Document:

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                                                                    EXHIBIT 4(b)

                          REGISTRATION RIGHTS AGREEMENT

                           Dated as of August 17, 2004

                                       by

                            Consumers Energy Company

                                       and

                              Barclays Capital Inc.
                          Citigroup Global Markets Inc.
               Merrill Lynch, Pierce, Fenner & Smith Incorporated
                              Goldman, Sachs & Co.
                              ABN AMRO Incorporated
                          BNP Paribas Securities Corp.
                            Comerica Securities, Inc.
                          Fifth Third Securities, Inc.
                            Huntington Capital Corp.
                           J.P. Morgan Securities Inc.
                         Wedbush Morgan Securities Inc.

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      This Registration Rights Agreement (this "Agreement") is made and entered
into as of August 17, 2004 by Consumers Energy Company, a Michigan corporation
(the "Company"), and Barclays Capital Inc., Citigroup Global Markets Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., ABN
AMRO Incorporated, BNP Paribas Securities Corp., Comerica Securities, Inc.,
Fifth Third Securities, Inc., Huntington Capital Corp., J.P. Morgan Securities
Inc. and Wedbush Morgan Securities Inc. (each an "Initial Purchaser" and,
collectively, the "Initial Purchasers"), which have agreed to purchase the
Company's $150,000,000 4.40% First Mortgage Bonds due 2009, Series K (the
"Series K Bonds"), $300,000,000 5.00% First Mortgage Bonds due 2012, Series L
(the "Series L Bonds") and $350,000,000 5.50% First Mortgage Bonds due 2016,
Series M (the "Series M Bonds" and, together with the Series K Bonds and the
Series L Bonds, the "Restricted Bonds") pursuant to the Purchase Agreement (as
defined below).

      This Agreement is made pursuant to the Purchase Agreement, dated August
11, 2004 (the "Purchase Agreement"), by the Company and the Initial Purchasers.
In order to induce the Initial Purchasers to purchase the Restricted Bonds, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers in the Purchase Agreement.

      The parties hereby agree as follows:

SECTION 1. DEFINITIONS

      Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Purchase Agreement. As used in this Agreement, the
following capitalized terms shall have the following meanings:

      Act: The Securities Act of 1933, as amended.

      Advice: As defined in Section 6(d) hereof.

      Agreement: As defined in the first paragraph hereof.

      Bonds: The Restricted Bonds and the Exchange Bonds.

      Broker-Dealer: Any broker or dealer registered under the Exchange Act.

      Broker-Dealer Transfer Restricted Securities: Exchange Bonds that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for Restricted
Bonds that such Broker-Dealer acquired for its own account as a result of
market-making activities or other trading activities (other than Restricted
Bonds acquired directly from the Company or any of its affiliates).

      Business Day: Any day except a Saturday, Sunday or other day in The City
of New York, or in the city of the primary corporate trust office of the
Trustee, on which banks are authorized to close.

      Certificated Securities: Bonds that are not in Global Bond form.

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      Closing Date: The date hereof.

      Commission: The Securities and Exchange Commission.

      Company: As defined in the first paragraph hereof.

      Consummate: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness under
the Act of the Exchange Offer Registration Statement relating to the Exchange
Bonds to be issued in the Exchange Offer, (b) the maintenance of such Exchange
Offer Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof and (c) the delivery by the Company to the
Registrar of the Series N Bonds in the same aggregate principal amount as the
aggregate principal amount of the Series K Bonds tendered by Holders thereof,
the delivery by the Company to the Registrar of the Series O Bonds in the same
aggregate principal amount as the aggregate principal amount of the Series L
Bonds tendered by Holders thereof and the delivery by the Company to the
Registrar of the Series P Bonds in the same aggregate principal amount as the
aggregate principal amount of the Series M Bonds tendered by holders thereof, in
each case, pursuant to the Exchange Offer.

      Damages Payment Date: With respect to the Restricted Bonds, each Interest
Payment Date.

      Exchange Act: The Securities Exchange Act of 1934, as amended.

      Exchange Bonds: The Series N Bonds, the Series O Bonds and the Series P
Bonds.

      Exchange Offer: The Series K Exchange Offer, the Series L Exchange Offer
and/or the Series M Exchange Offer, as the case may be.

      Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.

      Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Restricted Bonds to certain "qualified institutional buyers", as
such term is defined in Rule 144A under the Act, or to persons who are not "U.S.
persons", as such term is defined in Regulation S under the Act.

      Global Bond: As defined in the Bonds.

      Global Bond Holder: As defined in the Bonds.

      Holder: As defined in Section 2 hereof.

      Indemnified Holder: As defined in Section 8(a) hereof.

      Indemnified Person: As defined in Section 8(c) hereof.

      Indemnifying Person: As defined in Section 8(c) hereof.

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      Indenture: Indenture dated as of September 1, 1945, between the Company
and the Trustee, as supplemented by various supplemental indentures.

      Initial Purchaser: As defined in the first paragraph hereof.

      Initial Purchasers: As defined in the first paragraph hereof.

      Interest Payment Date: As defined in the Bonds.

      NASD: National Association of Securities Dealers, Inc.

      Person: An individual, partnership, corporation, trust, limited liability
company, unincorporated organization, or a government or agency or political
subdivision thereof.

      Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.

      Purchase Agreement: As defined in the second paragraph hereof.

      Record Holder: With respect to any Damages Payment Date, each Person who
is a Holder of Bonds on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.

      Registrar: As defined in the Indenture.

      Registration Default: As defined in Section 5 hereof.

      Registration Statement: Any registration statement of the Company relating
to (a) an offering of Exchange Bonds pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, in each case, (i) which is filed pursuant to the
provisions of this Agreement and (ii) including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.

      Restricted Bonds: As defined in the first paragraph hereof.

      Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.

      Series K Bonds: As defined in the first paragraph hereof.

      Series K Exchange Offer: The registration by the Company under the Act of
the Series N Bonds pursuant to the Exchange Offer Registration Statement
pursuant to which the Company shall offer the Holders of all outstanding
Transfer Restricted Securities relating to Series K Bonds the opportunity to
exchange all such outstanding Transfer Restricted Securities relating to Series
K Bonds for Series N Bonds in an aggregate principal amount equal to the
aggregate

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principal amount of the Transfer Restricted Securities relating to Series K
Bonds tendered in such exchange offer by such Holders.

      Series L Bonds: As defined in the first paragraph hereof.

      Series L Exchange Offer: The registration by the Company under the Act of
the Series O Bonds pursuant to the Exchange Offer Registration Statement
pursuant to which the Company shall offer the Holders of all outstanding
Transfer Restricted Securities relating to Series L Bonds the opportunity to
exchange all such outstanding Transfer Restricted Securities relating to Series
L Bonds for Series O Bonds in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities relating to
Series L Bonds tendered in such exchange offer by such Holders.

      Series M Bonds: As defined in the first paragraph hereof.

      Series M Exchange Offer: The registration by the Company under the Act of
the Series P Bonds pursuant to the Exchange Offer Registration Statement
pursuant to which the Company shall offer the Holders of all outstanding
Transfer Restricted Securities relating to Series M Bonds the opportunity to
exchange all such outstanding Transfer Restricted Securities relating to Series
M Bonds for Series P Bonds in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities relating to
Series M Bonds tendered in such exchange offer by such Holders.

      Series N Bonds: The Company's 4.40% First Mortgage Bonds due 2009, Series
N, to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon
the request of any Holder of Series K Bonds covered by a Shelf Registration
Statement, in exchange for such Series K Bonds.

      Series O Bonds: The Company's 5.00% First Mortgage Bonds due 2012, Series
O, to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon
the request of any holder of Series L Bonds covered by a Shelf Registration
Statement, in exchange for such Series L Bonds.

      Series P Bonds: The Company's 5.50% First Mortgage Bonds due 2016, Series
P, to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon
the request of any Holder of Series M Bonds covered by a Shelf Registration
Statement, in exchange for such Series M Bonds.

      Shelf Filing Date: As defined in Section 4(a) hereof.

      Shelf Registration Statement: As defined in Section 4(a) hereof.

      TIA: The Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as
in effect on the date of the Indenture.

      Transfer Restricted Securities: Each Restricted Bond, until the earliest
to occur of (a) the date on which such Restricted Bond is exchanged in the
Exchange Offer and entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements

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of the Act, (b) the date on which such Restricted Bond has been disposed of in
accordance with a Shelf Registration Statement, (c) the date on which such
Restricted Bond is disposed of by a Broker-Dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Restricted Bond is distributed to the public pursuant to Rule 144
under the Act.

      Trustee: JPMorgan Chase Bank (ultimate successor to City Bank Farmers
Trust Company), as trustee under the Indenture.

      Underwritten Offering or Underwritten Registration: An offering or
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.

SECTION 2. HOLDERS

      A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such Person owns Transfer Restricted Securities.

SECTION 3. REGISTERED EXCHANGE OFFER

      (a) Unless the Exchange Offer shall not be permitted by applicable federal
law (after the procedures set forth in Section 6(a)(i) hereof have been complied
with), the Company shall (i) cause to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 180 days after
the Closing Date, the Exchange Offer Registration Statement, (ii) use its
reasonable best efforts to cause such Exchange Offer Registration Statement to
become effective at the earliest possible time, but in no event later than 270
days after the Closing Date, (iii) in connection with the foregoing, (A) file
all pre-effective amendments to such Exchange Offer Registration Statement as
may be necessary in order to cause such Exchange Offer Registration Statement to
become effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) cause all necessary filings, if any, in connection with the registration and
qualification of the Exchange Bonds to be made under the blue sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting registration of the Exchange Bonds to be offered in
exchange for the Restricted Bonds that are Transfer Restricted Securities and to
permit sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers as contemplated by Section 3(c) hereof.

      (b) The Company shall use its reasonable best efforts to cause the
Exchange Offer Registration Statement to be effective continuously, and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 Business Days. The Company shall cause the Exchange Offer to comply with
all applicable federal and state securities laws. No securities other than the
Bonds shall be included in the Exchange Offer Registration Statement. The
Company shall use its best efforts to cause the Exchange Offer to be Consummated
on the earliest practicable date after the

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Exchange Offer Registration Statement has become effective, but in no event
later than 30 days thereafter.

      (c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Restricted Broker-Dealer who holds Restricted Bonds that are
Transfer Restricted Securities and that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Restricted Bonds (other than Transfer Restricted
Securities acquired directly from the Company or any affiliate of the Company)
pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be
an "underwriter" within the meaning of the Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with its initial
sale of each Exchange Bond received by such Broker-Dealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers that the Commission may require in order
to permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Bonds held by any such
Broker-Dealer, except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.

      The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) hereof to the extent necessary to
ensure that it is available for sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers, and to ensure that such Registration
Statement conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of one year from the date on which the Exchange Offer is
Consummated.

      The Company shall promptly provide sufficient copies of the latest version
of such Prospectus to such Restricted Broker-Dealers promptly upon request, and
in no event later than one day after such request, at any time during such
one-year period in order to facilitate such sales.

SECTION 4. SHELF REGISTRATION

      (a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement with respect to the Exchange Bonds because
the Exchange Offer is not permitted by applicable law or Commission policy
(after the procedures set forth in Section 6(a)(i) hereof have been complied
with) or (ii) any Holder of Transfer Restricted Securities shall notify the
Company within 20 Business Days following the Consummation of the Exchange Offer
that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the
Exchange Bonds acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder, the Company shall (x) cause to be filed on or prior to 90 days after the
date on which the Company determines that it is not required to file the
Exchange Offer Registration Statement

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pursuant to clause (i) above or 90 days after the date on which the Company
receives the notice specified in clause (ii) above (each such date, a "Shelf
Filing Date") a shelf registration statement pursuant to Rule 415 under the Act
(which may be an amendment to the Exchange Offer Registration Statement (in
either event, the "Shelf Registration Statement")), relating to all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof, and (y) use its best efforts to cause
such Shelf Registration Statement to become effective on or prior to 180 days
after the Shelf Filing Date. If the Company is not eligible to use Act Form S-3
on a Shelf Filing Date, then its obligation to file a Shelf Registration
Statement shall be deferred until the 30th day after the earliest time that such
eligibility is restored. If, after the Company has filed an Exchange Offer
Registration Statement which satisfies the requirements of Section 3(a) hereof,
the Company is required to file and make effective a Shelf Registration
Statement solely because the Exchange Offer shall not be permitted under
applicable federal law, then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above. Such
an event shall have no effect on the requirements of clause (y) above. The
Company shall use its reasonable best efforts to keep the Shelf Registration
Statement discussed in this Section 4(a) continuously effective, supplemented
and amended as required by and subject to the provisions of Sections 6(b) and
(c) hereof to the extent necessary to ensure that it is available for sales of
Transfer Restricted Securities by the Holders thereof entitled to the benefit of
this Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(c)(i) hereof) following the date on which such Shelf
Registration Statement first becomes effective under the Act.

      (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information specified in Item 507 of Regulation S-K for use in connection with
any Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be entitled
to liquidated damages pursuant to Section 5 hereof unless and until such Holder
shall have used its best efforts to provide all such information. Each Holder as
to which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading.

SECTION 5. LIQUIDATED DAMAGES

      If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the date specified for such filing in this
Agreement, (ii) any such Registration Statement has not been declared effective
by the Commission on or prior to the date specified for such effectiveness in
this Agreement, (iii) the Exchange Offer has not been Consummated within 30
calendar days after the Exchange Offer Registration Statement is first declared
effective by the Commission or (iv) any Registration Statement required by this
Agreement is filed and declared effective but shall thereafter cease to be
effective or fail to be usable for its intended purpose without being succeeded
within 15 Business Days by a post-

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effective amendment to such Registration Statement that cures such failure and
that is itself declared effective within five Business Days (each such event
referred to in clauses (i) through (iv), a "Registration Default"), then the
Company agrees to pay liquidated damages in the form of additional interest on
the Transfer Restricted Securities to each Holder of Transfer Restricted
Securities, from and including the date on which any Registration Default shall
occur to, but excluding, the date on which such Registration Default has been
cured, at a rate of 0.50% per annum. Notwithstanding anything to the contrary
set forth herein, (1) upon filing of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of clause
(i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of clause (ii) above, (3) upon Consummation of the Exchange Offer, in the case
of clause (iii) above, or (4) upon the filing of a post-effective amendment to
the Registration Statement or an additional Registration Statement that causes
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement) to again be declared effective or made usable, in the
case of clause (iv) above, the liquidated damages payable with respect to the
Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or
(iv), as applicable, shall cease.

      All additional interest shall be paid on each payment date to the Global
Bond Holder by wire transfer of immediately available funds or by federal funds
check and to Holders of Certificated Securities by mailing checks to their
registered addresses on the books of the Company or the Trustee for such
payment. All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such security shall have
been satisfied in full.

SECTION 6. REGISTRATION PROCEDURES

      (a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company shall comply with all applicable provisions of Section 6(c)
hereof, shall use its reasonable best efforts to effect such exchange and to
permit the sale of Broker-Dealer Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:

            (i) If, following the date hereof, there has been published a change
      in Commission policy with respect to exchange offers such as the Exchange
      Offer, such that in the reasonable opinion of counsel to the Company there
      is a substantial question as to whether the Exchange Offer is permitted by
      applicable federal law, the Company hereby agrees to seek a no-action
      letter or other favorable decision from the Commission allowing the
      Company to Consummate an Exchange Offer for the Restricted Bonds. The
      Company hereby agrees to pursue the issuance of such a decision to the
      Commission staff level. In connection with the foregoing, the Company
      hereby agrees to take all such other actions as are reasonably requested
      by the Commission or otherwise required in connection with the issuance of
      such decision, including without limitation (A) participating in
      telephonic conferences with the Commission, (B) delivering to the
      Commission staff an analysis prepared by counsel to the Company setting
      forth the legal bases, if any, upon which such counsel has concluded that
      such an

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      Exchange Offer should be permitted and (C) diligently pursuing a
      resolution (which need not be favorable) by the Commission staff of such
      submission.

            (ii) As a condition to its participation in the Exchange Offer
      pursuant to the terms of this Agreement, each Holder of Transfer
      Restricted Securities shall furnish upon the request of the Company, prior
      to the Consummation of the Exchange Offer, a written representation to the
      Company (which may be contained in the letter of transmittal contemplated
      by the Exchange Offer Registration Statement) to the effect that (A) it is
      not an affiliate of the Company, (B) it is not engaged in, and does not
      intend to engage in, and has no arrangement or understanding with any
      Person to participate in, a distribution of the Exchange Bonds to be
      issued in the Exchange Offer and (C) it is acquiring the Exchange Bonds in
      its ordinary course of business. Each Holder hereby acknowledges and
      agrees that any Broker-Dealer and any such Holder using the Exchange Offer
      to participate in a distribution of the securities to be acquired in the
      Exchange Offer (1) could not under Commission policy as in effect on the
      date of this Agreement rely on the position of the Commission enunciated
      in Morgan Stanley and Co. Inc. (available June 5, 1991) and Exxon Capital
      Holdings Corp. (available May 13, 1988), as interpreted in the
      Commission's letter to Shearman & Sterling (available July 2, 1993), and
      similar no-action letters (including, if applicable, any no-action letter
      obtained pursuant to clause (i) above), and (2) must comply with the
      registration and prospectus delivery requirements of the Act in connection
      with a secondary resale transaction and that such a secondary resale
      transaction must be covered by an effective registration statement
      containing the selling security holder information required by Item 507 or
      508, as applicable, of Regulation S-K if the resales are of Exchange Bonds
      obtained by such Holder in exchange for Restricted Bonds acquired by such
      Holder directly from the Company or an affiliate thereof.

            (iii) Prior to effectiveness of the Exchange Offer Registration
      Statement, the Company shall provide a supplemental letter to the
      Commission (A) stating that the Company is registering the Exchange Offer
      in reliance on the position of the Commission enunciated in Exxon Capital
      Holdings Corp. (available May 13, 1988), Morgan Stanley and Co. Inc.
      (available June 5, 1991) and, if applicable, any no-action letter obtained
      pursuant to clause (i) above, (B) including a representation that the
      Company has not entered into any arrangement or understanding with any
      Person to distribute the Exchange Bonds to be received in the Exchange
      Offer and that, to the best of the Company's information and belief, each
      Holder participating in the Exchange Offer is acquiring the Exchange Bonds
      in its ordinary course of business and has no arrangement or understanding
      with any Person to participate in the distribution of the Exchange Bonds
      received in the Exchange Offer and (C) any other undertaking or
      representation required by the Commission as set forth in any no-action
      letter obtained pursuant to clause (i) above.

      (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) hereof and shall use

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its best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
will prepare and file with the Commission a Registration Statement relating to
the registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance with
the intended method or methods of distribution thereof within the time periods
and otherwise in accordance with the provisions hereof.

      (c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities (including, without limitation, any Exchange
Offer Registration Statement and the related Prospectus, to the extent that the
same are required to be available to permit sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers), the Company shall:

            (i) use its best efforts to keep such Registration Statement
      continuously effective and provide all requisite financial statements for
      the period specified in Section 3 or 4 hereof, as applicable. Upon the
      occurrence of any event that would cause any such Registration Statement
      or the Prospectus contained therein (A) to contain a material misstatement
      or omission or (B) not to be effective and usable for resale of Transfer
      Restricted Securities during the period required by this Agreement, the
      Company shall file promptly an appropriate amendment to such Registration
      Statement, (1) in the case of clause (A), correcting any such misstatement
      or omission, and (2) in the case of clauses (A) and (B), using its best
      efforts to cause such amendment to be declared effective and such
      Registration Statement and the related Prospectus to become usable for
      their intended purpose(s) as soon as practicable thereafter;

            (ii) prepare and file with the Commission such amendments and
      post-effective amendments to the Registration Statement as may be
      necessary to keep the Registration Statement effective for the applicable
      period set forth in Section 3 or 4 hereof, or such shorter period as will
      terminate when all Transfer Restricted Securities covered by such
      Registration Statement have been sold; cause the Prospectus to be
      supplemented by any required Prospectus supplement, and as so supplemented
      to be filed pursuant to Rule 424 under the Act, and to comply fully with
      Rules 424, 430A and 462, as applicable, under the Act in a timely manner;
      and comply with the provisions of the Act with respect to the disposition
      of all securities covered by such Registration Statement during the
      applicable period in accordance with the intended method or methods of
      distribution by the sellers thereof set forth in such Registration
      Statement or supplement to the Prospectus;

            (iii) advise the underwriter(s), if any, and selling Holders
      promptly and, if requested by such Persons, confirm such advice in
      writing, (A) when the Prospectus or any Prospectus supplement or
      post-effective amendment has been filed, and, with respect to any
      Registration Statement or any post-effective amendment thereto, when the
      same has become effective, (B) of any request by the Commission for
      amendments to the Registration Statement or amendments or

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      supplements to the Prospectus or for additional information relating
      thereto, (C) of the issuance by the Commission of any stop order
      suspending the effectiveness of the Registration Statement under the Act
      or of the suspension by any state securities commission of the
      qualification of the Transfer Restricted Securities for offering or sale
      in any jurisdiction, or the initiation of any proceeding for any of the
      preceding purposes, (D) of the existence of any fact or the happening of
      any event that makes any statement of a material fact made in the
      Registration Statement, the Prospectus, any amendment or supplement
      thereto or any document incorporated by reference therein untrue, or that
      requires the making of any additions to or changes in the Registration
      Statement in order to make the statements therein not misleading, or that
      requires the making of any additions to or changes in the Prospectus in
      order to make the statements therein, in the light of the circumstances
      under which they were made, not misleading. If at any time the Commission
      shall issue any stop order suspending the effectiveness of the
      Registration Statement, or any state securities commission or other
      regulatory authority shall issue an order suspending the qualification or
      exemption from qualification of the Transfer Restricted Securities under
      state securities or blue sky laws, the Company shall use its best efforts
      to obtain the withdrawal or lifting of such order at the earliest possible
      time;

            (iv) furnish to the Initial Purchaser(s), each selling Holder named
      in any Registration Statement or Prospectus and each of the underwriter(s)
      in connection with such sale, if any, before filing with the Commission,
      copies of any Registration Statement or any Prospectus included therein or
      any amendments or supplements to any such Registration Statement or
      Prospectus (including all documents incorporated by reference after the
      initial filing of such Registration Statement), which documents will be
      subject to the review and comment of such Holders and underwriter(s) in
      connection with such sale, if any, for a period of at least five Business
      Days, and the Company will not file any such Registration Statement or
      Prospectus or any amendment or supplement to any such Registration
      Statement or Prospectus (including all such documents incorporated by
      reference) to which the selling Holders of the Transfer Restricted
      Securities covered by such Registration Statement or the underwriter(s) in
      connection with such sale, if any, shall reasonably object within five
      Business Days after the receipt thereof;

            (v) promptly prior to the filing of any document that is to be
      incorporated by reference into a Registration Statement or Prospectus,
      provide copies of such document to the selling Holders and to the
      underwriter(s) in connection with such sale, if any, make the Company's
      representatives available for discussion of such document and other
      customary due diligence matters, and include such information in such
      document prior to the filing thereof as such selling Holders or
      underwriter(s), if any, reasonably may request;

            (vi) make available at reasonable times for inspection by the
      selling Holders, any managing underwriter participating in any disposition
      pursuant to such Registration Statement and any attorney or accountant
      retained by such

                                       11
<PAGE>

      selling Holders or any of such underwriter(s), all financial and other
      records, material corporate documents and properties of the Company and
      cause the Company's officers, directors and employees to supply all
      information reasonably requested by any such Holder, underwriter, attorney
      or accountant in connection with such Registration Statement or any
      post-effective amendment thereto subsequent to the filing thereof and
      prior to its effectiveness;

            (vii) if requested by any selling Holders or the underwriter(s) in
      connection with such sale, if any, promptly include in any Registration
      Statement or Prospectus, pursuant to a supplement or post-effective
      amendment if necessary, such information as such selling Holders and
      underwriter(s), if any, may reasonably request to have included therein,
      including, without limitation, information relating to the "Plan of
      Distribution" of the Transfer Restricted Securities, information with
      respect to the principal amount of Transfer Restricted Securities being
      sold to such underwriter(s), the purchase price being paid therefor and
      any other terms of the offering of the Transfer Restricted Securities to
      be sold in such offering; and make all required filings of such Prospectus
      supplement or post-effective amendment as soon as practicable after the
      Company is notified of the matters to be included in such Prospectus
      supplement or post-effective amendment;

            (viii) if requested in writing by any selling Holder and each of the
      underwriter(s) in connection with such sale, if any, furnish, without
      charge, at least one copy of the Registration Statement, as first filed
      with the Commission, and of each amendment thereto, including all
      documents incorporated by reference therein and all exhibits (including
      exhibits incorporated therein by reference);

            (ix) if requested in writing by any selling Holder and each of the
      underwriter(s), if any, deliver, without charge, as many copies of the
      Prospectus (including each preliminary Prospectus) and any amendment or
      supplement thereto as such Persons reasonably may request; the Company
      hereby consents to the use (in accordance with law) of the Prospectus and
      any amendment or supplement thereto by each of the selling Holders and
      each of the underwriter(s), if any, in connection with the offering and
      the sale of the Transfer Restricted Securities covered by the Prospectus
      or any amendment or supplement thereto;

            (x) enter into such agreements (including an underwriting or similar
      agreement) and make such representations and warranties and take all such
      other actions in connection therewith in order to expedite or facilitate
      the disposition of the Transfer Restricted Securities pursuant to any
      Registration Statement contemplated by this Agreement as may be reasonably
      requested by any Holder of Transfer Restricted Securities or underwriter
      in connection with any sale or resale pursuant to any Registration
      Statement contemplated by this Agreement, and in such connection, whether
      or not an underwriting or similar agreement is entered into and whether or
      not the registration is an Underwritten Registration, the Company shall:

                                       12
<PAGE>

                  (A) furnish (or in the case of clauses (2) and (3) below, use
            its best efforts to furnish) to each selling Holder and each
            underwriter, if any, upon the effectiveness of the Shelf
            Registration Statement and to each Restricted Broker-Dealer upon
            Consummation of the Exchange Offer:

                        (1) a certificate, dated the date of Consummation of the
                  Exchange Offer or the date of effectiveness of the Shelf
                  Registration Statement, as the case may be, signed on behalf
                  of the Company by (x) the President or any Vice President and
                  (y) a principal financial or accounting officer of the
                  Company, confirming, as of the date thereof, the matters set
                  forth in Sections 10(d) and 10(e) of the Purchase Agreement
                  and such other similar matters as the Holders, underwriter(s)
                  and/or Restricted Broker-Dealers may reasonably request;

                        (2) an opinion, dated the date of Consummation of the
                  Exchange Offer or the date of effectiveness of the Shelf
                  Registration Statement, as the case may be, of counsel for the
                  Company covering matters similar to those set forth in Section
                  10(b)(i) of the Purchase Agreement and such other matters as
                  the Holders, underwriter(s) and/or Restricted Broker-Dealers
                  may reasonably request, and in any event including a statement
                  to the effect that such counsel has participated in
                  conferences with officers and other representatives of the
                  Company, representatives of the independent public accountants
                  for the Company and have considered the matters required to be
                  stated therein and the statements contained therein, although
                  such counsel has not independently verified the accuracy,
                  completeness or fairness of such statements; and that such
                  counsel advises that, on the basis of the foregoing (relying
                  as to materiality to a large extent upon facts provided to
                  such counsel by officers and other representatives of the
                  Company and without independent check or verification), no
                  facts came to such counsel's attention that caused such
                  counsel to believe that the applicable Registration Statement,
                  at the time such Registration Statement or any post-effective
                  amendment thereto became effective and, in the case of the
                  Exchange Offer Registration Statement, as of the date of
                  Consummation of the Exchange Offer, contained an untrue
                  statement of a material fact or omitted to state a material
                  fact required to be stated therein or necessary to make the
                  statements therein not misleading, or that the Prospectus
                  contained in such Registration Statement as of its date and,
                  in the case of the opinion dated the date of Consummation of
                  the Exchange Offer, as of the date of Consummation,

                                       13
<PAGE>

                  contained an untrue statement of a material fact or omitted to
                  state a material fact necessary in order to make the
                  statements therein, in the light of the circumstances under
                  which they were made, not misleading. Without limiting the
                  foregoing, such counsel may state further that such counsel
                  assumes no responsibility for, and has not independently
                  verified, the accuracy, completeness or fairness of the
                  financial statements, Bonds and schedules and other financial
                  data included in any Registration Statement contemplated by
                  this Agreement or the related Prospectus; and

                        (3) a customary comfort letter, dated as of the date of
                  effectiveness of the Shelf Registration Statement or the date
                  of Consummation of the Exchange Offer, as the case may be,
                  from the Company's independent accountants, in the customary
                  form and covering matters of the type customarily covered in
                  comfort letters to underwriters in connection with primary
                  underwritten offerings, and affirming the matters set forth in
                  the comfort letters delivered pursuant to Section 10(c)(i) and
                  Section 10(c)(ii) of the Purchase Agreement, without
                  exception;

                  (B) set forth in full or incorporate by reference in the
            underwriting or similar agreement, if any, in connection with any
            sale or resale pursuant to any Shelf Registration Statement, the
            indemnification provisions and procedures of Section 8 hereof with
            respect to all parties to be indemnified pursuant to said Section 8;
            and

                  (C) deliver such other documents and certificates as may be
            reasonably requested by the selling Holders, the underwriter(s), if
            any, and Restricted Broker-Dealers, if any, to evidence compliance
            with clause (A) above and with any customary conditions contained in
            the underwriting agreement or other agreement entered into by the
            Company pursuant to this clause (C);

the above shall be done at each closing under such underwriting or similar
agreement, as and to the extent required thereunder, and if at any time the
representations and warranties of the Company contemplated in clause (A)(1)
above cease to be true and correct, the Company shall so advise the
underwriter(s), if any, the selling Holders and each Restricted Broker-Dealer
promptly and, if requested by such Persons, shall confirm such advice in
writing;

            (xi) prior to any public offering of Transfer Restricted Securities,
      cooperate with the selling Holders, the underwriter(s), if any, and their
      respective counsel in connection with the registration and qualification
      of the Transfer Restricted Securities under the securities or blue sky
      laws of such jurisdictions as the selling Holders or underwriter(s), if
      any, may request and do any and all other

                                       14
<PAGE>

      acts or things necessary or advisable to enable the disposition in such
      jurisdictions of the Transfer Restricted Securities covered by the
      applicable Registration Statement; provided, however, that the Company
      shall not be required to register or qualify as a foreign corporation
      where it is not now so qualified or to take any action that would subject
      it to the service of process in suits or to taxation, other than as to
      matters and transactions relating to the Registration Statement, in any
      jurisdiction where it is not now so subject;

            (xii) (A) issue, upon the request of any Holder of Series K Bonds
      covered by any Shelf Registration Statement contemplated by this
      Agreement, Series N Bonds having an aggregate principal amount equal to
      the aggregate principal amount of Series K Bonds surrendered to the
      Company by such Holder in exchange therefor or being sold by such Holder;
      such Series N Bonds to be registered in the name of such Holder or in the
      name of the purchaser(s) of such Bonds, as the case may be; in return, the
      Series K Bonds held by such Holder shall be surrendered to the Company for
      cancellation;

                  (B) issue, upon the request of any Holder of Series L Bonds
      covered by any Shelf Registration Statement contemplated by this
      Agreement, Series O Bonds having an aggregate principal amount equal to
      the aggregate principal amount of Series L Bonds surrendered to the
      Company by such Holder in exchange therefor or being sold by such Holder;
      such Series O Bonds to be registered in the name of such Holder or in the
      name of the purchaser(s) of such Bonds, as the case may be; in return, the
      Series L Bonds held by such Holder shall be surrendered to the Company for
      cancellation;

                  (C) issue, upon the request of any Holder of Series M Bonds
      covered by any Shelf Registration Statement contemplated by this
      Agreement, Series P Bonds having an aggregate principal amount equal to
      the aggregate principal amount of Series M Bonds surrendered to the
      Company by such Holder in exchange therefor or being sold by such Holder;
      such Series P Bonds to be registered in the name of such Holder or in the
      name of the purchaser(s) of such Bonds, as the case may be; in return, the
      Series M Bonds held by such Holder shall be surrendered to the Company for
      cancellation;

            (xiii) in connection with any sale of Transfer Restricted Securities
      that will result in such securities no longer being Transfer Restricted
      Securities, cooperate with the selling Holders and the underwriter(s), if
      any, to facilitate the timely preparation and delivery of certificates
      representing Transfer Restricted Securities to be sold and not bearing any
      restrictive legends; and to register such Transfer Restricted Securities
      in such denominations and such names as the Holders or the underwriter(s),
      if any, may request at least two Business Days prior to such sale of
      Transfer Restricted Securities;

            (xiv) use its best efforts to cause the disposition of the Transfer
      Restricted Securities covered by the Registration Statement to be
      registered with or approved by such other governmental agencies or
      authorities as may be

                                       15
<PAGE>

      necessary to enable the seller or sellers thereof or the underwriter(s),
      if any, to consummate the disposition of such Transfer Restricted
      Securities, subject to the proviso contained in clause (xi) above;

            (xv) subject to clause (i) above, if any fact or event contemplated
      by clause (iii)(D) above shall exist or have occurred, prepare a
      supplement or post-effective amendment to the Registration Statement or
      related Prospectus or any document incorporated therein by reference or
      file any other required document so that, as thereafter delivered to the
      purchasers of Transfer Restricted Securities, the Prospectus will not
      contain an untrue statement of a material fact or omit to state any
      material fact necessary to make the statements therein, in the light of
      the circumstances under which they were made, not misleading;

            (xvi) provide CUSIP numbers for all Transfer Restricted Securities
      not later than the effective date of a Registration Statement covering
      such Transfer Restricted Securities and provide the Trustee with printed
      certificates for the Transfer Restricted Securities which are in a form
      eligible for deposit with The Depository Trust Company;

            (xvii) cooperate and assist in any filings required to be made with
      the NASD and in the performance of any due diligence investigation by any
      underwriter (including any "qualified independent underwriter") that is
      required to be retained in accordance with the rules and regulations of
      the NASD, and use its best efforts to cause such Registration Statement to
      become effective and approved by such governmental agencies or authorities
      as may be necessary to enable the Holders selling Transfer Restricted
      Securities to consummate the disposition of such Transfer Restricted
      Securities;

            (xviii) otherwise use its best efforts to comply with all applicable
      rules and regulations of the Commission, and make generally available to
      its security holders with regard to any applicable Registration Statement,
      as soon as practicable, a consolidated earning statement meeting the
      requirements of Rule 158 under the Act (which need not be audited)
      covering a twelve-month period beginning after the effective date of the
      Registration Statement (as such term is defined in paragraph (c) of Rule
      158 under the Act);

            (xix) cause the Indenture to be qualified under the TIA not later
      than the effective date of the first Registration Statement required by
      this Agreement and, in connection therewith, cooperate with the Trustee
      and the Holders of Bonds to effect such changes to the Indenture as may be
      required for such Indenture to be so qualified in accordance with the
      terms of the TIA; and execute and use its best efforts to cause the
      Trustee to execute all documents that may be required to effect such
      changes and all other forms and documents required to be filed with the
      Commission to enable such Indenture to be so qualified in a timely manner;
      and

                                       16
<PAGE>

            (xx) provide promptly to each Holder upon request each document
      filed with the Commission pursuant to the requirements of Section 13 or
      Section 15(d) of the Exchange Act.

      (d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of a notice of actions to be
taken as referred to in Section 6(c)(i) hereof or any notice from the Company of
the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof,
such Holder will forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xv) hereof, or until it is advised in writing by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus (the "Advice"). If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of either such notice. In the event the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 6(c)(i) or Section 6(c)(iii)(D) hereof
to and including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xv) hereof or shall have received the
Advice.

SECTION 7. REGISTRATION EXPENSES

      (a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees; (ii) all fees and expenses of compliance with
federal securities and state blue sky or securities laws; (iii) all expenses of
printing (including printing certificates for the Exchange Bonds to be issued in
the Exchange Offer and printing of Prospectuses), messenger and delivery
services and telephone; (iv) all fees and disbursements of counsel for the
Company and (other than in connection with the Exchange Offer) the Holders of
Transfer Restricted Securities; (v) all application and filing fees, if any, in
connection with listing the Bonds on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance).

      The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.

      (b) In connection with the Shelf Registration Statement, the Company will
reimburse the Holders of Transfer Restricted Securities registered pursuant to
the Shelf Registration Statement for the reasonable fees and disbursements of
not more than one counsel, who shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for

                                       17
<PAGE>

whose benefit the Shelf Registration Statement is being prepared in consultation
with the Company.

SECTION 8. INDEMNIFICATION AND CONTRIBUTION

      (a) The Company agrees, to the extent permitted by law, to indemnify and
hold harmless each Holder and each Person, if any, who controls any Holder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act or otherwise
("Indemnified Holder"), and to reimburse the Holders and such controlling Person
or Persons, if any, for any legal or other expenses incurred by them in
connection with defending any action, suit or proceeding (including governmental
investigations) as provided in Section 8(c) hereof, insofar as such losses,
claims, damages, liabilities or actions, suits or proceedings (including
governmental investigations) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement, or, if any Registration Statement shall be amended or supplemented,
in the Registration Statement as so amended or supplemented, or arise out of or
are based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any such untrue statement or alleged
untrue statement or omission or alleged omission which was made in the
Registration Statement or in the Registration Statement as so amended or
supplemented, in reliance upon and in conformity with information furnished in
writing to the Company by any Holder expressly for use therein.

      The Company's indemnity agreement contained in this Section 8(a), and the
covenants, representations and warranties of the Company contained in this
Agreement, shall remain in full force and effect regardless of any investigation
made by or on behalf of any Person, and the indemnity agreement contained in
this Section 8 shall survive any termination of this Agreement. The liabilities
of the Company in this Section 8 are in addition to any other liabilities of the
Company under this Agreement or otherwise.

      (b) Each Holder agrees, severally and not jointly, to the extent permitted
by law, to indemnify, hold harmless and reimburse the Company and each Person,
if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, to the same extent and upon the same terms as
the indemnity agreement of the Company set forth in Section 8(a) hereof, but
only with respect to alleged untrue statements or omissions made in the
Registration Statement or in the Registration Statement, as amended or
supplemented (if applicable), in reliance upon and in conformity with
information furnished in writing to the Company by such Holder expressly for use
therein.

      The indemnity agreement on the part of each Holder contained in this
Section 8(b) shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any other Person, and the
indemnity agreement contained in this Section 8(b) shall survive any termination
of this Agreement.

      (c) If a claim is made or an action, suit or proceeding (including
governmental investigations) is commenced or threatened against any person as to
which indemnity may be

                                       18
<PAGE>
sought under Section 8(a) or 8(b) hereof, such Person (the "Indemnified Person")
shall notify the Person against whom such indemnity may be sought (the
"Indemnifying Person") promptly after any assertion of such claim threatening to
institute an action, suit or proceeding or, if such an action, suit or
proceeding is commenced against such Indemnified Person, promptly after such
Indemnified Person shall have been served with a summons or other first legal
process, giving information as to the nature and basis of the claim. Failure to
so notify the Indemnifying Person shall not, however, relieve the Indemnifying
Person from any liability which it may have on account of the indemnity under
Section 8(a) or 8(b) hereof if the Indemnifying Person has not been prejudiced
in any material respect by such failure. Subject to the immediately succeeding
sentence, the Indemnifying Person shall assume the defense of any such
litigation or proceeding, including the employment of counsel and the payment of
all expenses, with such counsel being designated, subject to the immediately
succeeding sentence, in writing by a majority in principal amount of the Holders
in the case of parties indemnified pursuant to Section 8(b) hereof and by the
Company in the case of parties indemnified pursuant to Section 8(a) hereof. Any
Indemnified Person shall have the right to participate in such litigation or
proceeding and to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include (x) the Indemnifying Person and (y)
the Indemnified Person and, in the written opinion of counsel to such
Indemnified Person, representation of both parties by the same counsel would be
inappropriate due to actual or likely conflicts of interest between them, in
either of which cases the reasonable fees and expenses of counsel (including
disbursements) for such Indemnified Person shall be reimbursed by the
Indemnifying Person to the Indemnified Person. If there is a conflict as
described in clause (ii) above, and the Indemnified Persons have participated in
the litigation or proceeding utilizing separate counsel whose fees and expenses
have been reimbursed by the Indemnifying Person, and the Indemnified Persons, or
any of them, are found to be solely liable, such Indemnified Person shall repay
to the Indemnifying Parties such fees and expenses of such separate counsel as
the Indemnifying Person shall have reimbursed. It is understood that the
Indemnifying Person shall not, in connection with any litigation or proceeding
or related litigation or proceedings in the same jurisdiction as to which the
Indemnified Persons are entitled to such separate representation, be liable
under this Agreement for the reasonable fees and out-of-pocket expenses of more
than one separate firm (together with not more than one appropriate local
counsel) for all such Indemnified Persons. Subject to the next paragraph, all
such fees and expenses shall be reimbursed by payment to the Indemnified Persons
of such reasonable fees and expenses of counsel promptly after payment thereof
by the Indemnified Persons.

      In furtherance of the requirement above that fees and expenses of any
separate counsel for the Indemnified Persons shall be reasonable, the Holders
and the Company agree that the Indemnifying Person's obligations to pay such
fees and expenses shall be conditioned upon the following:

            (1) in case separate counsel is proposed to be retained by the
      Indemnified Persons pursuant to clause (ii) of the preceding paragraph,
      the Indemnified Persons shall in good faith fully consult with the
      Indemnifying Person in advance as to the selection of such counsel;

                                       19
<PAGE>

            (2) reimbursable fees and expenses of such separate counsel shall be
      detailed and supported in a manner reasonably acceptable to the
      Indemnifying Person (but nothing herein shall be deemed to require the
      furnishing to the Indemnifying Person of any information, including,
      without limitation, computer print-outs of lawyers' daily time entries, to
      the extent that, in the judgment of such counsel, furnishing such
      information might reasonably be expected to result in a waiver of any
      attorney-client privilege); and

            (3) the Company and the Holders shall cooperate in monitoring and
      controlling the fees and expenses of separate counsel for Indemnified
      Persons for which the Indemnifying Person is liable hereunder, and the
      Indemnified Person shall use every reasonable effort to cause such
      separate counsel to minimize the duplication of activities as between
      themselves and counsel to the Indemnifying Person.

      The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment against the Indemnified Person, the Indemnifying Person agrees, subject
to the provisions of this Section 8, to indemnify the Indemnified Person from
and against any loss, damage, liability or expenses by reason of such settlement
or judgment. The Indemnifying Person shall not, without the prior written
consent of the Indemnified Persons, effect any settlement of any pending or
threatened litigation, proceeding or claim in respect of which indemnity has
been properly sought by the Indemnified Persons hereunder, unless such
settlement includes an unconditional release by the claimant of all Indemnified
Persons from all liability with respect to claims which are the subject matter
of such litigation, proceeding or claim.

      (d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an Indemnified Person under this Section 8
in respect of any losses, claims, damages or liabilities (or actions, suits or
proceedings (including governmental investigations) in respect thereof) referred
to therein, then each Indemnifying Person under this Section 8 shall contribute
to the amount paid or payable by such Indemnified Person as a result of such
losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Indemnifying Person on the one hand and the Indemnified Person on the other from
the sale of the Transfer Restricted Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each Indemnifying Person shall contribute to such amount paid or
payable by such Indemnified Person in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
the Holders on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Holders were treated as one entity for such

                                       20
<PAGE>

purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 8. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages or
liabilities (or actions, suits or proceedings (including governmental
proceedings) in respect thereof) referred to in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such actions, suits or
proceedings (including governmental proceedings) or claims, provided that the
provisions of this Section 8 have been complied with (in all material respects)
in respect of any separate counsel for such Indemnified Person. Notwithstanding
the provisions of this Section 8, no Holder shall be required to contribute any
amount greater than the excess of the amount by which the total received by such
Holder with respect to the sale of its Transfer Restricted Securities pursuant
to a Registration Statement exceeds the sum of (A) the amount paid by such
Holder for such Transfer Restricted Securities plus (B) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations in this Section 8 to
contribute are several in proportion to their respective obligations and not
joint.

      The agreement with respect to contribution contained in this Section 8
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any Holder, and shall survive any termination of
this Agreement.

SECTION 9. RULE 144A

      The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder of Transfer Restricted Securities, to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.

SECTION 10. UNDERWRITTEN REGISTRATIONS

      No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, and other documents required under the terms
of such underwriting arrangements.

SECTION 11. SELECTION OF UNDERWRITERS

      For any Underwritten Offering, the investment banker or investment bankers
and manager or managers for any Underwritten Offering that will administer such
offering will be selected by the Holders of a majority in aggregate principal
amount of the Transfer Restricted

                                       21
<PAGE>

Securities included in such offering; provided, that such investment bankers and
managers must be reasonably satisfactory to the Company. The Holders of Transfer
Restricted Securities included in any such Underwritten Offering shall be
responsible for paying all underwriting or placement fees charged, or costs or
expenses incurred, by such investment bankers and managers in connection with
such Underwritten Offering. Such investment bankers and managers are referred to
herein as the "underwriters".

SECTION 12. MISCELLANEOUS

      (a) Remedies. Each Holder, in addition to being entitled to exercise all
rights provided herein, in the Indenture, in the Purchase Agreement or granted
by law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by the Company of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.

      (b) No Inconsistent Agreements. The Company will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement granting any registration rights with respect to its
securities to any Person. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof.

      (c) Adjustments Affecting the Bonds. The Company will not take any action,
or voluntarily permit any change to occur, with respect to the Bonds that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.

      (d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given, unless (i) in the case of Section 5
hereof and this Section 12(d)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to or
departure from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer and
that does not affect directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.

      (e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:

                                       22
<PAGE>

            (i) if to a Holder, at the address set forth on the records of the
      Registrar under the Indenture, with a copy to the Registrar; and

            (ii) if to the Company:

                 Consumers Energy Company
                 One Energy Plaza
                 Jackson, Michigan 49201
                 Telecopier No.: (517) 788-2186,
                 Attention: Chief Financial Officer

            With a copy at the same address to:

                 Robert C. Shrosbree, Esq.
                 Telecopier No.: (313) 436-9225

      All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.

      Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

      (f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder.

      (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

      (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

      (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

      (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

                                       23
<PAGE>

      (k) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

                                       24
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                         CONSUMERS ENERGY COMPANY

                                         By: /s/ Thomas J. Webb
                                             -----------------------------
                                             Name: Thomas J. Webb
                                             Title: Executive Vice President and
                                                    Chief Financial Officer

BARCLAYS CAPITAL INC.
CITIGROUP GLOBAL MARKETS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
              INCORPORATED
GOLDMAN, SACHS & CO.
ABN AMRO INCORPORATED
BNP PARIBAS SECURITIES CORP.
COMERICA SECURITIES, INC.
FIFTH THIRD SECURITIES, INC.
HUNTINGTON CAPITAL CORP.
J.P. MORGAN SECURITIES INC.
WEDBUSH MORGAN SECURITIES INC.

BY: BARCLAYS CAPITAL INC.

By:/s/ Pamela Kendall
   -------------------------------
   Name: Pamela Kendall
   Title: Director<PAGE>

                                                                    EXHIBIT 10.1

                         DATED THE 1st DAY OF JULY 2004

                                     BETWEEN

                                  TS MATRIX BHD
                             (Company No. 137599-H)

                                       AND

                          TRIO TECH (MALAYSIA) SDN BHD
                             (Company No. 105390-V)

                           --------------------------
                              SUB-TENANCY AGREEMENT
                           --------------------------
<PAGE>

                              SUB-TENANCY AGREEMENT

AN AGREEMENT made the day and year stated in Item 1 of the First Schedule
annexed hereto between TS MATRIX BHD (Company No 137599-H), a company
incorporated in Malaysia with its registered office at B-10-3,10th Floor (Suite
A), Megan Phileo Promenade, 189 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia
(hereinafter called "the Landlord") of the one part;

And

TRIO TECH (MALAYSIA) SDN. BHD. (Company No.: 105390-V) a company incorporated in
Malaysia with its registered office at Plot 1A Phase 1, Bayan Lepas, Free Trade
Zone, Pulau Pinang, 11900 Penang, Malaysia (hereinafter called "the Tenant") of
the other part.

SECTION 1          INTERPRETATION

DEFINITIONS

Wherever used in this Agreement unless the context shall otherwise require, the
following expressions shall have the following meanings:-

1.1       "APPROPRIATE AUTHORITIES" mean any governmental, semi or
          quasi-governmental and/or statutory departments, agencies or bodies
          having jurisdiction from time to time and at any time over a relevant
          matter;

1.2       "BUILDINGS" means the single storey detached factory block with an
          annexed double storey factory block and a three storey factory cum
          office block constructed on the Said Land and includes any extensions
          and additions subsequently made thereto together with all foundation,
          basement and other works carried thereon, roads, gardens, pavements,
          carparks, and all installations and facilities found on the Said Land;

1.3       "COMMON PROPERTY" means the canteen, the staircase leading to the
          canteen, the locker area, the carpark and all pathways connecting the
          car park and guardhouse with the Demised Premises;

1.4       "COMMENCEMENT DATE" means the date of this Sub-Tenancy Agreement;

1.5       "DEMISED PREMISES" mean all that parcel of premises forming part of
          the Buildings outlined in blue in the Floor Plans, in total 19,334
          square feet consisting of:-

          1.4.1     Burn-in Site 1 measuring 15,259 square feet;

          1.4.2     Burn- in Site 2 measuring 3,610 square feet;

          1.4.3     the Store measuring 465 square feet;

1.6       "FLOOR PLANS" mean the plans of the Demised Premises which are more
          particularly described and shown in the Second Schedule annexed
          hereto;

1.7       "LANDLORD" means TS MATRIX BHD. (Company No.: 137599-H) a company
          incorporated in Malaysia with its registered office at B-10-3,10th
          Floor (Suite A), Megan Phileo Promenade, 189, Jalan Tun Razak, 50400
          Kuala Lumpur, Malaysia and includes its successors-in-title and
          permitted assigns;

1.8       "LANDLORD'S EXCLUSIVE PREMISES" means the premises forming part of the
          Buildings outlined in yellow in the Floor Plans,

1.9       "OPERATION HOURS" mean twenty four (24) hours, every day of the year;

                                                 [MALAYSIAN STAMP]

                                                 /s/ Dr. Tan Enk Ee

                                                 /s/ Yong Siew Wai

<PAGE>

1.9A      "OWNER" means POLYMOLD TOOL & ENGINEERING SDN. BHD. (Company No.:
          14934 M) a company incorporated in Malaysia with its registered office
          at B-10-3,10th Floor (Suite A), Megan Phileo Promenade, 189, Jalan Tun
          Razak, 50400 Kuala Lumpur, Malaysia and includes its
          successors-in-title and permitted assigns;

1.10      "RENTAL" means the sum stipulated in item 3 of the First Schedule;

1.11      "SAID LAND" means all the lands held under P.M. 33, Lot 52540, Mukim
          Damansara and HS(D) 108103, PT6, Bandar Petaling Jaya Tambahan II
          known as Lot 11A, Jalan SS8/2, Sungai Way Free Industrial Zone, 47300
          Petaling Jaya, Selangor upon which the Buildings are erected;

1.12      "SECURITY SERVICES" means twenty-four hour security services to the
          Buildings and the Said Land;

1.13      "TENANT" mean TRIO TECH (MALAYSIA) SDN. BHD. (Company No.: 105390-V) a
          company incorporated in Malaysia with its registered office at Plot 1A
          Phase 1, Bayan Lepas, Free Trade Zone, Pulau Pinang, 11900 Penang,
          Malaysia and includes its successors-in-title, liquidators, receivers,
          managers and permitted assigns;

1.14      "UTILITIES" mean electricity and water supplied to the Demised
          Premises;

1.15      Headings in this Agreement are inserted for convenience only and shall
          be ignored in construing this Agreement.

1.16      Unless the context otherwise requires, words denoting the singular
          number shall include the plural and vice versa and words denoting
          natural persons shall include corporations and partnerships.

1.17      Words denoting the masculine gender shall include the feminine and
          neuter genders and vice versa.

1.18      Reference to sections are to be construed as reference to sections of
          this Agreement.

SECTION 2          THE SAID LAND

2.1       OWNERSHIP

The Owner is the registered and beneficial owner of the Said Land. By a tenancy
agreement dated   day of                ("Principal Tenancy"), the Owner has
agreed to let and the Landlord has agreed to accept a tenancy of 3 years subject
to automatic renewal of the tenancy period in respect of the Said Land upon the
terms and conditions thereunder.

2.2       SALE AND PURCHASE AGREEMENT

Further to a sale and purchase agreement relating to the acquisition of the
burn-in testing division business dealing with testing of semiconductor
components dated the    day of                 2004 ["Sale and Purchase
Agreement"], made between the Landlord as seller and the Tenant as buyer, it is
a term of the said Sale and Purchase Agreement that the Landlord shall agree to
sub-let the Demised Premises to the Tenant with effect from the Commencement
Date upon the terms and conditions herein.

2.3       PRIOR INSPECTION

The Tenant has inspected the Floor Plans, the Demised Premises and its
specifications and has agreed to take a sub-tenancy of the Demised Premises upon
the terms and conditions herein contained.

2.4       DEMISED PREMISES

                                                 /s/ Dr. Tan Enk Ee

                                                 /s/ Yong Siew Wai

<PAGE>

The Landlord agrees to sub-let and the Tenant agrees to take a sub-tenancy of
the Demised Premises for a period of three (3) years commencing on the
Commencement Date subject to the terms and conditions hereinafter contained. The
Landlord hereby confirms that the Owner has consented to this sub-tenancy and
will procure the Owner's acknowledgement of and consent to this sub-tenancy on
or before the Commencement Date.

2.5       MEASUREMENT OF DEMISED PREMISES

It is hereby declared, understood and agreed that the position of the Demised
Premises as shown in the Floor Plans annexed hereto and the measurement of the
boundaries and area of the Demised Premises as given herein are believed but are
not guaranteed to be correct. The Demised Premises have been staked out in
accordance with the Floor Plans and have been opened to the inspection of the
Tenant and shall not be the subject of any claims / dispute whatsoever. For the
purpose of all measurements, the external line of all walls, partitions or,
where applicable, glass lines are used, save and except for the common walls /
partitions shared by two or more occupants, in which case the middle line of the
common wall/partition shall be used. It is expressly declared and agreed that if
there are columns in the Demised Premises, the area occupied by the columns
shall be included as part of the area of the Demised Premises. For the purpose
of the calculation of the rental, the area stated for the Demised Premises
hereof shall be final and conclusive between the Landlord and the Tenant.

SECTION 3          DEPOSITS

3.1       RENTAL DEPOSIT

The Tenant shall on the Commencement Date pay to the Landlord a deposit as
stipulated in item 2 of the First Schedule as security for the due observance
and performance by the Tenant of the terms and conditions of this Agreement.

3.2       RENTAL DEPOSIT TO BE MAINTAINED

The rental deposit as stipulated in Section 3.1 hereof shall not be deemed to be
or treated as payment of rent or set-off against any arrears of payment due from
the Tenant to the Landlord and shall be maintained at the stipulated amounts at
all times during the term hereby created save and except where the Rental is
varied under the terms of this Agreement, in which circumstance, the rental
deposit shall be adjusted proportionately.

3.3       REFUND OF RENTAL DEPOSIT

Upon termination of the term hereby created by the effluxion of time or
otherwise, and provided that all moneys due hereunder shall have been duly paid
on the due dates and ail other terms covenants and conditions have been duly
performed and observed by the Tenant, the Landlord shall, subject always to
Section 8.1 below or subject to satisfactory inspection carried out in
accordance with Section 9.2 below, refund to the Tenant within fourteen (14)
days from the date of such termination or fourteen (14) days from the date of
delivery of vacant possession of the Demised Premises to the Landlord, whichever
shall be later the rental deposit free of interest less such sum or sums as may
then be found to be owing to the Landlord pursuant to satisfactory inspection
carried out in accordance with Section 9.2.

If the Tenant has not duly and punctually observed and performed all its
covenants, conditions and stipulations herein contained, the Landlord is
entitled at its sole discretion to forfeit the rental deposit as stipulated in
Section 3.1 hereof up to the aggregate of: (a) all amounts due and payable to
the Landlord under this Agreement and (b) all such sums which may be incurred by
the Landlord as a result of the Tenant's failure to observe and perform all its
covenants, conditions and stipulations herein contained.

3.4       INTERCHANGEABILITY OF DEPOSITS

                                                      /s/ Dr. Tan Enk Ee

                                                      /s/ Yong Siew Wai

<PAGE>

The rental deposit forfeited may be used at the Landlord's discretion against
any and all moneys due from the Tenant pursuant to the terms and conditions
herein.

3.5       DEPOSIT FOR OTHER SERVICES AND UTILITIES

The Tenant shall be solely responsible for any deposits required by the
Appropriate Authorities for the connection and use of internet and telephone
services and such other utilities as may be required by the Tenant. The Tenant
shall on the Commencement Date pay to the Landlord a utilities deposit as
stipulated in Item 8 of the First Schedule as security for the Tenant's
settlement of all electricity and water charges incurred by the Tenant and
Clauses 3.2, 3.3 and 3.4 shall apply to the utilities deposit referred to herein
mutates mutandis.

SECTION 4          COVENANTS BY THE TENANT

4.1       COVENANT TO PAY

4.1.1     RENTAL

The Tenant shall promptly pay the Landlord monthly in advance the Rental for the
Demised Premises as stipulated in Item 3 of the First Schedule the first of such
payments to be made on the Commencement Date and subsequently on the first day
of each succeeding month of this sub-tenancy.

4.1.2     PAYMENT FOR SECURITY SERVICE CONTRIBUTION

The Tenant shall as long as it requires the Security Services punctually pay the
Security Service Contribution stipulated in Item 4 of the First Schedule for the
Security Services provided by the Landlord, the first of such payments to be
made on the Commencement Date and subsequently on the first day of each
succeeding month of this sub-tenancy.

4.1.3     PAYMENT OF CANTEEN SUBSIDY

The Tenant shall as long as it requires the use of the canteen punctually pay to
the Landlord the Canteen Subsidy stipulated in Item 5 of the First Schedule, the
first of such, payments to be made on the Commencement Date and subsequently on
the first day of each succeeding month of this sub-tenancy.

4.1.4     PAYMENT OF UTILITY CHARGES AND OTHER OUTGOINGS

The Tenant shall punctually pay all internet, telephone charges, water,
electricity, sewerage and all other utility charges that may be incurred by the
Tenant during this sub-tenancy hereto. For the avoidance of doubt, the Tenant
shall be solely responsible for applying for the connection of telephone and
internet services in respect of the Demised Premises.

4.1.5     MODE OF PAYMENT

On or prior to the Commencement Date and from time to time thereafter, the
Landlord is to notify the Tenant whether the Rental and all other charges due
and owing by the Tenant is to be paid by: (a) cheque or (b) telegraphic transfer
into a bank account nominated by the Landlord.

4.2       OTHER COVENANTS OF THE TENANT

4.2.1     DIRECTORY BOARD

The Tenant shall not erect or affix any signboard on the face of the said
Building or any part of the said Land

                                                        /s/ Dr. Tan Enk Ee

                                                        /s/ Yong Siew Wai
<PAGE>

unless the Landlord or the Owner first consents to the same in writing. The
Tenant shall pay the Landlord immediately upon demand the actual cost of
affixing, repairing or replacing as necessary the Tenant's name in lettering to
the directory board at the entrances to the Said Land and to the directory board
on the entrance of the Demised Premises. For the avoidance of doubt, the size of
the directory board and location for the directory board will be designated by
the Landlord or the Owner, as the case may be.

4.2.2    UPKEEP AND MAINTENANCE OF DEMISED PREMISES

The Tenant shall keep the interior of the Demised Premises, the flooring and
interior plaster or other surface material on walls and ceilings, and the
Landlord's fixtures thereon including doors, windows, glass, shutters, locks,
fastenings, electric wiring, installations and fittings for light, power and all
mechanical and electrical components and other fixtures and additions thereto
clean and in good and tenantable repair and clean condition and to replace or
repair any of the aforesaid items and any part of the Demised Premises and the
Landlord's or Owner's (as the case may be) fixtures and fittings therein which
may be broken or damaged or become defective due to any act, default or
negligence of the Tenant whereupon the Tenant shall cause and procure, at its
own cost and expense, the same to be repaired or replaced with materials which
are of similar standard and quality (except due to fair wear and tear in which
event the Landlord shall be obliged to repair or replace the same or cause the
same to be repaired or replaced).

4.2.3    MECHANICAL & ELECTRICAL FITTINGS AND ACCESSORIES PROVIDED BY THE
         LANDLORD

In the event of a breakdown of any mechanical, electrical wiring, installations,
electrical fittings and / or accessories belonging to the Landlord or the Owner
in the Demised Premises, the Tenant shall immediately inform the Landlord
thereof and the Landlord shall, or shall procure the Owner (as the case may be)
to, at its own cost and expense maintain, repair and/or replace such mechanical,
electrical wiring, installations, electrical fittings and/or accessories within
reasonable time PROVIDED THAT if such breakdown is attributable to any act,
omission, default or negligence of the Tenant, the Tenant shall bear all cost
and expense (including the labour charges thereof) arising out of such
maintenance, repair and/or replacement. It is hereby agreed and understood that
all such repairs may be carried out only by the Landlord or the Owner or the
approved contractors of the Landlord or the Owner, as the case may be, and where
the repairs are to be carried out at the Tenant's costs, the Landlord or the
Owner shall seek the Tenant's agreement to such costs before carrying out the
repairs.

4.2.4    GARBAGE AND WASTE DISPOSAL

The Tenant shall dispose all rubbish at the appropriate rubbish disposal bins or
facilities provided by the Landlord or the Owner at locations designated by the
Landlord or the Owner and shall not indiscriminately throw waste, rubbish,
refuse, pollutants or the like so as to cause nuisance to other neighbouring
occupants, and to keep the Demised Premises and compound clean and tidy.

4.2.5    TO PERMIT LAYING OF WIRES, PIPES, ETC.

The Tenant shall permit the Landlord and the Owner, their respective agents,
employees, contractors or workmen to enter upon the Demised Premises to lay,
maintain, fix, repair and lead through the Demised Premises all such wires and
cables for electricity and pipes for water, gas and sewerage as the Landlord or
the Owner may from time to time require to be laid, maintained, fixed in,
repaired and led through the Demised Premises for the general purposes of
repairing, removing and replacing all or any of the said wire cables and pipes
and of attending to air-conditioning equipment PROVIDED ALWAYS THAT the Landlord
or the Owner (as the case may be) shall, except in the case of urgency for the
purpose of protecting the safety of the Buildings, carry out such work after
having given to the Tenant one (1 ) day prior notice of the intention of the
Landlord or the Owner (as the case may be), its respective agents, employees,
contractors or workmen to enter upon the Demised Premises to effect such
repairs, removals and replacements.

4.2.6    TO PERMIT INSPECTION AND REPAIRS

                                          /s/ Dr. Tan Enk Ee

                                          /s/ Yong Siew Wai

<PAGE>

The Tenant shall permit the Landlord and the Owner, their respective agents,
employees, contractors and all persons authorised by it with or without workmen
or others and with or without appliances at all reasonable times to enter upon
the Demised Premises to view the condition thereof and upon prior written notice
to the Tenant to take inventories of the Landlord's or the Owner's (as the case
may be) fixtures and fittings therein and to carry out any work or repair
required to be done.

4.2.7    NOTICE TO REPAIR

The Landlord may serve upon the Tenant notice in writing specifying any repair
or work necessary to be done or replacement necessary to be made to comply with
the Tenant's covenants to maintain and repair herein contained and to require
the Tenant forthwith to execute such repairs or work or make such replacements
at the cost and expense of the Tenant and if the Tenant shall not within
fourteen (14) days after the service of such notice proceed diligently with the
execution of such repairs or work or the making of such replacements then it
shall be lawful for the Landlord to enter upon the Demised Premises and execute
such repairs or work or make such replacements as the Landlord may reasonably
deem necessary and such costs and expenses incurred thereto shall be the sole
responsibility of the Tenant.

4.2.8    INSURANCE OF TENANT'S PROPERTY

The Tenant shall insure the Tenant's goods and property in the Demised Premises
at such amount and on such terms as the Tenant acting reasonably consider
appropriate against damage loss or destruction by fire and take out public
liability insurance with respect to the Demised Premises. The Tenant shall allow
the Landlord to view the policies for the said insurance at the Demised Premises
during the Tenant's office hours upon request and with prior reasonable notice.
The Tenant will take up adequate public liability insurance and where requested
by the Landlord from time to time, will provide a copy of the same to the
Landlord. The Tenant will have no recourse against the Landlord for any damage
suffered by the Tenant as a result of any failure by the Tenant to effect
insurance as required by this Clause 4.2.8.

4.2.9    DUTY TO INFORM

The Tenant shall immediately inform the Landlord of any damage caused to the
Demised Premises.

4.2.10   LICENSES

The Tenant will at all times obtain, and maintain at its own cost and expense
all licenses, permits, consents, approvals, registrations and authorizations
necessary from the Appropriate Authorities for the conduct of the Tenant's
activities on the Demised Premises.

4.3      RESTRICTIONS AND PROHIBITIONS

4.3.1    USAGE OF THE DEMISED PREMISES

The Tenant shall use the Demised Premises solely for the business described in
Item 7 of First Schedule only and shall not permit or suffer anyone to:-

4.3.1.1  sleep therein or to use the same or any portion or portions thereof
         wholly or partly as dwelling premises;

4.3.1.2  carry on or permit to be carried on within the Demised Premises or any
         part thereof the keeping or consumption of any dangerous drugs as
         comprised in the First Schedule of the Dangerous Drugs Act, 1982, the
         housing of foreign workers without the relevant permits or to use the
         Demised Premises or any part thereof as a place of entertainment or for
         any illegal or immoral purpose or anything which may contravene any
         laws, by-laws, Acts, Ordinances, Enactments or regulations made by the
         Appropriate Authorities or cause annoyance, nuisance, grievance, damage
         or disturbance of the

                                          /s/ Dr. Tan Enk Ee

                                          /s/ Yong Siew Wai

<PAGE>

         neighbouring occupants; and

4.3.1.3  use the Demised Premises or any part thereof or permit the same to be
         used for cooking.

4.3.2    NO SALES BY AUCTION OR OTHERWISE

The Tenant shall not hold or permit or suffer to be held any sales whether by
auction or otherwise within the Demised Premises or any part thereof.

4.3.3    NO TOUTING

The Tenant shall not nor permit its agents, employees, invitees, contractors,
licensees or sub-tenants to tout, solicit or procure any business or distribute
any pamphlets, notices or advertising matter outside the Demised Premises.

4.3.4    NOT TO ASSIGN OR SUBLET, ETC

The Tenant shall not assign, novate, underlet or otherwise part with the
possession of the Demised Premises for the duration of the sub-tenancy
hereunder.

4.3.5    ACTS AFFECTING INSURANCE RISKS

The Tenant shall not do or permit or suffer to be done anything whereby any
insurance in respect of the Demised Premises may be rendered void or voidable or
whereby the premium for any such insurance may be liable to be increased. In the
event the Tenant commits a breach hereof, the Tenant shall make good all damages
suffered by the Landlord and/or within seven (7) days of receipt of a notice of
demand from the Landlord pay to the Landlord any such increased premium and all
expenses rendered necessary by the Tenant's breach or non-observance of this
covenant without prejudice to the other rights of the Landlord. The Tenant
hereby indemnifies the Landlord against any claims, proceedings or demands
against the Landlord by any employee, worker, agent or visitor of the Tenant in
respect of any accident, loss or damage whatsoever to person or property
occurring in or upon the Demised Premises (unless the same is caused as a result
of an act or omission of the Landlord, the Owner its servants or agents) or as a
result of any breach by the Tenant of any provision of this Sub-Tenancy
Agreement.

4.3.6    NO OBSTRUCTIONS

The Tenant shall not allow or cause or permit any vehicles or bicycles or
containers or goods belonging to or under the control of the Tenant or its
servants or agents or invitees to be parked in or near the said Building so as
to be a hindrance to other lawful users thereof.

4.3.7    DANGEROUS ITEMS

The Tenant shall not bring or store or permit or suffer to be brought or stored
in the Demised Premises arms ammunition or unlawful goods gun powder saltpeter
kerosene or any combustible substance which in the opinion of the Landlord are
of noxious or dangerous or hazardous nature.

SECTION 5 COVENANTS BY THE LANDLORD WITH THE TENANT

5.1      QUIET ENJOYMENT WITHOUT INTERRUPTIONS

Upon the Tenant paying the Rental and any other moneys due hereunder and
observing and performing the

                                          /s/ Dr. Tan Enk Ee

                                          /s/ Yong Siew Wai

<PAGE>

Agreement and stipulations on its part herein contained the Landlord shall
permit the Tenant to quietly enjoy the Demised Premises during the sub-tenancy
hereby created without any interruption by the Landlord or any person claiming
under or in trust for the Landlord.

5.2      MAINTENANCE AND REPAIR

The Landlord agrees to use its best endeavours, and cause the Owner to use its
best endeavours, in its capacity to maintain and keep the main structure and
every part of such structure, the exterior, the roof, the Common Property, the
common parts, the common areas and services, the main drains and pipes and the
main electric cables and wirings and the concealed drains and pipes and the
concealed electric cables and wiring of the Demised Premises in proper and
tenantable repair and condition unless such work or repair shall be necessitated
by the act, default, omission or negligence of the Tenant and where the Landlord
refuses or omits to carry out repairs in the Demised Premises (which have not
been necessitated by the act, default, omission or negligence of the Tenant)
after notice is given to the Landlord, the Tenant may carry out such repairs at
the costs and expenses of the Landlord provided that the Tenant shall first seek
the Landlord's agreement to such costs before carrying out the repairs.

5.3      RIGHTS

The Landlord shall permit the Tenant the right for the Tenant and all persons
expressly or by implication authorised by the Tenant in particular its
employees, in common with the Landlord and all other persons having a like right
to use the Common Property for all proper purposes in connection with the use
and enjoyment of the Demised Premises. The Tenant shall be entitled to the use
of 7 car park bays. Vehicles belonging to the Tenant's suppliers or such other
visitors must be parked outside the said Lands.

5.4      PRINCIPAL TENANCY

         5.4.1    The Landlord shall not do or omit any acts that will result in
                  the breach of the Principal Tenancy and shall cause the Owner
                  to comply with all the Owner's obligations thereunder
                  including the payment of quit rent, rates, taxes, assessment,
                  sewerage charges / rates and other impositions by the
                  Appropriate Authorities of a like nature payable in respect of
                  the Demised Premises.

         5.4.2    The Landlord further confirms that the Landlord is not in
                  breach of any of the terms of the Principal Tenancy and the
                  Landlord's full compliance with the terms and conditions of
                  this sub-tenancy agreement will not result in a breach of the
                  Principal Tenancy.

5.5      SERVICES TO COMMON PROPERTY

The Landlord shall be responsible for the maintenance and management of the
services, amenities and facilities to be provided to the Common Property at no
additional cost to the Tenant including the following:-

         5.5.1    provision of lighting for entrances, halls, stairs, landings,
                  lavatories, passage ways and other parts of the Common
                  Property during Operation Hours as currently existing as at
                  the Commencement Date;

         5.5.2    provision of two-shift cleaning (including pest control (on
                  quarterly basis), upkeep and repair, repainting, renewing
                  (where appropriate) the external structure, roof foundation
                  and walls of the Common Property;

         5.5.3    employment of personnel engaged in the provision of the
                  services described in this Clause such as supervising staff,
                  cleaners and security guards;

         5.5.4    provision of suitable facilities for disposing of refuse or
                  removing it from the Demised Premises (but not including the
                  collection of refuse from within the Demised Premises);

                                          /s/ Dr. Tan Enk Ee

                                          /s/ Yong Siew Wai

<PAGE>

         5.5.5    supplying water for connection to the Demised Premises;

         5.5.6    maintaining all toilets and sanitary and water apparatus
                  (which the Tenant is permitted to use as designated by the
                  Landlord) in good, clean and tenantable state and in proper
                  repair and condition;

         5.5.7    dealing with any statutory or other obligation affecting or
                  alleged to affect the buildings and the Said Land including
                  any notice regulation or order of any government department,
                  local, public, regulatory or other authority or court
                  compliance with which is not the direct liability of the
                  Tenant.

5.6      SECURING OF DEMISED PREMISES

The Landlord shall be responsible for the provision of the Security Services
subject to the payment by the Tenant of the Security Services Contribution set
out in Item 4 of the First Schedule provided always that the Tenant shall be
allowed if the Tenant so wishes discontinue the Security Services (with three
(3) months written notice) and cease payment of the Security Services
Contribution and employ its own security guards. In the event that the Tenant
wishes to employ its own security guard service, the Tenant must, at its own
cost and expense, set up its own security guard booth, establish its own sign
in/out system and a separate entrance and exit to the Demised Premises.

5.7      PROHIBITION OF RANDOM PARKING OF VEHICLES

In so far as it is within the control of the Landlord, the Landlord shall ensure
that there shall be no obstruction, impediment or prevention of access to or
egress to and from the Demised Premises, the Buildings or any entrances or exits
thereof or upon any access roads leading to Buildings and Demised Premises by
the parking of motor vehicle of any kind including motor cycles, motor scooters,
bicycles or any form of transport thereon.

5.8      INSURANCE

The Landlord shall procure that the Owner insure the Buildings at such amount
and on such terms as the Landlord acting reasonably consider appropriate against
damage, loss or destruction by fire and the Landlord shall take out public
liability insurance with respect to the Buildings at such amount and on such
terms as the Landlord acting reasonably consider appropriate and shall allow the
Tenant to view the policies for the said insurance at the Landlord's offices
upon request and with prior reasonable notice.

5.9      CANTEEN

The Landlord will be responsible for providing facilities for food and drinks to
be enjoyed by the Tenant's employees subject to the Tenant paying the Canteen
Subsidy. The Tenant may if it so wishes decline the services provided for the
canteen (with three (3) months written notice) and cease payment of the Canteen
Subsidy.

5.10     ADDITIONAL SERVICES

It is agreed between the parties that:

         5.10.1   the Landlord shall provide the additional services as referred
                  to in the Fourth Schedule at the price and upon the terms
                  stated therein. However, should either party terminate any of
                  the additional services as referred to in the Fourth Schedule
                  pursuant to Clause 5.10.3 for whatever reason, it is hereby
                  mutually acknowledged and agreed between the parties that the
                  Landlord shall not be obliged to resume provision of the said
                  additional service(s) or to resume provision of the said
                  additional service(s) at the price and upon the terms referred
                  to in the Fourth Schedule;

                                          /s/ Dr. Tan Enk Ee

                                          /s/ Yong Siew Wai
<PAGE>

         5.10.2   the Tenant shall make the first payment to the Landlord for
                  these additional services on the Commencement Date and
                  subsequently on the first day of each succeeding month of this
                  sub-tenancy; and

         5.10.3   neither party may terminate the provision or use of the
                  additional services as referred to in the Fourth Schedule
                  within 3 months from the Commencement Date. Thereafter, either
                  party may terminate the provision or use of the aforementioned
                  additional services at any time with three (3) months' prior
                  written notice subject to the terms of this Agreement.

SECTION 6 FORCE MAJEURE

6.1      FORCE MAJEURE

In the case of the Demised Premises or any part thereof shall at any time during
the said term be destroyed or damaged by fire, lighting, acts of terrorism,
riot, civil commotion, tempest, war or other unforeseen cause so as to become
unfit for occupation and use then the Landlord shall not be bound or compelled
to rebuild or reinstate the same unless it, in its discretion, thinks fit. The
Tenant shall be entitled to terminate this Agreement forthwith in the event the
Demised Premises become unfit for occupation and are likely to remain unfit for
a period of at least three (3) months from the happening of such event. In the
event of the Landlord deciding to rebuild and reinstate the Demised Premises
then (provided the monies payable under any policy of insurance effected by the
Landlord shall not have become irrecoverable through any act, omission, default
or negligence of the Tenant) the Rental or a fair and just proportion thereof
according to the nature and extent of the damage sustained shall be suspended
until the Demised Premises shall have been again rendered fit for occupation and
use. In the event of the Landlord not deciding to rebuild and reinstate the
Demised Premises then the rents hereby reserved shall cease and determine from
the happening of such destruction or damage as aforesaid and the Tenant will
peaceably and quietly leave, surrender and yield up to the Landlord possession
of the Demised Premises.

6.2      INTERRUPTION OF SERVICES

Notwithstanding anything herein contained the Landlord shall not be liable to
the Tenant nor shall the Tenant have any claim against the Landlord in respect
of any interruption in any of the services herein mentioned by reason of
necessary repair or maintenance of any installations or apparatus or damage
thereto or destruction thereof by:-

6.3.1    fire, flood, Act of God or other causes beyond the control of the
         Landlord;

6.3.2    mechanical or other defect or break down or other defect beyond the
         control of the Landlord.

SECTION 7 RIGHT OF FIRST REFUSAL

7.1      RIGHT OF FIRST REFUSAL

(a)      If, at anytime during the term of this sub-tenancy or any extended term
         granted by the Landlord, the Owner wishes to sell the Said Land or any
         part thereof, the Landlord shall cause and procure that the Owner shall
         first offer to sell the same to the Tenant at a price not higher than
         that which the Owner is willing to offer to any third party ["Offer
         Price"]. In the event the Tenant decides not to accept the offer within
         a period of fourteen (14) calendar days from the dale of receipt of
         such offer, the Owner will be free to sell the same to any third party
         provided always that if the final agreed price ["Final Agreed Price] is
         lower than the Offer Price, the Landlord shall cause and procure that
         the Owner shall have to offer to sell the same on same terms and
         conditions (as given or offered by this third party) to the Tenant at
         the Final Agreed Price and in the event the Tenant does not accept the
         offer at the Final Agreed Price within fourteen (14) calendar days of
         receipt of the offer at the Final Agreed Price, the Owner will be free
         to sell to the third party at the Final Agreed Price without further
         notice to the

                                                      /s/ Dr. Tan Enk Ee

                                                      /s/ Yong Siew Wai

<PAGE>

         Tenant.

(b)      For the avoidance of doubt, Clause 7.1 (a) shall not apply where the
         Said Land or any part thereof is to be sold, assigned or transferred to
         a subsidiary or holding company of the Landlord or the Owner (as the
         case may be).

7.2      SUBJECT TO SUB-TENANCY

         It is hereby agreed that any sale or transfer of the Said Land or part
         thereof made by the Owner to any party will be made subject to this
         sub-tenancy.

SECTION 8 EVENTS OF DEFAULT

8.1      EVENTS OF DEFAULT

8.1.1    if the Rental or any part thereof or any sums due and payable by the
         Tenant to the Landlord under the terms hereof shall be unpaid for
         fourteen (14) days after due date (whether the same shall have been
         formally demanded or not);

8.1.2    if the Tenant commits a breach of any other provision of this Agreement
         which is not capable of being remedied or if being capable of remedy
         has not been remedied within fourteen (14) days from the date of notice
         to the Tenant from the Landlord requesting action to remedy the same;

8.1.3    if the Tenant shall become bankrupt or goes into winding-up (as the
         case may be) whether compulsorily or voluntarily;

8.1.4    if the Tenant enters into any arrangements or compositions with its
         creditors;

8.1.5    if the Tenant suffers any distress or execution to be levied on its
         goods or assets;

then the Landlord shall be at liberty to take at any time thereafter any one or
more of the following remedies: -

(i)      serve a forfeiture notice upon the Tenant pursuant to Section 235 of
         the National Land Code 1965 and it is hereby mutually agreed and deemed
         that a reasonable time in which to remedy the breach complained of and
         to be stipulated in the forfeiture notice shall be seven (7) days, and
         where the breach has not been remedied within the stipulated time, to
         re-enter upon the Demised Premises or any part thereof in the name of
         the whole, and thereupon this sub-tenancy shall absolutely terminate
         and all deposits paid shall be forfeited to the Landlord;

(ii)     to sue and take any other action the Landlord deems fit to recover all
         monies due and owing to by the Landlord.

8.2      INTEREST

In addition to and without derogation from any other rights accruing due to the
Landlord, the Landlord shall be entitled to charge interest upon late payment of
any sums due from the Tenant to the Landlord at the rate of ten per centum (10%)
per annum or at such other rate varied from time to time by the Landlord in its
absolute discretion by giving written notice of the variation to the Tenant,
which interest shall be calculated on a day to day basis from the due date till
the date of full and final settlement.

SECTION 9 TERMINATION

9.1      TO PERMIT INSPECTION PRIOR TO TERMINATION OF SUB-TENANCY

                                                      /s/ Dr. Tan Enk Ee

                                                      /s/ Yong Siew Wai

<PAGE>

At any time during the three (3) calendar months immediately preceding the
termination or expiry of the subtenancy hereby created the Tenant shall permit
prospective tenants and others with written authority from the Landlord or its
agents at all reasonable times of the day and with prior written notice to enter
and view the Demised Premises and permit the fixing of notices of the pending
vacancy of the said Demised Premises to the public.

9.2      ON TERMINATION OR EXPIRY OF SUB-TENANCY

On the termination of the sub-tenancy hereby created whether by effluxion of
time or otherwise, the Tenant shall yield up the Demised Premises and all
fixtures, fittings, matters and things thereto in anyway belonging or
appertaining to the Demised Premises in such good, clean and tenantable repair
(fair wear and tear excepted) as shall be in accordance with the covenants of
the Tenant herein contained with all locks and keys complete. The Tenant shall
be entitled to remove all fixtures and fittings belonging to the Tenant provided
that all damage shall be made good by the Tenant after removal of such fixtures
and fittings. Upon handing over the keys, the Landlord and the Tenant's
representative shall jointly inspect the Demised Premises and the Landlord shall
be entitled to deduct from the deposits such sums as may be necessary to repair
and/or make good any damages or breaches by the Tenant. The Landlord shall not
be obliged to refund any deposit until the damages and/or breach has been made
good or such repairs have been carried out or paid for.

If the Rental or any other charges covenanted to be paid by the Tenant is in
arrears and unpaid at any time, after receiving a formal demand for such sums or
any of the other covenants or stipulations on the part of the Tenant are not
performed or observed, it will be lawful for the Landlord to serve a forfeiture
notice on the Tenant pursuant to the National Land Code, 1965 and it is agreed
that a reasonable time to remedy the breach i.e. the subject matter of the said
forfeiture notice (if capable of remedy) is fourteen (14) days. On expiry of the
relevant period specified in the forfeiture notice without the breach complained
of having been remedied, the Landlord will be at liberty to re-enter the Demised
Premises and thereupon, this sub-tenancy will be absolutely determined, but
without prejudice to the right of action of the Landlord in respect of any
breach of the Tenant's covenants.

9.3      EARLIER TERMINATION

The Tenant shall be entitled to terminate this sub-tenancy at any time after the
Commencement Date with no less than six (6) months' prior written notice or
payment of Rental in lieu thereof.

9.4      RIGHT OF FIRST REFUSAL ON FIXTURES AND FITTINGS

Upon a notice of termination given by either party or expiry of the sub-tenancy
hereto, the Tenant shall first offer to sell the fixtures and fittings more
particularly specified in the Third Schedule to the Landlord at a price to be
mutually agreed. If the Landlord does not accept the offer within thirty (30)
days of the date of the offer, the Tenant shall be entitled to remove the same
upon termination or expiry of the sub-tenancy hereof or sell the same to a third
party upon termination or expiry of the sub-tenancy hereof.

SECTION 10 RENEWAL

10.1     RENEWAL OF SUB-TENANCY

The Landlord shall on the Tenant's written request made at least three (3)
months before expiration of the term hereby created and provided always that
there shall not be at the time of such request any breach or non-observance of
any of the covenant on the part of the Tenant herein contained, at the expense
of the Tenant grant to the Tenant a sub-tenancy of the Demised Premises for a
further term as provided for in item 6 A of the First Schedule from the
expiration of the term hereby created at a rental in accordance with Item 6 B
of the First Schedule but otherwise containing the like covenants and provisions
as are herein contained with the exception of the present covenant for renewal.

                                                      /s/ Dr. Tan Enk Ee

                                                      /s/ Yong Siew Wai

<PAGE>

If the Landlord shall not have received the Tenant's written request to renew
within the time frame stipulated in this Clause 10.1, this sub-tenancy is deemed
to lapse on expiry of this Sub-Tenancy Agreement and the Landlord is freed of
all obligations whatsoever to grant to the Tenant any further extension.

SECTION 11 MISCELLANEOUS

11.1     NOTICE

Any notice required to be served on the parties hereto shall be in writing and
shall be sufficiently served on the Tenant if delivered or sent to him by
prepaid registered post or left at the address herein, the Demised Premises or
his last known address and shall be sufficiently served on the Landlord if
delivered or sent by registered post to the Landlord or left at the address
herein or its last known address. Any notice sent by registered post shall be
deemed to have been served within four (4) days of posting of the notice,
notwithstanding that it is returned undelivered through the post office.

11.2     STAMP FEES, ETC

All stamp duty in respect of this Agreement and any subsequent agreement made
pursuant thereto shall be borne and paid by the Tenant provided always that each
party shall bear its own respective solicitors costs.

11.3     CURRENCY

All monies due under this Agreement shall be paid in Malaysian Ringgit and if
for any reason whatsoever moneys are received by the Landlord in any other
currency towards payment or satisfaction of any amount due in Malaysian Ringgit
and upon conversion of such moneys into Malaysian Ringgit the Tenant shall pay
such further amounts as are necessary to ensure that the Landlord receives the
full amount due in Malaysian Ringgit.

11.4     GOVERNING LAW

This Agreement shall be governed and interpreted in accordance with the laws of
Malaysia and the parties shall submit to the jurisdiction of the courts of
Malaysia.

11.5     TIME

Time wherever mentioned in this Agreement shall be of the essence of this
Agreement.

11.6     SCHEDULES

The schedules shall be taken as read and construed as an essential part of this
Agreement.

11.7     WAIVER OF INDULGENCE

Any delay, indulgence, forebearance or time given by any party shall not
constitute or be deemed to be a waiver of or prejudice that party's rights and
remedies at law or herein contained.

11.8     SUCCESSORS-IN-TITLE ASSIGNS AND REPRESENTATIVES

The Agreement shall be binding upon the heirs, successors-in-title, liquidators,
receivers, managers, assigns and representatives of each of the parties hereto.

11.9     VARIATION

A variation of any term of this Agreement must be in writing and signed by both
parties.

                                                      /s/ Dr. Tan Enk Ee

                                                      /s/ Yong Siew Wai

<PAGE>

11.10    ENTIRE AGREEMENT

This Agreement is the entire agreement between the parties in respect of its
subject matter and supercedes all previous agreements with respect to its
subject matter.

                  [remainder of page left intentionally blank]

                                                      /s/ Dr. Tan Enk Ee

                                                      /s/ Yong Siew Wai
<PAGE>

IN WITNESS HEREOF the parties hereto have hereunto set their hands and affix
their common seal on the day and year first above written.

The Common Seal of TS MATRIX BHD.       ]

was affixed hereto in the presence of:- ]

/s/ DR. TAN ENK EE                          /s/ LAW CHEOK YIN
-------------------------------             ------------------------------------
Director                                    Director/Secretary*
Name: DR. TAN ENK EE                        Name: LAW CHEOK YIN
NRIC No. 680319-10-6045                     NRIC No. 690505-10-5694

Signed by TING HOCK MING                ]   /s/ YONG SIEW WAI
for and on behalf of TRIO TECH          ]   YONG SIEW WAI (Singapore IC NO:
(MALAYSIA) SDN.BHD.                     ]   S0169920B)
in the presence of:-                    ]

/s/ TING HOCK MING
-------------------------------
TING HOCK MING
(Singapore IC NO: S0117093G)

                                                              /s/ DR. TAN ENK EE
<PAGE>

                                 FIRST SCHEDULE
   (WHICH IS TO BE READ AND CONSTRUED AS AN ESSENTIAL PART OF THIS AGREEMENT)

ITEM 1: DATE OF AGREEMENT: 1st JULY 2004

ITEM 2: RENTAL DEPOSIT:    Ringgit Malaysia Eighty Seven Thousand and Three
                           (RM87,003)only being three months Rental for the
                           Demised Premises.

ITEM 3: RENTAL:            Ringgit Malaysia Twenty Nine Thousand and One
                           (RM29,001) only on the basis of Ringgit Malaysia One
                           and Fifty (RM1.50) only per square feet of the
                           Demised Premises per month.

ITEM 4: SECURITY SERVICE   Ringgit Malaysia Eight Thousand Three Hundred
                           Thirteen and Sen Sixty Two (RM8,313.62) only on the
                           basis of forty three sen (RM0.43) only per square
                           feet of the Demised Premises per month.
        CONTRIBUTION:

ITEM 5: CANTEEN SUBSIDY:   Ringgit Malaysia Nineteen and Sen Eighty Nine
                           (RM19.89) only per employee of the Tenant working at
                           the Demised Premises per month.

                           (For the avoidance of doubt, the Tenant's employee
                           under this Item 5 refers to and includes such Direct
                           Workers, Key Employees and Shared Employee as defined
                           in the Sale and Purchase Agreement and any future
                           employees who are reported as part of the total
                           headcount for the Tenant which must be disclosed to
                           the Landlord on a quarterly basis effective from the
                           Commencement Date for the accurate calculation of the
                           Canteen Subsidy).

ITEM 6: OPTION TO RENEW (in accordance with Section 10)

                  A]       OPTION PERIOD
                           One (1)year.

                  B]       NEW RENTAL
                           At a new rental based on the market value at the time
                           of the exercise of the option to renew by the Tenant
                           and in the event the rental cannot be agreed between
                           the parties within thirty (30) days of the date of
                           the Tenant's written request to renew the sub-tenancy
                           whereupon either party may appoint at the joint costs
                           of the Landlord and Tenant the valuation firm of TD
                           Aziz Sdn. Bhd. to estimate the market rental rate of
                           the Demised Premises. The valuation by TD Aziz Sdn.
                           Bhd. shall be final and binding on the parties.

ITEM 7:  BUSINESS TO BE CARRIED ON THE DEMISED PREMISES

           Business dealing with the burn in testing of semiconductor components

                                        /s/ Dr. Tan Enk Ee

                                        /s/ Yong Siew Wai
<PAGE>

ITEM 8:  UTILITIES DEPOSIT

         Ringgit Malaysia Two Thousand Seven Hundred (RM2,700) only for water
         and Ringgit Malaysia One Hundred Thirty Six Thousand (RM136,000) only
         for electricity.

                                        /s/ Dr. Tan Enk Ee

                                        /s/ Yong Siew Wai

<PAGE>

                                SECOND SCHEDULE

              FLOOR PLANS OF SAID LAND BUILDINGS DEMISED PREMISES

                                        /s/ YONG SIEW WAI

<PAGE>

                           [LOCATION PLAN & KEY PLAN]
<PAGE>

                              SUB-TENANCY AGREEMENT
                                 THIRD SCHEDULE

<TABLE>
<CAPTION>
ASSET CODE            DESCRIPTION                          ACQUISIT      COST
                                                             DATE         RM
----------  ---------------------------------------------  ---------  ----------
<S>         <C>                                            <C>        <C>
9771127     1 UNIT 40HP ACSON AIR COOLED PACKAGE C/W       31-Jul-97   54,500.00
9671199     1 UNIT 10HP COMELAND COMPRESSOR                30-Dec-96    2,900.00
9671169     1 UMIT USED 10HP CARRIER SEMI SEAL COMPRESSOR  30-Nov-96    3,200.00
9671009A    10HP SEMI SEAL COMPRESOR                       15-Jan-96    3,200.00
9671009B    10HP SEMI SEAL COMPRESOR                       15-Jan-96    3,200.00
9571248     USED 10HP COMPRESSOR                           30-Dec-95    2,900.00
9571242     USED 10HP COMPRESSOR                           30-Nov-95    3,200.00
9571212     USED 10HP SEMI SEAL COMPRESSSOR                30-Sep-95    3,200.00
9571195     1 LOT A/COND DUCTING C/W AIR DIFFUSER          30-Aug-95   14,000.00
9571196     1 UNIT 80 TONS FRP COOLING TOWER C/W           30-Aug-95    5,600.00
9571199     1 SET AIR COND CONTROL PANEL SWITCH BOARD      30-Aug~95    5,500.00
9571200     4 LOT COMPRESSOR CONTROL WIRING IN CONDUIT     30-Aug-95    2,600.00
9571198 A   10HP WATER COOLED CONDENSER                    30-Aug-95    6,800.00
9571198 B   10HP WATER COOLED CONDENSER                    30-Aug-95    6,800.00
9571198 C   10HP WATER COOLED CONDENSER                    30-Aug-95    6,800.00
9571173     150KVA TRANSFORMER                             30-Jul-95   15,250.00
9571156     150KVA TRANSFORMER, 400A DB C/W 400A MCCB & 6  30-Jun-95   21,160.00
9571163     USED 10HP CARRIER COMPRESSOR                   30-Jun-95    3,200.00
9471192     1 UNIT USED CARRIER 10HP SEMI SEAL             30-Nov-94    3,200.00
9471184     REPLACE 1 UNIT USED CARRIER10 HP SEMI SEAL     15-Oct-94    6,400.00
9471098     USED CARRIER 10HP SEMI SEAL COMPRESSOR         15-Aug-94    3,200.00
9471099     USED CARRIER 10HP SEMI SEAL COMPRESSOR         15-Aug-94    3,200.00
9669124     1 UNIT AIR HANDLING UNITCOOLING TOWER &        31-May-94  166,756.00
9371254     1 UNIT USED CARRIER 10HP SEMI SEAL COMPRESSOR  31-Dec-93    2,600.00
9371255     1 UNIT USED CARRIER 10HP SEMI SEAL COMPRESSOR  31-Dec-93    3,200.00
9371293     10HP RECOND CARRIER COMPRESSOR                 31-Dec-93    3,630.00
9371147     7.5HP RECOND CARRIER AIR COOLE FLOOR           31-Aug-93    7,800.00
9371120     1 UNIT 5HP RECOND SPLIT AIR COMPRESSOR AT      31-Jul-93    5,900.00
9371078     15HP USED CARRIER SEMI SEAL COMPRESSOR         31-May-93    3,600.00
9271147     150KVA 415/208V TRANSFORMER AND SUB SW.        30-Sep-92   26,950.00
9271151     10 HP USED COMPRESSOR                          30-Sep-92    2,300.00
9271129     10HP AIRCOOLED CONDENSER                       26-Aug-92    6,500.00
9271130     1 UNIT 10HP TECUMSEH SEALHERMATIC              26-Aug-92    3,900.00
435501246   1 NO. 10HP HITACHI WATER COOL PKG NO. 3810009  01-Jun-91    7,800.00
435501226   I UNIT OF 10 HP PKG AIR-COND                   15-Feb-90    4,600.00
435501222   100KVA 3PHASE SINGLE WOUND X'FORMER C/W        01-Feb-90    4,600.00
435501218   10QKVA THREE PHASE SINGLE WOUND X'FORMER       10-Jan-90    4,600.00
435501203   ELECTRICAL INSTALLATION FOR NEW EXTENTION      30-Nov-89    4,500.00
435501179   1 SET YORK 40HP WATER COOLED PACKAGE UNIT      29-Apr-89   18,524.50
435501173   1 UNIT 150KVA 3 PHASE ISOLATION X'FORMER SN    09-Mar-89   10,100.00
435501163   1 UNIT 150KVA TRANSFORMER                      31-Jan-89    7,310.00
435501156   1 UNIT 10HP AIR-COOLED SPLIT AIR DUCTING AND   19-Jan-89   10,400.00
435501150   1 UNIT 100KVA 3 PHASE X'FORMER SN 90031        27-Dec-88    4,247.00
435501133   1 UNIT 100KVA 3 PHASE X'FORMER OAN 75001126    13-Aug-88    4,030.00
435501099   1 UNIT 100KVA AUTOWINDX'FORMER SN 107          30-Nov-87    3,840.90
435501036   1 UNIT 100KVA 3 PHASE X'FORMER SN 7111         10-Apr-87    3,774.75
435501037   1 UNIT 100KVA 3 PHASE X'FORMER SN 8091         10-Apr-87    3,774.75
435501022   1 UNIT 100KVA 3 PHASEX'FORMER SN 8051          01-Feb-87    3,695.55
435501002   1 UNIT 3 PHASE 100KVA X'FORMER SN 105          31-Dec-86    4,227.24
435501017   1 UNIT 3 PHASE 100KVA X'FORMER SN 106          31-Dec-86    3,641.28
435501018   1 UNIT 3 PHASE 100KVA X'FORMER SN 108          31-Dec-86    3,641.28
435501013   1 UNIT 3 PHASE 100KVA X'FORMER SN 103          15-Nov-86    3,725.15
435501014   1 UNIT 3 PHASE 100KVA X'FORMER SN 7901         15-Nov-86    3,725.15
                                                                      ----------
                                                            Total     527,903.55
                                                                      ==========
</TABLE>

                                                        /s/ Yong Siew Wai
<PAGE>

                              SUB-TENANCY AGREEMENT
                      FOURTH SCHEDULE - ADDITIONAL SERVICE

<TABLE>
<CAPTION>
      DIVISION                RM/ mth                         BRIEF JOB DESCRIPTION
<S>                     <C>                   <C>
1 Facility              0.69 per sq ft        Maintenance of a/c up to 290 HP
                                              Compressed air
                                              Lighting
                                              General housekeeping
                                              Carparks

2 Cleaning services     0.36 per sq ft        Cleaning services on 2 shifts
  & pest control                              Pest Control on quarterly basis

3 Payroll               3000.00 per month     Exclude Buyer's payslips
                                              Buyer has to apply to Bank for electronic payment

4 IT                    527.63 per computer   Software support on existing prog include licences,
                                              hardware maintenance
                                              Buyer to provide their own licences on the email addresses
  Assumption
  That the charges above are based on our current practice of maintenance; type of software.. etc.
</TABLE>

                                                               /s/ Yong Siew Wai

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]