**      AGREEMENT **
**CHINA      ARCHITECTURAL ENGINEERING, INC.**
**THE      BANK OF NEW YORK, LONDON BRANCH**
**ABN**

**RECITALS**

**WHEREAS      :-**

| (A) | A                Trust Deed (the “**Trust                Deed**”)                was made on April 12, 2007 between **CHINA                ARCHITECTURAL ENGINEERING, INC.**,                a                company incorporated under the laws of the State of Delaware whose                registered office is at 2711 Centerville Road, Suite 400, Wilmington,                Delaware 19808, c/o Corporation Service Company (the “**Issuer**”)                and **THE                BANK OF NEW YORK, LONDON BRANCH**,                a                company incorporated with limited liability in United Kingdom, whose                principal office is situated at 40th Floor, One Canada Square, London,                E14, 5AL, United Kingdom (the “**Trustee**”). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | The                Issuer has advised ABN that it will not take or permit any action                that                would cause the price of its common shares to drop below US$0.25                per                common share or which would cause, under the current terms of the                Trust                Deed, the Conversion Price of the Bonds to be less than US$0.25 per                common                share. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | In                order to address certain potential accounting issues of the Issuer,                the                Issuer wishes to amend the Trust Deed to provide that the Conversion                Price                of the Bonds cannot be adjusted lower than US$0.25 per common share                (as                adjusted for stock splits, stock dividends, rights offerings, capital                distributions and similar events) except in certain instances. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | Therefore,                the parties have agreed to enter into this Agreement to amend certain                provisions of the Trust Deed. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------|

**NOW      THEREFORE IT IS HEREBY AGREED as follows:**

| **1.** | **DEFINITIONS                AND INTERPRETATION** In                this Agreement,                terms and expressions defined in the Trust Deed shall, unless the                context                otherwise requires, have the same meanings when used                herein. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **2.** | **AMENDMENT                AND RESTATEMENT** The                Trust Deed is amended and restated as of                the date hereof in the form attached as Annex                A. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **UNDERTAKING** The                Issuer shall deliver to the Trustee and ABN                certified                copies of the resolutions of the board of directors of the Issuer                approving this Agreement and authorising the execution                thereof. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **4.** | **MISCELLANEOUS** |
|--------|-------------------|

| **4.1** | Except                as expressly amended in this Agreement, the Trust Deed shall continue                in                full force and effect in all respects and shall be read and construed                to                give full effect to the provisions of this                Agreement. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4.2** | All                costs, expenses and fees, including legal and accounting fees,                registration fees, taxes, stamp duty and all other charges and                disbursements whatsoever incurred by ABN or the Trustee in connection                with                the preparation, negotiation, execution, administration and enforcement                of                this Agreement and any documents to be executed pursuant hereto shall                be                paid by the Issuer forthwith on demand on a full indemnity                basis. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4.3** | This                Agreement shall be construed and governed by the laws of England                and the                parties hereby agree to submit to the exclusive jurisdiction of the                English courts. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**THE      **
**ISSUER**

**CHINA      ARCHITECTURAL ENGINEERING, INC.**

----

**THE      TRUSTEE**

**THE      BANK OF NEW YORK, LONDON BRANCH**

----

----

**THE      BONDHOLDER**

**ABN      AMRO BANK, N.V.**

|                                                 |   |   |                                                                      |
|------------------------------------------------------|--------|--------|---------------------------------------------------------------------------|
| /s/ A.              Gardner                     |   |   | /s/ G.              Booth                                            |
|                                                      |   |   |                                                                           |
| Name:              A. GardnerTitle: Regional Counsel |   |   | Name:              G. BoothTitle: Head of Asian              EquityLinked |

----

**ANNEX      A**

**FORM      OF AMENDED AND RESTATED TRUST DEED**

----

----

**AMENDED        AND RESTATED TRUST DEED**

**CHINA        ARCHITECTURAL ENGINEERING, INC.**

**US$10,000,000        VARIABLE RATE COUPON CONVERTIBLE BONDS DUE 2012**

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----

**CONTENTS**

| **Clause**   | **Page**                                                                |
|--------------|-------------------------------------------------------------------------|
|              |                                                                    |   |
| 1.           | Interpretation                                                          | 1 |
| 2.           | Amount                  of the Bonds and Covenant to Pay                | 5 |
| 3.           | Form                  of the Bonds and Certificates; Issue of the Bonds | 6 |
| 4.           | Stamp                  Duties and Taxes                                 | 7 |
| 5.           | Covenants                  relating to the Conversion Rights            | 8 |
| 6.           | Notices                  Relating to the Conversion Rights              | 10 |
| 7.           | Adjustments                  to the Conversion Price                    | 13 |
| 8.           | Application                  of Moneys Received by the Trustee          | 19 |
| 9.           | General                  Covenants                                      | 20 |
| 10.          | Remuneration                  and Indemnification of Trustee            | 23 |
| 11.          | Provisions                  supplemental to the Trustee Acts            | 25 |
| 12.          | Liability                  of the Trustee                               | 30 |
| 13.          | Waiver                  and Proof of Default                            | 30 |
| 14.          | Trustee                  not Precluded from Entering into Contracts     | 31 |
| 15.          | Modification                  and substitution                          | 31 |
| 16.          | Appointment,                  Retirement and Removal of the Trustee     | 33 |
| 17.          | Communications                                                          | 34 |
| 18.          | Further                  Issues                                         | 35 |
| 19.          | Currency                  Indemnity                                     | 35 |
| 20.          | Governing                  Law, Third Party Rights and Jurisdiction     | 36 |
| 21.          | Third                  Party Rights                                     | 36 |
| 22.          | Counterparts                                                            | 37 |
| 23.          | Termination                  of this Trust Deed                         | 37 |
|              |                                                                    |   |
| **Schedule** |                                                                    |
|              |                                                                    |   |
| 1.           | Form                  of Certificate                                    | 38 |
| 2.           | Form                  of Global Certificate                             | 71 |
| 3.           | Provisions                  for Meetings of Bondholders                 | 78 |

----

**THIS        AMENDED AND RESTATED TRUST DEED **
**Trust        Deed”**

| (1) | **CHINA                  ARCHITECTURAL ENGINEERING, INC.**,                  a                  company incorporated under the laws of the State of Delaware whose                  registered office is at 2711                  Centerville Road, Suite 400, Wilmington, Delaware 19808, c/o Corporation                  Service Company                  (the “**Issuer**”);                  and |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | **THE                  BANK OF NEW YORK, LONDON BRANCH**,                  a                  company incorporated with limited liability in United Kingdom,                  whose                  principal office is situated at 40th Floor, One Canada Square,                  London,                  E14, 5AL, United Kingdom (the “**Trustee**”,                  which expression, where the context so admits, includes all persons                  for                  the time being the trustee or trustees of this Trust                  Deed). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**WHEREAS**

| (A) | The                  Issuer has (pursuant to resolutions of its board of directors dated                  April                  9, 2007 and August [•], 2007) authorised the issue of US$10,000,000                  Variable Rate Convertible Bonds due 2012 convertible into shares                  of common                  stock of the Issuer with par value of US$0.001 each to be constituted                  by                  this Trust Deed. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | The                  Trustee has agreed to act as trustee of this Trust Deed on the                  following                  terms and conditions. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

**THIS        TRUST DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED AS        FOLLOWS**

| **1.** | **Interpretation** |
|--------|--------------------|

| **1.1** | **Definitions** |
|---------|-----------------|

**Accounts**

**Agency        Agreement**

**Agents**

**Alternative        Stock Exchange**

**AMEX**

**Auditors**

----

**Average        Closing Price**

**Bondholder**
**holder**

**Bonds**
**Bonds**

**Capital        Distribution**

**Certificate**

**Clearstream**

**Closing        Price**

**Conditions**

**Conversion        Date**

**Conversion        Notice**

**Conversion        Period**

**Conversion        Price**

**Conversion        Right**

**Current        Market Price**

**definitive        Certificate**

**“Dividend**

**Early        Redemption Amount**

**Employee        Share Scheme**

----

**Equivalent        Amount**

**Euroclear**

**Event        of Default**

**Extraordinary        Resolution**

**Fair        Market Value**

**Fiscal        Period**
** **

**Global        Certificate**

**Liability**
** **

**Listing        Rules**

**non-assessable**

**outstanding**

----

**Principal        Agent**

**record        date**

**Registrar**

**Relevant        Cash Dividend**

**Scrip        Dividend**

**Shares**

**Shareholder**

**specified        office**

**Subsidiary**

**Successor**

**Trading        Day**

**this        Trust Deed**

**trust        corporation**

----

| **1.2** | **Construction                  of Certain References** |
|---------|---------------------------------------------------------|

|   | (a) | costs,                  charges, remuneration or expenses include any withholding, value                  added,                  turnover or similar tax charged in respect                  thereof; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | “**United                  States dollars**”,                  **“US$**”                  and “**United                  States cents**”** **are                  to the lawful currency for the time being of the United States                  of                  America; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | a                  Schedule or a Clause or a sub-clause, paragraph or sub-paragraph                  is,                  unless otherwise stated, to a schedule hereto or a clause or sub-clause,                  paragraph or sub-paragraph hereof respectively; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | 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 England as shall                  most                  nearly approximate thereto; and |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | references                  in this Trust Deed and the Conditions to the consent or 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** |
|---------|--------------|

| **1.4** | **Schedules** |
|---------|---------------|

| **1.5** | **Definitions                  in Conditions** |
|---------|------------------------------------------------|

| **2.** | **AMOUNT                    OF THE BONDS AND COVENANT TO                    PAY** |
|--------|-----------------------------------------------------------------------------------|

| **2.1** | **Amount                  of the Bonds** |
|---------|------------------------------------------|

| **2.2** | **Covenant                  to pay** |
|---------|--------------------------------------|

----

|   | (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 11 will                  be deemed                  to have been made when the full amount due (including interest                  or 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 Clause 9.10)                  except (if payment is made to Principal Agent) to the extent that                  there is                  failure in the subsequent payment to the relevant Bondholders under                  the                  Conditions. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **2.3** | **Discharge** |
|---------|---------------|

| **2.4** | **Payment                  after a Default** |
|---------|----------------------------------------------|

|   | (a) | 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 Trust Deed and the Bonds                  on the                  terms of the Agency Agreement (with consequential amendments as                  necessary                  and except that the Trustee’s liability for the indemnification,                  remuneration and all other expenses of the Agents and the Registrar                  will                  be limited to the amounts for the time being held by the Trustee                  in                  respect of the Bonds on the terms of this Trust Deed) and thereafter                  to                  hold all Certificates and all moneys, documents and records held                  by them                  in respect of Bonds to the order of the Trustee;                  and/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 shall                  direct                  in such notice or subsequently, provided that this Clause 2.4(a)(ii)                  shall not apply to any documents or records which the Principal                  Agent, the                  Registrar or the relevant Agent is not obliged to release by any                  law or                  regulation to which it is subject;                  and |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | by                  notice in writing to the Issuer require them 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** |
|---------|---------------------------------------------|

----

| **3.2** | **The                  definitive Certificates** |
|---------|--------------------------------------------------|

| **3.3** | **Signature** |
|---------|---------------|

| **3.4** | **Issue** |
|---------|-----------|

| **3.5** | **Entitlement                  to treat holder as owner** |
|---------|-----------------------------------------------------------|

| **3.6** | **Authentication** |
|---------|--------------------|

| **4.** | STAMP                    DUTIES AND TAXES |
|--------|-------------------------------------------|

| **4.1** | **Stamp                  Duties** |
|---------|-----------------------------------|

----

| **4.2** | **Change                  of Taxing Jurisdiction** |
|---------|----------------------------------------------------|

| **5.** | COVENANTS                    RELATING TO THE CONVERSION                    RIGHTS |
|--------|-----------------------------------------------------------------------------------|

| **5.1** | **Availability                  of Shares** |
|---------|---------------------------------------------|

| **5.2** | **Restricted                  Actions** |
|---------|-----------------------------------------|

| **5.3** | **Notice** |
|---------|------------|

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| **5.4** | **Directors’                  Certificate** |
|---------|---------------------------------------------------|

| **5.5** | **Extend                  Offer** |
|---------|-----------------------------------|

| **5.6** | **No                  Reduction of Issued Share                  Capital** |
|---------|----------------------------------------------------------------------------|

| **5.7** | **Closing                  of Register of Members** |
|---------|-----------------------------------------------------|

| **5.8** | **Listing                  of Shares** |
|---------|----------------------------------------|

|   | (a) | promptly                  list the Shares into which the Bonds are or may be convertible                  pursuant to                  the terms of this Trust Deed and the Conditions on the AMEX or                  any                  Alternative Stock Exchange and in any event no later than three                  hundred                  and sixty-five (365) days after the date                  hereof, |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | maintain                  such listing on the AMEX or any Alternative Stock Exchange,                  and |
|--------|-----|------------------------------------------------------------------------------------------------------------|

|   | (c) | will                  forthwith give notice to the Bondholders in accordance with Condition                  18                  of any such listing or delisting of such Shares (as a class) by                  the AMEX                  or any Alternative Stock Exchange; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.9** | **Expenses** |
|---------|--------------|

**equity        share capital**

| **6.** | NOTICES                    RELATING TO THE CONVERSION                    RIGHTS |
|--------|---------------------------------------------------------------------------------|

| **6.1** | **Requirement                  to give notice** |
|---------|-------------------------------------------------|

|   | (a) | the                  Issuer declares, or pays or makes a Capital Distribution, or authorises                  the grant, issue or offer to all or substantially all 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;                  or |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | 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 not the surviving                  party or                  any sale or transfer of all or substantially all of the assets                  or business                  of the Issuer; or |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | the                  Issuer authorises the issue of any securities convertible into                  or                  exchangeable for Shares or rights or warrants to subscribe for                  or purchase                  Shares (other than the warrants issued to ABN AMRO Bank N.V.) or                  securities (other than those referred to in paragraph 6.1(a) above)                  which                  will, or authorises 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 of the Issuer 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 |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | there                  is a voluntary or involuntary dissolution, liquidation                  or winding-up of the Issuer, |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------|

----

|   | (i) | the                  record date in the United States for such issuance or event described                  in                  paragraphs 6.1(a), (b) or (c), above;                  or |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the                  date in the United States (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                  Shareholders 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 |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | (in                  the event of the declaration of a Capital Distribution referred                  to in                  paragraph 6.1(a)                  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                  of the                  Issuer before such Capital Distribution may be paid or made) the                  date of                  such submission; or |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | (in                  the event of an issue referred to in paragraph 6.1(c)                  above) the date of such issue; or |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | (in                  the event of such re-classification, consolidation, merger, amalgamation,                  sale, transfer, dissolution, liquidation or winding-up described                  in                  paragraph 6.1(b) or (c) above not being submitted to a general                  meeting of                  shareholders of the Issuer for approval) (1) the record date for                  the same                  (if applicable), and (2) the date when the same becomes                  effective; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **6.2** | **Where                  Adjustment to Conversion Price                  Required** |
|---------|-------------------------------------------------------------------------------------|

| **6.3** | **Notice                  of Adjustment or Reset** |
|---------|----------------------------------------------------|

| **6.4** | **Notification                  of Closed Periods** |
|---------|-----------------------------------------------------|

| **6.5** | **Notification                  of end of Conversion                  Period** |
|---------|--------------------------------------------------------------------------------|

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| **7.** | ADJUSTMENTS                    TO THE CONVERSION PRICE |
|--------|--------------------------------------------------------|

| **7.1** | **The                  Conversion Price will be subject to adjustment in the following                  events as                  follows:** |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | *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: |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| A |
|---|
| B |

| Where: |                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                         |
| A      | is                      the nominal amount of one (1) Share immediately after such                      alteration;                      and |
|   |                                                                                                                                         |
| B      | is                      the nominal amount of one (1) Share immediately before such                      alteration.                         |

|   | (b) | *Capitalisation                    of Profits or Reserves*:                    If and whenever the Issuer shall issue any Shares credited as                    fully paid                    to the holders of Shares (the “**Shareholders**”)                    by way of capitalisation 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 (except any Scrip                    Dividend)                    and which would not have constituted a Capital Distribution,                    the                    Conversion Price shall be adjusted by multiplying the Conversion                    Price in                    force immediately before such issue by the following                    fraction: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| A |
|---|
| B |

| Where: |                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                   |
| A      | is                      the aggregate nominal amount of the issued Shares immediately                      before such                      issue; and |
|   |                                                                                                                                                   |
| B      | is                      the aggregate nominal amount of the issued Shares immediately                      after such                      issue.      |

|   | (c) | *Capital                  Distributions*:                  If and whenever the Issuer shall pay or make any Capital Distribution                  to                  the Shareholders (except to the extent that the Conversion Price                  falls to                  be adjusted under paragraph (b) above), the Conversion Price shall                  be                  adjusted by multiplying the Conversion Price in force immediately                  before                  such Capital Distribution by the following                  fraction: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| A                      –                      B |
|-------------------------------------------------------|
| A                                                     |

| Where: |                                                                                                                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                     |
| A      | is                      the Current Market Price of one (1) Share on the last Trading                      Day                      preceding the date on which the Capital Distribution is publicly                      announced; and |
|   |                                                                                                                                                                                                                                     |
| B      | is                      the Fair Market Value on the date of such announcement of the                      portion of                      the Capital Distribution attributable to one (1)                      Share.                  |

----

|   | (d) | *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, of                  options,                  warrants or other rights to subscribe for or purchase or otherwise                  acquire                  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 the 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 +                      B                 |
|-------------------------------------------------|
| A                      +                      C |

| Where: |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 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 for the                        Shares issued by way of rights or for the options or warrants                        or other                        rights issued by way of rights and for the total number of                        Shares                        comprised therein would subscribe for, purchase or otherwise                        acquire at                        such Current Market Price per Share; and |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| C      | is                        the aggregate number of Shares issued or, as the case may                        be, comprised in                        the grant.                                                                                                                                                                                                                                                                                                                                                                                        |

|   | (e) | *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, purchase                  or                  otherwise acquire Shares) to all or substantially all Shareholders                  as a                  class by way of rights or grant to all or substantially all Shareholders                  as a class by way of rights, of options, warrants or other rights                  to                  subscribe for, purchase or otherwise acquire any securities (other                  than                  Shares or options, warrants or other rights to subscribe for, purchase                  or                  otherwise acquire 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                      –                      B |
|-------------------------------------------------------|
| A                                                     |

| Where: |                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                        |
| A      | is                    the Current Market Price of one (1) Share on the last Trading                    Day                    preceding the date on which such issue or grant is publicly announced;                    and |
|   |                                                                                                                                                                                                                        |
| B      | is                    the Fair Market Value on the date of such announcement of the                    portion of                    the rights attributable to one (1)                    Share.                           |

|   | (f) | *Issues                  at less than Conversion Price*:                  If and whenever the Issuer shall issue (otherwise than as mentioned                  in                  paragraph (d) above) 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 shall issue or                  grant                  (otherwise than as mentioned in paragraph (d) above) options, warrants                  or                  other rights to subscribe for, purchase or otherwise acquire Shares                  in                  each case at a price per Share which is less than the Conversion                  Price in                  effect at the time of such issue, then, in such event, the Conversion                  Price shall be reduced, concurrently with such issue or grant,                  to a price                  equal to the consideration per share for which such Shares are                  or will be                  issued. If such Shares are issued for no consideration, then the                  consideration per share shall be deemed to be the then current                  par value                  of each Share. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Determination        of Consideration:*

|   | (A) | in                  so far as such consideration consists of cash, it shall be computed                  at the                  aggregate amount of cash received by the                  Issuer; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | in                  so far as such consideration consists of property other than cash,                  it                  shall be computed at the fair value thereof at the time of such                  issue, as                  determined in good faith by the directors of the Issuer (the “**Directors**”);                  provided, however, that no value shall be attributed to any services                  performed by any employee, officer or director of the Issuer;                  and |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (C) | in                  the event the Shares are issued together with other shares or securities                  or other assets of the Issuer for consideration which covers both                  the                  proportion of such consideration so received with respect to such                  Shares,                  shall be computed as provided in paragraphs (A) and (B) above,                  as                  determined in good faith by the                  Directors. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (g) | *Other                  Issues at less than Conversion 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 this Clause 7.1(g), if                  and                  whenever the Issuer or any of its Subsidiaries (otherwise than                  as                  mentioned in paragraphs (d), (e) or (f), 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 shall issue 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 Conversion Price                  in effect                  at the time of issue of such securities, then, in such event, the                  Conversion Price shall be reduced, concurrently with such issue,                  to a                  price equal to the consideration per share receivable by the Issuer                  for                  the Shares to be issued on conversion or exchange or on exercise                  of the                  right of subscription determined by reference to the maximum number                  of                  Shares to be issued on conversion, exchange or subscription at                  the minimum                  conversion, exchange or subscription price. If such Shares are                  issued for                  no consideration, then the consideration per share shall be deemed                  to be                  the then current par value of each                  Share. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Determination        of Consideration:*

|   | (A) | in                  so far as such consideration consists of cash, it shall be computed                  at the                  aggregate amount of cash received by the                  Issuer; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | in                  so far as such consideration consists of property other than cash,                  it                  shall be computed at the fair value thereof at the time of such                  issue, as                  determined in good faith by the Directors; provided, however, that                  no                  value shall be attributed to any services performed by any employee,                  officer or director of the Issuer;                  and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (C) | in                  the event the Shares are issued together with                  other shares or securities or other assets of the Issuer for consideration                  which                  covers both the proportion of such consideration so received with                  respect                  to such Shares, shall be computed as provided in paragraphs (A)                  and (B)                  above, as determined in good faith by the                  Directors. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | *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 Clause 7.1(g) (other than in accordance with the                  terms of                  such securities) so that the consideration per Share (for the number                  of                  Shares available on conversion, exchange or subscription following                  the                  modification) is reduced and is less than the Conversion Price                  in effect                  at the time of such modification, the Conversion Price shall be                  reduced,                  concurrently with such modification, to a price equal to the modified                  consideration per share receivable by the Issuer for the Shares                  to be                  issued on conversion or exchange or on exercise of the right of                  subscription determined by reference to the maximum number of Shares                  to be                  issued on conversion, exchange or subscription at the minimum conversion,                  exchange or subscription price. If such Shares are issued for no                  consideration, then the consideration per share shall be deemed                  to be the                  then current par value of each                  Share. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Determination        of Consideration:*

|   | (A) | in                  so far as such consideration consists of cash, it shall be computed                  at the                  aggregate amount of cash received by the                  Issuer; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | in                  so far as such consideration consists of property other than cash,                  it                  shall be computed at the fair value thereof at the time of such                  issue, as                  determined in good faith by the Directors; provided, however, that                  no                  value shall be attributed to any services performed by any employee,                  officer or director of the Issuer;                  and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (C) | in                  the event the Shares are issued together with other shares or securities                  or other assets of the Issuer for consideration which covers both                  the                  proportion of such consideration so received with respect to such                  Shares,                  shall be computed as provided in paragraphs (A) and (B) above,                  as                  determined in good faith by the                  Directors. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | *Other                  Offers to Shareholders*:                  If and whenever 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 issues, sells                  or                  distributes any securities in connection with which an offer to                  which the                  Shareholders generally are entitled to participate in arrangements                  whereby                  such securities may be acquired by them (except where the Conversion                  Price                  falls to be adjusted under Clause 7.1(d), Clause 7.1(e), Clause                  7.1(f) or                  Clause (g), the Conversion Price shall be adjusted by multiplying                  the                  Conversion Price in force immediately before such issue by the                  following                  fraction: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| A                      –                      B |
|-------------------------------------------------------|
| A                                                     |

| Where: |                                                                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                               |
| A      | is                    the Current Market Price of one (1) Share on the last Trading                    Day                    preceding the date on which such issue is publicly announced;                    and |
|   |                                                                                                                                                                                                               |
| B      | is                    the Fair Market Value on the date of such announcement of the                    portion of                    the rights attributable to one (1)                    Share.                  |

|   | (j) | *Other                  Events*:                  If the Issuer determines that a downward adjustment should be made                  to the                  Conversion Price as a result of one (1) or more events or circumstances                  not referred to in this Clause 7.1, the Issuer shall, at its own                  expense,                  consult an independent investment bank of international repute                  (acting as                  expert), selected by the Issuer and approved in writing by the                  Trustee                  (such approval not to be unreasonably withheld or delayed), to                  determine                  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 by the                  independent investment bank such adjustment (if any) shall be made                  and                  shall take effect in accordance with such determination, provided                  that                  where the events or circumstances giving rise to any adjustment                  pursuant                  to this Clause 7.1 have already resulted or will result in an adjustment                  to the Conversion Price or where the events or circumstances giving                  rise                  to any adjustment arise by virtue of events or 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 Clause 7.1 as may be advised by the independent                  investment bank to be in their opinion appropriate to give the                  intended                  result. Neither the Agents nor the Trustee should have the responsible                  for                  determining the Conversion Price or the adjustment to the Conversion                  Price. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **7.2** | (a) | No                  adjustment will be made to the Conversion Price (i) when Shares                  or other                  securities (including rights or options) are issued, offered or                  granted to                  employees (including directors) of the Issuer or any of its Subsidiaries                  pursuant to any Employee Share Scheme (and which Employee Share                  Scheme (a)                  is in compliance with the listing rules of the AMEX or, if applicable,                  the                  listing rules of an Alternative Stock Exchange; and (b) does not                  amount                  to, relate to, or entitle such persons to receive, Shares in excess                  of ten                  percent (10%) of the average number of issued and outstanding Shares                  during any twelve (12) months); or (ii) as a result of the issuance                  on the                  date hereof of the Warrants issued to ABN AMRO Bank, N.V. or any                  exercise                  of such Warrants; or (iii) as a result of the exercise of the outstanding                  warrants issued on 17 October, 2006, to purchase 232,088 Shares                  at US$1.60                  per share. |
|---------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Notwithstanding                  anything herein, the Conversion Price shall only be adjusted pursuant                  to                  Clauses 7.1(f), 7.1(g), 7.1(h), 7.1(i) and 7.1(j) to an amount                  not less                  than US$0.25 per Share (as adjusted for stock splits, stock dividends,                  spin-offs, rights offerings, recapitalizations and similar                  events). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Where                  more than one (1) 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 an independent investment bank of international repute                  (acting                  as expert), selected by the Issuer and approved in writing by the                  Trustee                  (such approval shall not be unreasonably withheld or delayed),                  the                  foregoing provisions would need to be operated subject to some                  modification in order to give the intended result, such modification                  shall                  be made to the operation of the foregoing provisions as may be                  advised by                  such independent investment bank to be in their opinion appropriate                  in                  order to give such intended result. 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 Clause 7.1(a) above. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | 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. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | If                  any doubt arises as to an adjustment of the Conversion Price pursuant                  to                  Clause 7.1, the Trustee may, at the cost and expense of the Issuer,                  consult with any reputable investment bank in the United States                  and may                  act on the opinion or advice of or any certificate or information                  obtained                  from any such investment bank, and such determination, opinion,                  advice,                  certification or action (or absence thereof) shall be conclusive                  and                  binding upon the Issuer and the                  Bondholders. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **7.3** | **Conversion                  Price Reset** |
|---------|---------------------------------------------|

**Reset        Date**

----

|   | (a) | any                  such adjustment to the Conversion Price pursuant to this Clause                  7.3 shall                  be limited so that the Conversion Price adjusted in accordance                  with this                  Clause 7.3 shall not be less than seventy percent (70%) of the                  initial                  Conversion Price (taking account of any adjustments required under                  Clause                  7.1 above which may have occurred prior to the relevant Reset                  Date; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | subject                  to (a) above the provisions of Clause 7.1 shall apply, *mutatis                  mutandis*,                  to this Clause 7.3 to ensure that appropriate adjustments shall                  be made to                  any Closing Price to reflect any adjustments made to the Conversion                  Price                  in accordance with Clause 7.1; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | for                  the avoidance of doubt, any adjustments to the Conversion Price                  made                  pursuant to this Clause 7.3 shall only be downward adjustments;                  and |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | notwithstanding                  anything herein, the Conversion Price shall only be adjusted pursuant                  to                  Clause 7.3 to an amount not less than US$0.25 per Share (as adjusted                  for                  stock splits, stock dividends, spin-offs, rights offerings,                  recapitalizations and similar                  events). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8.** | APPLICATION                    OF MONEYS RECEIVED BY THE                    TRUSTEE |
|--------|-------------------------------------------------------------------------------------|

| **8.1** | **Declaration                  of Trust** |
|---------|-------------------------------------------|

|   | (a) | *firstly*,                  in payment of all costs, charges, expenses and liabilities properly                  incurred by the Trustee (including remuneration payable to the                  Trustee) in                  carrying out its functions under this Trust Deed; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | *secondly*,                  in payment of all costs, charges, expenses and liabilities properly                  incurred by the Agents, except the Registrar, (including remuneration                  payable to the Agents) in carrying out its functions under the                  Agency                  Agreement; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | *thirdly*,                  in payment of all costs, charges, expenses and liabilities properly                  incurred by the Registrar, (including remuneration payable to the                  Registrar) in carrying out its functions under the Agency                  Agreement; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | *fourthly*,                  in payment of any amounts of principal, interest, and premium (if                  any)                  owing in respect of the Bonds *pari                  passu*                  and rateably; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | *fifthly*,                  in payment of any other amounts owing in respect of the Bonds;                  and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

|   | (f) | *sixthly*,                  in payment of any balance (if any) to the Issuer for                  itself. |
|--------|-----|-----------------------------------------------------------------------------------------------------------|

----

| **8.2** | **Accumulation** |
|---------|------------------|

| **8.3** | **Investment** |
|---------|----------------|

| **9.** | GENERAL                    COVENANTS |
|--------|--------------------------------------|

| **9.1** | **Books                  of Account** |
|---------|---------------------------------------|

| **9.2** | **Notice                  of Events of Default** |
|---------|--------------------------------------------------|

| **9.3** | **Information** |
|---------|-----------------|

----

| **9.4** | **Financial                  Statements etc.** |
|---------|------------------------------------------------|

|   | (a) | in                  the case of the first semi-annual Fiscal Period falling within                  each of the                  annual Fiscal Periods, the semi-annual interim report containing                  unaudited                  consolidated Accounts of the Issuer in respect of such Fiscal Period                  which                  Accounts are prepared on a basis substantially consistent with                  the most                  recent audited Accounts, or which indicate the way in which their                  basis of                  preparation is different; and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | in                  the case of each annual Fiscal Period, the annual report containing                  audited Accounts 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 in the United States of                  America; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **9.5** | **Information                  Material to Bondholders** |
|---------|----------------------------------------------------------|

| **9.6** | **Other                  Information** |
|---------|----------------------------------------|

| **9.7** | **Certificate                  of Directors** |
|---------|-----------------------------------------------|

**Certification        Date**

|   | (a) | no                  Event of Default had occurred since the date of this Trust Deed                  or the                  Certification Date of the last such certificate (if any) or, if                  such an                  event had occurred, giving details of it;                  and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | the                  Issuer has complied with all its obligations under this Trust                  Deed. |
|--------|-----|-----------------------------------------------------------------------------------------------------------|

| **9.8** | **Notices                  to Bondholders** |
|---------|---------------------------------------------|

| **9.9** | **Further                  Acts** |
|---------|-----------------------------------|

| **9.10** | **Notice                  of late payment** |
|----------|---------------------------------------------|

| **9.11** | **Change                  in Agents** |
|----------|---------------------------------------|

| **9.12** | **Early                  Redemption** |
|----------|---------------------------------------|

| **9.13** | **Change                  of Control or Delisting** |
|----------|-----------------------------------------------------|

| **9.14** | **Compliance** |
|----------|----------------|

----

| **9.15** | **Bonds                  held by the Issuer etc.** |
|----------|----------------------------------------------------|

| **10.** | REMUNERATION                    AND INDEMNIFICATION OF                    TRUSTEE |
|---------|-----------------------------------------------------------------------------------|

| **10.1** | **Payment                  of Remuneration** |
|----------|----------------------------------------------|

| **10.2** | **Additional                  Remuneration** |
|----------|----------------------------------------------|

| **10.3** | **Tax** |
|----------|---------|

| **10.4** | **Disputes** |
|----------|--------------|

| **10.5** | **Payment                  of Liabilities** |
|----------|---------------------------------------------|

----

| **10.6** | **Interest** |
|----------|--------------|

| **10.7** | **No                  Set-off or Withholding** |
|----------|------------------------------------------------|

| **10.8** | **Survival                  of Clauses** |
|----------|------------------------------------------|

| **10.9** | **Indemnity** |
|----------|---------------|

| **10.10** | **Force                  Majeure** |
|-----------|------------------------------------|

----

| **11.** | PROVISIONS                    SUPPLEMENTAL TO THE TRUSTEE                    ACTS |
|---------|-----------------------------------------------------------------------------------|

|   | (a) | Advice:                  The Trustee, whenever it considers it reasonably necessary and                  expedient                  in the interest of the Bondholders, shall engage and consult, at                  the                  expense of the Issuer, with any legal or professional adviser and                  notice                  of appointment of any legal or professional adviser shall be given                  to the                  Issuer as soon as practicable. The Trustee may act on the opinion                  or                  advice of, or information obtained from, any lawyer, valuer, accountant                  (including the Auditors), banker or other expert whether obtained                  by or                  addressed to the Issuer, the Trustee, the Principal Agent or otherwise,                  and notwithstanding any monetary or other limit on liability contained                  therein, will not be responsible to anyone for any Liability 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. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Trustee                  to Assume Performance: The Trustee need not notify anyone of the                  execution                  of this Trust Deed or do anything to find out if an 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                  each of                  the Issuer and the Principal Agent is performing all its obligations                  under                  this Trust Deed and the Bonds. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Resolutions                  of Bondholders: The Trustee will not be responsible for having                  acted in                  good faith on a resolution in writing or any 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. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Illegality/Expenditure                  of Trustee Funds: No provision of these presents shall require                  the Trustee                  to do anything which may: (i) be illegal or contrary to applicable                  law or                  regulation; (ii) cause it to expend or risk its own funds or otherwise                  incur any financial liability in the performance of any of its                  duties or                  in the exercise of any of its own rights, powers, authorities or                  discretions, if it shall have grounds for believing that repayment                  of such                  funds or satisfactory indemnity against, or security for, such                  risk or the                  liability is not assured to it. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | 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 a                  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. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (f) | 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 believed by it to be of good repute and                  may                  deposit this Trust Deed and any other documents with such custodian                  and                  pay all sums due in respect thereof. The Trustee shall not be responsible                  for or required to insure against any Liability incurred in connection                  with such deposit and may pay all sums required to be paid on account                  of,                  or in respect of, any such deposit. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | Discretion:                  The Trustee will have absolute and uncontrolled discretion as to                  the                  exercise of its functions (the exercise of which, as between the                  Bondholders and the Trustee shall be conclusive and binding on                  the                  Bondholders) and will not be responsible for any Liability which                  may                  result from their exercise or non-exercise. Whenever in this Trust                  Deed,                  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 and need not exercise the same unless                  it has                  been indemnified and/or provided with security to its                  satisfaction. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | Agents:                  Whenever it considers it reasonably necessary and 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). Provided that the Trustee shall                  have                  exercised reasonable care in the selection of such agent, the Trustee                  shall not be responsible to the Bondholders for any misconduct                  on the part                  of any such person appointed by it hereunder or be bound to supervise                  the                  proceedings or acts of any such person. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | Delegation:                  Whenever it considers it reasonably necessary and expedient in                  the                  interests of the Bondholders, the Trustee may delegate by power                  of                  attorney or otherwise to any person or persons or fluctuating body                  of                  persons on any terms (including power to sub-delegate) all or any                  of its                  trusts, powers, authorities, discretions or functions under this                  Trust                  Deed. Provided that the Trustee shall have exercised reasonable                  care in                  the selection of such delegate, the Trustee shall not be under                  any                  obligation to the Bondholders to supervise the proceedings or be                  in any                  way responsible for any loss incurred by reason of any misconduct                  or                  default on the part of any such delegate or                  sub-delegate. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j) | Nominees:                  In relation to any asset held by it under this Trust Deed, the                  Trustee may                  appoint any person to act as its nominee on any                  terms. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (k) | Confidentiality:                  Unless required by law or ordered to do so by a court of competent                  jurisdiction, 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 and no Bondholder shall be entitled                  to take                  any action to obtain from the Trustee any such                  information. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (l) | 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 Trust Deed or any of the Bonds. 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. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (m) | Currency                  Conversion: Where it is necessary or desirable to translate or                  convert any                  sum from one (1) currency to another, it will (unless otherwise                  provided                  hereby or required by law) be converted or translated at such rate                  or                  rates, in accordance with such method and as at such date as may                  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. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (n) | 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. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (o) | 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. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (p) | The                  Shares: 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 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.                  The                  Trustee shall not be responsible for any failure of the Issuer                  to make                  available or deliver any Shares, share certificates or any other                  securities or property or make any payment on the exercise of any                  Conversion Right. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (q) | Responsibility:                  The Trustee assumes no responsibility for the correctness of Recital                  (A)                  to this Trust Deed (which shall be taken as a statement by the                  Issuer) or                  other statements, warranties or representations of the Issuer,                  nor shall                  the Trustee by the execution of this Trust Deed be deemed to make                  any                  representation as to the validity, sufficiency, enforceability                  or                  admissibility in evidence of the Bonds, this Trust Deed or the                  Agency                  Agreement. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (r) | Enforcement:                  The Trustee shall not be under any obligation to take proceedings                  against                  the Issuer to enforce payment of the Bonds after the Bonds have                  become due                  and payable nor to declare the Bonds due and payable unless it                  shall have                  been so requested in writing by holders of not less than twenty-five                  percent (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 and it shall have been indemnified and/or                  secured                  to its satisfaction. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (s) | Satisfaction                  of Trustee in Condition 9(C): For the purposes of Condition 8(C),                  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 (2) directors of the Issuer                  and (b)                  an opinion of independent legal or tax advisors of recognised standing                  to                  the effect that the amendment or change giving rise to the payment                  of                  additional amounts have occurred. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (t) | 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. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (u) | Forged                  Bonds and Documents: The Trustee shall not be liable to the Issuer                  or any                  Bondholder if without gross negligence, wilful default or fraud                  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. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | Consent:                  Any consent or approval to be given by the Trustee for the purposes                  of                  this Trust Deed may be given on such terms and subject to such                  conditions                  (if any) as the Trustee thinks fit and notwithstanding any contrary                  provision in this Trust Deed may be given retrospectively. The                  Issuer                  shall observe and perform any such terms and conditions and the                  Trustee                  may at any time waive or agree to a variation of such terms and                  conditions. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (w) | Acceleration:                  The Trustee shall not be obliged to declare the Bonds immediately                  due and                  payable under Condition 11 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. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x) | Bonds                  held by the Issuer etc.: In the absence of actual knowledge or                  express notice to the contrary, the Trustee may assume without                  enquiry                  (other than requesting a certificate under Clause 9.15)                  that no Bonds are for the time being held by or on behalf of the                  Issuer or                  its Subsidiaries. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (y) | Responsibility                  for agents etc.: If the Trustee exercises reasonable care in selecting                  any                  custodian, agent, delegate or nominee appointed under this clause                  (an                  “Appointee”) (in each case, after written notice have been given to the                  Issuer to the extent reasonably practicable), 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.  |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (z) | 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 (including the Auditors) pursuant to the Conditions                  and/or                  this Trust Deed, 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. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (aa) | 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 Trust Deed which shall be read and construed as one (1) document                  with                  the Bonds. The provisions contained in Schedule 3 shall have effect                  in the                  same manner as if herein set forth. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (bb) | 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. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (cc) | 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 Trust Deed and also his properly 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 Trust Deed, 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. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (dd) | Consequential                  loss: Notwithstanding any contrary provision of this Trust Deed,                  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 and regardless                  of whether the claim for such is made in negligence, breach of                  contract,                  fraud, breach of fiduciary obligation or                  otherwise. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ee) | Other                  Obligations: The Trustee shall not be responsible for the validity                  or                  enforceability of any obligations owed to it as Trustee hereof                  other than                  by the Issuer the benefit of which obligations have been taken                  by the                  Trustee in the interests of the                  Bondholders. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ff) | Reliance:                  Any certificate or report of the Auditors or any other expert or                  other                  person called for by or provided to the Trustee (whether or not                  addressed                  to the Trustee) in accordance with or for the purposes of these                  Conditions                  or this Trust Deed may be relied upon by the Trustee as sufficient                  evidence of the facts therein and shall, in absence of manifest                  error, be                  conclusive and binding on all parties and the Trustee shall not                  be                  responsible for any loss occasioned by acting on any such certificate                  or                  report. The Trustee shall be entitled to rely on any report of                  accountants, financial advisers or investment bank where the Issuer                  procures the delivery of the same pursuant to its obligations to                  do so                  under the Conditions and such report shall be binding on the Issuer                  and                  the holders of the Bonds in the absence of manifest or proven                  error. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (gg) | Certificates                  from clearing systems: The Trustee may call for any certificate                  or other                  document to be issued by Clearstream, Luxembourg or Euroclear (or                  any                  alternative clearing system on behalf of whom the Global Certificate                  may                  be held) as to the principal amount of Bonds evidenced by the Global                  Certificate standing to the account of any person. Any such certificate                  or                  other document shall, in the absence of manifest error, be conclusive                  and                  binding for all purposes. The Trustee shall not be liable to any                  person by                  reason of having accepted as valid or not having rejected any certificate                  or other document to such effect purporting to be issued by Clearstream                  or                  Euroclear (or any such alternative clearing system) and subsequently                  found                  to be forged or not authentic or not to be                  correct. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (hh) | Exercise                  of power: In connection with the exercise by it of any of its trusts,                  powers, authorities, duties and discretions under this Trust Deed                  (including, without limitation, any modification, waiver, authorisation                  or                  determination), the Trustee shall have regard to the interests                  of all of                  the Bondholders and shall not have regard to any interests arising                  from                  circumstances particular to individual Bondholders (whatever their                  number)                  (except where expressly provided otherwise), and, in particular                  but                  without limitation, shall not have regard to the consequences of                  such                  exercise for individual Bondholders resulting from their being                  for any                  purpose domiciled or resident in, or otherwise connected with,                  or subject                  to the jurisdiction of, any particular territory or any political                  sub-division thereof and the Trustee shall not be entitled to require,                  nor                  shall any Bondholder be entitled to claim, from the Issuer (except                  to the                  extent provided for in Condition 10), the Trustee or any other                  person any                  indemnification or payment in respect of any tax consequence of                  any such                  exercise upon individual                  Bondholders. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Transaction                  Documents: The Trustee shall not be responsible for the execution,                  delivery, legality, effectiveness, adequacy, genuineness, validity,                  performance, enforceability or admissibility in evidence of this                  Trust                  Deed or any other document relating thereto and shall not be liable                  for                  any failure to obtain any licence, consent or other authority for                  the                  execution, delivery, legality, effectiveness, adequacy, genuineness,                  validity, performance, enforceability or admissibility in evidence                  of this                  Trust Deed or any other document relating                  thereto. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (jj) | Legal                  Opinion: The Trustee shall not be responsible to any person for                  failing to                  request, require or receive any legal opinion relating to the Bonds                  or for                  checking or commenting upon the content of any such legal opinion                  and                  shall not be responsible for any Liability incurred                  thereby. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (kk) | Taking                  Action by Trustee: The Trustee shall not be bound to take any action                  in                  connection with this Trust Deed or any obligations arising pursuant                  thereto, including, without prejudice to the generality of the                  foregoing,                  forming any opinion or employing any financial adviser, where it                  is not                  reasonably satisfied that the Issuer will be able to indemnify                  it against                  all Liabilities which may be incurred in connection with such action                  and                  may demand prior to taking any such action that there be paid to                  it in                  advance such sums as it reasonably considers (without prejudice                  to any                  further demand) shall be sufficient so to indemnify it and on such                  demand                  being made the Issuer shall be obliged to make payment of all such                  sums in                  full. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **12.** | LIABILITY                    OF THE TRUSTEE |
|---------|---------------------------------------------|

| **13.** | **WAIVER                    AND PROOF OF DEFAULT** |
|---------|----------------------------------------------------|

----

| **13.1** | **Waiver** |
|----------|------------|

| **13.2** | **Proof                  of Default** |
|----------|---------------------------------------|

| **14.** | TRUSTEE                      NOT PRECLUDED FROM ENTERING **I**NTO                      CONTRACTS |
|---------|--------------------------------------------------------------------------------------------------|

| **15.** | MODIFICATION                      AND SUB**S**TITUTION |
|---------|--------------------------------------------------------|

| **15.1** | **Modification** |
|----------|------------------|

|   | (a) | The                  Trustee may (but is not obliged to) agree without the consent of                  the                  Bondholders to any modification to this Trust Deed (which for the                  avoidance of doubt includes the Bonds) and the Agency Agreement,                  which in                  the Trustee’s opinion, is of a formal, minor or technical nature or to                  correct a manifest or (to the satisfaction of the Trustee) proven                  error.                  The Trustee may (but is not obliged to) agree to any modification                  to this                  Trust Deed which is in its opinion proper to make if, in its opinion,                  such                  modification will not be materially prejudicial to the interests                  of the                  Bondholders. Unless the Trustee agrees otherwise, any such modification                  shall be notified to the Bondholders as soon as practicable                  thereafter. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Any                  amendment or supplement to this Trust Deed shall be made by an                  instrument                  in writing signed by all the parties to this Trust Deed. A waiver                  or                  consent by the Trustee with respect to action required or forbidden                  by                  this Trust Deed shall be effective only if sent in writing by the                  Trustee                  and only for that occasion. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **15.2** | **Substitution** |
|----------|------------------|

**Substituted        Obligor**

----

|   | (a) | no                  payment in respect of the Bonds is at the relevant time                  overdue; |
|--------|-----|-------------------------------------------------------------------------------------------------------|

|   | (b) | a                  deed is executed or undertaking given by the Substituted Obligor                  to the                  Trustee, agreeing to be bound by this Trust Deed and the Bonds                  (with                  consequential amendments as the Trustee may deem appropriate) as                  if the                  Substituted Obligor had been named in this Trust Deed and the Bonds                  as the                  principal debtor in place of the                  Issuer; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | 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 has given (unless the Trustee otherwise                  agrees) to                  the Trustee an undertaking satisfactory to the Trustee in terms                  corresponding to Condition 10 with the substitution for the references                  in                  that Condition to the Issuer’s Territory of references to the Substituted                  Territory whereupon this Trust Deed and the Bonds will be read                  accordingly; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | any                  two (2) directors of the Substituted Obligor certifies that it                  will be                  solvent immediately after such                  substitution; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | (unless                  the Issuer’s successor in business is the Substituted Obligor as the                  principal debtor under this Trust Deed and the Bonds) the obligations                  of                  the Substituted Obligor as the principal debtor under this Trust                  Deed and                  the Bonds are unconditionally and irrevocably guaranteed by the                  Issuer; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | a                  certificate signed by two (2) duly authorised signatories of the                  Issuer                  stating that the circumstances referred to in this Clause prevail                  and                  legal opinions addressed to the Trustee from independent legal                  advisors of                  recognised standing in each jurisdiction referred to in (c) above,                  in form                  and substance satisfactory to the Trustee, as to the fulfilment                  of the                  conditions set out in full in this Clause have been delivered to                  the                  Trustee and the Trustee shall not be liable to anyone for relying                  on such                  certificates and legal opinions;                  and |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | the                  Issuer shall have given, unless the Trustee agrees otherwise, at                  least                  fourteen (14) days’ prior notice of such substitution to the Bondholders,                  stating that copies, or pending execution the agreed text, of all                  documents in relation to the substitution which are referred to                  above, or                  which might otherwise reasonably be regarded as material to Bondholders,                  will be available for inspection at the specified office of the                  Principal                  Agent. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **15.3** | **Release                  of substituted Issuer** |
|----------|----------------------------------------------------|

----

| **15.4** | **Completion                  of Substitution** |
|----------|-------------------------------------------------|

| **16.** | APPOINTMENT,                    RETIREMENT AND REMOVAL OF THE                    TRUSTEE |
|---------|------------------------------------------------------------------------------------------|

| **16.1** | **Appointment** |
|----------|-----------------|

| **16.2** | **Retirement                  and Removal** |
|----------|---------------------------------------------|

| **16.3** | **Co-Trustees** |
|----------|-----------------|

|   | (a) | if                  the Trustee considers such appointment to be in the interests of                  the                  Bondholders; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | to                  conform with any legal requirement, restriction or condition in                  a                  jurisdiction in which a particular act is to be performed;                  or |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | to                  obtain a judgment or to enforce a judgment or any provision of                  this Trust                  Deed in any jurisdiction. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **16.4** | **Compet****e****nce                  of a Majority of Trustees** |
|----------|-------------------------------------------------------------------|

| **16.5** | **Successor** |
|----------|---------------|

| **17.** | COMMUNICATIONS |
|---------|----------------|

| Telephone                      no. | : | +86-756-853-8908                |
|------------------------------------|---|---------------------------------|
| Fax                      no.       | : | +86-756-853-8922                |
| Attention                          | : | Luo                      Ken Yi |

| Fax                      no.: | +44                      20 7964 6369       |
|-------------------------------|---------------------------------------------|
| Attention:                    | Global                      Corporate Trust |

| Fax                        no.: | 852                        2295 3283   |
|---------------------------------|----------------------------------------|
| Attention:                      | Corporate                        Trust |

----

**business        day**

| **18.** | **FURTHER                    ISSUES** |
|---------|---------------------------------------|

| **18.1** | **Supplemental                  Trust Deed** |
|----------|----------------------------------------------|

| **18.2** | **Meetings                  of Bondholders** |
|----------|----------------------------------------------|

**Bonds”**
**Bondholders”**

| **19.** | CURRENCY                    INDEMNITY |
|---------|---------------------------------------|

| **19.1** | **Currency                  of Account and Payment** |
|----------|------------------------------------------------------|

**Contractual        Currency**

| **19.2** | **Extent                  of discharge** |
|----------|------------------------------------------|

| **19.3** | **Indemnity** |
|----------|---------------|

----

| **19.4** | **Indemnity                  separate** |
|----------|-----------------------------------------|

| **20.** | GOVERNING                    LAW, THIRD PARTY RIGHTS AND                    JURISDICTION |
|---------|------------------------------------------------------------------------------------------|

| **20.1** | **Governing                  Law** |
|----------|------------------------------------|

| **20.2** | The                  Issuer irrevocably agrees for the benefit of the Trustee and the                  Bondholders that the courts of England are to have exclusive jurisdiction                  to settle any dispute which may arise out of or in connection with                  these                  presents and accordingly submit to the exclusive jurisdiction of                  the                  English courts. The Issuer waives any objection to the courts of                  England                  on the grounds that they are an inconvenient or inappropriate forum.                  The                  Trustee and the Bondholders may take any suit, action or proceedings                  arising out of or in connection with these presents (together referred                  to                  as “**Proceedings**”)                  against the Issuer in any other court of competent jurisdiction                  and                  concurrent Proceedings in any number of                  jurisdictions. |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **20.3** | The                  Issuer irrevocably and unconditionally appoints The London Law                  Agency at                  its registered office for the time being and in the event of its                  ceasing                  so to act will appoint such other person as the Trustee may approve                  and as                  the Issuer may nominate in writing to the Trustee for the purpose                  to                  accept service of process on its behalf in England in respect of                  any                  Proceedings. The Issuer: |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | agrees                  to procure that, so long as any of the Bonds remain liable to                  prescription, there shall be in force an appointment of such a                  person                  approved by the Trustee with an office in London with authority                  to accept                  service as aforesaid; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | agrees                  that failure by any such person to give notice of such service                  of process                  to the Issuer shall not impair the validity of such service or                  of any                  judgment based thereon; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | consents                  to the service of process in respect of any Proceedings by the                  airmailing                  of copies, postage prepaid, to the Issuer in accordance with clause                  17;                  and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | agrees                  that nothing in these presents shall affect the right to serve                  process in                  any other manner permitted by law. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **21.** | THIRD                    PARTY RIGHTS |
|---------|---------------------------------------|

----

| **22.** | **COUNTERPARTS** |
|---------|------------------|

| **23.** | TERMINATION                    OF THIS TRUST DEED |
|---------|---------------------------------------------------|

----

**SCHEDULE        1**

| Amount | ISIN | Common                  Code | Certificate                  Number |
|--------|------|------------------------------|-------------------------------------|

**CHINA        ARCHITECTURAL ENGINEERING, INC.**

**(incorporated        under the laws of the State of Delaware)**

**US$10,000,000**

**Variable        Rate Convertible Bonds due 2012**

**Bonds**
**Issuer**
**Conditions**

**CHINA        ARCHITECTURAL ENGINEERING, INC.**

----

**Certificate        of Authentication**

----

----

----

----

**The        Bank of New York as Registrar**

----

**TERMS        AND CONDITIONS OF THE BONDS**

*The        following is the text of the Conditions of the Bonds which (subject to        modification and except for the paragraphs in italics) will be endorsed on        the        Certificates issued in respect of the Bonds.*

**Bonds**
**Issuer**
**Original        Trust**
**Deed**
**Trustee**
**Amended        and Restated Trust Deed**
**Trust        Deed**
**Agency        Agreement**
**Principal        Agent**
**Registrar**
**Paying        Agent**
**Conversion        Agent**
**Transfer        Agent**
**Agents**
**Principal        Agent**
**Registrar**
**Agents**
**Conditions**

| 1. | **Status** |
|----|------------|

*pari        passu*

| 2. | **Form                  and Denomination** |
|----|--------------------------------------------|

**Certificate**

----

| 3. | **Title** |
|----|-----------|

**Bondholder**
**holder**

| 4. | **Transfers                  of Bonds; Issue of                  Certificates** |
|----|---------------------------------------------------------------------------------|

| A. | ***Register*** |
|----|----------------|

**Register**

| B. | ***Transfer*** |
|----|----------------|

| C. | ***Delivery                  of New Certificates*** |
|----|-----------------------------------------------------|

**business        day**

----

| D. | ***Formalities                  Free of Charge*** |
|----|---------------------------------------------------|

| E. | ***Closed                  Periods*** |
|----|---------------------------------------|

| F. | ***Regulations*** |
|----|-------------------|

| 5. | **Negative                  Pledge** |
|----|--------------------------------------|

| A. | ***Negative                  Pledge*** |
|----|----------------------------------------|

| B. | ***Interpretation*** |
|----|----------------------|

|   | (i) | any                  reference to an **Encumbrance**                  is                  to a mortgage, charge, pledge, lien or other encumbrance or security                  interest securing any obligation of any                  person; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | any                  reference to **Relevant                  Indebtedness**                  is                  to any future or present indebtedness in the form of or represented                  by                  debentures, loan stock, bonds, notes, bearer participation certificates,                  depository receipts, certificates of deposit or other similar securities                  or instruments or by bills of exchange drawn or accepted for the                  purpose                  of raising money which are, or are issued with the intention on                  the part                  of the Issuer or any Subsidiary of the Issuer that they should                  be, quoted,                  listed, ordinarily dealt in or traded on any stock exchange or                  over the                  counter or on any other securities market (whether or not initially                  distributed by way of private placement); and |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (iii) | any                  reference to a **Subsidiary**                  of                  any person is to any company or other business entity of which                  that person                  owns or controls (either directly or through one (1) or more other                  Subsidiaries) more than fifty percent (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 United States                  or                  other relevant law, regulations or generally accepted accounting                  principles from time to time, should have its accounts consolidated                  with                  those of that person. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6. | **Conversion** |
|----|----------------|

| A. | ***Conversion                  Right*** |
|----|-----------------------------------------|

| (i) | *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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Conversion        Right**
**Conversion        Period**

| (ii) | *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 re-classification                  of Shares                  by operation of law or otherwise occurring after April 12, 2007                  which                  reduces the number of Shares outstanding, the Issuer will upon                  conversion                  of Bonds pay in cash (in US dollars by means of a US dollar cheque                  drawn                  on a bank in New York) a sum equal to such portion of the 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(A)(i), as corresponds to any fraction of a Share not                  issued as                  a result of such consolidation or re-classification aforesaid if                  such sum                  exceeds US$10.00. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | *Conversion                  Price*:                  The price at which Shares will be issued upon conversion (the **Conversion                  Price**)                  will initially be the price per Share at which Shares are sold                  in the IPO                  (the **IPO                  Price**)                  but will be subject to adjustment in the manner provided in Conditions                  6(C) and 6(D). IPO means a public offering of the Shares of the                  Issuer on                  the American Stock Exchange (**AMEX**)                  with minimum gross proceeds of US$2,000,000. If no IPO has occurred                  prior                  to conversion, the Conversion Price will be deemed to be US$2.00                  as of                  April 12, 2007 (the “**Closing                  Date**”),                  subject to adjustment in the manner provided in Conditions 6(C)                  and                  6(D). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (iv) | *Revival                  and/or survival after Default*:                  Notwithstanding the provisions of Condition 6(A)(i), if (a) the                  Issuer                  shall default in making payment in full in respect of 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                  by                  reason of the occurrence of any of the events under Condition 11                  or (c)                  any Bond is not redeemed on the Maturity Date in accordance with                  Condition                  9(A), 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 moneys                  payable                  in respect of 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(A)(i),                  any                  Bond in respect of which the Certificate and Conversion Notice                  (as defined                  below) are deposited for conversion prior to such date shall be                  converted                  on the relevant Conversion Date (as defined below) notwithstanding                  that                  the full amount of the moneys payable in respect of 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. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v) | *Meaning                  of Shares:*                  As                  used in these Conditions, the expression **Shares**                  means shares of common stock of the Issuer or shares of any class                  or                  classes resulting from any subdivision, consolidation or re-classification                  of those shares, which as between themselves have no preference                  in respect                  of dividends or of amounts payable in the event of any voluntary                  or                  involuntary liquidation or dissolution of the Issuer, in each case,                  listed                  on the American Stock Exchange (the **AMEX**)                  . |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | ***Conversion                  Procedure*** |
|----|---------------------------------------------|

| (i) | *Conversion                  Notice*:                  To exercise the Conversion Right attaching to any Bond, the holder                  thereof                  must complete, execute and deliver 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(B)(ii). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Conversion        Date**
**Stock        Exchange Business Day**

----

| (ii) | *Stamp                  Duty etc*.:                  As conditions precedent to conversion, a Bondholder delivering                  a                  Certificate in respect of a Bond for conversion must pay any taxes                  and                  capital, stamp, issue and registration duties arising on conversion                  (other                  than any taxes or capital or stamp duties payable in the United                  States,                  the People’s Republic of China or England and, if relevant, in the place                  of the Alternative Stock Exchange, by the Issuer in respect of                  the                  allotment and issue of Shares and listing of the Shares on the                  AMEX or the                  Alternative Stock Exchange on conversion) (the **Taxes**)                  and such Bondholder must also pay all, if any, taxes arising by                  reference                  to any disposal or deemed disposal of a Bond in connection with                  such                  conversion. The Issuer will pay all other expenses arising on the                  issue of                  Shares on conversion of Bonds. The Bondholder (and, if applicable,                  the                  person other than the Bondholder to whom the Shares are to be issued)                  must                  provide the Conversion Agent with details of the relevant tax authorities                  to which the Conversion Agent must pay monies received in settlement                  of                  Taxes payable pursuant to this Condition 6(B)(ii). The Conversion                  Agent is                  under no obligation to determine whether a Bondholder is liable                  to pay any                  Taxes including capital, stamp, issue, registration or similar                  taxes and                  duties or the amounts payable (if any) in connection with this                  Condition                  6(B)(ii). |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | *Registration*:                  As soon as practicable, and in any event not later than seven (7)                  Trading                  Days (as defined below) after the Conversion Date, the Issuer will,                  procure that the relevant number of Shares are allotted to and                  registered                  in the name of the nominee of a depositary common to Euroclear                  and                  Clearstream for credit to the securities account designated for                  the                  purpose in the Conversion Notice for so long as the Shares are                  listed on                  the AMEX. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*mutatis        mutandis*

**Registration        Date**
*pari        passu*

**Equivalent        Amount**

----

| C. | ***Adjustments                  to Conversion Price*** |
|----|--------------------------------------------------------|

| *(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: |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| A |
|---|
| B |

| Where: |                                                                                                          |
|--------|--------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                               |
| A      | is                  the nominal amount of one (1) Share immediately after such alteration;                  and    |
|   |                                                                                                               |
| B      |  is                  the nominal amount of one (1) Share immediately before such                  alteration. |

| *(2)* | *Capitalisation                  of Profits or Reserves:*If                  and whenever the Issuer shall issue any Shares credited as fully                  paid to                  the holders of Shares (the **Shareholders**)                  by way of capitalisation 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 (except any Scrip                  Dividend                  (as defined below)) and which would not have constituted a Capital                  Distribution (as defined below), the Conversion Price shall be                  adjusted by                  multiplying the Conversion Price in force immediately before such                  issue by                  the following fraction: |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| A |
|---|
| B |

| Where: |                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                       |
| A      | is                  the aggregate nominal amount of the issued Shares immediately before                  such                  issue; and |
|   |                                                                                                                                       |
| B      | is                  the aggregate nominal amount of the issued Shares immediately after                  such                  issue.      |

----

| *(3)* | *Capital                  Distributions:*If                  and whenever the Issuer shall pay or make any Capital Distribution                  to the                  Shareholders (except to the extent that the Conversion Price falls                  to be                  adjusted under Condition 6(C)(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                        –                        B |
|-----------------------------------------------------------|
| A                                                         |

| Where: |                                                                                                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                       |
| A      | is                  the Current Market Price of one (1) Share on the last Trading Day                  preceding the date on which the Capital Distribution is publicly                  announced; and                    |
|   |                                                                                                                                                                                                                       |
| B      | is                  the Fair Market Value (as defined below) on the date of such announcement                  of the portion of the Capital Distribution attributable to one                  (1)                  Share. |

| *(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, of                  options,                  warrants or other rights to subscribe for or purchase or otherwise                  acquire                  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 the 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                          +                          B |
|---------------------------------------------------------|
| A +                          C                     |

| Where: |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 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                  for the                  Shares issued by way of rights or for the options or warrants or                  other                  rights issued by way of rights and for the total number of Shares                  comprised therein would subscribe for, purchase or otherwise acquire                  at                  such Current Market Price per Share; and |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| C      | is                  the aggregate number of Shares issued or, as the case may be, comprised                  in                  the grant.                                                                                                                                                                                                                                                                                                                                   |

----

| *(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, purchase or                  otherwise                  acquire Shares) to all or substantially all Shareholders as a class                  by way                  of rights or grant to all or substantially all Shareholders as                  a class by                  way of rights, of options, warrants or other rights to subscribe                  for,                  purchase or otherwise acquire any securities (other than Shares                  or                  options, warrants or other rights to subscribe for, purchase or                  otherwise                  acquire 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                            –                            B |
|-------------------------------------------------------------------|
| A                                                                 |

| Where: |                                                                                                                                                                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                               |
| A      | is                  the Current Market Price of one (1) Share on the last Trading Day                  preceding the date on which such issue or grant is publicly announced;                  and |
|   |                                                                                                                                                                                               |
| B      | is                  the Fair Market Value on the date of such announcement of the portion                  of                  the rights attributable to one (1)                  Share.          |

| *(6)* | *Issues                  at less than Conversion Price:*** **If                  and whenever the Issuer shall issue (otherwise than as mentioned                  in                  Condition 6(C)(4) above) 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 shall                  issue                  or grant (otherwise than as mentioned in Condition 6(C)(4) above)                  options,                  warrants or other rights to subscribe for, purchase or otherwise                  acquire                  Shares in each case at a price per Share which is less than the                  Conversion                  Price in effect at the time of such issue, then, in such event,                  the                  Conversion Price shall be reduced, concurrently with such issue                  or grant,                  to a price equal to the consideration per share for which such                  Shares are                  or will be issued. If such Shares are issued for no consideration,                  then                  the consideration per share shall be deemed to be the then current                  par                  value of each Share. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Determination        of Consideration:*

|   | (A) | in                  so far as such consideration consists of cash, it shall be computed                  at the                  aggregate amount of cash received by the                  Issuer; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | in                  so far as such consideration consists of property other than cash,                  it                  shall be computed at the fair value thereof at the time of such                  issue, as                  determined in good faith by the directors of the Issuer (the **Directors**);                  provided, however, that no value shall be attributed to any services                  performed by any employee, officer or director of the Company;                  and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (C) | in                  the event the Shares are issued together with other shares or securities                  or other assets of the Issuer for consideration which covers both                  the                  proportion of such consideration so received with respect to such                  Shares,                  shall be computed as provided in Clauses (A) and (B) above, as                  determined                  in good faith by the Directors.  |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *(7)* | *Other                  Issues at less than Conversion 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 this Condition 6(C)(7),                  if and                  whenever the Issuer or any of its Subsidiaries (otherwise than                  as                  mentioned in Conditions 6(C)(4), 6(C)(5) or 6(C)(6)), 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 shall issue                  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 Conversion Price                  in effect                  at the time of issue of such securities, then, in such event, the                  Conversion Price shall be reduced, concurrently with such issue,                  to a                  price equal to the consideration per share receivable by the Issuer                  for                  the Shares to be issued on conversion or exchange or on exercise                  of the                  right of subscription determined by reference to the maximum number                  of                  Shares to be issued on conversion, exchange or subscription at                  the minimum                  conversion, exchange or subscription price. If such Shares are                  issued for                  no consideration, then the consideration per share shall be deemed                  to be                  the then current par value of each                  Share. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Determination        of Consideration:*

|   | (A) | in                  so far as such consideration consists of cash, it shall be computed                  at the                  aggregate amount of cash received by the                  Issuer; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | in                  so far as such consideration consists of property other than cash,                  it                  shall be computed at the fair value thereof at the time of such                  issue, as                  determined in good faith by the Directors; provided, however, that                  no                  value shall be attributed to any services performed by any employee,                  officer or director of the Company;                  and |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (C) | in                  the event the Shares are issued together with other shares or securities                  or other assets of the Issuer for consideration which                  covers both the proportion of such consideration so received with                  respect                  to such Shares, shall be computed as provided in Clauses (A) and                  (B)                  above, as determined in good faith by the                  Directors. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| *(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(C)(7) (other than in accordance with the terms of                  such                  securities) so that the consideration per Share (for the number                  of Shares                  available on conversion, exchange or subscription following the                  modification) is reduced and is less than the Conversion Price                  in effect                  at the time of such modification, the Conversion Price shall be                  reduced,                  concurrently with such modification, to a price equal to the modified                  consideration per share receivable by the Issuer for the Shares                  to be                  issued on conversion or exchange or on exercise of the right of                  subscription determined by reference to the maximum number of Shares                  to be                  issued on conversion, exchange or subscription at the minimum conversion,                  exchange or subscription price. If such Shares are issued for no                  consideration, then the consideration per share shall be deemed                  to be the                  then current par value of each                  Share. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Determination        of Consideration:*

|   | (A) | in                  so far as such consideration consists of cash, it shall be computed                  at the                  aggregate amount of cash received by the                  Issuer; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (B) | in                  so far as such consideration consists of property other than cash,                  it                  shall be computed at the fair value thereof at the time of such                  issue, as                  determined in good faith by the Directors; provided, however, that                  no                  value shall be attributed to any services performed by any employee,                  officer or director of the Company;                  and |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (C) | in                  the event the Shares are issued together with other shares or securities                  or other assets of the Issuer for consideration which covers both                  the                  proportion of such consideration so received with respect to such                  Shares,                  shall be computed as provided in Clauses (A) and (B) above, as                  determined                  in good faith by the Directors. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *(9)* | *Other                  Offers to Shareholders:*                  If                  and whenever 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 issues, sells                  or                  distributes any securities in connection with which an offer to                  which the                  Shareholders generally 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(C)(4), Condition 6(C)(5),                  Condition                  6(C)(6) or Condition 6(C)(7)), the Conversion Price shall be adjusted                  by                  multiplying the Conversion Price in force immediately before such                  issue by                  the following fraction: |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| A                          –                          B |
|---------------------------------------------------------------|
| A                                                             |

| Where: |                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                      |
| A      | is                  the Current Market Price of one (1) Share on the last Trading Day                  preceding the date on which such issue is publicly announced;                  and |
|   |                                                                                                                                                                                      |
| B      | is                  the Fair Market Value on the date of such announcement of the portion                  of                  the rights attributable to one (1)                  Share. |

| *(10)* | Other                  Events: If the Issuer determines that a downward adjustment should                  be made                  to the Conversion Price as a result of one (1) or more events or                  circumstances not referred to in this Condition 6, the Issuer shall,                  at                  its own expense, consult an independent investment bank of international                  repute (acting as expert), selected by the Issuer** **and                  approved in writing by the Trustee (such approval not to be unreasonably                  withheld or delayed), to determine 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 by the independent investment bank such adjustment                  (if                  any) shall be made and shall take effect in accordance with such                  determination, provided that where the events or circumstances                  giving rise                  to any adjustment pursuant to this Condition 6 have already resulted                  or                  will result in an adjustment to the Conversion Price or where the                  events                  or circumstances giving rise to any adjustment arise by virtue                  of events                  or 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 as                  may be                  advised by the independent investment bank to be in their opinion                  appropriate to give the intended                  result. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Alternative        Stock Exchange**

**Average        Closing Price**

**Capital        Distribution**

**Closing        Price**

**Current        Market Price**

----

| (i) | if                  the Shares                  to be issued in such circumstances do not rank for the dividend                  in                  question, the quotations on the dates on which the Shares 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 Share; or |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | if                  the Shares to be issued in such circumstances rank for the dividend                  in                  question, the quotations on the dates on which the Shares 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; |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Dividend**

| (i) | where                  a cash Dividend is announced which is to be, or may at the election                  of a                  holder or holders of Shares be, satisfied by the issue or delivery                  of                  Shares or other property or assets, then, the Dividend in question                  shall                  be treated as a Dividend of (a) the cash Dividend so announced,                  or (b) the                  Current Market Price on the date of announcement of such Dividend,                  of such                  Shares or the Fair Market Value of other property or assets to                  be issued                  or delivered in satisfaction of such Dividend (or which would be                  issued if                  all holders of Shares elected therefor, regardless of whether any                  such                  election is made) if the Current Market Price of such Shares or                  the Fair                  Market Value of other property or assets is greater than the cash                  Dividend                  so announced; and |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | any                  issue of Shares falling within Condition 6(C)(2) shall be                  disregarded. |
|------|--------------------------------------------------------------------------------------------------------------|

**Fair        Market Value**
** **

**Relevant        Cash Dividend**

**Total        Current Dividend**

----

**Trading        Day**

** **

----

| D. | ***Conversion                  Price Reset*** |
|----|-----------------------------------------------|

**Average        Closing Price**
**Reset        Date**

| (i) | any                  such adjustment to the Conversion Price pursuant to this Condition                  6(D)                  shall be limited so that the Conversion Price adjusted in accordance                  with                  this Condition 6(D) shall not be less than seventy percent (70%)                  of the                  initial Conversion Price (taking account of any adjustments required                  under                  Condition 6(C) above which may have occurred prior to the relevant                  Reset                  Date); |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | subject                  to (i) above the provisions of Condition 6(C) shall apply,*mutatis mutandis*,                  to this Condition 6(D) to ensure that appropriate adjustments shall                  be                  made to any Closing Price to reflect any adjustments made to the                  Conversion Price in accordance with Condition 6(C); |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | for                  the avoidance of doubt, any adjustments to the Conversion Price                  made                  pursuant to this Condition 6(D) shall only be downward adjustments;                  and |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv) | notwithstanding                  anything herein, the Conversion Price shall only be adjusted pursuant                  to this Condition 6(D) to an amount not less than US$0.25 per Share                  (as                  adjusted for stock splits, stock dividends, spin-offs, rights offerings,                  recapitalizations and similar                  events). |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| E. | ***Undertakings*** |
|----|--------------------|

** **
*inter        alia*

| (i) | it                  will obtain                  on or before the first anniversary of the Closing Date, and thereafter                  maintain, a listing on AMEX or the New York Stock Exchange or NASDAQ                  for                  all the issued Shares and for all the Shares issued on the exercise                  of the                  Conversion Rights attaching to the Bonds;                  and |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | it                  will pay the expenses of the issue of, and all expenses of obtaining                  and                  maintaining such listing for, the Shares arising on conversion                  of the                  Bonds. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| F. | ***Notice                  of Change in Conversion                  Price*** |
|----|------------------------------------------------------------------------------|

| 7. | **Interest** |
|----|--------------|

**Interest        Payment Date**

----

| 8. | **Payments** |
|----|--------------|

| A. | ***Principal,                  premium and interest*** |
|----|--------------------------------------------------------|

**Interest        Record Date**

| B. | ***Registered                  Accounts*** |
|----|--------------------------------------------|

| C. | ***Fiscal                  Laws*** |
|----|------------------------------------|

| D. | ***Payment                  Initiation*** |
|----|-------------------------------------------|

----

| E. | ***Default                  Interest and Delay In                  Payment*** |
|----|-------------------------------------------------------------------------------|

| F. | ***Business                  Day*** |
|----|-------------------------------------|

**business        day**

| G. | ***Annotation                  of Register*** |
|----|-----------------------------------------------|

| H. | ***Rounding*** |
|----|----------------|

| 9. | **Redemption,                  Purchase and Cancellation** |
|----|------------------------------------------------------------|

| A. | ***Maturity*** |
|----|----------------|

**Maturity        Date**

| B. | ***Redemption                  at the Option of the                  Issuer*** |
|----|--------------------------------------------------------------------------------|

**Early        Redemption Amount**

----

| **Semi-Annual                    Date**               | **Early                    Redemption****Amount                    (US$)** |
|-------------------------------------------------------|----------------------------------------------------------------------------|
| October                    4,                    2007 | 1,030.00                                                                   |
| April                    4,                    2008   | 1,060.90                                                                   |
| October                    4,                    2008 | 1,108.64                                                                   |
| April                    4,                    2009   | 1,158.53                                                                   |
| October                    4,                    2009 | 1,210.66                                                                   |
| April                    4,                    2010   | 1,265.14                                                                   |
| October                    4,                    2010 | 1,322.07                                                                   |
| April                    4,                    2011   | 1,381.57                                                                   |
| October                    4,                    2011 | 1,443.74                                                                   |
| April                    4,                    2012   | 1,508.71                                                                   |

| r                = | 12%                  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 October 4, 2007 from                  and                  including April 12, 2007) to, but excluding, the date fixed for                  redemption, calculated on the basis of a 360-day year consisting                  of twelve                  (12) months of thirty (30) days each and, in the case of an incomplete                  month, the number of days elapsed. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| p                = | 180 |
|--------------------|-----|

| C. | ***Redemption                  for Taxation Reasons*** |
|----|--------------------------------------------------------|

| (i) | At                  any time the Issuer may, having given not less than thirty                  (30) nor more than sixty (60) days’ notice (a **Tax                  Redemption Notice**)                  to the Bondholders in accordance with Condition 18 (which notice                  shall be                  irrevocable) redeem all, but not some only, of the Bonds at a redemption                  price equal to the Early Redemption Amount on the redemption date                  (the                  **Tax                  Redemption Date**)                  if (i) the Issuer satisfies the Trustee immediately prior to the                  giving of                  such Tax Redemption Notice that the Issuer has or will become obliged                  to                  pay additional amounts as referred to in Condition 10 as a result                  of any                  change in, or amendment to, the laws or regulations of the United                  States                  or, as the case may be, the People’s Republic of China (the **PRC**),England                  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 April 12, 2007 and (ii) such obligation                  cannot be avoided by the Issuer taking reasonable measures available                  to                  it, provided that no Tax Redemption Notice shall be given earlier                  than                  ninety (90) days prior to the earliest date on which the Issuer                  would be                  obliged to pay such additional amounts were a payment in respect                  of the                  Bonds then due. Prior to the publication of any Tax Redemption                  Notice                  pursuant to this paragraph, the Issuer shall deliver to the Trustee                  (a) a                  certificate signed by two (2) directors of the Issuer stating that                  the                  obligation referred to in (i) above cannot be avoided by the Issuer                  taking                  reasonable measures available to it 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) 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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (ii) | If                  the Issuer gives a Tax Redemption Notice pursuant to Condition                  9(C)(i),                  each Bondholder will have the right to elect that his Bond(s) shall                  not be                  redeemed and that the provisions of Condition 10 shall not apply                  in                  respect of any payment of principal, premium (if any) or interest                  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 10 and payment of all amounts                  shall                  be made subject to the deduction or withholding of any tax required                  to be                  deducted or withheld (provided that such election shall only be                  in respect                  of the deduction or withholding then required to be made and the                  Issuer                  shall comply with the provisions of Condition 10 in respect of                  any further                  deductions or withholding). To exercise a right pursuant to this                  Condition                  9(C), 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 exercise, in the form for the time being current, obtainable                  from the specified office of any Paying Agent together with the                  Certificate evidencing the Bonds on or before the day falling ten                  (10)                  days prior to the Tax Redemption                  Date. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| D. | ***Redemption                  for Delisting or Change of                  Control*** |
|----|---------------------------------------------------------------------------------------|

**Relevant        Event Redemption Notice**
**Relevant        Event Redemption Date**

----

**Relevant        Event**

| (i) | when                  the Shares                  cease to be listed or admitted to trading, or for twenty (20) or                  more                  Trading Days occurring consecutively, trading in respect of the                  Shares is                  suspended, temporarily or otherwise, on the AMEX (and if applicable,                  the                  Alternative Stock Exchange); or |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | when                  there is a Change of Control. |
|------|-----------------------------------------------------|

**Control**

**Change        of Control**

| (i) | any                  Person or Persons acting together acquires Control of the Issuer                  if such                  Person or Persons does not or do not have, and would not be deemed                  to                  have, Control of the Issuer on the Closing Date; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | 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; or |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | one                  (1) or more Persons (other than any Person referred to in sub-paragraph                  (i) above) acquires the legal or beneficial ownership of all or                  substantially all of the Issuer’s issued share                  capital. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Person**

----

| E. | ***Redemption                  at the Option of the Bondholder*** |
|----|-------------------------------------------------------------------|

**Warrants**

| F. | ***Purchases*** |
|----|-----------------|

| G. | ***Cancellation*** |
|----|--------------------|

| H. | ***Redemption                  Notices*** |
|----|-------------------------------------------|

| 10. | **Taxation** |
|-----|--------------|

* *

----

| (i) | to                  a holder (or to a third party on behalf of a holder) who is subject                  to                  such taxes, duties, assessments or governmental charges in respect                  of such                  Bond by reason of his having some connection with the                  United States or the PRC or any political subdivisions thereof                  otherwise                  than merely by holding such Bond or by the receipt of principal,                  interest                  or premium (if any) in respect of the                  Bond; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | (in                  the case of a payment of principal) if the Certificate in respect                  of such                  Bond is surrendered more than thirty (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 thirty (30) days; |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | where                  such withholding or deduction is imposed on a payment to an individual                  and                  is required to be made pursuant to European Council Directive 2003/48/EC                  or any law implementing or complying with, or introduced in order                  to                  conform to, such Directive; or |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv) | presented                  for payment by or on behalf of a Bondholder who would have been                  able to                  avoid such withholding or deduction by presenting the relevant                  Bond to                  another Paying Agent in a Member State of the European Union. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**relevant        date**

*If        the Issuer becomes obliged to pay additional amounts in accordance with this        Condition 10, the Issuer shall have the right to redeem the Bonds in accordance        with the provisions of Condition 9(C)(i), subject to the right of each        Bondholder under the provisions of Condition 9(C)(ii) to elect that his Bond(s)        shall not be so redeemed and that the provisions of Condition 10 shall not        apply        in respect of any payment to be made in respect of such Bond(s) which falls        due        after the relevant Tax Redemption Date.*

| 11. | **Events                  of Default** |
|-----|----------------------------------------|

| A. | ***Events                  of Default*** |
|----|------------------------------------------|

|   | (i) | a                  default is made in the payment of any principal or Early Redemption                  Amount                  due in respect of the Bonds; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ii) | any                  failure by the Issuer to deliver the Shares                  as and when the Shares are required to be delivered following conversion                  of Bonds and such failure continues for seven (7) days; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | the                  Issuer does not perform or comply with one (1) or more of its other                  obligations in the Bonds or the Trust Deed 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 twenty-one (21) days                  after                  written notice by the Trustee of such default shall have been delivered                  to                  the Issuer; |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | the                  Issuer or any of its Subsidiaries (as defined below) 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 in respect of any of such debts                  or a                  moratorium is agreed or declared in respect of or affecting all                  or any                  part of (or of a particular type of) the debts of the Issuer or                  any of its                  Subsidiaries; an administrator or liquidator of the Issuer or any                  of its                  Subsidiaries or the whole or any material part of the assets and                  turnover                  of the Issuer or any of its Subsidiaries is appointed (or application                  for                  any such appointment is made); |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | (a)                  any other present or future indebtedness (whether actual or contingent)                  of                  the Issuer or any of its Subsidiaries for or in respect of moneys                  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 (b) any                  such                  indebtedness is not paid when due or, as the case may be, within                  any                  applicable grace period, or (c) 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 in respect of, any moneys borrowed                  or raised,                  provided that the aggregate amount of the relevant indebtedness,                  guarantees and indemnities in respect of which one (1) or more                  of the                  events mentioned above in this paragraph (v) have occurred equals                  or                  exceeds US$5,000,000 or its equivalent in any other currency 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 guarantees                  or                  indemnity; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | a                  distress, attachment, execution, seizure before judgment or other                  legal                  process is levied, enforced or sued out on or against any of the                  property,                  assets or turnover of the Issuer or any of its                  Subsidiaries; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | an                  order is made or an effective resolution passed for the winding-up                  or                  dissolution, judicial management or administration of the Issuer                  or any of                  its Subsidiaries (except for a members’ voluntary solvent winding-up), or                  the Issuer or any Subsidiaries ceases or threatens to cease to                  carry on                  all or substantially all of its business or operations and except                  for the                  purpose of and followed by a reconstruction, amalgamation, reorganisation,                  merger or consolidation (a) on terms approved by an Extraordinary                  Resolution, or (b) in the case of any Subsidiary, whereby the undertaking                  and assets of such Subsidiary are transferred to or otherwise vested                  in                  the Issuer or any of its Subsidiaries; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (viii) | an                  encumbrancer takes possession or an administrative or other receiver,                  manager, administrator or other similar officer is appointed of                  the whole                  or any material part of the property, assets or turnover of the                  Issuer or                  any of its Subsidiaries (as the case may be) and is not discharged                  within                  thirty (30) days; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ix) | (a)                  any step is taken by any person with a view to the seizure, compulsory                  acquisition, expropriation or nationalisation of all or a material                  part of                  the assets of the Issuer or any of its Subsidiaries; or (b) the                  Issuer or                  any of its Subsidiaries is prevented from exercising normal control                  over                  all or any substantial part of its property, assets and                  turnover; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x) | any                  action, condition or thing (including the obtaining or effecting                  of any                  necessary consent, approval, authorisation, exemption, filing,                  licence,                  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 its obligations                  under the Bonds and the Trust Deed, (b) to ensure that those obligations                  are legally binding and enforceable and (c) to make the Bonds and                  the                  Trust Deed admissible in evidence in the courts of the United States                  or                  the PRC is not taken, fulfilled or                  done; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xi) | it                  is or will become unlawful for the Issuer to perform or comply                  with any                  one (1) or more of its obligations under any of the Bonds or the                  Trust                  Deed; |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xii) | the                  Conversion Price is affected by any limitation to an adjustment                  to the                  Conversion Price set forth in Condition 6(C) or Condition 6(D)(iv)                  of                  these Conditions or Clause 7.2(b) or Clause 7.3(d) of the Trust                  Deed; or |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xiii) | 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; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | ***Default                  Cure Amount*** |
|----|--------------------------------------------|

----

**Default        Cure Amount**

**Share        Price**

| 12. | **Consolidation,                  Amalgamation or Merger** |
|-----|------------------------------------------------------------|

| (i) | the                  entity formed by such amalgamation or consolidation or into which                  the                  Issuer is merged or which acquired or leased such property and                  assets of                  the Issuer shall be a corporation organised and validly existing                  under the                  laws of its place of incorporation, and shall, by a trust deed                  supplemental to the Trust Deed and an agency agreement supplemental                  to the                  Agency Agreement and such other undertakings or documents as the                  Trustee                  may require, executed and delivered in form and content acceptable                  to the                  Trustee, expressly assume all of the obligations of the Issuer                  in respect                  of all of the Bonds and under the Trust Deed and the Agency Agreement                  and                  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 consolidation, amalgamation,                  merger, sale, conveyance, transfer lease or other disposal with                  respect to                  the payment of principal, premium and interest on the                  Bonds; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | the                  supplemental Trust Deed referred to in paragraph (i) above will                  ensure                  that (a) the holder of each Bond then outstanding will have the                  right                  (during the period in which such Bond shall be convertible) to                  convert                  such Bond into the class and amount of shares and other securities                  and                  property receivable upon such consolidation, amalgamation, merger,                  sale,                  conveyance, transfer lease or other disposal by a holder of the                  number of                  Shares                  which would have become liable to be issued upon conversion of                  such Bond                  immediately prior to such consolidation, amalgamation, merger,                  sale,                  conveyance, transfer, lease or other disposal (such supplemental                  Trust                  Deed will provide for adjustments which will be as nearly equivalent                  as                  may be practicable to the adjustments provided for in the provisions                  of                  Condition 6(C), (b) the rights of Bondholders shall not be adversely                  affected as a result of such transaction and (c) that there shall                  be no                  right to exercise a redemption of the Bonds under Condition 9(C)                  as a                  result of (A) any change in the domicile or place of incorporation                  of the                  Issuer or (B) the successor entity not being incorporated in the                  State of                  Delaware and the provisions of Condition 10 shall also be supplemented                  or                  modified as the Trustee deems appropriate;                  and |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (iii) | immediately                  after giving effect to such transaction, no default or event of                  default                  (including an Event of Default) shall have occurred and be continuing. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*mutatis        mutandis*

| 13. | **Prescription** |
|-----|------------------|

| 14. | **Enforcement** |
|-----|-----------------|

| 15. | **Meetings                  of Bondholders, Modification and                  Waiver** |
|-----|----------------------------------------------------------------------------------------|

| A. | ***Meetings*** |
|----|----------------|

*inter        alia*

----

| B. | ***Modification                  and Waiver*** |
|----|------------------------------------------------|

| C. | ***Substitution*** |
|----|--------------------|

| D. | ***Interests                  of Bondholders*** |
|----|-------------------------------------------------|

*In        the event of the passing of an Extraordinary Resolution in accordance with        Condition 15(A), a modification, waiver or authorisation in accordance with        Condition 15(B) or a substitution in accordance with Condition 15(C), the        Issuer        will procure that the Bondholders be notified in accordance with Condition        18.*

----

| 16. | **Replacement                  of Certificates** |
|-----|--------------------------------------------------|

| 17. | **Further                  Issues** |
|-----|-------------------------------------|

| 18. | **Notices** |
|-----|-------------|

| 19. | **Agents** |
|-----|------------|

| 20. | **Indemnification** |
|-----|---------------------|

| 20. | **Rights                  of Third Parties** |
|-----|----------------------------------------------|

----

| 21. | **Governing                  Law and Submission to Jurisdiction** |
|-----|-------------------------------------------------------------------|

**Proceedings**

----

**PRINCIPAL        PAYING, CONVERSION AND TRANSFER AGENT**

**REGISTRAR**

----

**Form        of Transfer**

----

----

*(Please        Print or Typewrite Name and Address of Transferee)*

| Name                    of bank:       |   |
|----------------------------------------|--------|
|                                   |   |
| US$                    account number: |   |
|                                   |   |
| For                    the account of: |   |

| 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 Agent or the Registrar may                  require. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SCHEDULE        2**

**FORM          OF GLOBAL CERTIFICATE**

**CHINA        ARCHITECTURAL ENGINEERING, INC.**

**(incorporated        under the laws of the State of Delaware)**

**US$10,000,000**

**Variable        Rate Convertible Bonds due 2012**

**GLOBAL        CERTIFICATE**

**Bonds**
**Issuer**

**Trust        Deed**
**Trustee**
**Conditions**
**Terms        and Conditions**

**Alternative        Clearing System**

----

**Meetings**

**Cancellation**

**Trustee’s        Powers**

**Conversion**

----

**Payment**

**Notices**

**Bondholders’        Redemption**

**Registration        of Title**

**Transfers**

**Enforcement**

----

**Third        Party Rights**

**In        witness**

**CHINA        ARCHITECTURAL ENGINEERING, INC.**

| By: |   |
|-----|--------|

**Certificate        of Authentication**

**The        Bank of New York as Registrar**

| By: |   |
|-----|--------|

----

**Schedule        A**

**Schedule        of Reductions in Principal Amount of Bonds in respect of which        this**

**Global        Certificate is Issued**

| **Date                  of Conversion /****Redemption                  / Issue of definitive Certificates / Purchase and cancellation                  of the                  Bonds** |   | **Amount                  of decrease in principal amount of this Global                  Certificate** |   | **Principal                  Amount of this Global Certificate following such                  decrease** |   | **Notation                  made by or on behalf of the Registrar** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
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|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
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|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |
|                                                                                                                                                                                   |   |                                                                                                    |   |                                                                                                      |   |                                                                |

----

**PRINCIPAL        PAYING, CONVERSION AND TRANSFER AGENT**

**REGISTRAR**

----

**Form        of Transfer**

| Principal                    Amount transferred |   | Name,                    address and account for |
|-------------------------------------------------|--------|--------------------------------------------------|
|                                            |   | payments                    of transferee        |
|                                            |   |                                             |   |   |
|                                            |   |                                             |   |   |
|                                            |   |                                             |   |   |
| Dated                    :                      |   |                                             | Certifying                    Signature : |   |
|                                            |   |                                             |   |   |
| Name                    :                       |   |                                             |  |  |
|                                            |   |                                             |   |   |
| Notes:                                          |        |                                             |  |   |

| (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. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SCHEDULE        3**

**Provisions        for Meetings of Bondholders**

| 21. | 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                  twenty-four (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. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 22. | A                  holder of a Bond which is a corporation may by delivering to any                  Agent not                  later than twenty-four (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. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 23. | 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. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 24. | 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 ten percent (10%) in principal amount of the Bonds                  for                  the time being outstanding and is indemnified 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. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 25. | At                  least twenty-one (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 to convene a meeting of 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 twenty-four (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 twenty-four (24) hours before the time                  fixed                  for the meeting. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 26. | 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 fifteen (15)                  minutes                  after the time fixed for the meeting the Bondholders present shall                  choose                  one (1) of their number to be chairman, failing which, the Issuer                  may                  appoint the chairman. The chairman of an adjourned meeting need                  not be the                  same person as was chairman of the original                  meeting. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 27. | At                  a meeting two (2) or more persons present in person holding Bonds                  or being                  proxies or representatives and holding or representing in the aggregate                  not less than ten percent (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 (2) or more persons present                  in                  person holding Bonds or being proxies or representatives and holding                  or                  representing in the aggregate over fifty percent (50%) 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 (2) or more persons so present holding Bonds or being                  proxies                  or representatives and holding or representing in the aggregate                  not less                  than two-thirds (2/3) in principal amount of the Bonds for the                  time being                  outstanding. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 28. | If                  within fifteen (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                  fourteen                  (14) nor more than forty-two (42) days later, and to such place                  as the                  chairman may decide. At such adjourned meeting two (2) 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 (2) or more persons so present holding                  Bonds or                  being proxies or representatives and holding or representing in                  the                  aggregate not less than one-third (1/3) in principal amount of                  the Bonds                  for the time being outstanding. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 29. | 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. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 30. | At                  least ten (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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31. | 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. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32. | 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 (1) or more persons holding one (1) or more Bonds or being                  proxies                  or representatives and holding or representing in the aggregate                  not less                  than two percent (2%) 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. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 33. | 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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 34. | A                  poll demanded on the election of a chairman or on any question                  of                  adjournment shall be taken at the meeting without                  adjournment. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 35. | 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. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 36. | 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 (1) vote                  and on                  a poll every person who is so present shall have one (1) 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 (1) vote need not use them all or cast                  them all                  in the same way. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 37. | A                  proxy need not be a Bondholder. |
|-----|----------------------------------------------------|

| 38. | 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 Trust Deed, have power exercisable by Extraordinary                  Resolution: |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 38.1 | 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 Trust Deed; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 38.2 | 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; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 38.3 | to                  assent to any modification of this Trust Deed or the Bonds which                  shall be                  proposed by the Issuer or the                  Trustee; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 38.4 | to                  authorise anyone to concur in and do anything necessary to carry                  out and                  give effect to an Extraordinary                  Resolution; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 38.5 | to                  give any authority, direction or sanction required to be given                  by                  Extraordinary Resolution; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 38.6 | 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; |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 38.7 | to                  approve the substitution of any entity for the Issuer (or any previous                  substitute) as principal debtor under this Trust Deed; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 38.8 | to                  approve a proposed new Trustee and to remove a Trustee;                  and |
|--------|------|--------------------------------------------------------------------------------------------------|

|   | 38.9 | to                  discharge or exonerate the Trustee from any liability in respect                  of any                  act or omission for which it may become responsible under this                  Trust Deed                  or the Bonds, |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 18.9.1 | modifying                  the due date for any payment in respect of the Bonds;                  or |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | 18.9.2 | reducing                  or cancelling the amount of principal, interest, premium, or default                  interest (including any Early Redemption Amount) or Equivalent                  Amount                  payable in respect of the Bonds or changing the method of calculation                  of                  the Early Redemption Amount; or |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 18.9.3 | changing                  the currency of payment of the Bonds;                  or |
|--------|--------|-------------------------------------------------------------------------------------|

|   | 18.9.4 | modifying                  (except by a unilateral and unconditional reduction in the Conversion                  Price) or cancelling the Conversion Rights or the options specified                  in                  Conditions 9(D) or 9(E); or |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 18.9.5 | modifying                  the provisions contained in this Schedule concerning the quorum                  required                  at a meeting of Bondholders or the majority required to pass an                  Extraordinary Resolution or sign a resolution in writing;                  or |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 18.9.6 | amending                  this proviso. |
|--------|--------|-----------------------------------------|

| 39. | An                  Extraordinary Resolution passed at a meeting of Bondholders duly                  convened                  and held in accordance with this Trust Deed 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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 40. | 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 (3/4) of the votes cast at such                  meeting. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 41. | A                  resolution in writing signed by or on behalf of the holders of                  not less                  than ninety percent (90%) in 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                  (1) document or several documents in like form each signed by or                  on behalf                  of one (1) or more of the                  Bondholders. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 42. | 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. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 43. | Subject                  to all other provisions contained in this Trust Deed, 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 Trust                  Deed 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. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**The        Issuer**

**CHINA        ARCHITECTURAL ENGINEERING, INC.**

----

**The        Trustee**

**THE        BANK OF NEW YORK, LONDON BRANCH**

----

----