    y
       = the
      number of Common Shares which the aggregate par value of such Common Shares
      to
      be distributed to the shareholders as a dividend would purchase at the current
      market price per Common Share on the date of the declaration of such dividend
      (or, if a prior record date has been fixed as aforesaid, such record date).
      An
      adjustment made pursuant to this paragraph (i)(y) shall become effective as
      provided with respect to paragraph (i)(x); provided
      that in
      the case of a dividend in Common Shares which must, under the applicable law,
      be
      submitted for approval to a general meeting of shareholders of the Company
      before being legally paid, and which is so approved after the record date fixed
      for the determination of shareholders entitled to receive such dividend, such
      adjustment shall, immediately upon such approval being given by such meeting,
      become effective retroactively to immediately after such record
      date.

    


    If
      the
      Company shall declare a dividend in Common Shares which dividend is to be paid
      or made to shareholders as of a record date which is also:

    


    
      	(a)  	
              the
                record date for the issue of any rights or warrants which requires
                an
                adjustment of the Conversion Price pursuant to paragraph (ii) or
                (iii)
                below;

            


    

    


    
      	(b)  	
              the
                day immediately before the date of issue of any securities convertible
                into or exchangeable for Common Shares which requires an adjustment
                of the
                Conversion Price pursuant to paragraph (v)
                below;

            


    

    


    
      	(c)  	
              the
                day immediately before the date of issue of any Common Shares which
                requires an adjustment of the Conversion Price pursuant to paragraph
                (vi)
                below; or

            


    

    


    
      	(d)  	
              the
                day immediately before the date of issue of any rights or warrants
                which
                requires an adjustment of the Conversion Price pursuant to paragraph
                (vii)
                below,

            


    

    


    then
      (except where such dividend gives rise to a retroactive adjustment of the
      Conversion Price under the first paragraph of paragraph (i)(x) above) no
      adjustment of the Conversion Price in respect of such dividend shall be made
      under this paragraph (i)(y), but in lieu thereof an adjustment shall be made
      under paragraph (ii), (iii), (v), (vi) or (vii) below (as the case may require)
      by including in the denominator of the fraction described therein the aggregate
      number of Common Shares to be issued pursuant to such dividend and including
      in
      the numerator of the fraction described therein the number of Common Shares
      which the aggregate par value of Common Shares to be so distributed would
      purchase at the current market price per Common Share.

    


    
      	(ii)  	
              if
                the Company shall grant, issue or offer to the holders of Common
                Shares
                rights or warrants entitling them to subscribe for or purchase Common
                Shares:

            


    

    


    
      
        
        

      

      
        -
          19
          -

        
          

        

      

      
        
        

      

    

    
      	(a)  	
              at
                a consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) which is fixed on or prior to the
                record
                date mentioned below and is less than the current market price per
                Common
                Share at such record date; or 

            


    

    


    
      	(b)  	
              at
                a consideration per Common Share receivable by the Company (determined
                as
                aforesaid) which is fixed after the record date mentioned below and
                is
                less than the current market price per Common Share on the date the
                Company fixes the said consideration, then the Conversion Price in
                effect
                (in a case within (a) above) on the record date for the determination
                of
                shareholders entitled to receive such rights or warrants or (in a
                case
                within (b) above) on the date the Company fixes the said consideration
                shall be adjusted in accordance with the following formula:

            


    

    


    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    


    where:

    


    NCP = the
      Conversion Price after such adjustment

    


    OCP = the
      Conversion Price before such adjustment

    


    N = the
      number of Common Shares outstanding (having regard to paragraph (x) below)
      at
      the close of business in the United States (in a case within (a) above) on
      such
      record date or (in a case within (b) above) on the date the Company fixes the
      said consideration

    


    n = the
      number of Common Shares initially to be issued upon exercise of such rights
      or
      warrants at the said consideration

    


    v = the
      number of Common Shares which the aggregate consideration receivable by the
      Company (determined as provided in paragraph (ix) below) would purchase at
      such
      current market price per Common Share specified in (a) or, as the case may
      be,
      (b) above.

    


    Such
      adjustment shall become effective (in a case within (a) above) immediately
      after
      the record date for the determination of shareholders entitled to receive such
      rights or warrants or (in a case within (b) above) immediately after the Company
      fixes the said consideration but retroactively to immediately after the record
      date for the said determination.

    


    If,
      in
      connection with a grant, issue or offer to the holders of Common Shares of
      rights or warrants entitling them to subscribe for or purchase Common Shares,
      any Common Shares which are not subscribed for or purchased by the persons
      entitled thereto are offered to or subscribed by others (whether as places
      or
      members of the public or pursuant to underwriting arrangements or otherwise),
      no
      further adjustment shall be required or made to the Conversion Price by reason
      of such offer or subscription.

    


    
      	(iii)  	
              If
                the Company shall grant, issue or offer to the holders of Common
                Shares
                rights or warrants entitling them to subscribe for or purchase any
                securities convertible into or exchangeable for Common Shares (other
                than
                those rights and warrants granted, issued or offered to and accepted
                by
                existing employees of the Company in accordance with mandatory provisions
                of the applicable law):

            


    

    


    
      
        
        

      

      
        -
          20
          -

        
          

        

      

      
        
        

      

    

    
      	(a)  	
              at
                a consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) which is fixed on or prior to the
                record
                date mentioned below and is less than the current market price per
                Common
                Share at such record date; or

            


    

    


    
      	(b)  	
              at
                a consideration per Common Share receivable by the Company (determined
                as
                aforesaid) which is fixed after the record date mentioned below and
                is
                less than the current market price per Common Share on the date the
                Company fixes the said
                consideration,

            


    

    


    then
      the
      Conversion Price in effect (in a case within (a) above) on the record date
      for
      the determination of shareholders entitled to receive such rights or warrants
      or
      (in a case within (b) above) on the date the Company fixes the said
      consideration shall be adjusted in accordance with the following
      formula:

    


    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    


    where:

    


    NCP
      and
      OCP have the meanings ascribed thereto in paragraph (ii) above.

    


    N = the
      number of Common Shares outstanding (having regard to paragraph (x) below)
      at
      the close of business in the United States (in a case within (a) above) on
      such
      record date or (in a case within (b) above) on the date the Company fixes the
      said consideration 

    


    n = the
      number of Common Shares initially to be issued upon exercise of such rights
      or
      warrants and conversion or exchange of such convertible or exchangeable
      securities at the said consideration

    


    v = the
      number of Common Shares which the aggregate consideration receivable by the
      Company (determined as provided in paragraph (ix) below) would purchase at
      such
      current market price per Common Share specified in (a) or, as the case may
      be,
      (b) above.

    


    Such
      adjustment shall become effective (in a case within (a) above) immediately
      after
      the record date for the determination of shareholders entitled to receive such
      rights or warrants or (in a case within (b) above) immediately after the Company
      fixes the said consideration but retroactively to immediately after the record
      date for the said determination. 

    


    If,
      in
      connection with a grant, issue or offer to the holders of Common Shares of
      rights or warrants entitling them to subscribe for or purchase securities
      convertible into or exchangeable for Common Shares, any such securities
      convertible into or exchangeable for Common Shares which are not subscribed
      for
      or purchased by the persons entitled thereto are offered to or subscribed by
      others (whether as places or members of the public or pursuant to underwriting
      arrangements or otherwise) no further adjustments shall be required or made
      to
      the Conversion Price by reason of such offer or subscription or the conversion
      or exchange of such securities.

    


    
      	(iv)  	
              If
                the Company shall distribute to the holders of Common Shares evidences
                of
                its indebtedness, shares of capital stock of the Company (other than
                Common Shares), assets (excluding annual cash dividends) or rights
                or
                warrants to subscribe for or purchase shares or securities at less
                than
                fair market value (excluding those rights and warrants referred to
                in
                paragraphs (ii) and (iii) above and any rights and warrants granted,
                issued or offered to and accepted by existing employees of the Company
                in
                accordance with mandatory provisions of the applicable law), then
                the
                Conversion Price in effect on the record date for the determination
                of
                shareholders entitled to receive such distribution shall be adjusted
                in
                accordance with the following
                formula:

            


    

    


    
      
        
        

      

      
        -
          21
          -

        
          

        

      

      
        
        

      

    

    NCP
      = OCP
 ́
      [(CMP -
      fmv)  ̧
      CMP]

    


    where:

    


    NCP
      and
      OCP have the meanings ascribed thereto in paragraph (ii) above.

    


    CMP = the
      current market price per Common Share on the record date for the determination
      of shareholders entitled to receive such distribution

    


    fmv = the
      fair
      market value (as determined by the Company or, if pursuant to the applicable
      law
      such determination is to be made by application to a court of competent
      jurisdiction, as determined by such court or by an appraiser appointed by such
      court) of the portion of the evidences of indebtedness, shares, assets, rights
      or warrants so distributed applicable to one Common Shares less any
      consideration paid for the same by the relevant shareholder.

    


    In
      making
      a determination of the fair market value of any such rights or warrants, the
      Company shall consult a leading independent securities company or bank in New
      York selected by the Company and approved in writing by the Holder and shall
      take fully into account the advice received from such company or
      bank.

    


    Such
      adjustment shall become effective immediately after the record date for the
      determination of shareholders entitled to receive such distribution;
provided,
      that (a)
      in the case of such a distribution which must, under the applicable law, be
      submitted for approval to a general meeting of shareholders or be approved
      by a
      meeting of the Board of Directors of the Company before such distribution may
      legally be made and is so approved after the record date fixed for the
      determination of shareholders entitled to receive such distribution, such
      adjustment shall, immediately upon such approval being given by such meeting,
      become effective retroactively to immediately after such record date and (b)
      if
      the fair market value of the evidences of indebtedness, shares, assets, rights
      or warrants so distributed cannot be determined until after the record date
      fixed for the determination of shareholders entitled to receive such
      distribution, such adjustment shall, immediately upon such fair market value
      being determined, become effective retroactively immediately after such record
      date.

    


    
      	(v)  	
              If
                the Company shall grant, issue or offer any securities convertible
                into or
                exchangeable for Common Shares (other than in any of the circumstances
                described in paragraph (iii) above and paragraph (vii) below) and
                the
                consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) shall be less than the current
                market
                price per Common Share on the date in the United States on which
                the
                Company fixes the said consideration (or, if the issue of such securities
                is subject to approval by a general meeting of shareholders, on the
                date
                on which the Board of Directors of the Company fixes the consideration
                to
                be recommended at such meeting), then the Conversion Price in effect
                immediately prior to the date of issue of such convertible or exchangeable
                securities shall be adjusted in accordance with the following
                formula:

            


    

    


    
      
        
        

      

      
        -
          22
          -

        
          

        

      

      
        
        

      

    

    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    


    where :

    


    NCP
      and
      OCP have the meanings ascribed thereto in paragraph (ii) above.

    


    N = the
      number of Common Shares outstanding (having regard to paragraph (x) below)
      at
      the close of business in the United States on the day immediately prior to
      the
      date of such issue

    


    n = the
      number of Common Shares to be issued upon conversion or exchange of such
      convertible or exchangeable securities at the initial conversion or exchange
      price or rate

    


    v = the
      number of Common Shares which the aggregate consideration receivable by the
      Company (determined as provided in paragraph (ix) below) would purchase at
      such
      current market price per Common Share.

    


    Such
      adjustment shall become effective as of the calendar day in the United States
      corresponding to the calendar day at the place of issue on which such
      convertible or exchangeable securities are issued.

    


    
      	(vi)  	
              If
                the Company shall issue any Common Shares (other than Common Shares
                issued
                (a) on conversion of the Bonds or on conversion or exchange of any
                convertible or exchangeable securities issued by the Company prior
                to the
                Issue Date or (b) on exercise of any rights or warrants granted,
                issued or
                offered by the Company prior to the Issue Date or (c) in any of the
                circumstances described above or (d) to shareholders of any company
                which
                merges into the Company in proportion to their shareholdings in such
                company immediately prior to such merger, upon such merger) for a
                consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) less than the current market price
                per
                Common Share on the date in the United States on which the Company
                fixes
                the said consideration (or, if the issue of such Common Shares is
                subject
                to approval by a general meeting of shareholders, on the date on
                which the
                Board of Directors of the Company fixes the consideration to be
                recommended at such meeting), then the Conversion Price in effect
                immediately prior to the issue of such additional Common Shares shall
                be
                adjusted in accordance with the following
                formula:

            


    

    


    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    


    where:

    


    NCP
      and
      OCP have the meanings ascribed thereto in paragraph (ii) above.

    


    N = the
      number of Common Shares outstanding (having regard to paragraph (x) below)
      at
      the close of business in the United States on the day immediately prior to
      the
      date of issue of such additional Common Shares.

    


    n = the
      number of additional Common Shares issued as aforesaid.

    


    v = the
      number of Common Shares which the aggregate consideration receivable by the
      Company (determined as provided in paragraph (ix) below) would purchase at
      such
      current market price per Common Share.

    


    Such
      adjustment shall become effective as of the calendar day in the United States
      of
      the issue of such additional Common Shares.

    


    
      
        
        

      

      
        -
          23
          -

        
          

        

      

      
        
        

      

    

    
      	(vii)  	
              If
                the Company shall issue rights or warrants to subscribe for or purchase
                Common Shares or securities convertible into or exchangeable for
                Common
                Shares (other than any rights or warrants granted, issued or offered
                to
                the holders of Common Shares and to existing employees of the Company
                in
                accordance with mandatory provisions of the applicable law) and the
                consideration per Common Share receivable by the Company (determined
                as
                provided in paragraph (ix) below) shall be less than the current
                market
                price per Common Share on the date in the United States on which
                the
                Company fixes the said consideration (or, if the issue of such rights
                or
                warrants is subject to approval by a general meeting of shareholders,
                on
                the date on which the Board of Directors of the Company fixes the
                consideration to be recommended at such meeting), then the Conversion
                Price in effect immediately prior to the date of the issue of such
                rights
                or warrants shall be adjusted in accordance with the following
                formula:

            


    

    


    NCP
      = OCP
 ́
      [(N + v)
 ̧
      (N +
      n)]

    


    where:

    


    NCP
      and
      OCP have the meanings ascribed thereto in paragraph (ii) above.

    


    N = the
      number of Common Shares outstanding (having regard to paragraph (x) below)
      at
      the close of business in the United States on the day immediately prior to
      the
      date of such issue

    


    n = the
      number of Common Shares to be issued on exercise of such rights or warrants
      and
      (if applicable) conversion or exchange of such convertible or exchangeable
      securities at the said consideration

    


    v = the
      number of Common Shares which the aggregate consideration receivable by the
      Company (determined as provided in paragraph (ix) below) would purchase at
      such
      current market price per Common Share.

    


    Such
      adjustment shall become effective as of the calendar day in the United States
      corresponding to the calendar day at the place of issue on which such rights
      or
      warrants are issued.

    


    
      	(viii)  	
              For
                the purposes of any calculation of the consideration receivable by
                the
                Company pursuant to paragraphs (ii), (iii), (v), (vi) and (vii) of
                Condition 2(C), the following provisions shall be
                applicable:

            


    

    


    
      	(a)  	
              in
                the case of the issue of Common Shares for cash, the consideration
                shall
                be the amount of such cash;

            


    

    


    
      	(b)  	
              in
                the case of the issue of Common Shares for a consideration in whole
                or in
                part other than cash, the consideration other than cash shall be
                deemed to
                be the fair value thereof as determined by an independent financial
                institution or, if pursuant to applicable law of the United States
                such
                determination is to be made by application to a court of competent
                jurisdiction, as determined by such court or an appraiser appointed
                by
                such court, irrespective of the accounting treatment
                thereof;

            


    

    


    
      
        
        

      

      
        -
          24
          -

        
          

        

      

      
        
        

      

    

    
      	(c)  	
              in
                the case of the issue (whether initially or upon the exercise of
                rights or
                warrants) of securities convertible into or exchangeable for Common
                Shares, the aggregate consideration receivable by the Company shall
                be
                deemed to be the consideration received by the Company for such securities
                and (if applicable) rights or warrants plus the additional consideration
                (if any) to be received by the Company upon (and assuming) the conversion
                or exchange of such securities at the initial conversion or exchange
                price
                or rate and (if applicable) the exercise of such rights or warrants
                at the
                initial subscription or purchase price (the consideration in each
                case to
                be determined in the same manner as provided in this paragraph (ix)
                of
                Condition 2(C)) and the consideration per Common Share receivable
                by the
                Company shall be such aggregate consideration divided by the number
                of
                Common Shares to be issued upon (and assuming) such conversion or
                exchange
                at the initial conversion or exchange price or rate and (if applicable)
                the exercise of such rights or warrants at the initial subscription
                or
                purchase price;

            


    

    


    
      	(d)  	
              in
                the case of the issue of rights or warrants to subscribe for or purchase
                Common Shares, the aggregate consideration receivable by the Company
                shall
                be deemed to be the consideration received by the Company for any
                such
                rights or warrants plus the additional consideration to be received
                by the
                Company upon (and assuming) the exercise of such rights or warrants
                at the
                initial subscription or purchase price (the consideration in each
                case to
                be determined in the same manner as provided in this paragraph (ix)
                of
                Condition 2(C)) and the consideration per Common Share receivable
                by the
                Company shall be such aggregate consideration divided by the number
                of
                Common Shares to be issued upon (and assuming) the exercise of such
                rights
                or warrants at the initial subscription or purchase
                price;

            


    

    


    
      	(e)  	
              if
                any of the consideration referred to in any of the preceding paragraphs
                of
                this paragraph (viii)(c) of Condition 2(C) is receivable in a currency
                other than United States Dollars, such consideration shall (in any
                case
                where there is a fixed rate of exchange between United States Dollars
                and
                the relevant currency for the purposes of the issue of the Common
                Shares,
                the conversion or exchange of such securities or the exercise of
                such
                rights or warrants) be translated into United States Dollars for
                the
                purposes of this paragraph (viii) of Condition 2(C) at such fixed
                rate of
                exchange and shall (in all other cases) be translated into United
                States
                Dollars at such rate of exchange as may be determined in good faith
                by an
                independent financial institution to be the spot rate ruling at the
                close
                of business on the date as of which the said consideration is required
                to
                be calculated as aforesaid; 

            


    

    


    
      	(f)  	
              in
                the case of the issue of Common Shares credited as fully paid out
                of
                retained earnings or capitalisation of reserves at their par value,
                the
                aggregate consideration receivable by the Company shall be deemed
                to be
                zero (and accordingly the number of Common Shares which such aggregate
                consideration receivable by the Company could purchase at the relevant
                current market price per Common Share shall also be deemed to be
                zero);
                and

            


    

    


    
      	(g)  	
              in
                making any such determination, no deduction shall be made for any
                commissions or any expenses paid or incurred by the
                Company.

            


    

    


    
      	(ix)  	
              If,
                at the time of computing an adjustment (the “later
                adjustment”)
                of the Conversion Price pursuant to any of paragraphs (ii), (iii),
                (v),
                (vi) and (vii) above, the Conversion Price already incorporates an
                adjustment made (or taken or to be taken into account pursuant to
                the
                proviso to paragraph (x) below) to reflect an issue of Common Shares
                or of
                securities convertible into or exchangeable for Common Shares or
                of rights
                or warrants to subscribe for or purchase Common Shares or securities,
                to
                the extent that the number of such Common Shares or securities taken
                into
                account for the purposes of such adjustment exceeds the number of
                such
                Common Shares in issue at the time relevant for ascertaining the
                number of
                outstanding Common Shares for the purposes of computing the later
                adjustment, such Common Shares shall be deemed to be outstanding
                for the
                purposes of making such
                computation.

            


    

    


    
      
        
        

      

      
        -
          25
          -

        
          

        

      

      
        
        

      

    

    
      	(x)  	
              No
                adjustment of the Conversion Price shall be required unless such
                adjustment would require an increase or decrease in such price of
                at least
                United States Dollars 0.001; provided,
                that any adjustment which by reason of this paragraph (x) is not
                required
                to be made shall be carried forward and taken into account (as if
                such
                adjustment had been made at the time when it would have been made
                but for
                the provisions of this paragraph (x)) in any subsequent adjustment.
                All
                calculations under this Condition 2(C) shall be made to the nearest
                United
                States Dollars.

            


    

    


    
      	(xi)  	
              Notwithstanding
                the provisions of this Condition 2(C), the Conversion Price shall
                not be
                reduced below the par value of the Common Shares as a result of any
                adjustment made hereunder unless under applicable law then in effect
                Bonds
                may be converted at such reduced Conversion Price into legally issued,
                fully-paid Common Shares.

            


    

    


    
      	(xii)  	
              Any
                references herein to the date on which a consideration is “fixed”
                shall, where the consideration is originally expressed by reference
                to a
                formula which cannot be expressed an actual cash amount until a later
                date, be construed as a reference to the first day on which such
                actual
                cash amount can be ascertained.

            


    

    


    
      	(xiii)  	
              No
                adjustment involving an increase in the Conversion Price will be
                made,
                except in the case of a consolidation of the Common Shares, as referred
                to
                in paragraph (i) of Condition 2(C).

            


    

    


    
      	(xiv)  	
              The
                Company may purchase its Common Shares to the extent permitted by
                law.

            


    

    


    
      	(xv)  	
              Notice
                of any adjustment in the Conversion Price shall be given to Holder
                in
                accordance with Condition 11 as soon as practicable after the
                determination thereof.

            


    

    


    
      	(xvi)  	
              Where
                more than one event which gives or may give rise to an adjustment
                to the
                Conversion Price occurs within such a short period of time that in
                the
                opinion of a leading investment bank of international repute (acting
                as
                expert), selected by the Company and approved in writing by the Holder
                at
                the expense of the Company, the foregoing provisions would need to
                be
                operated subject to some modification in order to give the intended
                result, such modification shall be made to the operation of the foregoing
                provisions as may be advised by a leading investment bank of international
                repute (acting as expert), selected by the Company and approved in
                writing
                by the Holder at the expense of the Company, to be in their opinion
                appropriate in order to give such intended
                result.

            


    

    


    (D)  The
      Conversion Price shall be subject to resetting as follows:

    


    
      	(i)  	
              If
                the Common Shares are listed on any of the Stock Exchanges (as defined
                below), and if the lower of (x) the simple arithmetic average of
                (i) the
                volume weighted average of the Closing Prices (as defined below)
                of the
                Common Shares on such Stock Exchange for the one month prior to each
                relevant Setting Date (as defined below), (ii) the volume weighted
                average
                of the Closing Prices for the one week prior to the relevant Setting
                Date,
                and (iii) the Closing Price one trading day prior to the relevant
                Setting
                Date, being rounded upwards (if necessary) to the nearest United
                States
                Cent, and (y) the Closing Price at the close of business in the United
                States one trading day prior to each relevant Setting Date (the lower
                of
                (x) and (y), “Adjusted
                Share Price”)
                is lower than the then applicable Conversion Price on the relevant
                Setting
                Date, then the Conversion Price shall be adjusted to the Adjusted
                Share
                Price in effect on and from the relevant Setting Date (such adjusted
                Conversion Price being rounded upwards (if necessary) to the nearest
                United States Cent). 

            


    

    


    
      
        
        

      

      
        -
          26
          -

        
          

        

      

      
        
        

      

    

    PROVIDED
      THAT:

    


    
      	(1)  	
              the
                provisions of Condition 2(C) shall apply mutatis
                mutandis to
                this Condition 2(D)(i) to ensure that appropriate adjustments shall
                be
                made to any Closing Price to reflect any adjustments made to the
                Conversion Price in accordance with Condition
                2(C);

            


    

    


    
      	(2)  	
              any
                such adjustment to the Conversion Price pursuant to this Condition
                2(D)(i)
                shall be limited so that the Conversion Price shall not be reduced
                below
                70 per cent. of (x) the Initial Conversion Price or (y) if any adjustment
                has been made to the Conversion Price in accordance with Condition
                2(C),
                such adjusted Conversion Price;

            


    

    


    
      	(3)  	
              the
                Conversion Price shall not be reduced below the par value of the
                Common
                Shares (currently United States Dollars 0.001 per Common Share as
                of the
                Issue Date) as a result of any adjustment made hereunder unless under
                applicable law then in effect, the Bonds may be converted at such
                reduced
                Conversion Price into legally issued, fully-paid and non-assessable
                Common
                Shares;

            


    

    


    
      	(4)  	
              the
                adjustment of the Conversion Price in respect of any Setting Date
                shall be
                subject to the provisions of the applicable United States law and
                regulations then in effect; and

            


    

    


    
      	(5)  	
              for
                the avoidance of doubt (x) any adjustments to the Conversion Price
                made
                pursuant to this Condition 2(D)(i) shall only be downward adjustments,
                (y)
                no adjustment will be made where such adjustment would be less than
                United
                States Dollar 0.001 and (z) an adjustment may be made in respect
                of a
                Setting Date notwithstanding that an adjustment may have been made
                in
                respect of a prior Setting Date or Setting
                Dates.

            


    

    


    
      	(ii)  	
              Notwithstanding
                anything to the contrary in these Conditions, in the event that the
                Company’s Common Shares become de-registered or de-listed from such Stock
                Exchange, the Conversion Price shall be immediately adjusted to the
                par
                value of the Common Shares with effect on and from the date such
                event
                takes effect.

            


    

    


    The
      term
“Closing
      Price”
for
      any
      day means the last selling price or, if no sales take place on such day, the
      closing bid or offered price in each case as reported by the Stock Exchange
      the
      Common Shares are listed for such day. The term “trading
      day”
is
      a
      day when the Stock Exchange the Common Shares are listed is open for business,
      but does not include a day when (a) no such last selling price or closing bid
      or
      offered price is reported and (b) (if the Common Shares is not admitted to
      trading on such Stock Exchange) no such closing bid and offered prices are
      furnished as aforesaid. If during the said 45 trading days or any period
      thereafter up to but excluding the date as of which the adjustment of the
      Conversion Price in question shall be effected, any event (other than the event
      which requires the adjustment in question) shall occur which gives rise to
      a
      separate adjustment to the Conversion Price under the provisions of Condition
      2(C), then the current market price as determined above shall be adjusted in
      such manner and to such extent as a leading independent securities company
      or
      bank in New York selected by the Company and approved in writing by the Holder
      shall in its absolute discretion deem appropriate and fair to compensate for
      the
      effect thereof.

    


    
      
        
        

      

      
        -
          27
          -

        
          

        

      

      
        
        

      

    

    The
      term
“Setting
      Date”
means
      a
      day falling one calendar month after the Issue Date (i.e. May 12, 2007) and
      thereafter every three calendar months after the previous Setting Date (starting
      with August 12, 2007) up to one month prior to the Maturity Date. If any Setting
      Date would otherwise fall on a day which is not a Business Day, it shall be
      postponed to the next day which is a Business Day unless it would thereby fall
      into the next calendar month in which event it shall be brought forward to
      the
      immediately preceding Business Day.

    Such
      adjustments (if any) shall be notified promptly to the Holder in accordance
      with
      Condition 11.

    


    (E)  If,
      while
      any Conversion Right is or is capable of being or becoming exercisable, there
      shall be any adjustment to the Conversion Price, the Company shall (i) as soon
      as practicable notify the Holder of particulars of the event giving rise to
      the
      adjustment, the Conversion Price after such adjustment, the date on which such
      adjustment takes effect and such other particulars and information as the Holder
      may require and (ii) promptly after the date upon which such adjustment takes
      effect, give notice to the Holder in a form previously approved in writing
      by
      the Holder, stating that the Conversion Price has been adjusted and setting
      both
      the Conversion Price in effect prior to such adjustment, the adjusted Conversion
      Price and the effective date of such adjustment. The Conversion Notice shall
      be
      made in a form agreed upon by and between the Company and the
      Holders.

     

    
      	3.  	
              Redemption
                at Maturity

            


    

     

    Unless
      previously redeemed or converted or purchased and in each case canceled as
      herein provided, the Company will redeem on the Maturity Date the Bonds at
      one
      hundred per cent. (100%) of their face principal amount and interest on the
      amount of the Bonds calculated at the compounded rate of eight per cent. (8%)
      per annum, provided, however, that the foregoing rate shall be changed from
      eight per cent. (8%) per annum to ten per cent. (10%) per annum, if the Company
      does not go through the initial public offering process by October 31, 2009
      for
      any reason not solely attributable to the Holder. 

     

    
      	4.  	
              Put
                Option 

            


    

     

    The
      Holder shall have put/redemption option as follows: In case the Company does
      not
      go through the initial public offering process by October 31, 2009 for any
      reason not solely attributable to the Holder, the Holder shall be entitled
      to
      exercise its put option to redeem the Bonds at the face value thereof and shall
      also be entitled to receive from the Company the payment of interest on the
      outstanding principal balance of the Bonds calculated at the compounded rate
      of
      ten per cent. (10%) per annum. In case the Company goes through the initial
      public offering process prior to the end of October of 2009, the Holder shall
      be
      entitled, on or after the fourth anniversary of the date of issuance of the
      Bonds hereunder, to exercise its put option to redeem the Bonds at the face
      value thereof, in which case the Holder shall also be entitled to receive from
      the Company the payment of interest on the outstanding principal balance of
      the
      Bonds calculated at the compounded rate of eight per cent. (8%) per annum.
      In
      case of the occurrence of any Event of Default by the Company hereunder, the
      Holder shall be entitled to exercise its put option to redeem the Bonds at
      the
      face value thereof if the said Event of Default is not cured within sixty (60)
      days of notice thereof, in which case the Holder shall also be entitled to
      receive from the Company the payment of default interest on the outstanding
      principal balance of the Bonds calculated at the compounded rate of nineteen
      per
      cent. (19%) per annum. 

    


    
      
        
        

      

      
        -
          28
          -

        
          

        

      

      
        
        

      

    

    
      	5.  	
              Undertaking

            


    

    


    The
      Company undertakes with the Holder that the Company shall apply for listing
      of
      the Common Shares on any of NASDAQ, London Stock Exchange, Hong Kong Exchanges
      and Clearing Limited and Singapore Exchange Ltd. (collectively, “Stock
      Exchanges”)
      and
      use its best efforts to obtain such listing by October 31, 2009. 

    


    
      	6.  	
              Charges,
                Taxes and Expenses

            


    

     

    Issuance
      of the equity interest upon the conversion of the Bonds shall be made without
      charge to the Holder for any issue or transfer tax or other incidental expense
      in respect of the issuance of such equity interest, all of which taxes and
      expenses shall be paid by the Company.

     

    
      	7.  	
              Events
                of Default

            


    

     

    If
      any of
      the following events (each, an “Event
      of Default”)
      occurs
      and is continuing, the Company shall promptly inform the Holder of such Event
      of
      Default. In such case, the Holder at its discretion may give notice to the
      Company that the Bonds are, and they shall immediately become, due and payable,
      in which case the entire unpaid principal balance of the Bonds and all of the
      unpaid interest accrued thereon shall be immediately due and payable. The term
      “subsidiaries” as used in this Condition 7 shall refer to the
      semiconductor-related group of companies under the control or management of
      the
      Company or fifteen per cent (15%) or more shares of which are held by the
      Company, including but not limited to the Acquired Company, etc. (but expressly
      excluding Cintel Information & Technology Co., Ltd. and Pheonix Asset
      Management Inc.).

     

    
      	(i)  	
              Non-Payment

            


    

     

    The
      Company fails to pay principal, premium, interest and/or any other amount owing
      by the Company to the Holder hereunder when due and payable; or

    


    
      	(ii)  	
              Breach
                of Other Obligations

            


    

     

    The
      Company defaults in the performance or observance of or compliance with any
      of
      its obligations set out in this Agreement and/or these Conditions which default
      is incapable of remedy or, if it is capable of remedy, is not remedied within
      thirty (30) days after such default; or

    


    
      	(iii)  	
              Breach
                of Representation or Warranty

            


    

     

    Any
      representation or warranty given by the Company under these Conditions is no
      longer correct in material respect on the date on which it was made or repeated
      and this situation continues for a period of thirty (30) days; or

     

    
      	(iv)  	
              Security
                Interest

            


    

     

    If
      the
      security interest created under this Agreement and/or these Conditions ceases
      to
      be, or is claimed by the Holder not to be, in full force and effect and
      alternative arrangements to the reasonable satisfaction of the Holder have
      not
      been made prior to the occurrence of such event; provided, however, that this
      clause shall not be applicable if the Holder is not the Subscriber nor a special
      purpose entity managed or sponsored by Woori Private Equity Co., Ltd. in
      accordance with the Asset-Backed Securitization Act (as amended) or the Indirect
      Investment Asset Management Business Act (as amended) (the “SPE”);
      or


     

    
      
        
        

      

      
        -
          29
          -

        
          

        

      

      
        
        

      

    

    
      	(v)  	
              Cross
                Default

            


    

     

    a.Any
      other
      present or future indebtedness for borrowed money of the Company or any of
      its
      subsidiaries becomes due and payable prior to its stated maturity by reason
      of
      an Event of Default; or

     

    b.Any
      such
      indebtedness for borrowed money is not paid when due, as the case may be, within
      any applicable grace period originally provided for; or

     

    c.The
      Company or any of its subsidiaries fails to pay when due (or within any
      applicable grace period originally provided for) any amount payable by it under
      any present or future guarantee or indemnity in respect of indebtedness for
      borrowed money.

     

    
      	(vi)  	
              Enforcement
                Proceedings

            


    

     

    A
      distress, execution or other legal process is levied, enforced or sued upon
      or
      against any material part of the property, assets or revenues of the Company
      or
      any of its subsidiaries and is not discharged or stayed within ninety (90)
      days
      of having been so levied, enforced or sued out unless enforcement or suit is
      being contested in good faith and by appropriate proceedings; or

     

    
      	(vii)  	
              Security
                Enforced

            


    

     

    An
      encumbrancer takes possession or a receiver, manager or other similar person
      is
      appointed over, or an attachment order is issued in respect of the whole or
      any
      material part of the undertaking, property, assets or revenues of the Company
      or
      any of its subsidiaries and in any such case such possession, appointment or
      attachment is not stayed or terminated or the debt on account of which such
      possession was taken or appointment or attachment was made is not discharged
      or
      satisfied within thirty (30) days of such possession, appointment or the issue
      of such order; or

     

    
      	(viii)  	
              Insolvency

            


    

     

    The
      Company or any of its subsidiaries is declared by a court of competent
      jurisdiction to be insolvent, bankrupt or unable to pay its debts, or stops,
      suspends or threatens to stop or suspend payment of all or a material part
      of
      its debts as they mature or applies for or consents to or suffers the
      appointment of an administrator, liquidator or receiver or other similar person
      in respect of the Company or any of its subsidiaries or over the whole or any
      material part of the undertaking, property, assets or revenues of the Company
      or
      any of its subsidiaries pursuant to any insolvency law and such appointment
      is
      not discharged within thirty (30) days of its taking effect or takes any
      proceedings under any law for a readjustment or deferment of its obligations
      or
      any part of them or makes or enters into a general assignment or an arrangement
      or composition with or for the benefit of its creditors except, in any such
      case, for the purpose of and followed by a reconstruction, amalgamation,
      reorganization, merger or consolidation on terms approved by the Holder;
      or

     

    
      	(ix)  	
              Winding-up

            


    

     

    An
      order
      of a court of competent jurisdiction is made or an effective resolution passed
      for the winding-up or dissolution of the Company or any of its subsidiaries
      ceases to carry on all or any material part of its business or operations
      except, in any such case, for the purpose of and followed by a reconstruction,
      amalgamation, reorganization, merger or consolidation on terms approved by
      the
      Holder; or

     

    
      
        
        

      

      
        -
          30
          -

        
          

        

      

      
        
        

      

    

    
      	(x)  	
              Expropriation

            


    

     

    Any
      governmental authority or agency compulsorily purchases or expropriates all
      or
      any material part of the assets of the Company or any of its subsidiaries
      without fair compensation; or

     

    
      	(xi)  	
              Unlawfulness

            


    

     

    The
      Company is in breach of any law or regulation in any jurisdiction in material
      respects to which it and/or any of its properties are subject.

     

    
      	(xii)  	
              Analogous
                Events

            


    

     

    Any
      event, which under the laws of the U.S. or Korea has an analogous effect to
      any
      of the events referred to in (viii) and (ix) above, occurs.

    


     

    
      	8.  	
              Replacement
                of Bonds

            


    

     

    Upon
      receipt by the Company of evidence reasonably satisfactory to it of the loss,
      theft or destruction of the Bonds and of indemnity or security reasonably
      satisfactory to it, the Company will make and deliver a new security which
      shall
      carry the same rights to interest (unpaid and to accrue) carried by the Bonds,
      stating that such security is issued in replacement of the Bonds, making
      reference to the original date of issuance of the Bonds (and any successors
      hereto) and dated as of such cancellation, in lieu of the Bonds.

     

    
      	9.  	
              Governing
                Law and Jurisdiction

            


    

     

    The
      Bonds
      shall be construed in accordance with the laws of the Republic of
      Korea, excluding
      its conflicts of laws rules.

    


    
      	10.  	
              Dispute
                Resolution 

            


    

     

    The
      Company and the Holder shall attempt in good faith to resolve all disputes,
      controversies or claims arising out of or in connection with the interpretation
      or application of the provisions of the terms and conditions hereto or in
      connection with the determination of any matters which are subject to objective
      determination pursuant to the terms and conditions hereto (each, a “Dispute”)
      by
      mutual agreement. If any Dispute cannot be resolved by the parties hereto
      pursuant to above or otherwise, then such Dispute shall be brought to the Seoul
      Central District Court of Korea.

    


    
      	11.  	
              Notices

            


    

     

    Any
      notice, request or other communication required or permitted hereunder shall
      be
      in writing and shall be deemed to have been duly given if personally delivered
      or mailed by registered or certified mail, postage prepaid, or by recognized
      overnight courier or personal delivery at the respective addresses of the
      parties as set forth in the Convertible Bonds Subscription Agreement or on
      the
      register maintained by the Company. Any party hereto may change its address
      for
      future notice hereunder by giving notice of such change to the other party.
      Notice shall conclusively be deemed to have been given where
      received.

     

    
      
        
        

      

      
        -
          31
          -

        
          

        

      

      
        
        

      

    

    
      	12.  	
              Miscellaneous
                

            


    

    


    (A)  No
      Waiver. 

     

    No
      failure or delay by the Holder to exercise any right hereunder shall operate
      as
      a waiver thereof, nor shall any single or partial exercise of any right, power
      or privilege preclude any other right, power or privilege.

     

    (B)  Attorneys’
      Fees. 

     

    If
      the
      Holder retains an attorney for collection of the Bonds, or if any suit or
      proceeding is brought for the recovery of all, or any part of, or for protection
      of the indebtedness respected by the Bonds, then the Company agrees to pay
      all
      costs and expenses of the suit or proceeding, or any appeal thereof, incurred
      by
      the Holder, including without limitation, reasonable attorneys'
      fees.

     

    (C)  Default
      Rate. 

     

    The
      default interest rate shall be the compounded rate of nineteen per cent. (19%)
      per annum. 

     

    (D)  Assignment.
      

     

    The
      Holder may assign the Bonds, in whole or in part, at the Holder's sole
      discretion to any other person.
      For the
      avoidance of doubt, in the event that the Subscriber assigns the Bonds to any
      person other than the SPE, the security conferred on the Bonds under this
      Agreement shall be immediately released.

    


    


    


    
 

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
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