EXHIBIT 2.1
   HOME INNS & HOTELS MANAGEMENT INC.
  THE BANK OF NEW YORK




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Table of Contents
 Contents
    
    
    
    Page1
    
    
    Interpretation
    
    
    12
    
    
    Amount of the Bonds and Covenant to Pay
    
    
    53
    
    
    Form of the Bonds and Certificates; Issue of the Bonds
    
    
    64
    
    
    Stamp Duties and Taxes
    
    
    75
    
    
    Covenants relating to the Conversion Rights
    
    
    76
    
    
    Notices Relating to the Conversion Rights
    
    
    117
    
    
    Adjustments to the Conversion Price
    
    
    138
    
    
    Consolidation, Amalgamation or Merger
    
    
    209
    
    
    Application of Moneys Received by the Trustee
    
    
    2110
    
    
    General Covenants
    
    
    2211
    
    
    Remuneration and Indemnification of the Trustee
    
    
    2412
    
    
    Provisions Supplemental to the Trustee Act 1925 and the Trustee Act 2000
    
    
    2513
    
    
    Trustee Liable for Negligence
    
    
    2914
    
    
    Waiver and Proof of Default
    
    
    2915
    
    
    Trustee not Precluded from Entering into Contracts
    
    
    2916
    
    
    Modification and Substitution
    
    
    3017
    
    
    Currency Indemnity
    
    
    3118
    
    
    Appointment, Retirement and Removal of the Trustee
    
    
    31
  i




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Contents
    
    
    
    Page19
    
    
    Communications
    
    
    3220
    
    
    Further Issues
    
    
    3321
    
    
    Governing Law and Jurisdiction
    
    
    3322
    
    
    Counterparts
    
    
    34SCHEDULE 1 Form of Certificate
    
    
    35SCHEDULE 2 Form of Global Certificate
    
    
    65SCHEDULE 3 Provisions for Meetings of Bondholders
    
    
    72SCHEDULE 4 Regulation S Legend
    
    
    76
  ii




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This Indenture between:
 (1)
    
    HOME INNS & HOTELS MANAGEMENT INC., a company incorporated in the Cayman Islands whose
registered office is at the offices of M&C Corporate Services Limited, P.O. Box 309GT, Ugland
House, South Church Street, George Town, Grand Cayman, British West Indies (the Issuer); and
 (2)
    
    THE BANK OF NEW YORK, whose specified office is situated at 101 Barclay Street,
21st Floor West, New York, NY 10286, United States of America (the Trustee, which
expression, where the context so admits, includes all persons for the time being the trustee
or trustees of this Indenture).
 Whereas:
 (A)
    
    The Issuer has (pursuant to a resolution of the Board of Directors dated December 3, 2007)
authorized the issue of RMB1,110,000,000 USD Settled Zero Coupon Convertible Bonds due
December 10, 2012, convertible into fully paid ordinary shares of the Issuer, to be
constituted by this Indenture.
 (B)
    
    The Trustee has agreed to act as trustee of this Indenture on the following terms and
conditions.
 This Indenture witnesses and it is declared
 1
    
    Interpretation1.1
    
    Definitions:The following expressions have the following meanings:
 Accounts
 ADS ADSs
 Agency Agreement
 Agents
 Alternative Stock Exchange
 Auditors
 Board of Directors
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Bondholder holder
 Bonds
 business day
 Capital Distribution
 Certificate
 Change of Control
 Clearstream
 Conditions
 Conversion Date
 Conversion Notice
 Conversion Period
 Conversion Price
 Conversion Right
 Current Market Price
 Current Market Price per ADS
 Deposit Agreement
 Definitive Certificate
 Early Redemption Amount
 Equivalent Amount
 Euroclear
 Event of Default
 Exchange Act
 Extraordinary Resolution
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F-6 Registration Statement
 Fair Market Value
 Fiscal Period
 Global Certificate
 Hong Kong
 this Indenture
 Nasdaq Global Market
 Nasdaq Marketplace Rules
 outstanding
 Potential Event of Default
 PRC China
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Principal Agent
 record date
 Registrar
 SEC
 Securities Act
 Security
 Share Option Scheme
 Shares
 Shareholder
 specified office
 Subsidiary
 Successor
 Trading Day
 trust corporation
 U.S. Dollar Equivalent
 1.2
    
    Construction of Certain References: References to:
 1.2.1
    
    costs, charges, remuneration or expenses include any withholding, value added,
turnover or similar tax charged in respect thereof;
 1.2.2
    
    United States dollars and US$ are to the lawful currency for the time
being of the United States of America;
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1.2.3
    
    Renminbi, RMB and Yuan are the lawful currency for the time being of the
Peoples Republic of China;
 1.2.4
    
    an action, remedy or method of judicial proceedings for the enforcement of
rights of creditors include references to the action, remedy or method of judicial
proceedings in jurisdictions other than the State of New York as shall most nearly
approximate thereto; and
 1.2.5
    
    references in this Indenture and the Conditions to the approval of the Trustee
not being unreasonably withheld or delayed shall be construed giving due regard to the
fact that the Trustee in giving any such consent or approval is acting as Trustee for
the Bondholders and is obliged to act in their interests.
 1.3
    
    Headings:Headings shall be ignored in construing this Indenture.1.4
    
    Schedules:The Schedules are part of this Indenture and have effect accordingly.1.5
    
    Definitions in Conditions:Terms defined in the Conditions shall, unless otherwise defined
herein, have the same meaning when used in the main body of this Indenture.2
    
    Amount of the Bonds and Covenant to Pay
 2.1
    
    Amount of the Bonds:The aggregate principal amount of the Bonds is limited to
RMB1,110,000,000.
 2.2
    
    Interest:Other than default interest described in Condition 7.6, the Bonds will not bear any
interest.
 2.3
    
    Covenant to pay:The Issuer will on any date when the Bonds or any of them become due to be
redeemed unconditionally pay, or caused to be paid, to or to the order of the Trustee in
United States dollars in immediately available funds the U.S. Dollar Equivalent of the
principal amount of the Bonds becoming due for redemption on that date calculated in
accordance with the Conditions together with any applicable premium (if any) and will (subject
to the Conditions) until such payment (both before and after judgment) unconditionally so pay
to or to the order of the Trustee default interest on the principal amount of the Bonds
outstanding as set out in Condition 7.6 provided that:
 (a)
    
    every payment of any sum due in respect of the Bonds made to the Principal
Agent as provided in the Agency Agreement shall, to that extent, satisfy such
obligation except to the extent that there is failure in its subsequent payment to the
relevant Bondholders under the Conditions; and
 (b)
    
    a payment made after the due date or pursuant to Condition 10 will be deemed to
have been made when the full amount due (including default interest accrued, if any)
has been received by the Principal Agent or the Trustee and notice to that effect has
been given to Bondholders (if required under Sub-clause 10.10) except (if payment is
made to the Principal Agent) to the extent that there is failure in the subsequent
payment to the relevant Bondholders under the Conditions.
  2.4
    
    Discharge:Subject to Sub-clause 2.5, any payment to be made in respect of the Bonds by the
Issuer or the Trustee may be made as provided in the Conditions and any payment so made will
(subject to Sub-clause 2.5) to such extent be a good discharge to the Issuer or the Trustee,
as the case may be.
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2.5
    
    Payment after a Default:At any time after an Event of Default or a Potential Event of
Default has occurred the Trustee may:
 2.5.1
    
    by notice in writing to the Issuer, the Agents and the Registrar, require the
Agents and the Registrar, until notified by the Trustee to the contrary, so far as
permitted by applicable law:
 (i)
    
    to act as agents of the Trustee under this Indenture and the
Bonds on the terms of the Agency Agreement (with consequential amendments as
necessary and save that the Trustees liability for the indemnification,
remuneration and all other expenses of the Agents and the Registrar shall be
limited to the amounts for the time being held by the Trustee in respect of the
Bonds on the terms of this Indenture) and thereafter to hold all Certificates
and all moneys, documents and records held by them in respect of the Bonds to
the order of the Trustee; or(ii)
    
    to deliver all Certificates and all moneys, documents and
records held by them in respect of the Bonds to the Trustee or as the Trustee
directs in such notice or subsequently; and
 2.5.2
    
    by notice in writing to the Issuer require it to make all subsequent payments
in respect of the Bonds to or to the order of the Trustee and not to the Principal
Agent.
 3
    
    Form of the Bonds and Certificates; Issue of the Bonds
 3.1
    
    The Global Certificate:On issue of the Bonds, the Global Certificate substantially in the
form of Schedule 2 will be issued in respect of the aggregate principal amount of the Bonds
and the Issuer shall procure the Registrar to make such entries of Bonds in the register of
Bondholders as appropriate. The Global Certificate will be issued in the name of the common
depositary for Euroclear and Clearstream or their nominee. The Global Certificate need not be
security printed. The Bonds evidenced by the Global Certificate shall be subject to their
terms in all respects and entitled to the same benefits under this Indenture as Bonds
evidenced by individual Definitive Certificates.
 3.2
    
    The Definitive Certificates:The Definitive Certificates, if issued, will be security printed
in accordance with all applicable stock exchange requirements and will be substantially in the
form set out in Schedule 1 and endorsed with the Conditions. Each Definitive Certificate
issued upon exchange for a beneficial interest in the Global Certificate shall bear the
Regulation S Legend in the form of Schedule 4.
 3.3
    
    Signature:The Global Certificate (and the Definitive Certificates, if issued) will be issued
under the common seal or securities seal of the Issuer and signed manually or in facsimile
(with signatures affixed by mechanical means) by any two directors or authorized persons duly
authorized for the purpose of the Issuer and authenticated manually by or on behalf of the
Registrar. The Issuer may use the signatures of any two directors of the Issuer who at the
date of this Indenture are duly authorized even if at the time of issue of any Certificate or
the Global Certificate either one or both of them no longer hold such office and the Bonds in
respect of which the Global Certificate or a Certificate is so executed and authenticated will
be binding and valid obligations of the Issuer.
 3.4
    
    Issue:Issue and delivery of the Bonds shall be complete on the issue and delivery of the
Global Certificate to the common depositary referred to in Sub-clause 3.1 (or its
representative) by, or by the order of, the Issuer and completion of the register of
Bondholders by or on behalf of the Registrar.
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3.5
    
    Entitlement to treat holder as owner:The holder of any Bond will (save as otherwise required
by law) be treated as its absolute owner for all purposes (whether or not it is overdue and
regardless of any notice of ownership, trust or any interest in it or any writing on or the
theft or loss of the Certificate issued in respect of it) and no person will be liable for so
treating the holder.4
    
    Stamp Duties and Taxes
 4.1
    
    Stamp Duties:The Issuer will pay any stamp, issue, registration, documentary, transfer or
other taxes and duties, including interest and penalties, payable in Cayman Islands or the PRC
or Belgium or the Grand Duchy of Luxembourg in respect of the creation, issue and offering of
the Bonds, the execution or delivery of this Indenture and pay any taxes and capital, stamp,
issue and registration duties in the PRC or Cayman Islands or Belgium or the Grand Duchy of
Luxembourg or, if relevant, the place of the Alternative Stock Exchange, arising from the
deposit of Certificates for the conversion of Bonds and the issue and delivery of Shares
following such deposit, except for the taxes and capital, stamp, issue and registration duties
required to be paid by Bondholders under Condition 6.2.2. The Issuer will also indemnify the
Trustee and the Bondholders from and against all stamp, issue, registration, documentary or
other taxes and duties paid by any of them in any jurisdiction in connection with any action
taken by or on behalf of the Trustee or, as the case may be, (where entitled under Condition
13 to do so) the Bondholders to enforce the obligations of the Issuer under this Indenture or
the Bonds.
 4.2
    
    Change of Taxing Jurisdiction:If the Issuer becomes subject generally to the taxing
jurisdiction of any territory or any authority of or in that territory having power to tax
other than or in addition to Cayman Islands or the PRC or any such authority of or in such
territory which imposes taxes, duties, assessments or governmental charges of whatever nature
with respect to this Indenture or the Bonds then the Issuer will notify the Trustee as soon as
practicable and give to the Trustee an undertaking satisfactory to the Trustee in terms
corresponding to the terms of Condition 9 with the substitution for, or (as the case may
require) the addition to, the references in that Condition to Cayman Islands or the PRC of
references to that other or additional territory or authority to whose taxing jurisdiction the
Issuer has become so subject. In such event, this Indenture and the Bonds, including, but not
limited to, Condition 8.3 will be read accordingly.5
    
    Covenants relating to the Conversion Rights
  5.1
    
    Availability of Shares and ADSs:
reserve, free from any
pre-emptive or other similar
rights, out of its authorized but
unissued ordinary share capital,
(i) the full number of Shares
liable to be issued on conversion
of all the Bonds from time to
time remaining outstanding and
(ii) the full number of ADSs
issuable under its current or any
succeeding Deposit Agreement
liable to be issued on deposit of
Shares conversion of all the
Bonds
from time to time outstanding,
and shall ensure that all ADSs
delivered on conversion of the
Bonds will be duly and validly
issued as fully-paid;
    
    A4.2(1g)
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5.2
    
    Limited Issues of Shares and ADSs:subject to the Conditions, not issue or pay up any securities,
by way of capitalization of profits or reserves unless, in any such case, it gives rise (or
would, if the adjustment would be 1% or more of the Conversion Price then in effect, give
rise) to an adjustment of the Conversion Price, provided that the Issuer may issue or pay up
any security by way of capitalization of profits or reserves (a) by the issue of fully paid
Shares to the Shareholders and other persons entitled to them, (b) by the issue of Shares paid
up in full out of profits or reserves in accordance with applicable law and issued in lieu of
a cash dividend or (c) by the issue of fully paid equity share capital (other than Shares) to
the holders of equity share capital of the same class and other persons entitled thereto,
subject in each case to the provisions of Clause 7;
    
    A4.2(1c)5.3
    
    Limited Modification of Rights:not modify the rights attaching
to the Shares or ADSs with respect to voting, dividends or
liquidation nor issue any other
class of ordinary share capital
carrying any rights which are
more favorable than the rights
attaching to Shares or ADSs but
so that nothing in this
Sub-clause 5.3 shall prevent (a)
the offer or grant of option for
the subscription of or the issue
of equity share capital to
employees (including directors)
or former employees of the Issuer
or any of its Subsidiaries or
associated companies, or persons
related to such employees
(including directors) or former
employees or other eligible
participants under a share option
scheme of the Issuer effective on
December 4, 2007, (b) a
consolidation or subdivision of
the Shares or ADSs or the
conversion of any Shares or ADSs
into stock or vice versa, (c) a
modification to the rights
attaching to the Shares or ADSs
which is not, in the good faith
determination of the board of
directors of the Issuer, after
consultation with an investment
bank of international standing,
materially prejudicial to the
interests of the Bondholders, (d)
the conversion of Shares or ADSs
into, or the issue of any Shares
or ADSs in, uncertificated form
(or the conversion of Shares or
ADSs in uncertificated form to
certificated form) or the
amendment of the articles of
association of the Issuer to
enable title to securities of the
Issuer (including Shares and
ADSs) to be evidenced and
transferred without a written
instrument or any other
alteration to the articles of
association of the Issuer made in
connection with the matters
described in this Sub-clause 5.3
or which are supplemental or
incidental to any of the
foregoing (including amendments
made to enable or facilitate
procedures relating to such
matters and amendments dealing
with the rights and obligations
of holders of securities
(including Shares and ADSs) dealt
with under such procedures) or
(e) any issue of equity share
capital which results (or would,
if the adjustment would be one
per cent. or more of the
Conversion Price then in effect,
otherwise result) in an
adjustment of the Conversion
Price;
    
    A4.2(1j(ii))A4.2(1b)5.4
    
    Limited Grant of Rights:procure that no securities (whether issued by the Issuer or any of its
Subsidiaries or otherwise procured by the Issuer or any of its Subsidiaries to be issued)
issued without rights to convert into or exchange or subscribe for Shares shall subsequently
be granted such rights at a consideration per Share which is less than the Current Market
Price at close of business on the date of the announcement of the proposed inclusion of such
rights unless the same gives rise (or would, if the adjustment would be 1% or more of the
Conversion Price then in effect, give rise) to an adjustment of the Conversion Price and that
at no time shall there be in issue Shares of differing nominal values;
    
    A4.2(1d)
 5.5
    
    Restricted Action:not make any offer, issue, grant or distribution or take any other action
if the effect thereof would be that, on the conversion of Bonds or Shares would fall to be
issued at a discount to their nominal value or would require Shares to be issued in any
other circumstances not permitted by applicable law;
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5.6
    
    Notice:as soon as practicable with the announcement of the terms of any issue pursuant to
Sub-clause 7.1.6 or 7.1.7 and the announcement of any proposed modification pursuant to
Sub-clause 7.1.8 give notice to the Bondholders and the Trustee in accordance with Condition
17 (such notice to be signed by an authorized officer of the Issuer) advising them of the date
on which the relevant adjustment of the Conversion Price is likely to become effective and of
the effect of exercising their rights of conversion before then;
 5.7
    
    Directors Certificate:if an event happens as a result of which the Conversion Price may be
adjusted pursuant to this Indenture, subject to Sub-clause 7.3, as soon as practicable send
the Trustee a certificate signed by two executive officers of the Issuer on behalf of the
Issuer setting out particulars of the event, whether an adjustment to the Conversion Price
falls to be made and, if so, the adjusted Conversion Price and the date on which such
adjustment takes effect, whether an amount falls to be carried forward pursuant to Sub-clause
7.5 and if so the amount to be carried forward and in any case setting out such other
information as the Trustee may reasonably require;
 5.8
    
    Extend Offer:if an offer is made to all (or as nearly as may be practicable all)
Shareholders, or all (or as nearly as may be practicable all) such Shareholders other than the
offeror and/or any affiliate or affiliates (as defined in Rule 144 pursuant to the Securities
Act) of the offeror and parties acting in concert with the offeror to acquire all or a
majority of the issued equity share capital of the Issuer, or if any person proposes a scheme
with regard to such acquisition, give notice of such offer or scheme to the Bondholders at the
same time as any notice thereof is sent to its Shareholders (or as soon as practicable
thereafter) stating that details concerning such offer or scheme may be obtained from the
specified offices of the Agents and the Registrar and provide the Agents and Registrar with
such details and, where such an offer or scheme has been recommended by the Board of Directors
or where such an offer has become or been declared unconditional in all respects, use its best
endeavours to procure that a like offer or scheme is extended to the Bondholders and the
holders of any Shares issued during the period of the offer or scheme arising out of
Conversion Rights;
 5.9
    
    No Reduction of Issued Share Capital:not make any reduction of its issued ordinary share
capital or any uncalled liability in respect thereof or of any share premium account or
capital redemption reserve fund except in each case, as permitted by law or by means of a
purchase or redemption of the share capital of the Issuer permitted by Sub-clause 7.1 or where
the reduction results (or would, but for the fact that the adjustment would be less than 1% of
the Conversion Price then in effect, result) in an adjustment to the Conversion Price under
Sub-clause 7.1;
 5.10
    
    Closing of Register:unless so required by applicable law or regulation or the articles of
association of the Issuer or in order to establish a dividend or other rights attaching to the
Shares, not close its register of Shareholders or take any other action which prevents the
transfer of its ADSs generally and ensure that the Bonds may be converted legally and the ADSs
issued on conversion may (subject to any limitation imposed by law) be transferred (as between
transferor and transferee although not as against the Issuer) at all times while the register
is closed or such other action is effective, nor take any action which prevents the conversion
of the Bonds or the issue of ADSs in respect of them otherwise than in accordance with the
Conditions;
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5.11
    
    Listing of ADSs:use its reasonable endeavours (a) to maintain a listing for all the issued
ADSs on the Nasdaq Global Market, (b) to obtain and maintain a listing for all the ADSs issued
on deposit of Shares issued exercise of Conversion Rights attaching to the Bonds on the Nasdaq
Global Market and, (c) if the Issuer is unable to obtain or maintain such listing, to obtain
and maintain a listing for all the ADSs issued on deposit of Shares issued on the exercise of
the Conversion Rights on an Alternative Stock Exchange as the Issuer may from time to time
(with the prior written consent of the Trustee) determine and will forthwith give notice to
the Bondholders in accordance with Condition 17 of the listing or delisting of the ADSs (as a
class) by any of such stock exchanges; and
 5.12
    
    Expenses:pay the expenses of the issue of, and all expenses of obtaining listing for, ADSs
arising on conversion of the Bonds.
 5.13
    
    Payments: pay all amounts due with respect to the Bonds on the dates and in the manner
provided in the Conditions and in this Indenture. All such amounts shall be considered paid
on the date due if the Paying Agent holds on that date money sufficient to pay the amount then
due with respect to the Bonds (unless there shall be a Default in the payment of such amounts
to the respective Bondholder(s)). The Issuer will pay, in money of the United States that at
the time of payment is legal tender for payment of public and private debts, all amounts due
in cash with respect to the Bonds, which amounts shall be paid (A) in the case of a Bond that
is in global form, by wire transfer of immediately available funds to the account designated
by the Depositary or its nominee; (B) in the case of a Bond that is held, other than global
form, by a Bondholder of more than thirty-five million Renminbi (RMB35,000,000) in aggregate
principal amount of Bonds, by wire transfer of immediately available funds to the account
specified by such Bondholder or, if such Bondholder does not specify an account, by mailing a
check to the address of such Bondholder set forth in the register of the Registrar; and (C) in
the case of a Bond that is held, other than global form, by a Bondholder of thirty-five
million Renminbi (RMB35,000,000) or less in aggregate principal amount of Bonds, by mailing a
check to the address of such Bondholder set forth in the register of the Registrar. The
Issuer shall pay, in cash, interest on any overdue amount (including, to the extent permitted
by applicable law, overdue interest) at the rate borne by the Bonds.
 5.14
    
    Compliance Certificate:The Issuer shall deliver to the Trustee, within ninety (90) calendar
days after the end of each fiscal year of the Issuer, or, if earlier, by the date the Issuer
is, or would be, required to file with the SEC the Issuers annual report (whether on Form
20-F under the Exchange Act or another appropriate form) for such fiscal year, certificate of
two (2) or more Officers, stating whether or not the signatories to such certificate have
actual knowledge of any Default or Event of Default by the Issuer in performing any of its
obligations under this Indenture or the Bonds. If such signatories do know of any such
Default or Event of Default, then such certificate shall describe the Default or Event of
Default and its status.
 5.15
    
    F-6 Registration Statement:The Company will use its reasonable best efforts to keep the F-6
Registration Statement continuously effective.
 equity share capital
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6
    
    Notices Relating to the Conversion Rights6.1
    
    Requirement to give notice:If after the date of this Indenture:
 6.1.1
    
    the Issuer authorizes the grant, issue or offer to the holders of Shares of
options (except the grant of options under an approved Share Option Scheme), rights or
warrants to subscribe for or purchase either any Shares or any securities convertible
into, or exchangeable for or which confer rights to purchase, Shares; or
 6.1.2
    
    the Issuer declares, or pays or makes a Capital Distribution, or authorizes
the grant, issue or offer to the holders of Shares of rights or warrants to subscribe
for or purchase any shares or securities other than Shares or any securities
convertible into or exchangeable for or which confer rights to purchase Shares which
will, upon declaration or payment, or when made, or upon grant, issue or offer, give
rise to an adjustment to the Conversion Price pursuant to Clause 7; or
 6.1.3
    
    there is a re-classification of the Shares (including a sub-division or
consolidation of the Issuers outstanding Shares) or a consolidation, merger or
amalgamation to which the Issuer is a party or any sale or transfer of all or
substantially all of the assets or business of the Issuer which will, upon such an
event, give rise to an adjustment to the Conversion Price pursuant to Clause 7; or
 6.1.4
    
    the Issuer authorizes the issue of any securities convertible into or
exchangeable for Shares or rights or warrants to subscribe for or purchase Shares or
securities (other than those referred to in Sub-clause 6.1.1 or 6.1.2 above) which
will, or authorizes the issue of any Shares which will, (or, if in any such case a
relevant consideration or offering price fixed by the Board of Directors to be
recommended at a relevant general meeting of Shareholders is adopted, will) upon issue
give rise to an adjustment to the Conversion Price pursuant to Clause 7; or
 6.1.5
    
    there is a voluntary or involuntary dissolution, liquidation or winding-up of
the Issuer,
  (a)
    
    the record date in Cayman Islands for such grant, issue or offer of options,
rights or warrants, dividend, distribution or payment or such re-classification (and,
in the case of the grant, issue or offer of options, rights or warrants, the period
during which such options, rights or warrants may be exercised); or
 (b)
    
    the date in Cayman Islands (1) on which such re-classification, consolidation,
merger, amalgamation, sale, transfer, dissolution, liquidation or winding-up is to be
submitted to a general meeting of the holders of ordinary shares of the Issuer for
approval, and (2) which is the record date for the same (if applicable), and (3) on
which such re-classification, consolidation, merger, amalgamation, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective, and (4) as of
which it is expected that holders of Shares will be entitled, if at all, to exchange
their Shares for securities or other property deliverable upon such re-classification,
consolidation, merger, amalgamation, sale, transfer, dissolution, liquidation or
winding-up; or
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(c)
    
    (in the event of the declaration of a Capital Distribution referred to in
Sub-clause 6.1.2 above, the payment of which must be submitted for approval to a
general meeting of Shareholders or to a meeting of the Board of Directors before such
Capital Distribution may be paid or made) the date of such submission; or
 (d)
    
    (in the event of an issue referred to in Sub-clause 6.1.4 above) the date of
such issue; or
 (e)
    
    (in the event of such re-classification, consolidation, merger, amalgamation,
sale, transfer, dissolution, liquidation or winding-up not being submitted to a general
meeting of Shareholders for approval) (1) the record date for the same (if applicable),
and (2) the date when the same becomes effective;
  6.2
    
    Where Adjustment to Conversion Price Required:If the event referred to in the notice
required pursuant to Sub-clause 6.1 would result in an adjustment to the Conversion Price,
such notice shall also state the Conversion Price in effect at the time such notice is
required to be given and the Conversion Price which will result after giving effect to such
event or, if such adjusted Conversion Price is not then determinable, the fact that an
adjustment in the Conversion Price may result. Without prejudice to Sub-clause 5.5, if, after
giving effect to the event covered by any such notice and to any adjustment in the Conversion
Price, the Shares could not or might not (but for Sub-clause 7.6), under applicable law then
in effect, be legally issued on conversion of Bonds as fully-paid, such notice shall also
state such fact and the extent to which, by reason of such provisions, effect will not be
given to such adjustment.
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6.3
    
    Notice of Adjustment:If, while any Conversion Right is or is capable of being or becoming
exercisable, there shall be any adjustment to the Conversion Price, the Issuer shall (a) as
soon as practicable notify the Trustee and the Agents of particulars of the event
giving rise to the adjustment, the Conversion Price before and after the adjustment, the
date on which the adjustment takes effect and such other relevant information as the Trustee
may require, and (b) promptly after the adjustment takes effect, give notice to the
Bondholders stating that the Conversion Price has been adjusted and setting out the event
giving rise to the adjustment, the Conversion Price in effect before the adjustment, the
adjusted Conversion Price and the effective date of the adjustment. However, a notice
pursuant to another Sub-clause of this Clause 6 correctly stating any information required
to be given pursuant to this Sub-clause shall, as to such information, satisfy the
requirements of this Sub-clause 6.3.
 6.4
    
    Notification of Closed Periods:The Issuer shall give not less than 15 days nor more than 60
days notice to the Trustee and the Agents of (a) any days during the Conversion Period on
which the Issuers register of Shareholders is to be closed by reason of Cayman Islands law or
regulation or the articles of association of the Issuer or for the purpose of establishing any
dividend or other rights attaching to the Shares, and (b) any other day during the Conversion
Period on which it is aware that its register of Shareholders is to be closed. The notice
shall state the reason for such closure and whether the Issuer intends to give notice to
Bondholders of the closure.
 6.5
    
    Notice of the end of the Conversion Period:Bondholders must be given by the Issuer not less
than 28 days nor more than 42 days notice in writing prior to September 10, 2012 reminding
them of the Conversion Right and the Conversion Price.7
    
    Adjustments to the Conversion Price7.1
    
    The Conversion Price shall be adjusted as follows:
 7.1.1
    
    Consolidation, Subdivision or Reclassification:If and whenever there shall be
an alteration to the nominal value of the Shares as a result of consolidation,
subdivision or reclassification, the Conversion Price shall be adjusted by multiplying
the Conversion Price in force immediately before such alteration by the following
fraction:
 AB
  A
    
    is the nominal amount of one Share immediately after such alteration; andB
    
    is the nominal amount of one Share immediately before such alteration.
  7.1.2
    
    Capitalization of Profits or Reserves:If and whenever the Issuer shall issue
any Shares credited as fully paid to the Shareholders by way of capitalization of
profits or reserves (including any share premium account) including Shares paid up out
of distributable profits or reserves and/or share premium account issued, the
Conversion Price shall be adjusted by multiplying the Conversion Price in force
immediately before such issue by the following fraction:
 AB
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A
    
    is the aggregate nominal amount of the issued Shares immediately
before such issue; andB
    
    is the aggregate nominal amount of the issued Shares immediately after
such issue.
 7.1.3
    
    Capital Distribution:If and whenever the Issuer shall pay or make any Capital
Distribution to the Shareholders (except where the Conversion Price falls to be
adjusted under Sub-clause 7.1.2 above), the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately before such Capital Distribution
by the following fraction:
 A-BA
  A
    
    is the Current Market Price of one Share on last Trading Day
preceeding the date on which the Capital Distribution is publicly
announced; andB
    
    is the Fair Market Value on the date of such announcement, as
determined in good faith by the board of directors of the Company
after consultation with an investment bank of international standing,
of the portion of the Capital Distribution attributable to one Share.
  7.1.4
    
    Rights Issues of Shares or Options over Shares:If and whenever the Issuer
shall issue Shares to all or substantially all Shareholders as a class by way of
rights, or issue or grant to all or substantially all Shareholders as a class, by way
of rights, options, warrants or other rights to subscribe for or purchase any Shares,
in each case at less than the Current Market Price per Share on the last Trading Day
preceding the date of the announcement of the terms of such issue or grant, the
Conversion Price shall be adjusted by multiplying the Conversion Price in force
immediately before such issue or grant by the following fraction:
 A+BA+C
  A
    
    is the number of Shares in issue immediately before such announcement;B
    
    is the number of Shares which the aggregate amount (if any) payable
(i) for the Shares issued by way of rights or (ii) for the options or
warrants or other rights issued by way of rights and for the total
number of Shares issuable upon exercise thereof, would purchase at
such Current Market Price per Share; and
  14




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##### 



C
    
    is the aggregate number of Shares issued or, as the case may be,
comprised in the issue or grant.
  7.1.5
    
    Rights Issues of Other Securities:If and whenever the Issuer shall issue any securities
(other than Shares or options, warrants or other rights to subscribe for or purchase
Shares) to all or substantially all Shareholders as a class, by way of rights, or the
grant to all or substantially all Shareholders as a class by way of rights, of any
options, warrants or other rights to subscribe for or purchase, any securities (other
than Shares or options, warrants or other rights to subscribe or purchase Shares), the
Conversion Price shall be adjusted by multiplying the Conversion Price in force
immediately before such issue or grant by the following fraction:
 A-BA
  A
    
    is the Current Market Price of one Share on the last Trading Date
preceding the date on which such issue or grant is publicly announced;
andB
    
    is the Fair Market Value on the date of such announcement, as
determined in good faith by the board of directors of the Issuer after
consultation with an investment bank of international standing, of the
portion of the rights attributable to one Share.
  7.1.6
    
    Issues at less than Current Market Price:If and whenever the Issuer shall
issue (otherwise than as mentioned in Sub-clause 7.1.4 above) wholly for cash any
Shares (other than Shares issued on the exercise of Conversion Rights or on the
exercise of any other rights of conversion into, or exchange or subscription for,
Shares) or issue or grant (otherwise than as mentioned in Sub-clause 7.1.4 above)
wholly for cash or for no consideration, any options, warrants or other rights to
subscribe for or purchase Shares in each case at a price per Share which is less than
the Current Market Price on the last Trading Day preceding the date of announcement of
the terms of such issue or grant, the Conversion Price shall be adjusted by multiplying
the Conversion Price in force immediately before such issue by the following fraction:
 A+BC
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A
    
    is the number of Shares in issue immediately before the issue of such
additional Shares or the grant of such options, warrants or other
rights to subscribe for or purchase any Shares;B
    
    is the number of Shares which the aggregate consideration receivable
for the issue of such additional Shares would purchase at such Current
Market Price per Share; andC
    
    is the number of Shares in issue immediately after the issue of such
additional Shares.
   7.1.7
    
    Other Issues at less than Current Market Price:Save in the case of an issue
of securities arising from a conversion or exchange of other securities in accordance
with the terms applicable to such securities themselves falling within the provisions
of this Sub-clause 7.1.7, the issue wholly for cash by the Issuer or any of its
Subsidiaries (otherwise than as mentioned in Sub-clauses 7.1.4, 7.1.5 or 7.1.6 above)
or (at the direction or request of or pursuant to any arrangements with the Issuer or
any of its Subsidiaries) any other company, person or entity of any securities (other
than the Bonds) which by their terms of issue carry rights of conversion into, or
exchange or subscription for, Shares to be issued by the Issuer upon conversion,
exchange or subscription at a consideration per Share which is less than the Current
Market Price on the date of announcement of the terms of issue of such securities.
  A+BA+C
  A
    
    is the number of Shares in issue immediately before such issue;B
    
    is the number of Shares which the aggregate consideration receivable
by the Issuer for the Shares to be issued on conversion or exchange or
on exercise of the right of subscription attached to such securities
would purchase at such Current Market Price; andC
    
    is the maximum number of Shares to be issued on conversion or exchange
of such securities or on the exercise of such rights of subscription
attached thereto at the initial conversion, exchange or subscription
price or rate.
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7.1.8
    
    Modification of Rights of Conversion etc.:If and whenever there shall be any
modification of the rights of conversion, exchange or subscription attaching to any
such securities as are mentioned in Sub-clause 7.1.7 above (other than in accordance
with the terms applicable to such securities) so that the consideration per Share (for
the number of Shares available on conversion, exchange or subscription following the
modification) is less than the Current Market Price on the last Trading Day preceding
the date of announcement of the proposals for such modification, the Conversion Price
shall be adjusted by multiplying the Conversion Price in force immediately before such
modification by the following fraction:
 A+BA+C
  A
    
    is the number of Shares in issue immediately before such modification;B
    
    is the number of Shares which the aggregate consideration (if any)
receivable by the Issuer for the Shares to be issued, or otherwise
made available, on conversion or exchange or on exercise of the right
of subscription attached to the securities, in each case so modified,
would purchase at such Current Market Price per Share or, if lower,
the existing conversion, exchange or subscription price of such
securities; andC
    
    is the maximum number of Shares to be issued, or otherwise made
available, on conversion or exchange of such securities or on the
exercise of such rights of subscription attached thereto at the
modified conversion, exchange or subscription price or rate but giving
credit in such manner as the board of directors of the Issuer, after
consultation with an investment bank of international standing,
considers appropriate (if at all) for any previous adjustment under
this Sub-clause 7.1.8 or Sub-clause 7.1.7 above.
  7.1.9
    
    Other Offers to Shareholders:The issue, sale or distribution by or on behalf
of the Issuer or any of its Subsidiaries or (at the direction or request of or pursuant
to any arrangements with the Issuer or any of its Subsidiaries) any other company,
person or entity of any securities in connection with an offer by or on behalf of the
Issuer or any of its Subsidiaries or such other company, person or entity pursuant to
which offer the Shareholders generally (meaning for these purposes the holders of at
least 60% of the Shares outstanding at the time such offer is made) are entitled to
participate in arrangements whereby such securities may be acquired by them (except
where the Conversion Price falls to be adjusted under Sub-clauses 7.1.4, 7.1.5, 7.1.6
or 7.1.7 above).
   17




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A-BA
  A
    
    is the Current Market Price of one Share on the last Trading Day
preceding the date on which such issue is publicly announced; andB
    
    is the Fair Market Value on the date of such announcement, as
determined in good faith by the board of directors of the Issuer after
consultation with an investment bank of international standing, of the
portion of the rights attributable to one Share.
  7.1.10
    
    Other Events:If the Issuer or the Trustee determines that an adjustment should be
made to the Conversion Price as a result of one or more events or circumstances not
referred to in this Sub-clause 7.1, the board of directors of the Issuer, after
consultation with an investment bank of international standing, shall determine in good
faith as soon as practicable what adjustment (if any) to the Conversion Price is fair
and reasonable to take account thereof, if the adjustment would result in a reduction
in the Conversion Price, and the date on which such adjustment should take effect and
upon such determination such adjustment (if any) shall be made and shall take effect in
accordance with such determination PROVIDED THATwhere the circumstances giving rise to
any adjustment pursuant to this Sub-clause 7.1 have already resulted or will result in
an adjustment to the Conversion Price or where the circumstances giving rise to any
adjustment arise by virtue of circumstances which have already given rise or will give
rise to an adjustment to the Conversion Price, such modification (if any) shall be made
to the operation of the provisions of this Sub-clause 7.1 as may be determined in good
faith by the board of directors of the Issuer after consultation with an investment
bank of international standing to be in its opinion appropriate to give the intended
result.
 7.2
    
    Calculation of Consideration Receivable:For the purpose of any calculation of the
consideration receivable pursuant to Sub-clauses 7.1.6, 7.1.7 and 7.1.8:
 7.2.1
    
    Issue of Shares for Cash:the aggregate consideration receivable for Shares
issued for cash shall be the amount of such cash provided that in no case shall any
deduction be made for any commission or any expenses paid or incurred by the Issuer for
any underwriting of the issue or otherwise in connection therewith; and
 7.2.2
    
    Issue of Shares on Conversion or Exercise of Securities:(1) the aggregate
consideration receivable for the Shares to be issued on the conversion or exchange of
any securities shall be deemed to be the consideration received or receivable by the
Issuer for any such securities and (2) the aggregate consideration receivable for the
Shares to be issued on the exercise of rights of subscription attached to any
securities shall be deemed to be that part (which may be the whole) of the
consideration received or receivable by the Issuer for such securities which is
attributed by the Issuer to such rights of subscription or, if no part of such
consideration is so attributed or the Trustee so requires by written notice to the
Issuer, the Fair Market Value of such rights of subscription as at the date of the
announcement of the terms of issue of such securities (as determined
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in good faith by the board of directors of the Company after consultation with an
investment bank of international standing, plus in the case of each of (1) and (2)
above, the additional minimum consideration (if any) to be received by the Issuer on
the conversion or exchange of such securities, or on the exercise of such rights of
subscription (the consideration in all such cases to be determined subject to the
proviso in Sub-clause 7.2.1) and (3) the consideration per Share receivable by the
Issuer on the conversion or exchange of, or on the exercise of such rights of
subscription attached to, such securities shall be the aggregate consideration
referred to in (1) or (2) above (as the case may be) converted into United States
dollars if such consideration is expressed in a currency other than United States
dollars at such rate of exchange as may be determined in good faith by the board of
directors of the Company after consultation with an investment bank of international
standing to be the spot rate ruling at the close of business on the date of
announcement of the terms of issue of such securities, divided by the number of
Shares to be issued on such conversion or exchange or exercise at the initial
conversion, exchange or subscription price or rate.
 7.3
    
    More than One Event in Quick Succession: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 the board of directors of the Issuer after consultation with an investment
bank of international standing, 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 determined by the board of directors of the Issuer
after consultation with an investment bank of international standing, to be in the board of
directors opinion appropriate in order to give such intended result.
 7.4
    
    Certificate Conclusive:If any doubt shall arise as to the appropriate adjustment to the
Conversion Price, the good faith determination of the board of directors of the Issuer, after
consultation with an investment bank of international standing, shall be conclusive and
binding on all concerned save in the case of manifest error.
 7.5
    
    Rounding and Minor Adjustments:On any adjustment, the relevant Conversion Price, if not an
integral multiple of US$0.01, shall be rounded down to the nearest US$0.01. No adjustment
shall be made to the Conversion Price where such adjustment (rounded down if applicable) would
be less than 1% of the Conversion Price then in effect. Any adjustment not required to be
made, and any amount by which the Conversion Price has not been rounded down, shall be carried
forward and taken into account in any subsequent adjustment. Notice of any adjustment shall be
given to Bondholders in accordance with Condition 17 as soon as practicable after the
determination thereof.
 7.6
    
    No Discount to Par Value:The Conversion Price may not be reduced so that, on conversion of
Bonds, Shares would fall to be issued at a discount to their nominal value or would require
Shares to be issued below their par value or in any other circumstances not permitted by
applicable law.
 7.7
    
    Selection of Investment Banks:It shall contitute a breach of this Indenture for the Issuer
to fail to consult with an independent investment bank when required for the purposes of this
Clause 7.
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7.8
    
    Post-Record Date Adjustments:If the Conversion Date in relation to any Bond shall be after
the record date for any such issue, distribution, grant, offer or other event as is
mentioned in Sub-clause 7.1.2 to 7.1.5 and 7.1.9, or any such issue as is mentioned in
Sub-clause 7.1.6 and 7.1.7 which is made to the Shareholders or any of them, but before the
relevant adjustment becomes effective under Sub-clause 7.1, the Issuer shall (conditional on
such adjustment becoming effective) procure that there be issued to the converting
Bondholder or in accordance with the instructions contained in the Conversion Notice
(subject to applicable exchange control or other laws or other regulations) such additional
number of Shares as, together with the Shares issued or to be issued on conversion of the
relevant Bond, is equal to the number of Shares which would have been required to be issued
on conversion of such Bond if the relevant adjustment (more particularly referred to in the
said Clauses above) to the Conversion Price had in fact been made and become effective
immediately after the relevant record date. Such additional Shares will be allotted as at,
and within one month after, the relevant Conversion Date or, if the adjustment results from
the issue of Shares, the date of issue of Shares. Certificates for such Shares will be
despatched within such period of one month.
 7.9
    
    No Duty to Monitor:The Trustee shall not be under any duty to monitor whether any event or
circumstance has happened or exists which may require an adjustment to be made to the
Conversion Price and will not be responsible to Bondholders for any loss arising from any
failure by it to do so.
 7.10
    
    Share Option Schemes:No adjustment shall be made to the Conversion Price where Shares or
other securities (including rights, warrants or options) are issued, offered, exercised,
allotted, appropriated, modified or granted to or for the benefit of eligible participants
such as directors (including directors holding or formerly holding executive and non-executive
offices), employees or former employees and consultants of the Issuer or any Subsidiary or any
associated company of the Issuer pursuant to any Share Option Scheme.
 7.11
    
    Increase in the Conversion Price:No adjustment involving an increase in the Conversion Price
will be made, except in the case of a consolidation of the Shares as referred to in Sub-clause
7.1.1 above or to correct an error.8
    
    Consolidation, Amalgamation or Merger
 Merger
 (a)
    
    the corporation formed by such Merger or the person that acquired such
properties and assets shall expressly assume, by a supplemental indenture, all
obligations of the Issuer under this Indenture and the performance of every covenant
and agreement applicable to it contained herein;
 (b)
    
    immediately after giving effect to any such Merger, no Event of Default, and no
event which, after notice or lapse of time, or both, may become an Event of Default
shall have occurred and be continuing or would result therefrom; and
 (c)
    
    the corporation formed by such Merger, or the person that acquired such
properties and assets, shall expressly agree, among other things, to indemnify each
holder of a Bond against any tax, assessment or governmental charge payable by
withholding or deduction thereafter imposed on such holder solely as a
consequence of such Merger with respect to the payment of principal and premium on
the Bonds.
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9
    
    Application of Moneys Received by the Trustee
 9.1
    
    Declaration of Trust:All moneys received by the Trustee in respect of the Bonds or amounts
payable under this Indenture will, despite any appropriation of all or part of them by the
Issuer, be held by the Trustee upon trust to apply them (subject to Sub-clause 9.2):
      9.2
    
    Accumulation:If the amount of the moneys at any time available for payment in respect of the
Bonds under Sub-clause 9.1 is less than 10% of the principal amount of the Bonds then
outstanding, the Trustee may, at its sole discretion, invest such moneys upon some or one of
the investments authorised under Sub-clause 9.3 with power from time to time similarly to vary
such investments. The Trustee may retain such investments and accumulate the resulting income
until the investments and the accumulations, together with any other funds for the time being
under its control and available for such payment, amount to at least 10% of the principal
amount of the Bonds then outstanding and then such investments, accumulations and funds (after
deduction of, or provision for, any applicable taxes) will be applied as specified in
Sub-clause 9.1.
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9.3
    
    Investment:Moneys held by the Trustee may be invested in its name or under its control in
any investments or other assets anywhere whether or not they produce income or deposited in
its name or under its control at such bank or other financial institution in such currency as
the Trustee may, in its absolute discretion, think fit. If that bank or institution is the
Trustee or a subsidiary, holding or associated company of the Trustee, it needs only account
for an amount of interest equal to the standard amount of interest payable by it on such a
deposit to an independent customer. The Trustee may at any time vary or transpose any such
investments or assets or convert any moneys so deposited into any other currency, and will not
be responsible for any resulting loss, whether by depreciation in value, change in exchange
rates or otherwise.10
    
    General Covenants
  10.1
    
    Books of Account:keep, and procure that its Subsidiaries (so far as required by applicable
law) keep, proper books of account and, at any time after an Event of Default or Potential
Event of Default has occurred or if the Trustee has grounds to believe that such an event has
occurred, so far as permitted by applicable law, allow, and procure that each of its
Subsidiaries will allow, the Trustee and anyone appointed by it, access to the books of
account of the Issuer and/or the relevant Subsidiary respectively at all reasonable times
during normal business hours;
 10.2
    
    Notice of Events of Default:notify the Trustee in writing immediately on becoming aware of
the occurrence of any Event of Default or Potential Event of Default;
 10.3
    
    Information:so far as permitted by applicable law and regulations, give the Trustee such
information as it requires to perform its functions;
 10.4
    
    Financial Statements etc.:send to the Trustee, as soon as practicable and in any event
within ten days of request from the Trustee (and, in the case of each annual Fiscal Period, in
any event within 180 days after the close of the relevant Fiscal Period) after the same is
made available to its Shareholders following the close of each Fiscal Period, three copies or
translations, in each case in English, of the following:
 10.4.1
    
    in the case of the first quarterly Fiscal Period falling within each of the annual
Fiscal Periods, the quarterly interim report containing unaudited consolidated Accounts
of the Issuer in respect of such Fiscal Period which Accounts are prepared on a basis
as required by the Listing Rules; and
 10.4.2
    
    in the case of each annual Fiscal Period, the annual report containing audited
Accounts (including without limitation the income statement and the balance sheets) of
the Issuer as at the end of, and for, such Fiscal Period, reported on by the Auditors
and prepared in accordance with generally accepted accounting principles and commercial
practice in the United States;
  10.5
    
    Information Material to Bondholders:send to the Trustee three copies or translations, in
each case in the English language, of all notices, statements and documents which are
issued to the holders of its Shares or ADSs or its creditors generally as soon as
practicable (but not later than 30 days) after their date of issue and make available to the
Agents (without cost to the Agents) as many further copies or translations as they may
reasonably request in order to satisfy requests from Bondholders for them;
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10.6
    
    Other Information:send to the Trustee together with the Accounts referred to in Sub-clause
10.4 a list in the English language of all documents issued, during or in respect of the
relevant annual Fiscal Period, by the Issuer to its Shareholders, which list shall indicate
the principal subject of each of such documents, and (if the Trustee so requires at any time)
provide a certified copy or translation, in each case in the English language, of any document
described in such list (except those documents already sent to the Trustee pursuant to
Sub-clause 10.5) within 30 days after being requested so to do;
 10.7
    
    Directors Certificate:send to the Trustee, at the same time as its annual audited Accounts
being provided pursuant to Sub-clause 10.4.2 above, and also within 14 days after any request
by the Trustee, a certificate of the Issuer signed by a director on behalf of the Issuer to
the effect that, having made all reasonable enquiries, to the best of the knowledge,
information and belief of the Issuer as at a date (the Certification Date) being not more
than five days before the date of the certificate:
 10.7.1
    
    no Event of Default or Potential Event of Default had occurred since the date of this
Indenture or the Certification Date of the last such certificate (if any) or, if such
an event had occurred, giving details of it; and10.7.2
    
    the Issuer has complied with all its obligations under this Indenture.
  10.8
    
    Notices to Bondholders:send to the Trustee at least seven days (or such shorter period as
may be agreed by the Trustee) prior to the date of publication, a copy of the form of each
notice to be given to Bondholders and once given, two copies of each such notice, such notice
to be in a form approved by the Trustee (such approval not to be unreasonably withheld) and
(if applicable) complying with the requirements of the Nasdaq Global Market or an Alternative
Stock Exchange;
 10.9
    
    Further Acts:so far as permitted by applicable law and regulations, do such further things
as may be necessary in the opinion of the Trustee to give effect to this Indenture;
 10.10
    
    Notice of late payment:forthwith upon request by the Trustee give notice to the Bondholders
of any unconditional payment to the Principal Agent or the Trustee of any sum due in respect
of the Bonds made after the due date for such payment;
 10.11
    
    Change in Agents:give at least 14 days prior notice to the Bondholders of any future
appointment, resignation or removal of any Agent or of the Registrar or of any change by any
Agent or by the Registrar of its specified office and not make any such appointment or removal
without the Trustees prior written approval (such approval not to be unreasonably withheld or
delayed);
 10.12
    
    Early Redemption:give prior notice to the Trustee of any proposed early redemption pursuant
to Condition 8.2 or 8.3;
 10.13
    
    Compliance:the Conditions shall be binding on the Issuer and the Bondholders. The Trustee
shall be entitled to enforce the obligations of the Issuer under the Bonds and the Conditions
as if the same were set out and contained in this Indenture, which shall be read
and construed as one document with the Bonds. The provisions contained in Schedule 3 shall
have effect in the same manner as if herein set forth;
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10.14
    
    Bonds held by the Issuer etc.: send to the Trustee as soon as practicable after being so
requested by the Trustee a certificate of the Issuer signed by a director stating the number
of Bonds held at the date of such certificate by or on behalf of the Issuer or its
Subsidiaries;
 10.15
    
    Default Interest: if there shall be a default in the payment of all or any part of the
principal and premium (if any) on any Bond when the same shall have become due and payable,
whether upon maturity or by declaration or otherwise, pay default interest on any overdue
principal and premium (if any) at the rate of 5% per annum, which shall accrue (subject to
Condition 7.6) on the overdue sum from the due date on the basis of the actual number of days
elapsed and a 360-day year;
 10.16
    
    Notification of a Relevant Event: notify the Trustee in writing and the holders of the Bonds
in accordance with the Conditions by not later than 14 days following the first day on which
it becomes aware of the occurrence of a Relevant Event; and
 10.17
    
    European Union Directive: if the conclusions of the ECOFIN Council meeting of November
26-27, 2000 on the taxation of savings income are implemented, ensure that it maintains or
appoints, as the case may be, a Paying Agent and Conversion Agent with a specified office in a
European Union member state that will not be obliged to withhold or deduct tax pursuant to
European Council Directive 2003/48/EC or any other European Union Directive on the taxation of
savings implementing the conclusions of the ECOFIN Council meeting of 2627 November 2000 or
any law implementing or comprising, or introduced in order to conform to, such Directive.11
    
    Remuneration and Indemnification of the Trustee
 11.1
    
    Normal Remuneration:So long as any Bond is outstanding the Issuer will pay the Trustee as
remuneration for its services as Trustee such sum on such dates in each case as they may from
time to time agree in writing. Such remuneration will accrue from day to day from the date of
this Indenture. However, if any payment to a Bondholder of moneys due in respect of any Bond
or delivery of Shares on conversion of a Bond is improperly withheld or refused by the Issuer,
such remuneration will again accrue as from the date of such withholding or refusal until
payment or delivery to such Bondholder or the Trustee is duly made.
 11.2
    
    Extra Remuneration:If an Event of Default or a Potential Event of Default shall have
occurred or if the Trustee (after prior consultation with the Issuer) finds it expedient or
necessary or is requested by the Issuer to undertake duties which are agreed by the Trustee
and the Issuer to be of an exceptional nature or otherwise outside the scope of the Trustees
normal duties under this Indenture, the Issuer will pay such additional remuneration as they
may agree or, failing agreement as to any of the matters in this Sub-clause 11.2 (or as to
such sums referred to in Sub-clause 11.1), as determined by the boad of directors of the
Issuer after consultation with an investment bank of international standing. The expenses
involved in such nomination and such investment banks fee will be paid by the Issuer. The
determination of such investment bank will be conclusive and binding on the Issuer, the
Trustee and the Bondholders.
  24




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##### 



11.3
    
    Expenses:The Issuer will also on demand by the Trustee pay or discharge all costs, charges,
liabilities and expenses properly incurred by the Trustee in the preparation and execution of
this Indenture and the performance of its functions under this Indenture including, but not
limited to, legal and traveling expenses and any stamp, documentary or other taxes or duties
paid by the Trustee in connection with any legal proceedings properly brought or contemplated
by the Trustee against the Issuer to enforce any provision of this Indenture or the Bonds.
Such costs, charges, liabilities and expenses will:
 11.3.1
    
    in the case of payments made by the Trustee before such demand carry interest from
the due date of such demand and shall accrue at the rate of one per cent. above the
costs of funds reasonably determined by the Trustee; and
 11.3.2
    
    in other cases carry interest at such rate from 30 days after the due date of the
demand or (where the demand specifies that payment is to be made on an earlier date)
from such earlier date.
 11.4
    
    Indemnity:The Issuer will on demand by the Trustee indemnify it in respect of Amounts or
Claims paid or incurred by it in acting as the Trustee under this Indenture (including (1) any
Agent/Delegate Liabilities and (2) in respect of any proceedings or disputing or defending any
Amounts or Claims made against the Trustee or any Agent/Delegate Liabilities). The Issuer will
on demand by such agent or delegate indemnify it against such Agent/Delegate Liabilities.
Amounts or Claims are losses, liabilities, costs, claims, actions, demands or expenses and
Agent/Delegate Liabilities are Amounts or Claims which the Trustee is or would be obliged to
pay or reimburse to any of its agents or delegates appointed pursuant to this Indenture.
 11.5
    
    Continuing Effect:Sub-clauses 11.3 and 11.4 will continue in full force and effect as
regards the Trustee even if it no longer is Trustee or the Bonds are no longer outstanding or
this Indenture has been discharged.12
    
    Supplemental Provisions
 12.1
    
    Advice: The Trustee may act on the opinion or advice of, or information obtained from, any
expert (including the Auditors), whether obtained by or addressed to the Issuer, the Trustee,
the Principal Agent or otherwise, and notwithstanding any monetary or other limit on liability
in respect thereof, will not be responsible to anyone for any loss occasioned by so acting.
Any such opinion, advice or information may be sent or obtained by letter, telex, fax or
electronic mail and the Trustee will not be liable to anyone for acting in good faith on any
opinion, advice or information purporting to be conveyed by such means, notwithstanding any
limitation on liability (monetary or otherwise) in relation to such persons opinion or advice
and even if it contains some error or is not authentic.
 12.2
    
    Trustee to Assume Performance:The Trustee need not notify anyone of the execution of this
Indenture or do anything to find out if an Event of Default or Potential Event of Default has
occurred. Until it has actual knowledge or express notice to the contrary, the Trustee may
assume that no such event has occurred and that the Issuer is performing all its obligations
under this Indenture and the Bonds.
 12.3
    
    Resolutions of Bondholders:The Trustee will not be responsible for having acted in good
faith on a resolution purporting to have been passed at a meeting of Bondholders in respect of
which minutes have been made and signed even if it is later found that there
was a defect in the constitution of the meeting or the passing of the resolution or that the
resolution was not valid or binding on the Bondholders.
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12.4
    
    Certificate signed by Directors:If the Trustee, in the exercise of its functions, requires
to be satisfied or to have information as to any fact or the expediency of any act, it may
call for and accept as sufficient evidence of that fact or the expediency of that act a
certificate signed by any Director of the Issuer as to that fact or to the effect that, in
their opinion, that act is expedient and the Trustee need not call for further evidence and
will not be responsible for any loss occasioned by acting on such a certificate.
 12.5
    
    Deposit of Documents:The Trustee may appoint as custodian, on any terms, any bank or entity
whose business includes the safe custody of documents or any lawyer or firm of lawyers
reasonably believed by it to be of good repute and may deposit this Indenture and any other
documents with such custodian and pay all sums due in respect thereof.
 12.6
    
    Discretion:Subject to Clause 13, the Trustee will have absolute and uncontrolled discretion
as to the exercise of its functions pursuant to the terms of this Indenture and the Conditions
and will not be responsible for any loss, liability, cost, claim, action, demand, expense or
inconvenience which may result from their exercise or non-exercise. Whenever in this
Indenture, the Agency Agreement or by law, the Trustee shall have discretion or permissive
power it may decline to exercise the same in the absence of approval by the Bondholders.
 12.7
    
    Agents:Whenever it reasonably considers it expedient in the interests of the Bondholders,
the Trustee may, in the conduct of its trust business, instead of acting personally, employ
and pay an agent selected by it, whether or not a lawyer or other professional person, to
transact or conduct, or concur in transacting or conducting, any business and to do or concur
in doing all acts required to be done by the Trustee (including the receipt and payment of
money).
 12.8
    
    Delegation:Whenever it considers it expedient in the interests of the Bondholders, the
Trustee may delegate to any person on any terms (including power to sub-delegate) all or any
of its functions.
 12.9
    
    Nominees:In relation to any asset held by it under this Indenture, the Trustee may appoint
any person to act as its nominee on any terms.
 12.10
    
    Forged Bonds:The Trustee will not be liable to the Issuer or any Bondholder by reason of
having accepted as valid or not having rejected any Bond purporting to be such and later found
to be forged or not authentic.
 12.11
    
    Confidentiality:Unless ordered to do so by a court of competent jurisdiction (and provided
that, subject to applicable laws and regulations, the Issuer shall be notified as soon as
practicable of the receipt of such order by the Trustee) the Trustee shall not be required to
disclose to any Bondholder any confidential financial or other information made available to
the Trustee by the Issuer.
 12.12
    
    Determinations Conclusive:As between itself and the Bondholders the Trustee may determine
all questions and doubts arising in relation to any of the provisions of this Indenture. Such
determinations, whether made upon such a question actually raised or implied in the acts or
proceedings of the Trustee, will be conclusive and shall bind the Trustee and the Bondholders.
  26




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12.13
    
    Currency Conversion:Save as provided in the Conditions, where it is necessary or desirable
to convert any sum from one currency to another, it will (unless otherwise provided hereby or
required by law) be converted at such rate or rates, in accordance with such method and as at
such date as may reasonably be specified by the Trustee but having regard to current rates of
exchange, if available. Any rate, method and date so specified will be binding on the Issuer
and the Bondholders.
 12.14
    
    Events of Default:The Trustee may determine whether or not an Event of Default or Potential
Event of Default is in its opinion capable of remedy and/or materially prejudicial to the
interests of the Bondholders. Any such determination will be conclusive and binding on the
Issuer and the Bondholders.
 12.15
    
    Payment for and Delivery of Bonds:The Trustee will not be responsible for the receipt or
application by the Issuer of the proceeds of the issue of the Bonds, any exchange of Bonds or
the delivery of Bonds to the persons entitled to them.
 12.16
    
    Conversion Price:The Trustee shall have no duty or responsibility to determine whether
facts exist which may require an adjustment of the Conversion Price or to determine the nature
or extent of any such adjustment when made or the method used or to be used in making it.
 12.17
    
    The Shares and ADSs:The Trustee shall have no duty or responsibility at any time in respect
of the validity or value (or the kind or amount) of the Shares, ADSs or any other property
which may at any time be issued or delivered on the conversion of any Bonds or the sale or
other disposal of any Shares or ADSs. The Trustee shall not be responsible for any failure of
the Issuer to make available or deliver any ADSs, certificates or any other securities or
property or make any payment on the exercise of any Conversion Right.
 12.18
    
    Responsibility:The Trustee assumes no responsibility for the correctness of Recital (A) to
this Indenture which shall be taken as a statement by the Issuer, nor shall the Trustee by the
execution of this Indenture be deemed to make any representation as to the validity,
sufficiency or enforceability of the Bonds.
 12.19
    
    Enforcement:The Trustee may at its discretion take proceedings against the Issuer to
enforce payment of the Bonds after the Bonds have become due and payable or to declare the
Bonds due and payable, provided that the Trustee shall not be under any obligation to do any
of the foregoing unless it shall have been so requested in writing by the holders of not less
than 25% in principal amount of the Bonds then outstanding (which request has not been
revoked) or shall have been so directed by an Extraordinary Resolution of the Bondholders and
it shall have been indemnified and/or secured to its satisfaction.
 12.20
    
    Satisfaction of Trustee in Condition 8.3:For the purposes of Condition 8.3 the Trustee
shall be satisfied by the Issuer that the Issuer will be obliged to pay additional amounts as
provided in that Condition by the delivery to it of (a) a certificate signed by two directors
of the Issuer and (b) an opinion of independent legal or tax advisors of recognised standing
to the effect that such change or amendment has occurred (irrespective of whether such
amendment or change is then effective).
 12.21
    
    Consolidation, amalgamation etc.:The Trustee shall not be responsible for any
consolidation, amalgamation, merger, reconstruction or scheme of the Issuer or any sale or
transfer of all or substantially all of the assets of the Issuer or the form or substance of
any plan relating thereto or the consequences thereof to any Bondholder.
  27




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12.22
    
    Bonds and documents:The Trustee shall not be liable to the Issuer or any Bondholder if
without fraud, negligence or wilful default on its part it has accepted as valid or has not
rejected any Bonds purporting to be such and subsequently found to be forged or not authentic
nor shall it be liable for any action taken or omitted to be taken in reliance on any
document, certificate or communication believed by it to be genuine and to have been presented
or signed by the proper parties.
 12.23
    
    Consent:Any consent to be given by the Trustee for the purposes of this Indenture may be
given on such reasonable terms and subject to such reasonable conditions (if any) as the
Trustee thinks fit.
 12.24
    
    Acceleration:The Trustee shall not be obliged to declare the Bonds immediately due and
payable under Condition 10 unless it has been indemnified and/or secured to its satisfaction
in respect of all costs, claims and liabilities which it has incurred to that date and to
which it may thereby and as a consequence thereof in its opinion render itself, or have
rendered itself, liable.
 12.25
    
    Responsibility for agents etc.:If the Trustee exercises reasonable care in selecting any
custodian, agent, delegate or nominee appointed under this Clause 12 (an Appointee), it will
not have any obligation to supervise the Appointee or be responsible for any loss, liability,
cost, claim, action, demand or expense incurred by reason of the Appointees misconduct or
default or the misconduct or default of any substitute appointed by the Appointee.
 12.26
    
    Bonds held by the Issuer: In the absence of knowledge or express notice to the contrary, the
Trustee may assume without enquiry (other than requesting a certificate under Sub-clause
10.16) that no Bonds are for the time being held by or on behalf of the Issuer or its
Subsidiaries.
 12.27
    
    Reliance on Certificates: The Trustee may rely without liability to Bondholders on any
certificate prepared by the directors of the Issuer and accompanied by a certificate or report
prepared by an internationally recognised firm of accountants pursuant to the Conditions
and/or this Indenture, whether or not addressed to the Trustee and whether or not the
internationally recognised firm of accountants liability in respect thereof is limited by a
monetary cap or otherwise limited or excluded and shall be obliged to do so where the
certificate or report is delivered pursuant to the obligation of the Issuer to procure such
delivery under the Conditions; any such certificate or report shall be conclusive and binding
on the Issuer, the Trustee and the Bondholders.
 12.28
    
    Error of Judgment:The Trustee shall not be liable for any error of judgment made in good
faith by any officer or employee of the Trustee assigned by the Trustee to administer its
corporate trust matters.
 12.29
    
    Professional Charges:Any Trustee being a banker, lawyer, broker or other person engaged in
any profession or business shall be entitled to charge and be paid all usual professional and
other charges for business transacted and acts done by him or his partner or firm on matters
arising in connection with the trusts of this Indenture and also his properly and reasonably
incurred charges in addition to disbursements for all other work and business done and all
time spent by him or his partner or firm on matters arising in connection with this Indenture,
including matters which might or should have been attended to in person by a trustee not being
a banker, lawyer, broker or other professional person.
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12.30
    
    Expenditure by the Trustee:Nothing contained in this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the performance of
its duties or the exercise of any right, power, authority or discretion hereunder if it has
grounds for believing the repayment of such funds or adequate indemnity against, or security
for, such risk or liability is not reasonably assured to it.
 12.31
    
    Consequential loss: Notwithstanding any provision of this Indenture to the contrary, the
Trustee shall not in any event be liable for special, indirect, punitive or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits), whether or not
foreseeable, even if the Trustee has been advised of the likelihood of such loss or damage,
unless the claim for loss or damage is made in respect of fraud or willful default on the part
of the Trustee.13
    
    Trustee Liable for Negligence
  14
    
    Waiver and Proof of Default
 14.1
    
    Waiver:The Trustee may, without the consent of the Bondholders and without prejudice to its
rights in respect of any subsequent breach, from time to time and at any time, if in its
opinion the interests of the Bondholders will not be materially prejudiced thereby, waive or
authorize, on such terms as seem expedient to it, any breach or proposed breach by the Issuer
of this Indenture, the Bonds, the Agency Agreement or the Conditions or determine that an
Event of Default or Potential Event of Default will not be treated as such provided that the
Trustee will not do so in contravention of an express direction given by an Extraordinary
Resolution or a request made pursuant to Condition 10. No such direction or request will
affect a previous waiver, authorization or determination. Any such waiver, authorization or
determination will be binding on the Bondholders and, if the Trustee so requires, will be
notified to the Bondholders as soon as practicable.
 14.2
    
    Proof of Default:Proof that the Issuer has failed to pay a sum due to the holder of any one
Bond will (unless the contrary be proved) be sufficient evidence that it has made the same
default as regards all other Bonds which are then payable.
 14.3
    
    Calculation of threshold amount: In computing the threshold amounts for the purpose of
Condition 10.1.5, (a) no obligation in respect of which there is a default shall be counted
more than once, by reason for instance that the person is actually liable for such obligation
and another person is contingently liable for it and (b) where any obligation is a net
obligation, the net amount of such obligation shall be taken rather than the gross obligation
which has been reduced to such net amount.15
    
    Trustee not Precluded from Entering into Contracts
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16
    
    Modification and Substitution
 16.1
    
    Modification:The Trustee may agree, without the consent of the Bondholders, to any
modification to the Bonds or this Indenture which is (a) of a formal, minor or technical
nature or (b) made to correct a manifest error or to comply with mandatory provisions of law.
The Trustee may also so agree to any modification to this Indenture which is in its opinion
not materially prejudicial to the interests of the Bondholders or is otherwise generally in
the interests of the Bondholders, but such power does not extend to any such modification as
is mentioned in the proviso to paragraph 16 of Schedule 3. Any such modification as is
permitted by this Sub-clause 16.1 shall be binding on the Bondholders. Unless the Trustee
agrees otherwise, the Issuer shall, upon a modification pursuant to this Sub-clause 16.1, give
notice to the Bondholders in accordance with Condition 17.16.2
    
    Substitution:
 16.2.1
    
    The Trustee may, without the consent of the Bondholders, agree to the substitution of
any other company (the Substituted Obligor) in place of the Issuer (or of any
previous substitute under this Sub-clause 16.2) as the principal debtor under this
Indenture and the Bonds provided that:
 (i)
    
    a deed is executed or undertaking given by the Substituted
Obligor to the Trustee, in form and manner satisfactory to the Trustee,
agreeing to be bound by this Indenture and the Bonds (with consequential
amendments as the Trustee may deem appropriate) as if the Substituted Obligor
had been named in this Indenture and the Bonds as the principal debtor in place
of the Issuer;(ii)
    
    if the Substituted Obligor is subject generally to the taxing
jurisdiction of a territory or any authority of or in that territory with power
to tax (the Substituted Territory) other than the territory to the taxing
jurisdiction of which (or to any such authority of or in which) the Issuer is
subject generally (the Issuers Territory), the Substituted Obligor will
(unless the Trustee otherwise agrees) give to the Trustee an undertaking
satisfactory to the Trustee in terms corresponding to Condition 9 with the
substitution for the references in that Condition to the Issuers Territory of
references to the Substituted Territory whereupon the Indenture and the Bonds
will be read accordingly;(iii)
    
    two directors of the Substituted Obligor certify that it will
be solvent immediately after such substitution and the Trustee need not have
regard to the Substituted Obligors financial condition, profits or prospects
or compare them with those of the Issuer;(iv)
    
    the Issuer and the Substituted Obligor comply with such other
requirements as the Trustee may direct in the interests of the Bondholders; and(v)
    
    (unless the Issuers successor in business is the Substituted
Obligor as the principal debtor under this Indenture and the Bonds) the
obligations of the
Substituted Obligor as the principal debtor under this Indenture and the
Bonds are guaranteed by the Issuer to the Trustees satisfaction.
  30




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16.3
    
    Release of substituted Issuer:An agreement by the Trustee pursuant to Sub-clause 16.2 will,
if so expressed, release the Issuer (or a previous substitute) from any or all of its
obligations under this Indenture and the Bonds. Notice of the substitution will be given to
the Bondholders within 14 days of the execution of such documents and compliance with such
requirements.
 16.4
    
    Completion of Substitution:On completion of the formalities set out in Sub-clause 16.2, the
Substituted Obligor will be deemed to be named in this Indenture and the Bonds as the
principal debtor in place of the Issuer (or of any previous substitute) and this Indenture and
the Bonds will be deemed to be amended as necessary to give effect to the substitution.17
    
    Currency Indemnity
 17.1
    
    Currency of Account and Payment: United States dollars (the Contractual Currency) is the
sole currency of account and payment for all sums payable by the Issuer under or in connection
with this Indenture and the Bonds, including damages.
 17.2
    
    Extent of discharge: An amount received or recovered in a currency other than the Contractual
Currency (whether as a result of, or of the enforcement of, a judgment or order of a court of
any jurisdiction, in the winding-up or dissolution of the Issuer or otherwise), by the Trustee
or any Bondholder in respect of any sum expressed to be due to it from the Issuer will only
discharge the Issuer to the extent of the Contractual Currency amount which the recipient is
able to purchase with the amount so received or recovered in that other currency on the date
of that receipt or recovery (or, if it is not practicable to make that purchase on that date,
on the first date on which it is practicable to do so).
 17.3
    
    Indemnity: If that Contractual Currency amount is less than the Contractual Currency amount
expressed to be due to the recipient under this Indenture or the Bonds, the Issuer will
indemnify it against any loss sustained by it as a result. In any event, the Issuer will
indemnify the recipient against the cost of making any such purchase.
 17.4
    
    Indemnity separate: The indemnities in this Clause 17 and in Sub-clause 11.4 constitute
separate and independent obligations from the other obligations in this Indenture, will give
rise to a separate and independent cause of action, will apply irrespective of any indulgence
granted by the Trustee and/or any Bondholder and will continue in full force and effect
despite any judgment, order, claim or proof for a liquidated amount in respect of any sum due
under this Indenture and/or the Bonds or any other judgment or order.18
    
    Appointment, Retirement and Removal of the Trustee
 18.1
    
    Appointment:The Issuer has the power of appointing new trustees but no one may be so
appointed unless previously approved by an Extraordinary Resolution. A trust corporation will
at all times be a Trustee and may be the sole Trustee. Any appointment of a new Trustee will
be notified by the Issuer to the Bondholders as soon as practicable.
 18.2
    
    Retirement and Removal:Any Trustee may retire at any time on giving at least 30 days
written notice to the Issuer without giving any reason and without being responsible for any
costs occasioned by such retirement (other than for refunding any annual fee paid upfront) and
the Bondholders may by Extraordinary Resolution remove any Trustee provided that
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18.3
    
    Co-Trustees:The Trustee may, despite Sub-clause 18.1, by written notice to the Issuer
appoint anyone to act as an additional Trustee jointly with the Trustee:
 18.3.1
    
    if the Trustee considers such appointment to be in the interests of the Bondholders;
 18.3.2
    
    to conform with any legal requirement, restriction or condition in a jurisdiction in
which a particular act is to be performed; or
 18.3.3
    
    to obtain a judgment or to enforce a judgment or any provision of this Indenture in
any jurisdiction.
  18.4
    
    Competence of a Majority of Trustees:If there are more than two Trustees the majority of
them will be competent to perform the Trustees functions provided the majority includes a
trust corporation. Notwithstanding the above, the Trustee shall not be responsible for
supervising any additional Trustee, and shall not be liable for any actions or omissions of
such additional Trustee.
 18.5
    
    Successor:Any corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Trustee, shall be the successor to the Trustee
hereunder (provided it is a trust corporation) without the execution or filing of any papers
or any further act on the part of any of the parties hereto.
  19
    
    Communications
  
   32




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20
    
    Further Issues
 20.1
    
    Supplemental Indenture:If the Issuer issues further securities as provided in Condition 16,
it shall, before their issue, execute and deliver to the Trustee a deed supplemental to this
Indenture containing such provisions (corresponding to any of the provisions of this
Indenture) as the Trustee may require.
 20.2
    
    Meetings of Bondholders:If the Trustee so directs, Schedule 3 shall apply equally to
Bondholders and to holders of any securities issued pursuant to the Conditions as if
references in it to Bonds and Bondholders were also to such securities and their holders
respectively.
 21
    
    Governing Law and Jurisdiction
 21.1
    
    Governing Law:This Indenture shall be governed by and construed in accordance with the laws
of the State of New York.
 21.2
    
    Jurisdiction:For the benefit of the Trustee and each of the Bondholders, the Issuer agrees
that the federal and state courts sitting in the Borough of Manhattan, City of New York are to
have jurisdiction to settle any disputes which may arise out of or in connection with this
Indenture or the Bonds and accordingly any legal action or proceedings arising out of or in
connection with this Indenture or the Bonds (Proceedings) may be brought in such courts. The
Issuer irrevocably submits to the jurisdiction of such courts and irrevocably waives any
objections to Proceedings in such courts on the ground of venue or on the ground that the
Proceedings have been brought in an inconvenient forum. This submission is for the benefit of
the Trustee and each of the Bondholders and shall not limit the right of any of them to take
Proceedings in any other court of competent jurisdiction nor
shall the taking of Proceedings in any one or more jurisdictions preclude the taking of
Proceedings in any other jurisdiction (whether concurrently or not).
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21.3
    
    Service of Process:The Issuer appoints CT Corporation Systems, currently at 111 Eight
Avenue, New York, New York 10011 to receive, for it and on its behalf, service of process in
any Proceedings in the State of New York. Such service shall be deemed completed on delivery
to such process agent (whether or not it is forwarded to and received by the Issuer). If such
process agent ceases to be able to act as such or no longer has an address in New York, the
Issuer will appoint a substitute process agent acceptable to the Trustee and will immediately
notify the Trustee of such appointment. Nothing shall affect the right to serve process in any
other manner permitted by law.22
    
    Counterparts
   34




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SCHEDULE 1
Form of Certificate
  Amount
    
    ISIN
    
    Common Code
    
    Certificate Number
 Home Inns & Hotels Management Inc.
(incorporated in Cayman Islands with limited liability)
RMB1,110,000,000
USD Settled Zero Coupon Convertible Senior Bonds due 2012
 Bonds Issuer
 
      35




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##### 



IN WITNESS
 
 HOME INNS & HOTELS MANAGEMENT INC.
 By:Name:Title:
 Certificate of Authentication
  
 THE BANK OF NEW YORK
 By:Name:Title:
   36




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TERMS AND CONDITIONS OF THE BONDS
 Bonds Issuer Indenture Trustee Agency Agreement Principal Agent Registrar Paying Agent Conversion Agent Transfer Agent Agents Conditions
 1.
    
    STATUS
 pari passu
 2.
    
    FORM, DENOMINATION AND TITLE
 2.1
    
    Form and Denomination
 Certificate
  2.2
    
    Title
 Bondholder holder
  37




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3.
    
    TRANSFERS OF BONDS; ISSUE OF CERTIFICATES
 3.1
    
    Register
 Register
 3.2
    
    Transfers
  3.3
    
    Delivery of New Certificates
 3.3.1
    
    Each new Certificate to be issued upon a transfer or exchange of Bonds will, within five
business days of receipt by the Registrar or, as the case may be, any other relevant Transfer
Agent of the form of transfer duly completed and signed, be made available for collection at
the specified office of the Registrar or such other relevant Transfer Agent or, if so
requested in the form of transfer, be mailed by uninsured mail at the risk of the holder
entitled to the Bonds (but free of charge to the holder) to the address specified in the form
of transfer. The form of transfer is available at the specified office of the Principal Agent.3.3.2
    
    Where only part of a principal amount of the Bonds (being that of one or more Bonds) with
respect to which a Certificate is issued is to be transferred, redeemed or converted, a new
Certificate with respect to the Bonds not so transferred, redeemed or converted will, within
five business days of delivery of the original Certificate to the Registrar or other relevant
Agent, be made available for collection at the specified office of the Registrar or such other
relevant Agent or, if so requested in the form of transfer, be mailed by uninsured mail at the
risk of the holder of the Bonds not so transferred, redeemed or converted (but free of charge
to the holder) to the address of such holder appearing on the Register.3.3.3
    
    For the purposes of these Conditions (except for Condition 7), business day shall mean a
day other than a Saturday or Sunday on which banks are open for business in Beijing, Hong Kong
or New York City, or the city in which the specified office of the Registrar (if a Certificate
is deposited with it in connection with a transfer or conversion) or the Agent with whom a
Certificate is deposited in connection with a transfer or conversion is located, or in the
case of the surrender of a Certificate, in the place where the Certificate is surrendered.
 3.4
    
    Formalities Free of Charge
  3.5
    
    Closed Periods
 Closed Period
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3.6
    
    Regulations
  4.
    
    NEGATIVE PLEDGE
   International Investment Securities
 Security
 5.
    
    INTEREST
 5.1
    
    Except as provided in Condition 7.6, the Bonds do not and shall not bear any interest.
 6.
    
    CONVERSION
 6.1
    
    Conversion Right
 6.1.1
    
    Conversion Period: Subject as hereinafter provided, Bondholders have the right to convert
their Bonds into Shares at any time during the Conversion Period referred to below.The right of a Bondholder to convert any Bond into Shares is called the Conversion Right.
Subject to and upon compliance with the provisions of this Condition, the Conversion Right
attaching to any Bond may be exercised, at the option of the holder thereof, at any time on
and after March 9, 2008 up to the close of business (at the place where the Certificate
evidencing such Bond is deposited for conversion) on November 30, 2012, or if such day is
not a business day in such place, on the immediately preceding business day (but, except as
provided in Condition 6.1.4, in no event thereafter) or if such Bond shall have been called
for redemption before December 10, 2012, then up to the close of business (at the place
aforesaid) on a date no later than seven business days (at the place aforesaid) prior to
the date fixed for redemption thereof (the Conversion Period).The number of Shares to be issued on conversion of a Bond will be determined by dividing
the principal amount of the Bond to be converted (translated into U.S. dollars at the fixed
exchange rate of US$1.00 to RMB7.400) by the Conversion Price in effect at the Conversion
Date (both as hereinafter defined). A Conversion Right may only be exercised with respect
to one or more Bonds. If more than one Bond held by the same holder is converted at any one
time by the same holder, the number of Shares to be issued upon such conversion will be
calculated on the basis of the RMB aggregate principal amount of the Bonds to be converted.
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6.1.2
    
    Fractions of Shares: Fractions of Shares will not be issued on conversion and no cash
adjustments will be made in respect thereof. Notwithstanding the foregoing, in the event of a
consolidation or reclassification of Shares by operation of law or otherwise occurring after
December 10, 2007 which reduces the number of Shares outstanding, the Issuer will upon
conversion of Bonds pay in cash (in U.S. dollars by means of a U.S. dollar check drawn on a
bank in New York) the U.S. Dollar Equivalent (as defined in Condition 7.1 hereof) of a sum
equal to such portion of the RMB principal amount of the Bond or Bonds evidenced by the
Certificate deposited in connection with the exercise of Conversion Rights, aggregated as
provided in Condition 6.1.1, as corresponds to any fraction of a Share not issued if such sum
exceeds US$10.00.6.1.3
    
    Conversion Price and Conversion Ratio: The price at which Shares will be issued upon
conversion, as adjusted from time to time (the Conversion Price), will initially be
US$26.545 per Share (equal to $53.09 per ADS) but will be subject to adjustment in the manner
provided in Condition 6.3. The conversion ratio (the Conversion Ratio) is equal to the
principal amount of each Bond divided by the then Conversion Price.6.1.4
    
    Revival and/or survival after Default: Notwithstanding the provisions of Condition 6.1.1, if
(a) the Issuer shall default in making payment in full with respect to any Bond which shall
have been called for redemption on the date fixed for redemption thereof, (b) any Bond has
become due and payable prior to the Maturity Date (as defined in Condition 5.1) by reason of
the occurrence of any of the events referred to in Condition 10 or (c) any outstanding Bond is
not redeemed on the Maturity Date in accordance with Condition 8.1, the Conversion Right
attaching to such Bond will revive and/or will continue to be exercisable up to, and
including, the close of business (at the place where the Certificate evidencing such Bond is
deposited for conversion) on the date upon which the full amount of the monies payable with
respect to such Bond has been duly received by the Principal Agent or the Trustee and notice
of such receipt has been duly given to the Bondholders and, notwithstanding the provisions of
Condition 6.1.1, any Bond with respect to which the Certificate and Conversion Notice are
deposited for conversion prior to such date shall be converted on the relevant Conversion Date
(as defined in Condition 6.2.1(ii)) notwithstanding that the full amount of the monies payable
with respect to such Bond shall have been received by the Principal Agent or the Trustee
before such Conversion Date or that the Conversion Period may have expired before such
Conversion Date.6.1.5
    
    Meaning of
Shares: As used in these Conditions, the expression Shares means ordinary
 shares of the Issuer, with a par value US$0.005 or Shares of any class or classes resulting
from any subdivision, consolidation or reclassification of those Shares, which as between
themselves have no preference with respect to dividends or of amounts payable in the event of
any voluntary or involuntary liquidation or dissolution of the Issuer. In addition, as used in
these Conditions, the expression ADSs means American Depositary Shares listed on the Nasdaq
Global Market (Nasdaq) under the symbol HMIN, each representing two Shares, as of the date
hereof, with a par value of US$0.005 each of the Issuer and issued pursuant to a deposit
agreement (the Deposit Agreement) dated October 31, 2006 by and between the Issuer, the Bank
of New York, as depositary (the Depositary), and the holders and beneficial owners from time
to time of the ADSs or ADSs of any class or classes resulting from any subdivision,
consolidation or reclassification of those ADSs, which as between themselves have no
preference with respect to dividends or of amounts payable in the event of any voluntary or
involuntary liquidation or dissolution of the Issuer.
 6.2
    
    Conversion Procedure
 6.2.1
    
    Conversion Notice:
 (i)
    
    To exercise the Conversion Right attaching to any Bond, the holder thereof must complete,
execute and deposit at his own expense during normal business hours at the specified office of
any Conversion Agent a notice of conversion (a Conversion Notice) in duplicate in the form
(for the time being current) obtainable from the specified office of each Agent, together with
the relevant Certificate and any amounts required to be paid by the Bondholder under Condition
6.2.2. Conversion Rights shall be exercised subject in each case to any applicable fiscal or
other laws or regulations applicable in the jurisdiction in which the specified office of the Conversion
Agent to whom the relevant Conversion Notice is delivered is located.
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(ii)
    
    The conversion date with respect to a Bond (the Conversion Date) must fall at a time when
the Conversion Right attaching to that Bond is expressed in these Conditions to be exercisable
(subject to the provisions of Condition 6.1.4 above) and will be deemed to be the Trading Day
(as defined below) immediately following the date of the surrender of the Certificate with
respect to such Bond and delivery of such Conversion Notice and, if applicable, any payment to
be made or indemnity given under these Conditions in connection with the exercise of such
Conversion Right or, in the case of a conversion on redemption pursuant to Condition 6.8, the
relevant date fixed for redemption. A Conversion Notice once delivered shall be irrevocable
and may not be withdrawn unless the Issuer consents to such withdrawal. Trading Day means
any day (other than a Saturday or Sunday) on which Nasdaq or the Alternative Stock Exchange
(as defined in Condition 6.4.1), as the case may be, is open for securities trading.(iii)
    
    Following the expiration of forty days after the issuance of the Bonds, a holder of Bonds
may elect to deposit the Shares to be issued upon such conversion with the Depositary in
exchange for ADSs issued in such holders name and request that the Trustee notify the
Depositary of this election. To make such an election, the converting holder must submit a
Conversion Notice no earlier than forty (40) days after the initial delivery of the Bonds (i)
indicating that the holder it elects to deposit its Shares with the Depositary in exchange for
newly issued ADSs and (ii) representing that such holder is not an affiliate of the Issuer
(as such term is defined in Rule 144 under the Act).
 6.2.2
    
    Stamp Duty etc.: A Bondholder delivering a Certificate with respect to a Bond for conversion
or the Trustee, in the case of conversion pursuant to Condition 6.8 by way of deduction from
the net proceeds of sale referred to in Condition 6.8, must pay to the relevant Conversion
Agent any taxes and capital, stamp, issue and registration duties arising on conversion (but
not fees that may be payable to the registrar of the Shares on exercise of the Conversion
Right, nor fees that may be payable to The Bank of New York, the depositary for the ADSs, on
issue of any ADSs from the deposit with the depositary of Shares issued upon, and at the time
of, conversion of such Bonds, which in each case shall be paid by the Issuer) and such
Bondholder or the Trustee (as the case may be) must pay (in the case of the Trustee by way of
deduction from the net proceeds of sale as aforesaid) all, if any, taxes arising by reference
to any disposal or deemed disposal of a Bond in connection with such conversion. The Issuer
shall pay all other expenses arising on the issuance and delivery of Shares on conversion of
the Bonds. The Bondholder (and, if applicable, the person other than the Bondholder to whom
the Shares are to be issued) must provide the relevant Paying and Conversion Agent with
details of the relevant tax authorities to which the relevant Paying and Conversion Agent must
pay monies received in settlement of all amounts payable pursuant to this Condition 6.2.2.The relevant Paying and Conversion Agent is under no obligation to determine whether a
Bondholder is liable to pay any taxes including stamp, issue, registration or similar taxes
and duties or the amounts payable (if any) in connection with this Condition 6.2.2. The
relevant Paying and Conversion Agent shall not be concerned with, nor shall it be obliged
or required to enquire into, the sufficiency of any amount paid to it for this purpose.
 6.2.3
    
    Registration:
 (i)
    
    As soon as practicable, and in any event, not later than ten Trading Days after the
Conversion Date, the Issuer shall, in the case of Bonds converted on exercise of the
Conversion Right and with respect to which a duly completed Conversion Notice and the relevant
Certificate have been deposited as required by Condition 6.2.1 and all amounts payable by the
relevant Bondholder as required by Condition 6.2.2 have been paid, (A) transfer to the person
or persons designated for the purpose in the Conversion Notice full legal and beneficial title
to the relevant number of Shares, free and clear of all mortgages, charges, liens,
encumbrances and other security interests, and (B) make available for collection at the
Issuers registered office in the Cayman Islands or, if so requested in the relevant
Conversion Notice, mail (at the expense and risk of such person or persons) the relevant
notice(s) of allotment to the person or persons and at the place specified in the Conversion
Notice.
  41




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Subject to the foregoing, where Shares in certificated form are transferred, the Issuer
shall make such certificate or certificates available for collection at the office of the
share registrar in Hong Kong (currently M&C Corporate Services Limited located at 1504 One
International Finance Centre, 1 Harbour View Street, Central, Hong Kong) notified to
Bondholders in accordance with Condition 17 or, if so requested in the relevant Conversion
Notice, shall cause its share registrar to mail, within 21 days after the Conversion Date
(at the risk, and, if sent at the request of such person otherwise than by ordinary mail,
at the expense, of the person to whom such certificate or certificates are sent) such
certificate or certificates or evidence of share registration in the Issuers share
registry to the person and at the place specified in the Conversion Notice together with
any other securities, property or cash required to be delivered upon conversion and such
assignments and other documents (if any) as may be required by law to effect the transfer
thereof.(ii)
    
    If the Conversion Date in relation to any Bond falls after the record date for any issue,
distribution, grant, offer or other event as gives rise to the adjustment of the Conversion
Price pursuant to Condition 6.3, but before the relevant adjustment becomes effective under
the relevant Condition, upon the relevant adjustment becoming effective the Issuer shall issue
and deliver to the converting Bondholder (or in accordance with the instructions contained in
the Conversion Notice (subject to applicable exchange control or other laws or other
regulations)) such additional number of Shares as, together with the Shares issued and
delivered or to be issued and delivered on conversion of the relevant Bond, is equal to the
number of Shares which would have been required to be issued and delivered as above on
conversion of such Bond if the relevant adjustment to the Conversion Price had been made and
become effective immediately after the relevant record date.(iii)
    
    The person or persons designated in the Conversion Notice will become the holder of record
of the number of Shares issuable upon conversion with effect from the date he is or they are
registered as such in the Issuers share register (the Registration Date). The Shares issued
and delivered upon conversion of the Bonds will be duly authorized and validly issued and will
be delivered free and clear of all liens, charges, encumbrances or other third party claims
and will in all respects rank pari passuwith the Shares, in issue on the relevant
Registration Date. Save as set out in these Conditions, a holder of Shares issued and
delivered on conversion of Bonds shall not be entitled to any rights the record date for which
precedes the relevant date of issue of such Shares. If a holder has elected to deposit Shares
issuable upon conversion with the Depositary in exchange for ADSs in accordance with Condition
6.2.1(iii), the Trustee shall notify the Depositary and identify the Shares to be deposited as
Shares issued upon conversion of Bonds. The Shares issued and delivered upon conversion of the
Bonds for deposit with the Depositary in exchange for ADSs (a) will be duly authorized and
validly issued and delivered in accordance with the Deposit Agreement (provided that no legal
opinion from counsel shall be required by the Depositary) and will be delivered free and clear
of all liens, charges, encumbrances or other third party claims, (b) will represent Shares
which have been duly authorized and validly issued and are fully paid and non-assessable and
(c) will in all respects rank pari passuwith the Shares, as the case may be, in issue on the
relevant date of transfer of such ADSs. It is expected that ADSs can be issued within fifteen
business days (excluding public holidays) from the submission of a Conversion Notice.(iv)
    
    If the record date for the payment of any dividend or other distribution with respect to the
Shares falls on or after the Conversion Date in respect of any Bond, but before the
Registration Date of such Shares pursuant to the Conversion Right (disregarding any
retroactive adjustment of the Conversion Price referred to in this Condition 6.2.3 prior to
the time such retroactive adjustment shall have become effective), the Issuer will pay to the
converting Bondholder or his designee the U.S. Dollar Equivalent of an amount (the Equivalent
Amount) equal to the Fair Market Value (as defined in Condition 6.4.5) of any such dividend
or other distribution to which he would have been entitled had he on that record date been
such a holder of record and will make the payment at the same time as it makes payment of the
dividend or other distribution, or as soon as practicable on or after the date of delivery of
such Shares, but, in any event, not later than seven days thereafter. The Equivalent Amount
shall be paid by means of a United States dollar check drawn on a bank in New York City and
mailed (at the risk of the Bondholder) by ordinary mail (but free of charge to the holder) to
the address specified in the relevant Conversion Notice.
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6.3
    
    Adjustments to Conversion Price
  6.3.1
    
    Consolidation, Subdivision or Reclassification: If and whenever there shall be an alteration
to the nominal value of the Shares as a result of consolidation, subdivision or
reclassification, the Conversion Price shall be adjusted by multiplying the Conversion Price
in force immediately before such alteration by the following fraction:
 AB
  A
    
    is the nominal amount of one Share immediately after such alteration; andB
    
    is the nominal amount of one Share immediately before such alteration.
 Such adjustment shall become effective on the date the alteration takes effect.6.3.2
    
    Capitalization of Profits or Reserves: If and whenever the Issuer shall issue any Shares
credited as fully paid to the holders of the Shares (the Shareholders) by way of
capitalization of profits or reserves (including any share premium account) including Shares
paid up out of distributable profits or reserves and/or share premium account issued, the
Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately
before such issue by the following fraction:
 AB
  A
    
    is the aggregate nominal amount of the issued Shares immediately before such issue; andB
    
    is the aggregate nominal amount of the issued Shares immediately after such issue.
 6.3.3
    
    Capital Distribution: If and whenever the Issuer shall pay or make any Capital Distribution
(as defined in Condition 6.4.2) to the Shareholders (except where the Conversion Price falls
to be adjusted under Condition 6.3.2 above), the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately before such Capital Distribution by the
following fraction:
 A-BA
  A
    
    is the Current Market Price of one Share on the last Trading Day preceding
the date on which the Capital Distribution is publicly announced; andB
    
    is the Fair Market Value on the date of such announcement, as determined in
good faith by the board of directors of the Issuer, after consultation with an
investment bank of international standing, of the portion of the Capital Distribution
attributable to one Share.
 Such adjustment shall become effective on the date that such Capital Distribution is made.
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6.3.4
    
    Rights Issues of Shares or Options over Shares: If and whenever the Issuer shall issue
Shares to all or substantially all Shareholders as a class by way of rights, or issue or grant
to all or substantially all Shareholders as a class, by way of rights, options, warrants or
other rights to subscribe for or purchase any Shares, in each case at less than the Current
Market Price (as defined in Condition 6.4.3) per Share on the last Trading Day preceding the
date of the announcement of the terms of such issue or grant, the Conversion Price shall be adjusted by multiplying the Conversion
Price in force immediately before such issue or grant by the following fraction:
 A+BA+C
  A
    
    is the number of Shares in issue immediately before such announcement;B
    
    is the number of Shares which the aggregate amount (if any) payable (i) for
the Shares issued by way of rights or (ii) for the options or warrants or other rights
issued by way of rights and for the total number of Shares issuable upon exercise
thereof, would purchase at such Current Market Price per Share; andC
    
    is the aggregate number of Shares, issued or issuable, as the case may be,
comprised in the issue or grant.
 Such adjustment shall become effective on the date of issue of such Shares or issue or
grant of such options, warrants or other rights (as the case may be).6.3.5
    
    Rights Issues of Other Securities: If and whenever the Issuer shall issue any securities
(other than Shares or options, warrants or other rights to subscribe for or purchase Shares)
to all or substantially all Shareholders as a class, by way of rights, or the grant to all or
substantially all Shareholders as a class by way of rights, of any options, warrants or other
rights to subscribe for or purchase, any securities (other than Shares or options, warrants or
other rights to subscribe for or purchase Shares), the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately before such issue or grant by the
following fraction:
 A-BA
  A
    
    is the Current Market Price of one Share on the last Trading Day preceding
the date on which such issue or grant is publicly announced; andB
    
    is the Fair Market Value on the date of such announcement, as determined in
good faith by the board of directors of the Issuer, after consultation with an
investment bank of international standing, of the portion of the rights attributable
to one Share.
  6.3.6
    
    Issues at less than Current Market Price: If and whenever the Issuer shall issue (otherwise
than as mentioned in Condition 6.3.4 above) wholly for cash any Shares (other than Shares
issued on the exercise of Conversion Rights or on the exercise of any other rights of
conversion into, or exchange or subscription for, Shares) or issue or grant (otherwise than as
mentioned in Condition 6.3.4 above) wholly for cash or for no consideration, any options,
warrants or other rights to subscribe for or purchase Shares in each case at a price per Share
which is less than the Current Market Price on the last Trading Day preceding the date of
announcement of the terms of such issue or grant, the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately before such issue by the following
fraction:
 A+BC
  44




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A
    
    is the number of Shares in issue immediately before the issue of such
additional Shares or the grant of such options, warrants or other rights to subscribe
for or purchase any Shares;B
    
    is the number of Shares which the aggregate consideration receivable for the
issue of such additional Shares would purchase at such Current Market Price per Share;
andC
    
    is the number of Shares in issue immediately after the issue of such
additional Shares.
 References to additional Shares in the above formula shall, in the case of an issue by the
Issuer of options, warrants or other rights to subscribe for or purchase Shares, mean such
Shares to be issued, or otherwise made available, assuming that such options, warrants or
other rights are exercised in full at the initial exercise price (if applicable) on the
date of issue of such options, warrants or other rights.Such adjustment shall become effective on the date of issue of such additional Shares or,
as the case may be, the grant of such options, warrants or other rights.6.3.7
    
    Other Issues at less than Current Market Price: Save in the case of an issue of securities
arising from a conversion or exchange of other securities in accordance with the terms
applicable to such securities themselves falling within the provisions of this Condition
6.3.7, the issue wholly for cash by the Issuer or any Subsidiary of the Issuer (otherwise than
as mentioned in Conditions 6.3.4, 6.3.5 or 6.3.6 above) or (at the direction or request of or
pursuant to any arrangements with the Issuer or any Subsidiary of the Issuer) any other
company, person or entity of any securities (other than the Bonds) which by their terms of
issue carry rights of conversion into, or exchange or subscription for, Shares to be issued by
the Issuer upon conversion, exchange or subscription at a consideration per Share which is
less than the Current Market Price on the last Trading Day preceding the date of announcement
of the terms of issue of such securities.In such an event, the Conversion Price shall be adjusted by multiplying the Conversion
Price in force immediately before such issue by the following fraction:
 A+BA+C
  A
    
    is the number of Shares in issue immediately before such issue;B
    
    is the number of Shares which the aggregate consideration receivable by the
Issuer for the Shares to be issued on conversion or exchange or on exercise of the
right of subscription attached to such securities would purchase at such Current
Market Price andC
    
    is the maximum number of Shares to be issued on conversion or exchange of
such securities or on the exercise of such rights of subscription attached thereto at
the initial conversion, exchange or subscription price or rate.
 Such adjustment shall become effective on the date of issue of such securities.6.3.8
    
    Modification of Rights of Conversion etc: If and whenever there shall be any modification of
the rights of conversion, exchange or subscription attaching to any such securities as are
mentioned in Condition 6.3.7 (other than in accordance with the terms applicable to such
securities) so that the consideration per Share (for the number of Shares available on
conversion, exchange or subscription following the modification) is less than the Current
Market Price on the last Trading Day preceding the date of announcement of the proposals for
such modification, then the Conversion Price shall be adjusted by multiplying the Conversion
Price in force immediately before such modification by the following fraction:
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A+BA+C
  A
    
    is the number of Shares in issue immediately before such modification;B
    
    is the number of Shares which the aggregate consideration (if any) receivable
by the Issuer for the Shares to be issued, or otherwise made available, on conversion
or exchange or on exercise of the right of subscription attached to the securities, in
each case so modified, would purchase at such Current Market Price per Share or, if
lower, the existing conversion, exchange or subscription price of such securities; andC
    
    is the maximum number of Shares to be issued, or otherwise made available, on
conversion or exchange of such securities or on the exercise of such rights of
subscription attached thereto at the modified conversion, exchange or subscription
price or rate but giving credit in such manner as the board of directors of the
Issuer, after consultation with an investment bank of international standing,
considers appropriate (if at all) for any previous adjustment under this Condition
6.3.8 or Condition 6.3.7.
 Such adjustment shall become effective on the date of modification of the rights of
conversion, exchange or subscription attaching to such securities.6.3.9
    
    Other Offers to Shareholders: The issue, sale or distribution by or on behalf of the Issuer
or any Subsidiary of the Issuer or (at the direction or request of or pursuant to any
arrangements with the Issuer or any Subsidiary of the Issuer) any other company, person or
entity of any securities in connection with an offer by or on behalf of the Issuer or any
Subsidiary of the Issuer or such other company, person or entity pursuant to which offer the
Shareholders generally (meaning for these purposes the holders of at least 60% of the Shares
outstanding at the time such offer is made) are entitled to participate in arrangements
whereby such securities may be acquired by them (except where the Conversion Price falls to be
adjusted under Condition 6.3.4, 6.3.5, 6.3.6 or 6.3.7 above).In such an event, the Conversion Price shall be adjusted by multiplying the Conversion
Price in force immediately before such issue, sale or distribution by the following
fraction:
 A-BA
  A
    
    is the Current Market Price of one Share on the last Trading Day preceding
the date on which such issue is publicly announced; andB
    
    is the Fair Market Value on the date of such announcement, as determined in
good faith by the board of directors of the Issuer, after consultation with an
investment bank of international standing, of the portion of the rights attributable
to one Share.
  6.3.10
    
    Other Events: If the Issuer or the Trustee determines that an adjustment should be made to
the Conversion Price as a result of one or more events or circumstances not referred to in
this Condition 6.3, the board of directors of the Issuer, after consultation with an
investment bank of international standing, shall determine in good faith as soon as
practicable what adjustment (if any) to the Conversion Price is fair and reasonable to take
account thereof, if the adjustment would result in a reduction in the Conversion Price, and
the date on which such adjustment should take effect and upon such determination such
adjustment (if any) shall be made and shall take effect in accordance with such determination,
providedthat where the circumstances giving rise to any adjustment pursuant to this Condition
6.3 have already resulted or will result in an adjustment to the
Conversion Price or where the circumstances giving rise to any adjustment arise by virtue
of circumstances which have already given rise or will give rise to an adjustment to the
Conversion Price, such modification (if any) shall be made to the operation of the
provisions of this Condition 6.3 as may be determined in good faith by the board of
directors of the Issuer, after consultation with an investment bank of international
standing, to be in its opinion appropriate to give the intended result.
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6.4
    
    For the Purposes of these Conditions
 6.4.1
    
    Alternative Stock Exchange means at any time, in the case of the ADSs, if they are not at
that time listed and traded on Nasdaq, the principal stock exchange or securities market on
which the ADSs are then listed or quoted or dealt in.
 6.4.2
    
    Capital Distribution means:
 (i)
    
    any distribution of assets in specie by the Issuer for any financial period
whenever paid or made and however described (and for these purposes a distribution of
assets in specie includes without limitation (i) an issue of Shares or other
securities credited as fully or partly paid (other than Shares credited as fully paid)
by way of capitalization of reserves, including any share premium account or capital
redemption reserve and (ii) a distribution of treasury shares); and(ii)
    
    any cash dividend or distribution of any kind by the Issuer (whenever paid or
made and however described) prior to the deduction of withholding tax attributable to
that dividend or distribution.
 Any dividend or distribution in respect of which an adjustment has been or will be made in
the Conversion Price pursuant to Condition 6.3.2 or in the number of Shares per ADS
pursuant to the Depositary Agreement shall not be treated as a Capital Distribution to the
extent of such adjustment.In making any such calculation under this Condition 6.4.2, such adjustments (if any) shall
be made as the board of directors of the Issuer, after consultation with an investment bank
of international standing, may consider appropriate to reflect (1) any consolidation or
subdivision of the Shares or in the number of Shares per ADSs pursuant to the Deposit
Agreement, (2) issues of Shares by way of capitalization of profits or reserves, or any
like or similar event or (3) the modification of any rights to dividends of Shares. In
computing any rates, the value of distributions in specie shall be taken into account and
such adjustments (if any) as are in the opinion of the board of directors of the Issuer,
after consultation with an investment bank of international standing, appropriate to the
circumstances shall be made (including adjustments in the event that the lengths of such
financial periods differ).6.4.3
    
    Current Market Price per ADS means, with respect to an ADS on a particular date, the
arithmetic average of the closing price per ADS for the five consecutive Trading Days ending
on the Trading Day immediately preceding such date; provided that if at any time during the
said five Trading Day period the ADSs shall have been quoted ex-dividend and during some other
part of that period the ADSs shall have been quoted cum-dividend then:
 (i)
    
    if the ADSs to be issued in such circumstances do not rank for the dividend
in question, the quotations on the dates on which ADSs shall have been quoted
cum-dividend shall for the purpose of this definition be deemed to be the amount
thereof reduced by an amount equal to the amount of that dividend per ADS; or(ii)
    
    if the ADSs to be issued in such circumstances rank for the dividend in
question, the quotations on the dates on which the ADSs shall have been quoted
ex-dividend shall for the purpose of this definition be deemed to be the amount
thereof increased by such similar amount; and provided further that if the ADSs on
each of the said five Trading Days have been quoted cum-dividend in respect of a
dividend which has been declared or announced but the ADSs to be issued do not rank
for that dividend, the quotations on each of such dates shall for the purpose of this
definition be deemed to be the amount thereof reduced by an amount equal to that
dividend per ADS;
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Current Market Price means, with respect to a Share on a particular date, the Current
Market Price per ADS on that particular date divided by the number of Shares represented
per ADS on that particular date.6.4.4
    
    References to any dividend in these Conditions include any distribution. References to
dividend or distribution in these Conditions mean such dividend or distribution before any
deductions or withholding.6.4.5
    
    Fair Market Value means, with respect to any asset, security, option, warrant or other
right on any date, the fair market value of that asset, security, option, warrant or other
right as determined in good faith by the board of directors of the Issuer, after consultation
with an investment bank of international standing, provided that (i) the fair market value of
a cash dividend (or any Shares or ADSs issued in lieu of the whole or any part of a
specifically declared cash dividend) paid or to be paid per Share shall be the amount of such
cash dividend per Share determined as at the date of announcement of such dividend; and (ii)
where options, warrants or other rights are publicly traded in a market of adequate liquidity
(as determined by such investment bank) the fair market value of such options, warrants or
other rights shall equal the arithmetic mean of the daily volume weighted average price of
such options, warrants or other rights during the period of five Trading Days on the relevant
market commencing on the first such Trading Day such options, warrants or other rights are
publicly traded.6.4.6
    
    Trading Day means any day (other than a Saturday or Sunday) on which Nasdaq or the
Alternative Stock Exchange (as defined in Condition 6.4.1), as the case may be, is open for
dealing in securities, provided that if no closing price is reported for one or more
consecutive dealing days such day or days will be disregarded in any relevant calculation and
shall be deemed not have existed when ascertaining any period of dealing days.6.4.7
    
    On any adjustment, the relevant Conversion Price, if not an integral multiple of one U.S.
cent, shall be rounded down to the nearest one U.S. cent. No adjustment shall be made to the
Conversion Price where such adjustment (rounded down, if applicable) would be less than 1% of
the Conversion Price then in effect. Any adjustment not required to be made, and any amount by
which the Conversion Price has not been rounded down, shall be carried forward and taken into
account in any subsequent adjustment. Notice of any adjustment shall be given to Bondholders
in accordance with Condition 17 as soon as practicable after the determination thereof.6.4.8
    
    The Conversion Price may not be reduced so that, on conversion of Bonds, Shares would be
required to be issued in any circumstances not permitted by applicable law.6.4.9
    
    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 an expert) selected by the Issuer and approved in
writing by the Trustee, the foregoing provisions would need to be carried out 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 determined in good faith by the board of
directors of the Issuer, after consultation with an investment bank of international standing,
to be in its opinion appropriate in order to give such intended result.6.4.10
    
    No adjustment shall be made to the Conversion Price where Shares or other securities
(including rights, warrants or options) are issued, offered, exercised, allotted,
appropriated, modified or granted to or for the benefit of employees or former employees
(including directors holding or formerly holding executive office) of the Issuer or any
Subsidiary or any associated company of the Issuer pursuant to any share scheme or plan
(including a dividend reinvestment plan) provided that such issues do not amount to, relate
to, or entitle such persons to receive, Shares in excess of 5% of the average number of issued
and outstanding Shares during any 12 months.6.4.11
    
    No adjustment involving an increase in the Conversion Price will be made, except in the case
of a consolidation of the Shares as referred to in Condition 6.3.1 above or to correct an
error.
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6.4.12
    
    The Trustee shall not be under any duty to monitor whether any event or circumstance has
happened or exists which may require an adjustment to be made to the Conversion Price and will
not be responsible to Bondholders for any loss arising from any failure by it to do so.6.4.12
    
    closing price means, (i) with respect to a Share, for any Trading Day shall be the closing
market price of the ADSs quoted by the Nasdaq or, as the case may be, the Alternative Stock
Exchange, for such Trading Day divided by the number of Shares represented per ADS on that
particular date and (ii) with respect to an ADS, for any Trading Day shall be the closing
market price of the ADSs quoted by the Nasdaq or, as the case may be, the Alternative Stock
Exchange, for such Trading Day.6.5
    
    Conversion upon Change of Control
 Change of Control Notice Change of
Control Conversion Period
 11+(CP x c/t)
  CP
   6.6
    
    Undertakings6.6.1
    
    The Issuer has undertaken in the Indenture, inter alia, that so long as any Bond remains
outstanding, save with the approval of an Extraordinary Resolution (as defined in the
Indenture) of the Bondholders or with the approval of the Trustee where, in the opinion of the
Trustee, it is not materially prejudicial to the interests of Bondholders to give such
approval:
 (i)
    
    it will pay the expenses (other than taxes and capital, stamp, issue and
registration duties, expressed to be payable by the Bondholders under these
Conditions) of the issue of, and all expenses of obtaining listing for, Shares arising
on conversion of the Bonds, and all fees that may be payable to the Issuers share
registrar on issue of the Shares on conversion of the Conversion Right; and(ii)
    
    it will not make any reduction of its ordinary share capital or any uncalled
liability in respect thereof or of any share premium account or capital redemption
reserve fund (except, in each case, as permitted by law).
 6.6.2
    
    In the Indenture, the Issuer has undertaken with the Trustee that so long as any Bond
remains outstanding it will not make any offer, issue or distribute or take any action the
effect of which would be to reduce the Conversion Price below the par value of the Shares;
providedalways that the Issuer shall not be prohibited from purchasing its Shares to the
extent permitted by law.
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6.6.3
    
    The Issuer has also given certain other undertakings in the Indenture for the protection of
the Conversion Rights.6.6.4
    
    The Issuer has undertaken in the Indenture, inter alia, to pay the fees payable to the
Depositary for the issue of the ADSs upon deposit of Shares upon conversion of the Bonds.6.7
    
    Notice of Change in Conversion Price
  6.8
    
    Conversion by the Trustee6.8.1
    
    The Trustee may, in its absolute discretion (and without any responsibility for any loss
occasioned thereby or by not so doing), within the period commencing on the date five days
immediately prior to, and ending at the close of business on the business day in New York City
immediately prior to, the date fixed for redemption from time to time of any of the Bonds under
Condition 8.1, 8.2 or 8.3, elect (on behalf of the relevant Bondholders) by notice in writing to
the Issuer and the Principal Agent to exercise the Conversion Rights with respect to all the Bonds
due for redemption on such date and with respect to which Conversion Rights have not previously
been exercised by Bondholders (Unexercised Bonds) at the Conversion Price applicable on the
Conversion Date, provided that all (if any) necessary consents have been obtained and the Trustee
is satisfied, or is advised by a leading independent investment bank of international repute
(acting as an expert) appointed by the Trustee at the expense of the Issuer, that the net proceeds
of an immediate sale of the Shares arising from such conversion disregarding any liability (other
than a liability of the Trustee) to taxation or the payment of any capital, stamp, transfer, issue
or registration duties consequent thereon, together in each case with any other amount payable by
the Issuer with respect to such exercise, would be likely to exceed by 5% or more of the principal
amount of the Bonds which would otherwise be payable with respect to such Unexercised Bonds.6.8.2
    
    All of the Shares delivered, or to be delivered, on such conversion shall be sold by, or on
behalf of, the Trustee as soon as practicable, and (subject to any necessary consents being
obtained, and to the deduction by the Trustee of any amount which it determines to be payable with
respect to its liability to taxation and the payment of any capital, stamp, transfer, issue or
registration duties (if any) and any costs incurred by the Trustee in connection with the transfer,
delivery and sale thereof, the net proceeds of sale, and any cash in lieu of fractions and any
other amount payable by the Issuer with respect to the relevant exercise with respect to the
Unexercised Bonds) shall be held by the Trustee and distributed
rateably to the holders of such
Unexercised Bonds.6.8.3
    
    The Trustee shall have no liability with respect to the exercise or non-exercise of its
discretion pursuant to this Condition 6.8 or the timing of such exercise or with respect to any
such sale of ADSs whether for the timing of any such sale or the price at which any such ADSs are
sold, or the inability to sell any such ADSs or otherwise.7.
    
    PAYMENTS7.1
    
    U.S. Dollar Settlement
  U.S. Dollar Equivalent
  Business Day
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Rate Calculation Date
 Spot
Rate
 7.2
    
    Principal Payment
  7.3
    
    Registered Accounts
  7.4
    
    Fiscal Laws
  7.5
    
    Payment Initiation
  7.6
    
    Default Interest and Delay in Payment
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7.7
    
    Rounding
  7.8
    
    Partial Payment
  8
    
    REDEMPTION, PURCHASE AND CANCELLATION8.1
    
    Maturity
 Maturity
Date
 8.2
    
    Redemption at the Option of the Issuer8.2.1
    
    On or at any time after December 10, 2010 but not less than seven business days prior to the
Maturity Date, the Issuer may, having given not less than 30 nor more than 60 days notice to
the Bondholders, the Trustee and the Principal Agent (which notice will be irrevocable),
redeem the Bonds, in whole but not in part, at a redemption price equal to the U.S. Dollar
Equivalent of their Early Redemption Amount (as defined below) on the redemption date,
provided that no such redemption may be made unless the closing price (as defined in Condition
6.4.12) of the Shares for each of 20 out of 30 consecutive Trading Days immediately prior to
the date upon which notice of such redemption is given pursuant to Condition 17, was at least
125% of the applicable Early Redemption Amount divided by the Conversion Ratio, translated
into RMB at the fixed rate of exchange of US$1.00 to RMB7.400. If there shall occur an event
giving rise to a change in the Conversion Price during any such 20 out of 30 consecutive
Trading Day period, appropriate adjustments for the relevant days approved by a leading
independent investment bank of international repute (acting as an expert) selected by the
Issuer and approved in writing by the Trustee, shall be made for the purpose of calculating
the closing price for such days. If the closing price cannot be determined for one or more
consecutive Trading Days, such day or days will be disregarded in the relevant calculation and
will be deemed not to have existed when ascertaining such 30 consecutive Trading Day period.8.2.2
    
    Upon the expiry of any such notice, the Issuer will be bound to redeem the Bonds at a
redemption price equal to the U.S. Dollar Equivalent of their Early Redemption Amount at the
date fixed for such redemption.If at any time the aggregate principal amount of the Bonds outstanding is less than 10% of
the aggregate principal amount originally issued (including any Bonds issued pursuant to
Condition 16), the Issuer shall have the option to redeem such outstanding Bonds in whole
but not in part at a redemption price equal to the U.S. Dollar Equivalent of their Early
Redemption Amount. The Issuer will give at least 30 days but not more than 60 days prior
notice to the Bondholders, the Trustee and the Principal Agent for such redemption.8.3
    
    Redemption for Taxation Reasons8.3.1
    
    At any time the Issuer may, having given not less than 30 nor more than 60 days notice
(such notice, a Tax Redemption Notice) to the Bondholders (which notice shall be
irrevocable) redeem all, but not part, of the Bonds at a redemption price equal to the U.S.
Dollar Equivalent of their Early Redemption Amount at the date fixed for such redemption in
the Tax Redemption Notice (such date, the Tax Redemption Date), if (i) the Issuer satisfies
the Trustee immediately prior to the giving of such notice that the Issuer has or will become
obliged to pay additional amounts as referred to in Condition 9 as a result of any change in,
or amendment to, the
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laws or regulations of the Cayman Islands or the Peoples Republic of China (the PRC) or
any political subdivision or any authority thereof or therein having power to tax, or any
change in the general application or official interpretation of such laws or regulations,
which change or amendment becomes effective on or after the Issue Date, and (ii) such
obligation cannot be avoided by the Issuer taking reasonable measures available to it,
provided that no such notice of redemption shall be given earlier than 90 days prior to the
earliest date on which the Issuer would be obliged to pay such additional amounts were a
payment with respect to the Bonds then due. Prior to the publication of any Tax Redemption
Notice, the Issuer shall deliver to the Trustee (a) a certificate signed by two directors
of the Issuer stating that the obligation referred to in (i) above cannot be avoided by the
Issuer (after using its best efforts to take all measures available to it) and (b) an
opinion of independent legal or tax advisers of recognized international standing to the
effect that such change or amendment has occurred (irrespective of whether such amendment
or change is then effective) and the Trustee shall be entitled to accept such certificate
and opinion as sufficient evidence thereof, in which event it shall be conclusive and
binding on the Bondholders.8.3.2
    
    Upon the expiry of any such notice, the Issuer will be bound to redeem the Bonds at a
redemption rate equal to the U.S. Dollar Equivalent of their Early Redemption Amount, together
with accrued but unpaid interest, at the date fixed for such redemption.8.3.3
    
    If the Issuer gives a Tax Redemption Notice pursuant to Condition 8.3.1, each Bondholder
will have the right to elect that his Bond(s) shall not be redeemed and that the provisions of
Condition 9 shall not apply in respect of any payment of principal, premium and default
interest (if any) to be made in respect of such Bond(s) which falls due after the relevant Tax
Redemption Date whereupon no additional amounts shall be payable in respect thereof pursuant
to Condition 9 and payment of all amounts shall be made subject to the deduction or
withholding of any tax required to be deducted or withheld. To exercise a right pursuant to
this Condition 8.3.3, the holder of the relevant Bond must complete, sign and deposit at his
own expense during normal business hours at the specified office of any Paying and Conversion
Agent no later than the day falling ten days prior to the Tax Redemption Date a duly completed
and signed notice of exercise, in the form for the time being current, obtainable from the
specified office of any Paying and Conversion Agent (the Tax Option Exercise Notice),
together with the Certificate evidencing the Bonds.8.4
    
    Redemption at the Option of the Bondholders
 Put Option Date
  8.5
    
    Redemption for Delisting or Change of Control8.5.1
    
    Following the occurrence of a Relevant Event (as defined below), the holder of each Bond
will have the right (the Relevant Event Put Right) at such holders option, to require the
Issuer to redeem in whole but not in part such holders Bonds on the Relevant Event Put Date
(as defined below) at a redemption price equal to the U.S. Dollar Equivalent of their Early
Redemption Amount. To exercise such right, the holder of the relevant Bond must complete, sign
and deposit at the specified office of any Paying Agent a duly completed and signed notice of
redemption, in the form for the time being current, obtainable from the specified office of
any Paying Agent (Relevant Event Put Exercise Notice) together with the Certificate
evidencing the Bonds to be redeemed by not later than 30 days following a Relevant Event, or,
if later, 30 days following the date upon which notice thereof is given to Bondholders by the
Issuer in accordance with Condition 17. The Relevant Event Put Date shall be the fourteenth
day after the expiry of such period of 30 days as referred to above.
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8.5.2
    
    A Relevant Event Put Exercise Notice, once delivered, shall be irrevocable and the Issuer
shall redeem the Bonds which form the subject of the Relevant Event Put Exercise Notice
delivered as aforesaid on the Relevant Event Put Date.8.5.3
    
    The Trustee shall not be required to take any steps to ascertain whether a Relevant Event or
any event which could lead to the occurrence of a Relevant Event has occurred.8.5.4
    
    Not later than seven days after becoming aware of a Relevant Event, the Issuer shall procure
that notice regarding the Relevant Event shall be delivered to Bondholders (in accordance with
Condition 17) stating:
 (i)
    
    the Relevant Event Put Date;(ii)
    
    the date of such Relevant Event and, briefly, the events causing such
Relevant Event;(iii)
    
    the date by which the Relevant Event Put Exercise Notice (as defined above)
must be given;(iv)
    
    the redemption amount and the method by which such amount will be paid;(v)
    
    the names and addresses of all Paying Agents;(vi)
    
    briefly, the Conversion Right and the then current Conversion Price;(vii)
    
    the procedures that Bondholders must follow and the requirements that
Bondholders must satisfy in order to exercise the Relevant Event Put Right or
Conversion Right; and(viii)
    
    that a Relevant Event Put Exercise Notice, once validly given, may not be withdrawn.
 8.5.5
    
    For the purposes of this Condition 8:
 (i)
    
    control means the acquisition or control of more than 50% of the voting
rights of the issued share capital of the Issuer or the right to appoint and/or remove
all or the majority of the members of the Issuers Board of Directors or other
governing body, whether obtained directly or indirectly, and whether obtained by
ownership of share capital, the possession of voting rights, contract or otherwise;(ii)
    
    a Change of Control occurs when:
 (a)
    
    any person or persons (as defined below), including their
Affiliates (as defined below), acting together, acquires control of the
Issuer; or(b)
    
    the Issuer consolidates with or merges into or sells or
transfers all or substantially all of the Issuers assets to any other person,
unless the consolidation, merger, sale or transfer will not result in the
other person or persons acquiring control over the Issuer or the successor
entity;
 Affiliate
 person
 (iii)
    
    Relevant Event occurs when (x) the ADSs cease to be listed or admitted to
trade on Nasdaq; or (y) there has been a Change of Control in the Issuer;
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(iv)
    
    Early Redemption Amount of a Bond, for each RMB100,000 principal amount of
the Bonds, is determined so that it represents for the Bondholder a gross yield to
maturity of 0.50% per annum (calculated on a semi-annual basis). The applicable Early
Redemption Amount for each RMB100,000 principal amount of Bonds is calculated on a
semi-annual basis in accordance with the following formula, rounded (if necessary) to
two decimal places with 0.005 being rounded upwards (provided that if the date fixed
for redemption is an the Semi-Annual Date (as set out below), the Early Redemption
Amount shall be as set out in the table below with respect to such Semi-Annual Date):Early Redemption Amount = Previous Redemption Amount x (1 + r/2)d/pPrevious Redemption Amount = the Early Redemption Amount for each RMB100,000
principal amount on the Semi-Annual Date immediately preceding the date fixed for
redemption as set out below (or if the Bonds are to be redeemed prior to June 10,
2008, RMB100,000).
 EarlyRedemptionSemi-Annual Date
    
    Amount(RMB)June 10, 2008
    
    
    100,250.00December 10, 2008
    
    
    100,500.63June 10, 2009
    
    
    100,751.88December 10, 2009
    
    
    101,003.76June 10, 2010
    
    
    101,256.27December 10, 2010
    
    
    101,509.41June 10, 2011
    
    
    101,763.18December 10, 2011
    
    
    102,017.59June 10, 2012
    
    
    102,272.63December 10, 2012
    
    
    102,528.31
 
 r = 0.5% expressed as a fraction.d = number of days from and including the immediately preceding Semi-Annual Date (or if the
Bonds are to be redeemed on or before June 10, 2008, from and including the Issue Date) to,
but excluding, the date fixed for redemption, calculated on the basis of a 360-day year
consisting of 12 months of 30 days each and, in the case of an incomplete month, the number
of days elapsed.p = 180
 8.6
    
    Redemption following exercise of a Put Option
 Put Date
 8.7
    
    Purchases
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8.8
    
    Cancellation
  8.9
    
    Redemption Notices
  9.
    
    TAXATION9.1
    
    All payments, whether of principal, premium or otherwise, made by the Issuer will be made
free from any restriction or condition and be made without deduction or withholding for or on
account of any present or future taxes, duties, assessments or governmental charges of
whatever nature imposed or levied by or on behalf of the Cayman Islands or the PRC or any
authority thereof or therein having power to tax, unless deduction or withholding of such
taxes, duties, assessments or governmental charges is compelled by law. In such event, the
Issuer will pay such additional amounts as will result in the receipt by the Bondholders of
the net amounts after such deduction or withholding equal to the amounts which would otherwise
have been receivable by them had no such deduction or withholding been required except that no
such additional amount shall be payable with respect to any Bond:9.1.1
    
    to a holder (or to a third party on behalf of a holder) who is subject to such taxes,
duties, assessments or governmental charges with respect to such Bond by reason of his having
some connection with the Cayman Islands or the PRC, as the case may be, otherwise than merely
by holding the Bond or by the receipt of amounts with respect to the Bond or where the
withholding or deduction could be avoided by the holder making a declaration of non-residence
or other similar claim for exemption to the appropriate authority which such holder is legally
capable and competent of making but fails to do so; or9.1.2
    
    (in the case of a payment of principal) if the Certificate with respect to such Bond is
surrendered more than 30 days after the relevant date except to the extent that the holder
would have been entitled to such additional amount on surrendering the relevant Certificate
for payment on the last day of such period of 30 days; or9.1.3
    
    where such withholding or deduction is imposed on a payment to an individual and is required
to be made pursuant to European Union Directive 2003/48/EC on the taxation of savings income
implementing the conclusions of the ECOFIN Council meeting of 2627 November 2000 or any law
implementing or complying with, or introduced in order to conform to, such Directive; or9.1.4
    
    presented for payment by or on behalf of a holder who would have been able to avoid such
withholding or deduction by presenting the relevant Bond to another Payment Agent or
Conversion Agent in a Member State of the European Union.9.2
    
    For the purposes of this Condition 9, relevant date means the date on which such payment
first becomes due except that if the full amount payable has not been received by the Trustee
or the Principal Agent on or prior to such due date, the date on which, the full amount having
been so received, notice to that effect shall have been given to the Bondholders and checks
dispatched or payment made.9.3
    
    References in fix Conditions to principal, premium, Equivalent Amount, and default interest
(if any) or any other payment made or to be made by the Issuer pursuant to these Conditions
shall be deemed also to refer to any additional amounts which may be payable under this
Condition 9 or any undertaking or covenant given in addition thereto or in substitution
therefor pursuant to the Indenture.
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10.
    
    EVENTS OF DEFAULT10.1
    
    The Trustee at its discretion may, and if so requested in writing by the holders of not less
than 25% in principal amount of the Bonds then outstanding or if so directed by an
Extraordinary Resolution (as defined in the Indenture) shall (subject to being indemnified
and/or secured by the Bondholders to its satisfaction), give notice to the Issuer that the
Bonds are, and they shall accordingly thereby become, immediately due and repayable at the
U.S. Dollar Equivalent of their Early Redemption Amount (subject as provided below and without
prejudice to the right of Bondholders to exercise the Conversion Right with respect to their
Bonds in accordance with Condition 6) if any of the following events has occurred:10.1.1
    
    a default is made in the payment of any principal and premium due, with respect to the Bonds
and such default continues for a period of five business days from such default;10.1.2
    
    failure by the Issuer to deliver the Shares as and when such Shares are required to be
delivered following conversion of a Bond;10.1.3
    
    the Issuer does not perform or comply with one or more of its other obligations in the Bonds
or the Indenture which default is incapable of remedy or, if in the opinion of the Trustee
capable of remedy, is not in the opinion of the Trustee remedied within 15 days after written
notice of such default shall have been given to the Issuer by the Trustee;10.1.4
    
    the Issuer or any Subsidiary is (or is, or could be, deemed by law or a court to be)
insolvent or bankrupt or unable to pay its debts, stops, suspends or threatens to stop or
suspend, payment of all or a material part of (or of a particular type of) its debts, proposes
or makes any agreement for the deferral, rescheduling or other readjustment of all of (or all
of a particular type of) its debts (or of any part which it will or might otherwise be unable
to pay when due), proposes or makes a general assignment or an arrangement or composition with
or for the benefit of the relevant creditors with respect to any of such debts or a moratorium
is agreed or declared with respect to or affecting all or any part of (or of a particular type
of) the debts of the Issuer or any of its Subsidiaries;10.1.5
    
    (i) any other present or future indebtedness of the Issuer or any of its Subsidiaries for or
with respect to monies borrowed or raised becomes (or becomes capable of being declared) due
and payable prior to its stated maturity by reason of any actual or potential default, event
of default or the like (howsoever described), or (ii) any such indebtedness is not paid when
due or, as the case may be, within any applicable grace period, or (iii) the Issuer or any of
its Subsidiaries fails to pay when due any amount payable by it under any present or future
guarantee for, or indemnity with respect to, any monies borrowed or raised, provided that the
aggregate amount of the relevant indebtedness, guarantees and indemnities with respect to
which one or more of the events mentioned above in this Condition 10.1.5 have occurred equals
or exceeds US$5 million or its equivalent (as reasonably determined on the basis of the middle
spot rate for the relevant currency against the US dollar as quoted by any leading bank
selected by the Trustee on the day on which such indebtedness becomes due and payable or is
not paid or any such amount becomes due and payable or is not paid under any such guarantee or
indemnity);10.1.6
    
    a distress, attachment, execution or other legal process is levied, enforced or sued out on
or against any material part of the property, assets or revenues of the Issuer or any of its
Subsidiaries, which is material to the Issuer and its Subsidiaries as a whole, and is not
discharged or stayed within 30 days;10.1.7
    
    an order is made and is not stayed or an effective resolution passed for the winding-up or
dissolution, judicial management or administration of the Issuer or any of its Subsidiaries,
or the Issuer or any of its Subsidiaries ceases or threatens to cease to carry on all or
substantially all of its business or operations, except for the purpose of and followed by a
reconstruction, amalgamation, reorganization, merger or consolidation on terms approved by an Extraordinary Resolution of
the Bondholders;
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10.1.8
    
    an encumbrancer takes possession or an administrative or other receiver or an administrator
is appointed of the whole or any substantial part of the property, assets or revenues of the
Issuer or any of its Subsidiaries (as the case may be) and is not discharged within 30 days;10.1.9
    
    it is or will become unlawful for the Issuer to perform or comply with any one or more of
its obligations under any of the Bonds or the Indenture;10.1.10
    
    any action, condition or thing (including the obtaining or effecting of any necessary
consent, approval, authorization, exemption, filing, license, order, recording or
registration) at any time required to be taken, fulfilled or done in order (a) to enable the
Issuer lawfully to enter into, exercise its rights and perform and comply with their
respective obligations under the Bonds and the Indenture, (b) to ensure that those obligations
are legally binding and enforceable and (c) to make the Bonds and the Indenture admissible in
evidence in the courts of the State of New York, is not taken, fulfilled or done;10.1.11
    
    any step is taken by any person with a view to the seizure, compulsory acquisition,
expropriation or nationalization of all or a material part of the assets of the Issuer or any
of its Subsidiaries, which is material to the Issuer and its Subsidiaries as a whole; or10.1.12
    
    any event occurs which under the laws of any relevant jurisdiction has an analogous effect
to any of the events referred to in any of the foregoing paragraphs.Subsidiary means any company or other business entity of which that person owns or
controls (either directly or through one or more other Subsidiaries) more than 50% of the
issued share capital or other ownership interest having ordinary voting power to elect
directors, managers or trustees of such company or other business entity or any company or
other business entity which at any time has its accounts consolidated with those of that
person or which, under the Cayman Islands or PRC law, regulations or generally accepted
accounting principles from time to time, should have its accounts consolidated with those
of that person.The Trustee and the Agents shall not be required to take any steps to ascertain whether an
Event of Default or any event which could lead to the occurrence of an Event of Default has
occurred and shall be entitled to assume that no such event has occurred until they have
received written notice to the contrary from the Issuer.10.2
    
    Notwithstanding receipt of any payment after the acceleration of the Bonds, a Bondholder may
exercise its Conversion Right by depositing a Conversion Notice with a Conversion Agent or
Paying Agent during the period from and including the date of a default notice with respect to
an event specified in Condition 10.1.2 (at which time the Issuer will notify the Bondholders
of the number of Shares per Bond to be delivered upon conversion, assuming all the then
outstanding Bonds are converted) to and including the 30th business day after such payment.If any converting Bondholder deposits a Conversion Notice pursuant to this Condition 10 on
the business day prior to, or during, a Closed Period, the Bondholders Conversion Right
shall continue until the business day following the last day of the Closed Period, which
shall be deemed the Conversion Date, for the purposes of such Bondholders exercise of its
Conversion Right pursuant to this Condition 10.If the Conversion Right attached to any Bond is exercised pursuant to this Condition 10,
the Issuer will deliver Shares (which number will be disclosed to such Bondholder as soon
as practicable after the Conversion Notice is given) in accordance with the Conditions,
except that the Issuer shall have 12 business days before it is required to register the
converting Bondholder (or its designee) in its register of members as the owner of the
number of Shares to be delivered pursuant to this Condition and an additional five business
days from such registration date to make payment in accordance with the following
paragraph.
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If the Conversion Right attached to any Bond is exercised pursuant to this Condition 10,
the Issuer shall, at the request of the converting Bondholder, pay to such Bondholder the
U.S. Dollar Equivalent of an amount (the Default Cure Amount), equal to the product of
(x) (i) the number of Shares that are required to be delivered by the Issuer to satisfy the
Conversion Right in relation to such converting Bondholder minus (ii) the number of Shares
that are actually delivered by the Issuer pursuant to such Bondholders Conversion Notice
and (y) the Current Market Price per Share on the Conversion Date; provided that if such
Bondholder has received any payment under the Bonds pursuant to this Condition 10, the
amount of such payment shall be deducted from the Default Cure Amount.11.
    
    CONSOLIDATION, AMALGAMATION OR MERGER
 Merger
 (i)
    
    the corporation formed by such Merger or the person that acquired such
properties and assets shall expressly assume, by a supplemental Indenture, all
obligations of the Issuer under the Indenture and the performance of every covenant
and agreement applicable to it contained therein;(ii)
    
    immediately after giving effect to any such Merger, no Event of Default, and
no event which, after notice or lapse of time, or both, may become an Event of Default
shall have occurred and be continuing or would result therefrom; and(iii)
    
    the corporation formed by such Merger, or the person that acquired such
properties and assets, shall expressly agree, among other things, to indemnify each
Bondholder against any tax, assessment or governmental charge payable by withholding
or deduction thereafter imposed on such holder solely as a consequence of such Merger
with respect to the payment of principal and premium on the Bonds.
  12.
    
    PRESCRIPTION
  13.
    
    ENFORCEMENT
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14.
    
    MEETINGS OF BONDHOLDERS, MODIFICATION, WAIVER AND SUBSTITUTION14.1
    
    Meetings
 inter alia
 14.2
    
    Modification and Waiver
  14.3
    
    Substitution
  14.4
    
    Interests of Bondholders
  14.5
    
    Certificates/Reports
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15.
    
    REPLACEMENT OF CERTIFICATES
  16.
    
    FURTHER ISSUES
  17.
    
    NOTICES
 Wall Street Journal
Asia
 18.
    
    AGENTS
  19.
    
    INDEMNIFICATION
    61




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20.
    
    CURRENCY INDEMNITY21.1
    
    Currency of Account and Payment
 Contractua Currency
 21.2
    
    Extent of Discharge
  21.3
    
    Indemnity
  21.4
    
    Indemnity Separate
  21.
    
    GOVERNING LAW
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PRINCIPAL PAYING, CONVERSION AND TRANSFER AGENT
 THE BANK OF NEW YORK
 
 REGISTRAR
 THE BANK OF NEW YORK
 
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Form of Transfer
   
 
    
 
 
 Dated:Certifying SignatureName:
  (i)
    
    A representative of the Bondholder should state the capacity in which he signs, e.g.
executor.(ii)
    
    The signature of the person effecting a transfer shall conform to any list of duly authorized
specimen signatures supplied by the registered holder or be certified by a recognized bank,
notary public or in such other manner as the Agent or the Registrar may require.
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SCHEDULE 2
Form of Global Certificate
 
 HOME INNS & HOTELS MANAGEMENT INC.
(incorporated in Cayman Islands with limited liability)
RMB1,110,000,000
USD Settled Zero Coupon Convertible Senior Bonds due 2012
 GLOBAL CERTIFICATE
 Bonds Issuer
 The Issuer hereby certifies that The Bank of New York Depository (Nominees) Limited is, at the date
hereof, entered in the register of Bondholders as the holder of Bonds in the principal amount of
RMB1,110,000,000 (ONE BILLION ONE HUNDRED TEN MILLION RENMINBI) or such other amount as is shown on
the register of Bondholders as being represented by this Global Certificate and is duly endorsed
(for information purposes only) in the third column of Schedule A to this Global Certificate. For
value received, the Issuer promises to pay the person who appears at the relevant time on the
register of Bondholders as holder of the Bonds in respect of which this Global Certificate is
issued such amount or amounts as shall become due in respect of such Bonds and otherwise to comply
with the Conditions, as referred to below.
    
    A4.5(2)
 , Indenture Trustee Conditions
  Definitive Certificates Alternative Clearing System
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Meetings
  Cancellation
  Trustees Powers
  Conversion
  Payment
   66




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Notices
  Bondholders Redemption
  Redemption at the option of the Issuer
  Bondholders Tax Option
  Registration of Title
  Transfers
  Enforcement
     67




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In witness
 ,
 HOME INNS & HOTELS MANAGEMENT INC.By:Name:Title:
 Certificate of Authentication
  THE BANK OF NEW YORKas RegistrarBy:Name:Title:
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Schedule A
Schedule of Reductions in Principal Amount of Bonds in respect of which this
Global Certificate is Issued
  Date of Conversion/Redemption/ Issue
    
    Amount of decrease
    
    Principal Amount ofof Definitive
    
    in principal amount
    
    this Global Certificate
    
    Notation made by orCertificates
    
    of this Global
    
    following such
    
    on behalf of the(stating which)
    
    Certificate
    
    decrease
    
    Principal Agent
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PRINCIPAL PAYING, CONVERSION AND TRANSFER AGENT
 THE BANK OF NEW YORK
 
 REGISTRAR
 THE BANK OF NEW YORK
 
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Form of Transfer
  Principal Amount transferred
    
    Name, address and account for payments of transferee
 Dated :
    
    
    
    Certifying Signature :Name :
  (i)
    
    A representative of the Bondholder should state the capacity in which he signs e.g. executor.(ii)
    
    The signature of the person effecting a transfer shall conform to any list of duly authorised
specimen signatures supplied by the registered holder or be certified by a recognised bank,
notary public or in such other manner as the Principal Agent or the Registrar may require.
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SCHEDULE 3
Provisions for Meetings of Bondholders
 11.1
    
    A holder of a Bond may by an instrument in writing (a form of proxy) in the form available
from the specified office of any Agent in English signed by the holder or, in the case of a
corporation, executed under its common seal or signed on its behalf by an attorney or a duly
authorised officer of the corporation and delivered to the Agent not later than 24 hours
before the time fixed for any meeting, appoint any person (a proxy) to act on his or its
behalf in connection with any meeting or proposed meeting of Bondholders.1.2
    
    A holder of a Bond which is a corporation may by delivering to any Agent not later than 24
hours before the time fixed for any meeting a resolution of its directors or other governing
body in English authorise any person to act as its representative (a representative) in
connection with any meeting or proposed meeting of Bondholders.1.3
    
    A proxy or representative so appointed shall so long as such appointment remains in force be
deemed, for all purposes in connection with any meeting or proposed meeting of Bondholders
specified in such appointment, to be the holder of the Bonds to which such appointment relates
and the holder of the Bond shall be deemed for such purposes not to be the holder.2
    
    Each of the Issuer and the Trustee may at any time convene a meeting of Bondholders. If the
Trustee receives a written request by Bondholders holding at least 10% in principal amount of
the Bonds for the time being outstanding and is indemnified and/or secured to its satisfaction
against all costs and expenses, the Trustee shall convene a meeting of Bondholders. Every
meeting shall be held at a time and place approved by the Trustee.3
    
    At least 21 days notice (exclusive of the day on which the notice is given and of the day of
the meeting) shall be given to the Bondholders. A copy of the notice shall be given by the
party convening the meeting to the other parties. The notice shall specify the day, time and
place of meeting, be given in the manner provided in the Conditions and shall specify, unless
the Trustee otherwise agrees, the nature of the resolutions to be proposed and shall include a
statement to the effect that the holders of Bonds may appoint proxies by executing and
delivering a form of proxy in English to the specified office of an Agent not later than 24
hours before the time fixed for the meeting or, in the case of corporations, may appoint
representatives by resolution in English of their directors or other governing body and by
delivering an executed copy of such resolution to the Agent not later than 24 hours before the
time fixed for the meeting.4
    
    A person (who may, but need not, be a Bondholder) nominated in writing by the Trustee may act
as chairman of a meeting but if no such nomination is made or if the person nominated is not
present within 15 minutes after the time fixed for the meeting the Bondholders present shall
choose one of their number to be chairman, failing which the Issuer, failing which the Issuer
may appoint a chairman. The chairman of an adjourned meeting need not be the same person as
was chairman of the original meeting.5
    
    At a meeting two or more persons present in person holding Bonds or being proxies or
representatives and holding or representing in the aggregate not less than 10% in principal
amount of the Bonds for the time being outstanding shall (except for the purpose of passing an
Extraordinary Resolution) form a quorum for the transaction of business and no
business (other than the choosing of a chairman) shall be transacted unless the requisite
quorum be present at the commencement of business. The quorum at a meeting for passing an
Extraordinary Resolution shall (subject as provided below) be two or more persons present in
person holding Bonds or being proxies or representatives and holding or representing in the
aggregate over 75% in principal amount of the Bonds for the time being outstanding provided
that the quorum at any meeting the business of which includes any of the matters specified
in the proviso to paragraph 16 shall be two or more persons so present holding Bonds or
being proxies or representatives and holding or representing in the aggregate not less than
75% in principal amount of the Bonds for the time being outstanding.
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6
    
    If within 15 minutes from the time fixed for a meeting a quorum is not present the meeting
shall, if convened upon the requisition of Bondholders or if the Issuer and the Trustee agree,
be dissolved. In any other case it shall stand adjourned to such date, not less than 14 nor
more than 42 days later, and to such place as the chairman may decide. At such adjourned
meeting two or more persons present in person holding Bonds or being proxies or
representatives (whatever the principal amount of the Bonds so held or represented) shall form
a quorum and may pass any resolution and decide upon all matters which could properly have
been dealt with at the meeting from which the adjournment took place had a quorum been present
at such meeting provided that at any adjourned meeting at which is to be proposed an
Extraordinary Resolution for the purpose of effecting any of the modifications specified in
the proviso to paragraph 16 the quorum shall be two or more persons so present holding Bonds
or being proxies or representatives and holding or representing in the aggregate not less than
25% in principal amount of the Bonds for the time being outstanding.7
    
    The chairman may with the consent of (and shall if directed by) a meeting adjourn the meeting
from time to time and from place to place but no business shall be transacted at an adjourned
meeting which might not lawfully have been transacted at the meeting from which the
adjournment took place.8
    
    At least 10 days notice of any meeting adjourned through want of a quorum shall be given in
the same manner as for an original meeting and such notice shall state the quorum required at
the adjourned meeting. No notice need, however, otherwise be given of an adjourned meeting.9
    
    Each question submitted to a meeting shall be decided in the first instance by a show of
hands and in case of equality of votes the chairman shall both on a show of hands and on a
poll have a casting vote in addition to the vote or votes (if any) which he may have as a
Bondholder or as a holder of a voting certificate or as a proxy or representative.10
    
    Unless a poll is (before or on the declaration of the result of the show of hands) demanded
at a meeting by the chairman, the Issuer, the Trustee or by one or more persons holding one or
more Bonds or being proxies or representatives and holding or representing in the aggregate
not less than two per cent. in principal amount of the Bonds for the time being outstanding, a
declaration by the chairman that a resolution has been carried or carried by a particular
majority or lost or not carried by a particular majority shall be conclusive evidence of the
fact without proof of the number or proportion of the votes recorded in favour of or against
such resolution.11
    
    If a poll is demanded, it shall be taken in such manner and (subject as provided below)
either at once or after such an adjournment as the chairman directs and the result of such
poll shall be deemed to be the resolution of the meeting at which the poll was demanded as
at the date of the taking of the poll. The demand for a poll shall not prevent the
continuation of the meeting for the transaction of any business other than the question on
which the poll has been demanded.
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12
    
    A poll demanded on the election of a chairman or on any question of adjournment shall be
taken at the meeting without adjournment.13
    
    The Issuer and the Trustee (through their respective representatives) and their respective
financial and legal advisers may attend and speak at any meeting of Bondholders. No one else
may attend or speak at a meeting of Bondholders unless he is the holder of a Bond or is a
proxy or a representative.14
    
    On a show of hands every holder who is present in person or any person who is present and is
a proxy or a representative shall have one vote and on a poll every person who is so present
shall have one vote in respect of each Bond produced or in respect of which he is a proxy or a
representative. Without prejudice to the obligations of proxies, a person entitled to more
than one vote need not use them all or cast them all in the same way.15
    
    A proxy need not be a Bondholder.16
    
    A meeting of Bondholders shall, subject to the Conditions, in addition to the powers given
above, but without prejudice to any powers conferred on other persons by this Indenture, have
power exercisable by Extraordinary Resolution:16.1
    
    to sanction any proposal by the Issuer for any modification, abrogation, variation or
compromise of, or arrangement in respect of, the rights of the Bondholders against the Issuer
whether or not such rights arise under this Indenture;16.2
    
    to sanction the exchange or substitution for the Bonds of, or the conversion of the Bonds
into, shares, bonds, or other obligations or securities of the Issuer or any other entity;16.3
    
    to assent to any modification of this Indenture or the Bonds which shall be proposed by the
Issuer or the Trustee;16.4
    
    to authorise anyone to concur in and do anything necessary to carry out and give effect to an
Extraordinary Resolution;16.5
    
    to give any authority, direction or sanction required to be given by Extraordinary
Resolution;16.6
    
    to appoint any persons (whether Bondholders or not) as a committee or committees to represent
the interests of the Bondholders and to confer on them any powers or discretions which the
Bondholders could themselves exercise by Extraordinary Resolution;16.7
    
    to approve the substitution of any entity for the Issuer (or any previous substitute) as
principal debtor under this Indenture;16.8
    
    to approve a proposed new Trustee and to remove a Trustee; and
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16.9
    
    to discharge or exonerate the Trustee from any liability in respect of any act or omission
for which it may become responsible under this Indenture or the Bonds,provided that the special quorum provisions contained in the proviso to paragraph 5 and, in
the case of an adjourned meeting, in the proviso to paragraph 6 shall apply for the purpose
of considering proposals to instruct the Trustee to withdraw a notice declaring an Event of
Default under Condition 10.1 or making any modification to the provisions contained in this
Indenture or the Bonds which would have the effect of:
 16.9.1
    
    modifying the due date for any payment in respect of the Bonds; or16.9.2
    
    reducing or cancelling the principal amount of the Bonds or default interest, premium
(if any) (including any Early Redemption Amount) or the Equivalent Amount payable in
respect of the Bonds or changing the method of calculation of the Early Redemption
Amount of the Bond; or16.9.3
    
    changing the currency of payment of the Bonds; or16.9.4
    
    modifying or cancelling the Conversion Rights or the put options specified in
Condition 8.4; or16.9.5
    
    modifying the provisions contained in this Schedule concerning the quorum required at
any meeting of Bondholders or the majority required to pass an Extraordinary Resolution
or sign a resolution in writing; or16.9.6
    
    amending this proviso.
 17
    
    An Extraordinary Resolution passed at a meeting of Bondholders duly convened and held in
accordance with this Indenture shall be binding on all the Bondholders, whether or not present
at the meeting, and each of them shall be bound to give effect to it accordingly. The passing
of such a resolution shall be conclusive evidence that the circumstances of such resolution
justify the passing of it.18
    
    The expression Extraordinary Resolution means a resolution passed at a meeting of
Bondholders duly convened and held in accordance with these provisions by a majority
consisting of not less than three-quarters of the votes cast.19
    
    A resolution in writing signed by or on behalf of the Bondholders of not less than 90% of the
aggregate principal amount of the Bonds who for the time being are entitled to receive notice
of a meeting in accordance with these provisions shall for all purposes be as valid as an
Extraordinary Resolution passed at a meeting of Bondholders convened and held in accordance
with these provisions. Such resolution in writing may be in one document or several documents
in like form each signed by or on behalf of one or more of the Bondholders.20
    
    Minutes shall be made of all resolutions and proceedings at every meeting and, if purporting
to be signed by the chairman of that meeting or of the next succeeding meeting of Bondholders,
shall be conclusive evidence of the matters in them. Until the contrary is proved every
meeting for which minutes have been so made and signed shall be deemed to have been duly
convened and held and all resolutions passed or proceedings transacted at it to have been duly
passed and transacted.21
    
    Subject to all other provisions contained in this Indenture the Trustee may without the
consent of the Bondholders prescribe such further regulations regarding the holding of
meetings and attendance and voting at them or regarding the making of resolutions in writing
as the Trustee may in its sole discretion determine including (without limitation) such
regulations and requirements as the Trustee thinks reasonable to satisfy itself that persons
who purport to make any requisition in accordance with this Indenture are entitled to do so
and that those who purport to attend or vote at a meeting or to sign a written resolution are
entitled to do so.
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SCHEDULE 4
Regulation S Legend
 THE BONDS EVIDENCED HEREBY (THE BONDS) AND THE ORDINARY SHARES OF HOME INNS & HOTELS MANAGEMENT
INC. (HOME INNS) ISSUABLE UPON CONVERSION OF THE BONDS EVIDENCED HEREBY HAVE NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES
ACT), AND PRIOR TO THE EXPIRATION OF 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING
OF BONDS AND THE LATEST CLOSING DATE (THE DISTRIBUTION COMPLIANCE PERIOD), THE BONDS MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO ANY U.S. PERSON OUTSIDE THE UNITED STATES OR ANY
PERSON IN THE UNITED STATES. EACH HOLDER AND BENEFICIAL OWNER, BY ITS ACCEPTANCE OF THE BONDS
EVIDENCED HEREBY, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING AND FOLLOWING
RESTRICTIONS.
 THIS LEGEND SHALL BE REMOVED AFTER THE END OF DISTRIBUTION COMPLIANCE PERIOD, AFTER WHICH THE BONDS
EVIDENCED HEREBY AND THE COMMON SHARES OF HOME INNS ISSUABLE UPON CONVERSION OF THE BONDS SHALL NO
LONGER BE SUBJECT TO THE RESTRICTIONS PROVIDED IN THIS LEGEND, PROVIDED THAT AT SUCH TIME AND
THEREAFTER THE OFFER OR SALE OF THE BONDS EVIDENCED HEREBY AND THE ORDINARY SHARES OF HOME INNS
ISSUABLE UPON CONVERSION OF THE BONDS WOULD NOT BE RESTRICTED UNDER ANY APPLICABLE SECURITIES LAWS
OF THE UNITED STATES OR OF THE STATES OR TERRITORIES OF THE UNITED STATES.
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This Indenture is delivered the day and year first before written.
 HOME INNS & HOTELS MANAGEMENT INC.By:
    
    /s/ May WuName:
    
    May WuTitle:
    
    Chief Financial OfficerTHE BANK OF NEW YORKBy:
    
    /s/ Terence YeungName:
    
    Terence YeungTitle:
    
    Vice President
  77