CNCN form 8k 04-12-2007 EX-10.1


    
      

      

    

    


    


    


    


    


    


    


    


    


    CONVERTIBLE
      BONDS SUBSCRIPTION AGREEMENT

    


    


    by
      and
      among

    


    


    


    


    Cintel
      Corp.,

    Issuer

    


    


    


    


    Korea
      Culture Promotion Inc.

    Subscriber

    


    


    and

    


    


    Phoenix
      M&M Corporation

    Subscriber

    


    


    


    


    


    


    


    


    


    


    


    


    April
      12,
      2007

    


    


    
      

      

    


    
      
        
 

         

      

      
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                CONVERTIBLE
                  BONDS SUBSCRIPTION AGREEMENT

                 

                 

                This
                  CONVERTIBLE BONDS SUBSCRIPTION AGREEMENT
                  (the “Agreement”)
                  is made and entered into as of April 12, 2007 by and among the
                  parties
                  stated hereunder:

                 

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

                 

                (2)  Korea
                  Culture Promotion Inc., a company incorporated under the laws of
                  the
                  Republic of Korea (“Korea”)
                  having its principal office at 503-5, 2F Duwon Building, Sinsa-Dong,
                  Gangnam-Gu, Seoul, Korea; and

                 

                (3)  Phoenix
                  M&M Corporation,
                  a
                  company incorporated under the laws of Korea having its principal
                  office
                  at 180
                  Unyong-Ri, Dunpo-Myun, Asan, Chungchoengnam-Do, Korea
                  (Korea Culture Promotion Inc. and Phoenix
                  M&M Corporation
                  shall hereinafter be referred to as the “Subscribers”
                  altogether and the “Subscriber”
                  respectively). 

                 

                Recitals

                 

                Whereas,
                  the Company has authorized the sale of convertible bonds in an
                  aggregate
                  principal amount of Korean Won (“KRW”
                  or “Won”)
                  10,000,000,000 (Ten Billion Won) (the “Bonds”
                  or “Convertible
                  Bonds”),
                  convertible into shares of the Company’s common stock, having the par
                  value of 0.001 United States Dollars (“USD”)
                  (the “Common
                  Stock”);

                 

                Whereas,
                  each of the Subscribers desires to subscribe for the Bonds in the
                  principal amount of KRW 5,000,000,000 (Five Billion Won) on the
                  terms and
                  conditions set forth herein; and

                 

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

                 

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

                 

                1. Issuance
                  of the Convertible Bonds. 

                 

                Pursuant
                  to the terms and conditions set forth in this Agreement on the
                  Closing
                  Date (as defined below), the Company shall issue to the Subscribers,
                  and
                  the Subscribers shall subscribe for, KRW 10,000,000,000 (Ten Billion
                  Won)
                  Convertible Bonds due on April 12, 2012, in accordance with the
                  terms and
                  conditions set forth in Exhibit A. The Bonds will be issued at
                  an issue
                  price (the “Subscription
                  Price”)
                  equal to 100 per cent. of the principal amount of the Bonds.

                 

                 

                2. Payment
                  of Subscription Price for the Convertible Bonds. 

                 

                       The
                  Subscription Price for the Convertible Bonds shall be paid or caused
                  to be
                  paid by the

              	 


      

    

    


    
      
         

      

      
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                Subscribers
                  to the Company at 10 a.m., Seoul, Korea, on the Closing Date in
                  same day
                  funds.

                 

                 

                3. Closing
                  

                 

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

                 

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

                 

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

                 

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

                 

                3.3Closing
                  Deliveries

                 

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

                 

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

                 

                (ii)  bond
                  certificate(s) representing the Convertible Bonds; 

                 

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

                 

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

                 

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

                 

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

                 

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

                 

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

              	 


      

    

    
      
         

      

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

                 

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

                 

                 

                4. Termination
                  

                 

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

                 

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

                 

                (ii)  the
                  Company and both of the Subscribers, if the Company and both of
                  the
                  Subscribers so mutually agree in writing; 

                 

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

                 

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

                 

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

                 

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

                 

                 

                5.Representations,
                  Warranties and Undertakings of the Subscribers.

                 

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

                 

              	 


      

    

     

    
      
         

      

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

                 

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

                 

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

                 

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

                 

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

                 

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

                 

                g.  Legends.

                 

              	 


      

    

    
      

      

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

                 

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

                 

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

                 

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

                 

                6. Representations,
                  Warranties and undertakings of the Company. 

                 

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

                 

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

                 

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

                 

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

                 

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

              	 


      

    

           


    
      
         

      

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

                 

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

                 

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

                 

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

                 

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

              	 


      

       

      
        
           

        

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

                 

                6.2
                   Undertaking.
                  The Company undertakes with the Subscribers that:

                 

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

                 

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

                 

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

                 

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

                 

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

                 

                c. it
                  will not issue any convertible bonds, bonds with warrants and/or
                  other
                  securities convertible into shares of the Company, with the exception
                  for
                  the convertible bonds agreed to be issued to KTB Networks in the
                  amount of
                  up to KRW 10 billion and the convertible bonds agreed to be issued
                  to
                  Woori Private Equity Fund in the amount of up to KRW 60
                  billion;

                 

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

                 

                e. after
                  the listing of its shares on any stock exchanges, it will not go
                  through
                  the delisting process nor take any steps that may cause the delisting
                  of
                  shares of the Company;

              	 


      

      
        
           

        

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

                 

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

                 

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

                 

                7. Conversion
                  of Convertible Bonds.

                 

                7.1 Mechanics
                  of Conversion.

                 

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

                 

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

                 

                 

                8. Miscellaneous.

                 

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

                 

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

                 

              	 


      



    
      
         

      

      
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                to
                  the Company:

                 

                Cintel
                  Corp.

                9900
                  Corporate Campus Drive Suite 3000

                Louisville,
                  KY 40223

                U.S.A.

                 

                Attention: Sang
                  Don Kim

                Telephone
                  No.: 822-512-2111

                Facsimile
                  No.: 822-512-5111

                 

                with
                  a copy to 

                 

                Phoenix
                  Asset Management Inc.

                26th
                  Fl., Hanwha Securities Bldg.

                23-5,
                  Yoido-dong, Youngdeungpo-gu

                Seoul
                  150-717, Korea

                 

                Attention: Stanley
                  S.Y. Oh

                Telephone
                  No.: 822-799-2202

                Facsimile
                  No.: 822-799-2286

                 

                to
                  the Subscribers:

                 

                Korea
                  Culture Promotion Inc. 

                503-5
                  Duwon Building, Sinsa-Dong, Gangnam-Gu, Seoul, Korea

                Attention:
                  Hyeong Gun Jang

                Telephone
                  No.: 822-560-9811

                Facsimile
                  No.: 822-560-9820

                 

                 

                Phoenix
                  M&M Corporation,
                  

                180
                  Unyong-Ri, Dunpo-Myun, Asan, Chungchoengnam-Do, Korea

                 

                Attention:
                  Jae Kyong Yoo

                Telephone
                  No.: 8241-534-2136

                Facsimile
                  No.: 8241-534-2136

                 

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

                 

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

                 

              	 


      

    

     

    
      
         

      

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

               

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

               

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

               

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

               

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

               

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

               

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

               

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

               

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

               

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

            	 


    

     

     

    
      
         

      

      
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    SIGNATURE
      PAGE FOLLOWS

    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    


     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

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

     

    
      	
              For
                and on behalf of

              Cintel
                Corp.

               

               

               

              /s/
                Sang Don Kim

              Name:
                Sang Don Kim 

              Title:
                President and Chief Executive Officer 

            	
              For
                and on behalf of

              Korea
                Culture Promotion Inc.

               

               

               

              /s/
                Sang Jin Lee

              Name:
                Sang Jin Lee

              Title:
                Chief Executive Officer

            
	 	 
	 	 
	 	 
	
              For
                and on behalf of

              Phoenix
                M&M Corporation

               

               

               

              /s/
                Yoo Jae Kyong

              Name:
                Yoo Jae Kyong

              Title:
                Finance Manager

            
	 
	 
	 


    

     

     

     

     

     

     

     

     

     

     


    
      
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    EXHIBIT
      A

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

    


    KRW
      10,000,000,000 Convertible Bond due on April 12, 2012 (the “Bond”)

    Convertible
      into Common Shares of Cintel Corp. 

    Bond
      Certificate No.: o

    


    April
      12,
      2007 (the “Issue
      Date”)
      

    



      The
        Bonds
        are issued in the denomination of KRW
        5,000,000,000 (Five
        Billion Korean Won) in
        an
        aggregate principal amount of KRW 10,000,000,000 (Ten
        Billion Korean Won).
        This
        bond
        certificate may not be subdivided for a period of one year from the Issue
        Date; provided
        that additional certificate(s) of different denomination(s) may be created
        by
        Cintel Corp. (the “Company”)
        in
        case of partial redemption or conversion of the Bonds by the Subscriber and/or
        the Holder.


     

    The
      issuance of the Bonds was duly authorized by
      the
      resolution of the Board of Directors of the
      Company passed on March
      29,
      2007.
      References herein to the Conditions shall be to the terms and conditions of
      the
      Bond attached hereto (the “Conditions”).

    


    For
      value
      received, the Company, subject to and in accordance with the Conditions,
      promises to pay to [ ] or their respective registered assigns (collectively
      the
“Holder”)
      upon
      presentation and surrender of this Certificate the principal sum of Korean
      Won
      5,000,000,000 (Five Billion Korean Won) (or such other amount as is shown on
      the
      register of the bondholder with respect to the Bond as being represented by
      this
      Certificate) on April 12, 2012 (the “Maturity
      Date”)
      or on
      such earlier date as such sum becomes due and repayable under the Conditions,
      together with any other sums payable under the Conditions, all subject to and
      in
      accordance with the Conditions. 

    


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

    


    
      
         

      

      
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          14
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    This
      Certificate is governed by, and shall be construed in accordance with, the
      laws
      of the Republic of Korea. The Company has submitted to the exclusive
      jurisdiction of the Seoul Central District Court of Korea for all purposes
      in
      connection with this Certificate.

    


    


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

    


    CINTEL
      CORP.

    


    


    By:
      _________________________

    Name:

    Title:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     


    
      
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    ATTACHMENT

    TERMS
      AND CONDITIONS OF THE BONDS

    


    


    The
      statements in these terms and conditions (the “Conditions”)
      constitute Korean Won 10,000,000,000 Convertible Bonds of Cintel Corp. (the
      “Company”)
      due on
      April 12, 2012 (the “Bonds”)
      and
      the holder of the Bonds (the “Holder”)
      is
      entitled to the benefit of and is bound by all the provisions of the Conditions.
      The term “Agreement” as used herein shall refer to the Convertible Bonds
      Subscription Agreement executed by and among the Company and the Subscribers
      dated as of April 12, 2007.

    


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

     

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

    


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

     

    (B)
       The
      Bonds
      are issued in the denomination of KRW 5,000,000,000 (Five
      Billion Korean Won)
      in an
      aggregate principal amount of KRW 10,000,000,000 (Ten
      Billion Korean Won).
      The
      bond
      certificate may not be subdivided for a period of one year from the date of
      issuance of the Bonds (the “Issue
      Date”); provided
      that additional certificate(s) of different denomination(s) may be created
      by
      the Company in case of partial redemption or conversion of the Bonds by the
      Holder.

    


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

     

    2.     Conversion

     

    (A)  
Conversion
      Period and Conversion Price

     

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

     

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

     

    
      
         

      

      
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    (B)      Procedure
      for Conversion

     

     

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

      

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

     

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

     

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

     

    (C) Adjustment
      of Conversion Price

    


    The
      Conversion Price shall be subject to adjustment as follows:

    
      	
              (i)(x)

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

            


    

    


    
      
         

      

      
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          17
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    If
      the
      Company shall authorize a free distribution of Common Shares which distribution
      is to be paid or made to shareholders as of a record date which is
      also:

    


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

    


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

    


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


    


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

    


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

    


    
      	
              (i)(y)

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

            


    

    


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

    
 

    where:

     

     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
        -
          18
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    NCP =
       the
      Conversion Price after such adjustment

    


    OCP
       =
       the
      Conversion Price before such adjustment

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

     

    
      
         

      

      
        -
          19
          -

        
          

        

      

      
         

      

    

    

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

                 

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

                 

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

                 

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

                 

                where:

                 

                NCP = the
                  Conversion Price after such adjustment

                 

                OCP = the
                  Conversion Price before such adjustment

                 

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

                 

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

                 

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

                 

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

                 

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

                 

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

                 

              	 


      

      
        
           

        

        
          -
            20
            -

          
            

          

        

        
           

        

      



    

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

                 

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

                 

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

                 

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

                 

                where:

                 

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

                 

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

                 

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

                 

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

                 

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

                 

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

                 

              	 


      



    
      
         

      

      
        -
          21
          -

        
          

        

      

      
         

      

    

    

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

                 

                NCP
                  = OCP  ́
                  [(CMP - fmv)  ̧
                  CMP]

                 

                where:

                 

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

                 

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

                 

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

                 

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

                 

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

                 

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

              	 



    

     

    
      
         

      

      
        -
          22
          -

        
          

        

      

      
         

      

    

     

    

      
        	 	
                 

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

                 

                where :

                 

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

                 

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

                 

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

                 

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

                 

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

                 

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

                 

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

                 

                where:

                 

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

                 

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

                 

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

                 

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

                 

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

              	 


      

    

    
      
         

      

      
        -
          23
          -

        
          

        

      

      
         

      

    

    

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

                 

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

                 

                where:

                 

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

                 

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

                 

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

                 

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

                 

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

                 

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

                 

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

                 

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

              	 


      

    

     

     

    
      
         

      

      
        -
          24
          -

        
          

        

      

      
         

      

    

    

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

                 

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

                 

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

                 

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

                 

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

                    

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

              	 


      

    

     

    
 

    
      
         

      

      
        -
          25
          -

        
          

        

      

      
         

      

    

    
      	
              (x)

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

            


    

    


    
      	
              (xi)

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

            


    

    


    
      	
              (xii)

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

            


    

    


    
      	
              (xiii)

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

            


    

    


    
      	
              (xiv)

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

            


    

    


    
      	
              (xv)

            	
              Notice
                of any adjustment in the Conversion Price shall be given to Holder
                in
                accordance with Condition 9 as soon as practicable after the determination
                thereof.

            


    

    


    
      	
              (xvi)

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

            


    

    


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

    


    
      	
              (i)

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

            


    

    


    
      
         

      

      
        -
          26
          -

        
          

        

      

      
         

      

    

    PROVIDED
      THAT:

    


    
      	 	
              (1)

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

            


    

    


    
      	 	
              (2)

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

            


    

    


    
      	 	
              (3)

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

            


    

    


    
      	 	
              (4)

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

            


    

    


    
      	 	
              (5)

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

            


    

    


    
      	
              (ii)

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

            


    

    


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

    


    
      
         

      

      
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          27
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              The
                term “Setting
                Date”
                means a day falling one calendar month after the Issue Date (i.e.
                May 12,
                2007) and thereafter every three calendar months after the previous
                Setting Date (starting with August 12, 2007) up to one month prior
                to the
                Maturity Date. If any Setting Date would otherwise fall on a day
                which is
                not a Business Day, it shall be postponed to the next day which is
                a
                Business Day unless it would thereby fall into the next calendar
                month in
                which event it shall be brought forward to the immediately preceding
                Business Day.

            


    

    Such
      adjustments (if any) shall be notified promptly to the Holder in accordance
      with
      Condition 9.

    


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

     

    3. Redemption
      at Maturity

     

    Unless
      previously redeemed or converted or purchased and in each case canceled as
      herein provided, the Company will redeem on the Maturity Date the Bonds at
      one
      hundred per cent. (100%) of their face principal amount and interest on the
      amount of the Bonds calculated at the compounded rate of eight per cent. (8.0%)
      per annum.

     

    4. Put
      Option

    


    At
      any
      time during the period from November 1, 2009 to March 12, 2012, the Holder
      shall
      be entitled to exercise its put option to redeem the Bonds at the face value
      thereof, in which case the Holder shall also be entitled to receive from the
      Company the payment of interest on the outstanding principal balance of the
      Bonds calculated at the compounded rate of eight per cent. (8.0%) per annum.
      In
      case of the occurrence of any Event of Default by the Company hereunder, the
      Holder shall be entitled to exercise its put option to redeem the Bonds at
      the
      face value thereof if the said Event of Default is not cured within sixty (60)
      days of notice thereof, in which case the Holder shall also be entitled to
      receive from the Company the payment of default interest on the outstanding
      principal balance of the Bonds calculated at the compounded rate of nineteen
      per
      cent. (19.0%) per annum. 

    


     

    5. Charges,
      Taxes and Expenses

     

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

     

    


    
      
         

      

      
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          28
          -

        
          

        

      

      
         

      

    

     

    6. Events
      of
      Default

     

    If
      any of
      the following events (each, an “Event
      of Default”)
      occurs
      and is continuing, the Company shall promptly inform the Holder of such Event
      of
      Default. In such case, the Holder at its discretion may give notice to the
      Company that the Bonds are, and they shall immediately become, due and payable,
      in which case the entire unpaid principal balance of the Bonds and all of the
      unpaid interest accrued thereon shall be immediately due and payable. The term
      “subsidiaries” as used in this Condition 6 shall refer to the
      semiconductor-related group of companies under the control or management of
      the
      Company or fifteen per cent (15%) or more shares of which are held by the
      Company, including but not limited to the Acquired Company, etc. (but expressly
      excluding Cintel Information & Technology Co., Ltd. and Pheonix Asset
      Management Inc.).

     

    
      	
              (i)

            	
              Non-Payment

            


    

     

      The
      Company fails to pay principal, premium, interest and/or any other amount owing
      by the Company to the Holder hereunder when due and payable and such failure
      continues for seven (7) days; or

    


    
      	
              (ii)

            	
              Breach
                of Other Obligations

            


    

     

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

    


    
      	
              (iii)

            	
              Breach
                of Representation or Warranty

            


    

     

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

     

    
      	
              (iv)

            	
              Cross
                Default

            


    

     

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

     

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

     

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

     

    
      	
              (v)

            	
              Enforcement
                Proceedings

            


    

     

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

     

    
      
         

      

      
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          29
          -

        
          

        

      

      
         

      

    

    
      	
              (vi)

            	
              Security
                Enforced

            


    

     

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

     

    
      	
              (vii)

            	
              Insolvency

            


    

     

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

     

    
      	
              (viii)

            	
              Winding-up

            


    

     

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

     

    (ix)   
Expropriation

     

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

     

    (x)     Unlawfulness

     

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

     

    
      	
              (xi)

            	
              Analogous
                Events

            


    

     

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

    


     

    
      
         

      

      
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          30
          -

        
          

        

      

      
         

      

    

    


     

    7. Replacement
      of Bonds

     

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

     

    8.
       Governing
      Law and Jurisdiction

     

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

    


    9. Dispute
      Resolution  

     

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

    


    10. Notices

     

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

     

    11. Miscellaneous
      

    


    (A) No
      Waiver. 

     

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

     

    (B) Attorneys’
      Fees. 

     

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

     

    (C) Default
      Rate. 

     

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

     

    (D) Assignment.
      

     

    The
      Holder may assign the Bonds, in whole or in part, at the Holder's sole
      discretion to any other person subject to any laws applicable to the
      Bonds. 

     

    
      
         

      

      
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          31
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